THE COMMISSIONER OF INCOME TAX-II, KOCHI vs. SMT. C.B.MINI

ITA/46/2012HC KeralaKLHC01023968201207 December 2017Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON5 pages

AI SummaryDismissed

What were the facts?

The Revenue is in appeal against an order of the Income Tax Appellate Tribunal (ITAT) that set aside proceedings initiated under Section 158 BD of the Income Tax Act, 1961. The case involves a search conducted at the premises of the petitioner's mother, where Fixed Deposit Receipts in the name of the petitioner's children were found. A summons was issued under Chapter XIVB. The petitioner had already filed returns for assessment years 1997-98 and 1998-99. The assessment order (Annexure A) was passed based on these proceedings. The first appellate authority had set aside the assessment order on multiple grounds, including a lack of evidence connecting the money to the petitioner and the absence of a valid search under Section 158 BD to initiate the proceedings. The ITAT upheld these findings.

What did the High Court hold?

The High Court held that the issue of lack of evidence connecting the petitioner with the amounts in question is a finding of fact. The Tribunal's interference with the findings of the first appellate authority on other counts was not considered as the assessee had not filed an appeal against those aspects. The Court found that no question of law arose from the ITAT's order. The Tribunal had accepted the finding of the first appellate authority that there was no evidence connecting the money to the assessee and that no undisclosed income could be found as there was no notice issued pursuant to a search under Section 158 BD. The summons issued was based on post-search inquiry material and was considered an open-ended summons, not a valid originating point for a notice under Section 158 BD. Consequently, the appeal filed by the Revenue was rejected, affirming the order of the Tribunal.

What were the issues?

1. Whether the Tribunal erred in setting aside the proceedings initiated under Section 158 BD of the Income Tax Act, 1961, when the Revenue relied on a summons issued based on post-search inquiries rather than a direct search under Section 158 BD. Assessee's Contentions: The assessee argued that the proceedings under Section 158 BD were invalid because there was no search conducted under Section 158 BD. The summons issued was an open-ended one, not based on any specific evidence found during a search, and therefore could not be the originating point for issuing a notice under Section 158 BD. The Tribunal ultimately found that there was no evidence connecting the petitioner with the amounts in question, which is a finding of fact. Revenue's Contentions: The Revenue contended that the proceedings were valid. However, the judgment does not explicitly detail the Revenue's arguments beyond their appeal against the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 158 BD, Section 158 BC

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON THUR AY, THE 7TH DAY OF DECEMBER 2017/16TH AGRAHAYANA, 1939 ---------------------- AGAINST THE ORDER IN ITSSA 111/2004 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 17-08-2011 APPELLANT/APPELLANT/APPELLANT: -------------------------------- THE COMMISSIONER OF INCOME TAX-II, COCHIN.

BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S)/RESPONDENT: ------------------------- SMT. C.B.MINI (MINI BALRAM) “NIRMALAYAM” PERINGAVU, TRISSUR - 680618. R1 BY ADV. SRI.K.ANAND (SR.) R1 BY ADV. SMT.LATHA ANAND THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 07-12-2017, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: APPENDIX APPELLANTS ANNEXURES: ANNEXURE A : COPY OF ASSESSMENT ORDER UNDER SECTION 158 BC R.W.S 158BD ANNEXURE B:OF THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) DATED 01.07.2004 ANNEXURE C: COPY OF THE ORDER OF THE ITAT IN IT (S&S) A NO.111/COCH/2004 DATED 17.08.2011 ANNEXURE D: LIST/INVENTORY OF ASSETS SEIZED FORM SMT. THANKAMA

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