SMT ANILA GUPTA,FARIDABAD vs. INCOME TAX OFFICER, FARIDABAD

2. Besides above, the assessees have also moved application for permission to raise following additional grounds: 1) In the case of Smt. Anila Gupta, following additional grounds have been raised: a) that the learned ITO, Ward-1(5), Faridabad has wrongly assumed jurisdiction to initiate proceedings under sec. 147 for assessment year 2008-09 in as much as (1) he is not the Assessing Officer of the assessee (ii) on the facts of the case the provisions of sec. 153C were applicable, which supersedes the applicability of the provisions of sec. 147 and 148 and (iii) he was not having material/documentary evidences suggesting any payment in cash, over and above, the disclosed investment. b) that the assessment order passed by the learned ITO, Ward-1(2), Faridabad under sec. 143(3)/148 on 15-2-2014 on the basis of proceedings initiated under sec. 147 by the officer, who was not the Assessing Officer of the assessee, being illegal, deserves to be quashed.

In the case of Shri Shanti Swaroop Gupta, following additional ground has been raised: a) that the learned Assessing Officer had wrongly assumed jurisdiction to initiate proceedings under sec. 147 for assessment year 2008-09, because on the facts of the case, provisions of section 153C were applicable, which supercedes 3 the applicability of the provisions of section 147 and 148 of the Act.

In the case of Shiv Kumar Gupta, the following additional grounds have been raised: a) that the learned ITO, Ward-1(5), Faridabad has wrongly assumed jurisdiction to initiate proceedings under sec. 147 for assessment year 2008-09 in as much as (1) he is not the Assessing Officer of the assessee (ii) on the facts of the case the provisions of sec. 153C were applicable, which supersedes the applicability of the provisions of sec. 147 and 148 and (iii) he was not having material/documentary evidences suggesting any payment in cash, over and above, the disclosed investment. b) that the assessment order passed by the learned ITO, Ward- 1(2), Faridabad under sec. 143(3)/148 on 13-2-2014 on the basis of proceedings initiated under sec. 147 by the officer, who was not the Assessing Officer of the assessee, being illegal, deserves to be quashed 3. In support of the above applications for permission to raise the above additional grounds, the Learned AR submitted that the issues raised therein are legal in nature and no fresh material outside the record is required to be considered for the adjudication of the same. He submitted further that the issues raised in the above additional grounds go to the root of the matter as the very assumption of jurisdiction of the Assessing Officer has been questioned.

In the rejoinder, the Learned AR submitted that before the Learned CIT(Appeals), the assessees had questioned the validity of assessment order framed under sec. 147 read with 143(3) of the Income-tax Act, 1961 but could not succeed.

Considering the above submissions, we find that the issues raised in the proposed additional grounds are legal in nature, which go to the root of the matter questioning the assumption of jurisdiction by the Assessing Officer to frame the assessment in question and adjudication of the same does not require consideration of fresh material outside the record. We thus allow the assessees/applicants to raise the above additional grounds for adjudication of the bench. The applications are accordingly allowed.

On the merit of additions in question, we after considering the arguments advanced by the parties, find that a search and seizure operation was conducted on AEZ group on 17.8.2011 by the Investigation Wing wherein computer hard discs were seized. It was found that AEZ group was constructing various projects and sold commercial space to different parties by receiving part payment in cash. Subsequently, this information was 5 received by the Assessing Officer from ADIT(Inv.) regarding purchase of commercial space by the assessees at G-4B for Rs. 62,95,200. On the basis of said information, the Assessing Officer initiated reopening proceedings under sec. 147 of the Act after recording reasons to belief that there was escapement of assessment of taxable income. Notice under sec. 148 of the Act was issued on the assessee and assessments under sec. 147/143(3) in question were framed. In the present case before us, it is an admitted fact, as also evident from the reasons recorded and the assessment order that the initiation of reopening proceedings was made by the Assessing Officer on the basis of information received from the Directorate of Income-tax (Inv.) on the basis of search & seizure operation conducted at the premises of AEZ Group of Cases wherein computer hard discs were found and seized as per which it was noted that AEZ group was constructing various projects and sold commercial space to different parties by receiving part payments in cash. Subsequently, this information was received by the Assessing Officer from the investigation wing of the department regarding purchase of commercial space by the assessees at G-4B for Rs.62,95,200 as extracted from hard disc of computer of AEZ group during search. Subsequent to this, the reopening proceedings were initiated and assessments were framed under sec. 147/143(3) of the Act by the present Assessing Officer.