“Section 132(1)(a)(b)”
The decision most relied on for Section 132(1)(a)(b) is Kishore Kumar v. Deputy Commissioner of Income (52 Taxmann.com 449), cited in 255 judgments on BharatTax.
Leading authorities on Section 132(1)(a)(b)
An unretracted admission of undisclosed income made by an assessee in a sworn statement under Section 132(4) during a search and seizure operation forms a valid basis for making additions and levying tax, especially when no books of accounts are maintained.
This Supreme Court decision is cited as authority in search and seizure assessment proceedings.
A retracted statement made during a search under section 132(4) carries no weight and is rejected, especially when the genuineness of purchases is disproved.
Procedural irregularities, especially where initiation was valid but completion was flawed, are often curable and may not automatically invalidate an entire order. This principle, tied to natural justice, means minor defects in procedure can be remedied without voiding the proceedings.
Under the mercantile system of accounting, revenue and expenses are matched on an accrual basis, comparing income earned and expenses incurred irrespective of cash flow. If the Department seeks to substitute an assessee's chosen method of accounting, the burden is on the Department to prove that the existing method is incorrect or distorts profits.
Failure to issue a draft assessment order under Section 144C(1) makes the final assessment order illegal and beyond jurisdiction. Non-compliance with Dispute Resolution Panel (DRP) directions renders the final assessment order bad in law.
When an Assessing Officer (AO) submits a favourable remand report in response to the CIT(A)'s direction for further inquiry, the Revenue is bound by this report and cannot be treated as an aggrieved party to challenge the additions. The CIT(A) must consider such a report when deciding the appeal.
The phrase "so far as may be" in a statutory provision indicates that the referred procedures, such as those for conducting searches, are to be generally followed to the extent possible, meaning they are not mandatory in every minute detail but applied practically.
