MRS RAMKANWAR S CHECHANI,JALNA vs. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -1, AURANGABAD

It emerges during the course of hearing that the all the instant appeals have arisen as a result of the department’s search action dated 02.05.2013 conducted involving M/s. Mantri Group of Jalna. The departmental authorities appear to have come across various seized documents (details given in all assessment orders dated 08.12.2017) which made the Assessing Officer to set section 148/147 mechanism in motion culminating him section 68/69 unexplained cash deposits and investments addition; as the case may be, involving varying sum(s) in these four cases.

This is what leaves all these assessees aggrieved raising three folded arguments challenging validity of section 148/147 proceedings, correctness of the forgoing impugned addition(s) on merits as well as interest computation u/s 234A, 234B and 234C of the Act.

3 to 716/PUN/2021 4. I have given my thoughtful consideration to first and foremost issue raised herein regarding validity of impugned section 148/147 proceedings. The assessees plead in their respective grounds that it is only section 153C of the Act which comes into operation when any incriminating evidence is found and seized during the course of search and therefore, both the learned lower authorities have erred in law and on facts in taking recourse to the impugned reopening mechanism. I find no merit in the assessees’ instant legal ground. It is made clear first of all that the search herein is dated 02.05.2013. The relevant statutory expression applicable in section 153C at that point of time read “belongs or belong to a person other than the person referred to in section 153A”. There is further no dispute that the legislature amended the same vide Finance Act, 2015 w.e.f. 1.06.2015 adding “pertains or pertain to ……… “relates to” which does not apply qua the earlier searches with retrospective effect. This is not the assessees’ case that any foregoing incriminating material in-fact belonged to them as per the statutory provision applicable on the date of search u/s 153C of the Act. I accordingly reject the assessees’ instant identical legal ground in all these four cases.

Next comes the second issue of correctness of unexplained deposits and investment additions made in all these cases. It is an 4 ITA Nos.713 to 716/PUN/2021 admitted fact that these assessees had been afforded sufficient opportunities during the course of reassessment proceedings to explain source regarding both the foregoing issues. They had not even filed their returns before the Assessing Officer. A perusal of the assessment discussion in “lead” appeal ITA No.713/PUN/2021 suggests that the Assessing Officer had not only issued section 142(1) notices on various occasions but also he initiated section 271(1)(b) penalty proceedings alleging non-cooperation. This is coupled with the fact that all these assessees are fair enough in not pleading any violation of the principle of natural justice in any of their respective grounds. I therefore find merit in Revenue vehement arguments supporting the impugned addition in principle. The assessees fail in their respective substantive grounds. There is yet another equally important aspect of the instant issue. These assessees have pleaded that the learned lower authorities had made double addition(s) regarding both credit as well as debit sides thereby treating the same as unexplained. I find force in the instant latter plea since both these sides do not deserve to be added i.e. credit side as well as debit side qua deposits and investments in issue. Mr. Desai could hardly dispute that the instant computation issue requires the Assessing Officer’s factual verification who shall ensure that these assessees shall not be