Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI A.K. GARODIA
Per Sunil Kumar Yadav, Judicial Member
These appeals are preferred by the assessee against the common order dated 07.10.2013 of the CIT(Appeals)-VI, Bangalore for the assessment years 2004-05 & 2007-08 inter alia on the following grounds:-
A.Y. 2004-05 “1. The order of the learned authorities below in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case.
2. The appellant denies itself liable to be assessed under section 153C r.w.s. 143[3] of the Act under the impugned order on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] & [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [ 224 ITR 19 [SC] ] and consequent assessment under section 153A is null and void- ab-inito on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The learned authorities below has not discharged the burden, of proving that there is a valid initiation of search under section 132[1][a], [b] & [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to' assume jurisdiction to make an assessment under section 153A of the Act.
3. The learned assessing officer failed to appreciate that a valid search is a sine qua non for making a valid assessment under section 153C of the Act on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajit Jain, reported in 260 ITR 80 and also reliance is placed on the decision of the Hon'ble Karnataka High Court in the case of C. Ramaiah Reddy Vs. DCIT, reported in 339 ITR 210.
4. Thus the order of assessment passed by the learned assessing officer is bad in law as the mandatory conditions to invoke the jurisdiction u/s. 153C of the Income-tax Act, 1961 did not exist or having not been complied with and consequently the assessment made is bad in law for want of requisite jurisdiction.
Without prejudice the appellant denies herself liable to be assessed on a total income of Rs. 28,77,910/- as determined by the learned assessing officer as against the income reported of Rs. 19,77,910/- by the appellant, under the facts and circumstances of the case.
6. The learned Assessing Officer is not justified in law in making an addition of Rs.9,00,000/- as unexplained investments under the provisions of section 69 of the Act under the facts and circumstances of the case. 7. The learned Assessing Officer failed to appreciate the fact that the appellant has not made any payments to M/s. Tool Masters towards advance of purchase of sawing machineries of Rs.9,00,000/- under the facts and circumstances of the case. 8. The learned Assessing Officer failed to appreciate the fact that the supplier i.e. M/s. Tool Master and also the appellant has categorically denied any such receipt or payment of cash under the facts and circumstances of the case. 9. The Appellant denies itself liable to be charged to interest under section 234 B & C of the Income Tax Act under the facts and circumstances of the case. The calculation of interest under section 234 B & C of the Act is not in accordance with law as the rate, amount, period and method of calculating interest is not discernable from the order of assessment. 10. The Appellant craves leave to add, alter, substitute, amend or delete any or all of the grounds of appeal
urged above.
11. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.” A.Y. 2007-08 “1. The order of the learned authorities below in so far as it is against the Appellant is opposed to law, equity, weight of evidence, probabilities and the facts and circumstances in the Appellant's case.
2. The appellant denies herself liable to be assessed under section 153C r.w.s. 143[3] of the Act under the impugned order on the ground that:- i. The search initiated in the case of the appellant is illegal and ultra vires the provisions of section 132[1][a], [b] & [c] of the Act; ii. That the search is conducted not on the basis of any prior information or material inducing any belief but purely on the suspicion and therefore, the action under section 132[2] is bad in law [ 224 ITR 19 [SC] ] and consequent assessment under section 153A is null and void- ab-inito on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajith Jain, reported in 260 ITR 80. iii. The learned authorities below has not discharged the burden, of proving that there is a valid initiation of search under section 132[1][a], [b] & [c] of the Act, its execution and its completion in accordance with law to render the proceedings valid and to' assume jurisdiction to make an assessment under section 153A of the Act and consequently no proceedings more so the proceedings under section 153C do not have legs to stand.
3. The learned assessing officer failed to appreciate that a valid search is a sine qua non for making a valid assessment under section 153C of the Act on the parity of the ratio of the decision of the Hon'ble Apex Court in the case of Ajit Jain, reported in 260 ITR 80 and also reliance is placed on the decision of the Hon'ble Karnataka High Court in the case of C. Ramaiah Reddy Vs. DCIT, reported in 339 ITR 210. 4. Thus the order of assessment passed by the learned assessing officer is bad in law as the mandatory conditions to invoke the jurisdiction u/s. 153C of the Income-tax Act, 1961 did not exist or having not been complied with and consequently the assessment made is bad in law for want of requisite jurisdiction. 5. Without prejudice the appellant denies herself liable to be assessed on a total income of Rs. 26,30,410/- as determined by the learned assessing officer as against the total income reported by the appellant of Rs. 15,30,410/- under the facts and circumstances of the case.
Without Prejudice the learned CIT[A] is not justified in law in confirming the disallowance of a sum of Rs. 11,00,000/- made by the learned assessing officer under the provisions of section 40[a][ia] of the Act, being the payments made by the appellant towards lease rentals to M/s. Oriental Granites, under the facts and circumstances of the case.
The learned authorities failed to appreciate the fact that the provisions of section 40[a][ia] of the Act is not applicable to the facts of the instant case since the recipient/payee i.e. M/s. Oriental Granites have already declared the payments made by the appellant in their respective returns and also it is maintaining its books of accounts as per the scheme of the act and is further subject to audit under the provisions of section 44-AB of the Act and hence no disallowance is warranted under the provisions of section 40[a][ia] of the Act under the facts and circumstances of the case. 8. The learned authorities below are not justified in law in not appreciating that the deduction of tax is only one mode of recovery of tax and once the tax is recovered by any other mode and the recovery of tax on the amount which has suffered tax in the hands of payee is not permissible since the same will amount to taxing the same income twice i.e. once disallowance of expenditure in the hands of the payer and once again the amounts being taxed in the hands of the payee under the facts and circumstances of the case. 9. Without prejudice the learned authorities below failed to appreciate that the provisions of section 40[a][ia] of the Act is attracted only to the amounts which are payable at the end of the year and not to the entire actual payments made/paid during the year under the facts and circumstances of the case. 10. Without prejudice to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies herself liable to be charged to interest under section 234 B & 234 c of the Income Tax Act under the facts and circumstances of the case. Further the levy of interest under section 234 B & 234 C of the Act is also bad in law as the period, rate, quantum and method of calculation adopted on which interest is levied are all not discernable and are wrong on the facts of the case.
The Appellant craves leave to add, alter, substitute, amend or delete any or all of the grounds of appeal
urged above.
12. For the above and other grounds to be urged during the hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice.”
These appeals were listed for hearing on 27.07.2016, but none appeared on behalf of the assessee, despite service of notice of hearing. Since none appeared on behalf of the assessee, we have no other option, except to hear the appeals ex parte, qua the assessee.
We have carefully examined the orders of the CIT(Appeals) on all the grounds raised before me and we find that the CIT(Appeals) has adjudicated all the grounds in detail in his order. Since no defect has been pointed out in the order of the CIT(Appeals), we confirm the same.
In the result, the appeals by the assessee are dismissed.
Pronounced in the open court on this 29th day of July, 2016.