TMI Blog2019 (8) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... llate order dated 31.05.2016 on account of unexplained jewellery. During appellate proceedings in ITAT, the assessee has failed to bring any material for our consideration to persuade us to take a view different from the view taken by Ld.CIT(A) in aforesaid impugned order dated 31.05.2016. Accordingly, 3rd, 4th and 5th grounds of appeal raised by the assessee in this appeal are dismissed. - the appeal filed by the assessee is dismissed - ITA No:- 6251/Del/2016 - - - Dated:- 13-8-2019 - Shri H.S. Sidhu, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : None For the Respondent : Shri Surender Pal, Sr.DR ORDER PER ANADEE NATH MISSHRA, AM [1]. This appeal filed by the assessee against the order dated 31.05.2016 passed by Ld.CIT(A)-25, Delhi [ Ld.CIT(A) ] pertaining to 2012-13 assessment year. The grounds of appeal are as under:- 1. That the said case learned CIT(A) has not followed instruction No. 20/2003 dated 23.12.2003 issued by CBDT regarding issue of appellate order within 15 days of last hearing of case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. That the impugned assessment order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 5. That the Appellant craves leave to add/alter any/all grounds of appeal before or at the time of hearing of the Appeal. [1.2]. On comparison of assessee s grounds of appeal in Income Tax Appellate Tribunal [ ITAT ] with those before Ld.CIT(A), it is found that disputes raised in Ground Nos. 2,4 and 5 in the appeal before us in ITAT, are similar to disputes raised in the appeal before Ld. CIT(A). However, the disputes raised in Ground Nos. 1 3 in appeal before ITAT are new. The third ground of appeal in the assessee s appeal in ITAT arises from the fact that enhancement has been made by Ld. CIT(A), amounting to ₹ 13,69,100/- on account of unexplained jewellery found during search. [2]. Assessment order u/s 143(3) of the Income Tax Act, 1961 ( Act ) was passed on 30.03.2014 wherein an addition of ₹ 4,15,400/- was made on account of cash found at the time of search seizure and survey operations u/s 132/133A of the Act conducted on 17.08.2011. The AO treated the af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 2013. In response to Notice u/s 143(2fRemrn declaring income of ₹ 57,35,000/- was filed by the Assessee. 7.2 During the course of search proceeding at the residence of the Assessee, Cash amounting to ₹ 4,15,400/- was found, besides Jewellery valued at ₹ 13,69,100/-. The Assessee was required to explain the nature and source of the Cash and Jewellery found. The Assessee could not give explanations to the satisfaction of the Learned Assessing Officer and hence the Cash and Jewellery were held to be unaccounted in the Assessment Order u/s 143(3) dated 30.03.14. The Assessing Officer held that he was satisfied that the Assessee had failed to file true and correct Return of Income for which Penalty proceedings were initiated by issue of penalty notice u/s 271(1 )(c). 7.3 The Assessee is in Appeal against the addition of ₹ 4,15,400/- on account of Unexplained Cash, levy of Interest u/s 234 A and 234 B and initiation of Penalty u/s 271(1) (c) and 271 AAA of the Income Tax Act,'l961. 7.4 The Appellant could not provide any justification regarding the claim that the Assessing Officer had erred in st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh, particularly the occasions, names of the relatives and other details to prove the genuineness of the Cash claimed to be received were given and hence the entire Cash found amounting to ₹ 4,15,400/- was treated as unaccounted income of the Assessee. It is further clearly mentioned in Para 4 of the Assessment Order that the Assessee failed to explain the nature and source of the Jewellery found. Thus, the Learned Assessing Officer has given the clear finding that the Assessee could not explain the nature and source of the Jewellery found in the Search. However, while computing the Income of the Assessee in Para 5 of the Assessment Order, the addition of only ₹ 4,15,400/- towards Unexplained Cash found in the Search Proceedings was made, mentioning the discussion in Para 3.1 of the Assessment Order. However, while doing so , the Ld. Assessing Officer, omitted making the addition towards Unexplained Jewellery found in the Search Proceedings, which was valued at ₹ 13,69,100/- and was discussed in Para 3 of the Assessment Order, and for which specific findings were given in Para 4 of the Assessment Order, and for which Penalty Proceedings u/s 271 (1) (c) were initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer that during the course of Search Proceedings at your residence, Cash amounting to ₹ 4,15,400/- was found, besides Jewellery valued at ₹ 13,69,100/- and you were required to explain the nature and source of the Cash found and the requisition of the Jewellery. It has been observed in Para 3.1 of the Assessment Order that the explanation regarding Cash was not satisfactory and no proper detail regarding the claimed receipt of Cash, particularly the occasions, names of the relatives and other details to prove the genuineness of the Cash claimed to be received were given and hence the entire Cash found amounting to ₹ 4,15,400/- was treated as unaccounted income of the Assessee. 3. It is further clearly mentioned in Para 4 of the Assessment Order that the Assessee failed to explain the nature and source of the Jewellery found. The specific observations of the Learned Assessing Officer in Para 4 of the Assessment Order are as under: - For assessee's failure to explain the nature and source of jewellery found as discussed above satisfactorily I am satisfied that assessee has failed to file true and correct return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch conducted u/s 132 of the Income Tax Act, 1961 upon the Assessee on 17.08.11. 8. This may please be treated as an opportunity of showing cause u/s 251(2) of the Income Tax Act, 1961 against such enhancement of income by ₹ 13,69,100/-. Please submit your reply at the next date of hearing on 26.05.16 at 5.00 PM. 7.12 In response to the above Notice for enhancement of Income u/s 251(2), the Appellant filed Written Submissions dated 31.05.16, stating as under : This is in reference of your goodself notice Dt. 18.05,16 wherein, your goodself asked that please explain as to why enhancement of the income assessed by the Assessing officer at ₹ 61,50,400/-vide Assessment order u/s 143(3) dated 30.03.14 for A.Y.12-13, by ₹ 13,69,100/- should not be made, being the value of the unexplained Jewellery found in the search conducted u/s 132 of the Income tax Act,1961 upon the Assessee on dt.17.08.11. In regarding the same we want to put in your knowledge that the said matter(Jewellery ₹ 13,69,100/-) had been already discussed during the assessment proceeding and assessee had been already submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained Jewellery found in the Search Proceedings, which was valued at ₹ 13,69,100/- and was discussed in Para 3 of the Assessment Order, and for which specific findings were given in Para 4 of the Assessment Order; and for which Penalty Proceedings u/s 271(1)(c) were initiated. 5. The Assessee has challenged the initiation of Penalty u/s 271 (l)(c) of the Income Tax Act, 1961 (alongwith initiation of Penalty u/s 271 AAA) in Ground no. 3 of the Appeal. This Ground is partly linked with the finding regarding the Unexplained Jewellery found during the Search Proceedings. The Assessing Officer has held the Jewellery found to be Unexplained and has initiated Penalty Proceedings u/s 271(l)(c), but the Assessee has challenged only the initiation of add the value of this Unexplained Jewellery amounting to ₹ 13,69,100/- to the Total Income of the Assessee. On the above contents of your goodself notice our rebuttal are as under:- The said matter had been already discussed during the assessment proceeding wherein, after the satisfactory reply of assessee, the Ld assessing officer had not made any addition against Jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. Your honor prima facie the matter has not aroused from the assessment order. However, we need some time to further elaborate the provisions of Section 251(1) (2) of The Income Tax Act in light of judgements and logics. Prayer Your honor in view of the settled law and facts, as matter already been dealt by the Ld. AO and it seems that due to some clerical error the word jewelry. It was being added only for the purpose of in initiating penalty. Hence, your honor is requested not to enhance the income of the assessee. And requested to withdraw the proceedings under U/s 251(2). Hence, on the same matter after know the actual fact if your goodself take any adverse conclusion it will be arbitrary and bad interpretation of law. We shall pray further your good self that sake of justice if required then we shall be happy to provide any other information/documents you may require in this matter. 7.13 Perusal of the above reply by the Appellant shows that the Appellant has failed to explain why enhancement of income for the Unexplained Jewellery amounting to ₹ 13,69,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced by the Appellant and secondly, the findings in the main Assessment Order will take precedence over the comments, if any, in an Office Note. Hence the claim of the Assessee that the Assessing Officer was satisfied on the issue of Jewellery has to be rejected. 7.15 It has been further claimed that there was a typing mistake/clerical error in the Assessment Order. The Assessee has not been able to show how any typing mistake / clerical error could help the Assessee to escape Assessment of the Unaccounted Jewellery of ₹ 13,69,100/- found in the Search. No doubt, there was a mistake, due to which the Unaccounted Jewellery of ₹ 13,69,100/- was not added to the income of the Assessee, but such mistake cannot be allowed to continue, and the Unaccounted Income of the Assessee to the extent of ₹ 13,69,100/-, appearing in the form of Unaccounted Jewellery found in the Search has to be brought to tax. 7.16 It was further claimed by Sh. Rajeshwar Prasad Painuly, CA , the Learned Counsel of the Appellant that the matter has not arisen from the Assessment Order and hence the Commissioner (Appeals) does not have power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. The entire assessment is thrown open before the Appellate Assistant Commissioner, and so long as it does not travel outside the matters considered and determined by the income-tax Officer, he can correct any decision of the Income-tax Officer in the course of the assessment even if the assessee is satisfied with it and has not specifically challenged it in the appeal. The order of the Appellate Assistant Commissioner would thus consist of various decisions on matters which may be raised in appeal by the assessee or considered suo motu by the Appellate Assistant Commissioner and the effect of these decisions would be to confirm or reduce or enhance or annul or set aside the assessment. Thus, the crux of the matter is that the Appellate Assistant Commissioner may deal with all points and grounds which arise from not merely the subject-matter of the appeal, but even from the larger area of the subject-matter of the assessment. 7.19.1 The Hon ble Gujarat High Court observed in the abovementioned case of Commissioner of Income Tax vs. Ahmedabad Crucible Company, 206 ITR 574 as under: ...the questions raised for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 also deals with the powers of the Appellate Assistant Commissioner. In this context, it has been observed that the powers of the Appellate Assistant Commissioner are not confined to the subject-matter of the appeal, but extend to the subject-matter of the assessment. The entire assessment is thrown open before the Appellate Assistant Commissioner, and so long as it does not travel outside the matters considered and determined by the Income-tax Officer, he can correct any decision of the Income-tax Officer in the course of the assessment even if the assessee is satisfied with it and has not specifically challenged it in the appeal. The order of the Appellate Assistant Commissioner would thus consist of various decisions on matters which may be raised in appeal by the assessee or considered suo motu by the Appellate Assistant Commissioner and the effect of these decisions would be to confirm or reduce or enhance or annul or set aside the assessment. Thus, the crux of the matter is that the Appellate Assistant Commissioner may deal with all points and grounds which arise from not merely the subject-matter of the appeal, but even from the larger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment was originally made on a total income of ₹ 28,724. On reassessment in proceedings initiated under section 147 of the Act the Income-tax Officer included in the total income a sum of ₹ 2,45,000 referable to ostensible transactions in hundi loans shown by the assessee. The assessee filed an appeal against the said assessment order passed by the Income-tax Officer. The Appellate Assistant Commissioner not only sustained the said addition of ₹ 2,45,000 but he also took notice of 10 other items of ostensible hundi loans amounting to ₹ 2,30,000 and directed that the total income be enhanced by the sum of ₹ 2,30,000. On further appeal, the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal ) deleted the said addition of ₹ 2,30,000 made by the Appellate Assistant Commissioner on the view that in doing so the Appellate Assistant Commissioner had exceeded his jurisdiction. At the instance of the Revenue, the Tribunal was directed by the High Court of Madhya Pradesh to refer the following questions of law for opinion: (1) Whether, on the facts and in the circumstances of the case, the Tribunal was justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225, 229, which was also a decision of a three judge Bench wherein the scope of section 31 (3)(a) of the Indian Income- tax Act, 1922 (which was almost identical to section 251(1)(a) of the Act) was considered and it was held (at page 693): If an appeal lies, section 31 of the Act describes the powers of the Appellate Assistant Commissioner in such an appeal. Under section 31(3)(a), in disposing of such an appeal, the Appellate Assistant Commissioner may, in the case of an order of assessment, confirm, reduce, enhance or annul the assessment; under clause (b) thereof he may set aside the assessment and direct the Income-tax Officer to make a fresh assessment. The Appellate Assistant Commissioner has, therefore, plenary powers in disposing of an appeal. The scope of his power is conterminous with that of the Income-tax Officer. He can do what the Income-tax Officer can do and also direct him to do what he has failed to do. After referring to these observations, this court in Jute Corporation of India Ltd. [1991] 187 ITR 688 has stated (at page 693): The above observations a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceeded his jurisdiction in making an addition of ₹ 2,30,000 on the basis of the other 10 items of hundis which had not been explained by the assessee. This means that even if question No. 2 is answered in the affirmative, questions Nos. 1 and 3 must be answered in the negative. The appeal is, therefore, allowed, the impugned judgment of the High Court in so far as it relates to questions Nos. 1 and 3 is set aside and the said questions are answered in the negative, i.e., in favour of the Revenue and against the assessee. No order as to costs. 7.21 In view of the facts of the case and the judicial pronouncements discussed above, it is clear that the income of the Assessee has to be enhanced by ₹ 13,69,100/- being the value of the Unexplained Jewellery found during the course of Search. Accordingly, it is directed that the Assessment be enhanced by an amount of ₹ 13,69,100/- u/s 251(l)(a) of the Income Tax Act, 1961. [3]. The assessee has filed this present appeal in Tribunal against the aforesaid impugned order dated 31.05.2016 of Ld.CIT(A). At the time of hearing before us, Revenue was represented by Mr. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the appellate proceedings before Ld.CIT(A). Even during the appellate proceedings in ITAT, the assessee has failed to furnish any satisfactory explanation regarding the aforesaid amount of ₹ 4,15,400/-. Relevant portion of the order of Ld.CIT(A) has already been reproduced in foregoing paragraph 2.1 of this order. In view of the foregoing discussion and as the assessee has failed to bring any material for our consideration during appellate proceedings in ITAT, to persuade us to take a view different from the view taken by Ld.CIT(A) in his impugned order; the addition made by the AO amounting to ₹ 4,15,400/- and confirmed by Ld.CIT(A) in his aforesaid order dated 31.05.2016 is hereby sustained. Accordingly, second ground of appeal filed by assessee in ITAT is dismissed. [6]. As far as 3rd, 4th and 5th grounds of appeal in assessee s appeal in ITAT are concerned; relevant portions of the order of the Ld. CIT(A) have already been reproduced in foregoing paragraph No.2.1 of this order. We find that Ld.CIT(A) has discussed the facts and circumstances of the case elaborately in his aforesaid order. Ld.CIT(A) has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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