NAMDEV ARORA vs. COMMISSIONER OF INCOME TAX & ANR

ITA/159/2016HC Punjab & HaryanaPHHC01110345201620 July 20169 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue was primarily about the Tribunal justifying the addition under Section 68 of the Act, while the AO and CIT(A) had invoked Section 69-A. The Court found the submission that the Tribunal erred in invoking Section 68 without notice to be unfounded. It reasoned that this was a case of a wrong section being mentioned in the assessment and CIT(A)'s orders, and all jurisdictional facts for invoking Section 68 were present. The inquiries made by the AO were factual, not tied to any specific provision. The Court held that if the AO had mentioned Section 68 instead of 69-A on the same facts, the assessee could not have contended they were not put on notice. The assessee was not prejudiced by the mention of the wrong section, as the queries were general to ascertain facts. The Court stated that Appellate Authorities can uphold an addition under the correct section even if a wrong one was mentioned, provided the assessee is not prejudiced. The request for remand to lead further evidence was denied as it was made after many years and lacked current evidence, though the assessee was at liberty to adopt appropriate proceedings if evidence was obtained.

What were the facts?

The assessee, Shri Namdev Arora, is appealing an order of the Income Tax Appellate Tribunal (ITAT) concerning assessment year 2008-09. The ITAT had confirmed an addition made by the Assessing Officer (AO) under Section 69-A of the Income Tax Act, 1961, and an enhancement of income by the Commissioner of Income Tax (Appeals) (CIT(A)). The assessee deposited Rs. 1,71,50,000/- in his bank account and named Dhruv Parti as a source. The AO found Rs. 19.30 lacs to be unexplained and added it under Section 69-A. The CIT(A) enhanced the addition to Rs. 30 lacs, noting the lack of confirmation from Dhruv Parti and the absence of documentary evidence for the alleged loan. The ITAT justified the addition under Section 68, despite the AO and CIT(A) having invoked Section 69-A.

What were the issues?

1. Whether the Tribunal erred in law and fact by holding that the AO/CIT(A) meant addition under Section 68 of the Act when the addition was specifically made under Section 69-A, and whether Section 292-B applied. (Assessee's contention: The AO and CIT(A) did not examine the applicability of Section 68. The Tribunal erred by invoking Section 68 without putting the assessee on notice, violating natural justice. Revenue's contention: This was a case of a wrong section being mentioned, and all jurisdictional facts for Section 68 existed. Enquiries were factual, not tied to a specific section. The assessee was not prejudiced.) 2. Whether the Tribunal erred in law and fact by upholding the respondent's order without examining the relevant facts and the nature of the addition/disallowance. (Assessee's contention: The Tribunal failed to consider the relevant facts and the fact that the AO and CIT(A) never examined the applicability of Section 68. Revenue's contention: The findings of the CIT(A) on facts were agreed with and were not absurd or perverse.) 3. Whether the Tribunal erred in law and fact by upholding the order of the AO/CIT(A) without giving the assessee an opportunity to address the applicability of the relevant section. (Assessee's contention: Violation of natural justice as no opportunity was given regarding Section 68. Revenue's contention: Assessee was not prejudiced by the wrong section mentioned.) 4. Whether the findings of the Tribunal were perverse. (Assessee's contention: Findings were unreasonable. Revenue's contention: Findings were not perverse and were in agreement with the CIT(A)'s conclusion on facts.)

Which sections of the Income-tax Act were involved?

Section 69-A,Section 68,Section 292-B,Section 143(1),Section 142(1),Section 143(2),Section 133(6)

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IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Date of Decision: 20th July, 2016

Shri Namdev Arora

..Appellant

versus

Commissioner of Income Tax, Jalandhar and another

..Respondents

CORAM: HON'BLE MR. JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICE

HON’BLE MR. JUSTICE DEEPAK SIBAL.

Present : Mr. Salil Kapoor, Advocate,

Mr. Saurabh Kapoor, Advocate and

Mr. Sumit Lal, Advocate, for the appellant. ****

S.J.VAZIFDAR, ACTING CHIEF JUSTICE

CM No. 13417-CII of 2016

Heard. For the reasons mentioned in the application, delay of 690 days in re-filing the appeal is condoned. Application stands disposed of.

This is an appeal against the order of the Income Tax Appellate Tribunal confirming an addition by the Assessing Officer under section 69- A of the Income Tax Act, 1961 (for short ‘the Act’) and the enhancement of the appellant’s income by the Commissioner of Income Tax (Appeals). The matter pertains to the assessment year 2008-09. 2. The appeal is admitted o

The order continues below.

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