SMT. SADHNA AGGARWAL,DELHI vs. ACIT, NEW DELHI

It will be pertinent to observe, there are two appeals each for assessment years 2011-12 and 2013-13 arising out of two separate search and seizure related proceedings.

The assessee has raised common grounds in all these appeals, inter alia, challenging the validity of the order passed under Section 153A of the Income-tax Act, 1961. Of course, the assessee has raised grounds on merits as well.

Briefly the facts, more or less common in all these appeals are, the assessee is a resident-individual and regularly file her return of income under Section 139(1) of the Income-tax Act, 1961. A search and seizure operation under Section 132(1) of the Act was initially conducted in case of the assessee on 24.05.2012. As a consequence of the search and seizure operation, proceedings under Section 153A of the Act was initiated against the assessee for the preceding six assessment years. While completing the assessment under Section 143(3) read with Section 153A of the Act, the major addition made by the Assessing Officer in all the assessment years under appeal was on account of unexplained income. Of course, the Assessing Officer made ad hoc disallowance on certain expenses. Against the assessment orders so passed, assessee preferred appeals before learned Commissioner (Appeals), inter alia, on the ground that assessment order passed under Section 153A of the Act is invalid. However, learned Commissioner (Appeals) did not find merit in the ground raised by the assessee challenging the validity of the assessment order. In so far as the merits of the issue is concerned, learned Commissioner (Appeals) granted partial relief to the assessee on both the additions made by the Assessing Officer. Be that as it may, one more search and seizure operation under Section 132(1) of the Act was carried out in case of the assessee on 07.08.2013. As a consequence of such search and seizure operation, the Assessing Officer again initiated proceedings under Section 153A of the Act and passed orders under Section 143(3) read with Section 153A of the Act repeating the additions made in the earlier assessment orders. Since, no fresh additions were made by the Assessing Officer in these assessment orders passed under Section 153A read with Section 143(3) of the Act, learned Commissioner (Appeals) followed his earlier order passed in appeals arising out of the first assessment orders.

Learned counsel for the assessee submitted, without properly considering assessee’s submission on the validity of the assessment orders passed under Section 153A of the Act, learned Commissioner (Appeals) had dismissed assessee’s ground raised on the issue. He submitted the assessee had specifically raised an issue that in absence of any search warrant in the name of the assessee, no proceedings under Section 153A of the Act could have been initiated. Further, he submitted, learned Commissioner (Appeals) had also ignored assessee’s submission that even if there was a search and seizure operation, no incriminating material against the assessee was found. As regards the merits of the issue, learned counsel for the assessee submitted, in course of proceedings before the first appellate authority, the assessee has furnished reconciliation of the entries in the bank accounts, which were not at all considered or examined. He submitted, all these bank accounts were taken into consideration in the return of income filed by the assessee, as the incomes were offered under Section 44AD of the Act on presumptive basis. He submitted, as various submissions made by the assessee and evidences placed on record were not properly examined and verified either by the Assessing Officer or learned first appellate authority, the issues may be restored back to the file of learned Commissioner (Appeals).

Learned Departmental Representative submitted, in so far as validity of the Assessment Order is concerned, there cannot be any issue as learned Commissioner (Appeals) has given categorical finding that search warrant was issued in the name of the assessee.

We have considered rival submissions and perused the material on record. The basic grievance of the assessee, as appears from the submissions made by learned counsel for the assessee, is the submissions made in course of first appellate proceeding, both, on the validity of the assessment order as well as on merits, have not been duly considered and examined with reference to the material brought on record. After perusing the material placed before us, we find some merit in the aforesaid submissions of the assessee. In our view, assessee’s contention that there is no incriminating material found as a result of search, requires consideration keeping in view the settled legal principles. Further, reconciliation of entries in the bank accounts furnished by the assessee needs to be verified with reference to the evidences placed by the assessee. In view of the aforesaid, we are inclined to restore the issue to the learned Commissioner (Appeals) for fresh adjudication after due opportunity of being heard to the assessee.

In the result, the appeals are allowed for statistical purposes.