| The Tax Publishers2019 TaxPub(DT) 5532 (Agra-Trib) INCOME TAX ACT, 1961
Section 254
As objection raised by assessee was a purely legal objection going to the root of matter, therefore, Tribunal in terms of section 254 could not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. Before lower authorities but raised before it for the first time moreover, assessee had challenged action of re-opening before CIT(A) by taking specific grounds, therefore, it could not be said that assessee was challenging legality of reopening for the first time before ITAT and, therefore, objection raised by AO without consideration of fact available on record was rejected.
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Appeal (Tribunal) - Additional ground - Admissibility - Purely legal objection going to the root of matter
AO received information as to assessee having deposited cash amounting to Rs. 12,50,000 in his bank account and since assessee could not prove source thereof with sufficient evidences. AO issued notice under section 148. In response to the notice, assessee filed evidences to explain the sources of cash deposits to be from sale of agricultural produce grown on agricultural land held in the name of father. However, same did not find favour with AO who framed assessment under section 147/143(3) and made addition. Assessee challenged this by way of appeal before ITAT contending that alleged lack of evidence might be a cause for further enquiry or might be a ground prompting 'reasons to suspect' for escapement of income but that alone did not give any valid foundation for reaching to 'reasons to believe' and thereafter arriving at the 'satisfaction' for escapement' of Income warranting recourse to Notice under section 148. AO's case was that since assessee had not challenged validity of notice under section 148 before the authorities below therefore, it could not be allowed to raise this objection at this belated stage and thereby taking the revenue by surprise.Held: As objection raised by assessee was a purely legal objection going to the root of matter, therefore, Tribunal in terms of section 254 could not be prevented from considering questions of law arising in assessment proceedings although not raised earlier. Before lower authorities but raised before it for the first time moreover, assessee had challenged action of re-opening before CIT(A) by taking specific grounds, therefore, it could not be said that assessee was challenging legality of reopening for the first time before ITAT and, therefore, objection raised by AO without consideration of fact available on record was rejected.
Relied:NTPC v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 342 (SC). Distinguished:GKN Driveshafts (India) Ltd. v. ITO (2003) 125 Taxman 963 (SC) : 2003 TaxPub(DT) 734 (SC) and 'CIT v. Safetag International India Pvt. Ltd. ITA No. 355, 412 of 2010 (Del-HC) : 2011 TaxPub(DT) 1058 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
INCOME TAX ACT, 1961
Section 147
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