DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- AGARTALA , AGARTALA vs. RAJARSHI MOTORS PVT. LTD., AGARTALA

Facts

A search and seizure operation under Section 132 at Rajarshi Motors Pvt. Ltd. premises revealed discrepancies between reported net profit and seized Tally data. The MD disclosed Rs. 19.55 crores as undisclosed income, including Rs. 95 lakhs for Rajarshi Motors, but this was not reflected in the return filed under Section 153A. The Assessing Officer made additions for undisclosed income, fund diversion, and investment due to the assessee's non-compliance during assessment proceedings.

Held

The Tribunal remitted the legal issue regarding the validity of assessment proceedings (due to alleged violation of Section 153D concerning consolidated approval) back to the CIT(A) for re-adjudication, directing consideration of facts from the AO and approving authority. Additionally, the issues on merits challenged by the Revenue and the Cross Objections were also remitted to the CIT(A) to be decided afresh after affording the assessee due opportunity of hearing under Section 250(6) of the Act.

Key Issues

The key legal issue was the validity of assessment orders passed in alleged violation of Section 153D of the Income Tax Act, specifically concerning the mechanical and consolidated approval given for multiple assessment years instead of individual approvals. The merits of additions made for undisclosed income, fund diversion, and investment were also contested.