Ashok Chaddha v. ITO - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT


The Tax Publishers2012 TaxPub(DT) 0248 (Del-HC) : (2012) 044 (I) ITCL 0347 : (2011) 337 ITR 0399 : (2011) 245 CTR 0416 : (2011) 063 DTR 0353 INCOME TAX ACT, 1961 --Search and seizure--Assessment under section 153AWhether issuance of notice under section 143(2) is a mandatory requirement--A search under section 132(1) was carried out in the residential premises of assessee where some cash and jewellery were found. A notice under section 153A was issued to assessee in response to which he filed a return. Two questionnaires were issued to assessee which were duly complied by him. After that AO computed the total income. Assessee contended that to examine or verify any return filed under section 153A, the issuance of notice under section 143(2) was a mandatory requirement and since AO had not issued notice under section 143(2), the assessment made was void ab initio. Held: No specific notice was required under section 143(2) when the notice as required under section 153A (1)(a) was already given. Sections 153A(1) starts with a non obstante clause stating that it was 'notwithstanding' anything contained in sections 147, 148 and 149, etc. Clause (a) thereof provides for issuance of notice to the person searched under section 132 or where documents, etc., are requisitioned under section 132A, to furnish a return of income. This clause nowhere prescribes for issuance of notice under section 143(2). Assessee sought to contend that the words, 'so far as may be applicable' made it mandatory for issuance of notice under section 143(2) since the return filed in response to a notice under section 153A was to be treated as one under section 139. [Para 11] The use of the words 'so far as may be' cannot be stretched to the extent of mandatory issue of notice under section 143(2). As is noted, a specific notice was required to be issued under clause (a) of sub-section (1) of section 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under section 143(2) could be contemplated for assessment under section 153A. [Para 13] Income Tax Act, 1961, Section 153A INCOME TAX ACT 1961, --Income from undisclosed sources--Addition under section 69ACash seized from an employee--AO made addition of Rs. 10 lakhs under section 69A in respect of cash seized from an employee of assessee. Assessee contended that the amount belonged to his nephew, who had sent the money for some property transaction and said employee was acting only as a carrier. To support this contention, he filed a copy of recovery suit filed by his nephew. AO argued that the amount was seized on 20-4-2003, whereas the claim of ownership was made by nephew on 23-1-2008, much after the date of seizure also that there was no plausible explanation given by assessee as to why his employee was found in possession of cash. CIT(A) and Tribunal confirmed the addition. Held: No steps were taken by assessee or his nephew for almost 5 years. It was only when the assessment order passed, assessee's nephew submitted a claim that the money belonged to him. Further no details had been filed about the land sought to be purchased by him. Income Tax Act, 1961, Section 69A SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 0248 (Del-HC) : (2012) 044 (I) ITCL 0347 : (2011) 337 ITR 0399 : (2011) 245 CTR 0416 : (2011) 063 DTR 0353

INCOME TAX ACT, 1961

--Search and seizure--Assessment under section 153AWhether issuance of notice under section 143(2) is a mandatory requirement--A search under section 132(1) was carried out in the residential premises of assessee where some cash and jewellery were found. A notice under section 153A was issued to assessee in response to which he filed a return. Two questionnaires were issued to assessee which were duly complied by him. After that AO computed the total income. Assessee contended that to examine or verify any return filed under section 153A, the issuance of notice under section 143(2) was a mandatory requirement and since AO had not issued notice under section 143(2), the assessment made was void ab initio. Held: No specific notice was required under section 143(2) when the notice as required under section 153A (1)(a) was already given.

Sections 153A(1) starts with a non obstante clause stating that it was 'notwithstanding' anything contained in sections 147, 148 and 149, etc. Clause (a) thereof provides for issuance of notice to the person searched under section 132 or where documents, etc., are requisitioned under section 132A, to furnish a return of income. This clause nowhere prescribes for issuance of notice under section 143(2). Assessee sought to contend that the words, 'so far as may be applicable' made it mandatory for issuance of notice under section 143(2) since the return filed in response to a notice under section 153A was to be treated as one under section 139. [Para 11] The use of the words 'so far as may be' cannot be stretched to the extent of mandatory issue of notice under section 143(2). As is noted, a specific notice was required to be issued under clause (a) of sub-section (1) of section 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under section 143(2) could be contemplated for assessment under section 153A. [Para 13]

Income Tax Act, 1961, Section 153A

INCOME TAX ACT 1961,

--Income from undisclosed sources--Addition under section 69ACash seized from an employee--AO made addition of Rs. 10 lakhs under section 69A in respect of cash seized from an employee of assessee. Assessee contended that the amount belonged to his nephew, who had sent the money for some property transaction and said employee was acting only as a carrier. To support this contention, he filed a copy of recovery suit filed by his nephew. AO argued that the amount was seized on 20-4-2003, whereas the claim of ownership was made by nephew on 23-1-2008, much after the date of seizure also that there was no plausible explanation given by assessee as to why his employee was found in possession of cash. CIT(A) and Tribunal confirmed the addition. Held: No steps were taken by assessee or his nephew for almost 5 years. It was only when the assessment order passed, assessee's nephew submitted a claim that the money belonged to him. Further no details had been filed about the land sought to be purchased by him.

Income Tax Act, 1961, Section 69A