| Question And Answer | |
|---|---|
| Subject: | 153C proceedings |
| Category: | Income-Tax |
| Querist: | manali |
| Answered by: | KSA Legal Chambers, reserch team |
| Tags: | assessment of any other person, search, search assessment |
| Date: | August 7, 2023 |
Assessee is an individual and regular in filling his return of income. Assessee has received the Notice U/Sec.153C for A.Y. 2019-20 and preceding 6 years on the basis of noting on the seized papers found during the course of search with the Developer from whom assessee has purchased the flat and statement given by the CFO of the developer U/SEc.132(4) of the Act that noting on seized paper is cash component in the transaction of purchase of flat and assessee has also accepted that said amount as on Money in the application made before the settlement commission and therefore the AO of the assessee has drawn the inference that that there is undisclosed income in the hands of the assessee and accordingly the satisfaction U/Sec. 153C has been recorded for initiating the proceedings for A.Y. 2019-20 and 6 years prior to A.Y. 2019-20.
The seized paper do not give any date or reference of project where flat purchase by the assessee or any signature of the assessee, even the name mentioned on the seized paper is not the full name of the assessee.
Issues :
1.whether action of the AO for issuance of Notice U/Sec.153C for A.Y. 2019-20 and 6 years prior to A.Y. 2019-20 is valid?
2. The ground taken by the AO about acceptance of CFO in statement U/SEc. 132(4) and acceptance of on money as per noting by the assessee before Settlement Commission is sacrosanct and drawing the inference about the assessee must have paid on Money is correct?
3. what is remedy available to the assessee?
pl guide
The assessee has to file the return in response to notice . The Assessing Officer must have recorded the satisfaction before the issue of the notices . However on merit no addition can be made in the assessment of the assessee , merely relying on the statement u/s 132(4) of the Act of the CFO of the company and offer made before the Settlement Commission . The assessee should ask for the copy of the statement recorded and an opportunity of cross examination. Without furnishing the copy of the statement and without giving an opportunity of cross examination addition cannot be made . In Neesa Technologies Pvt. Ltd. v. DCIT (2022) 217 TTJ 649/ 214 DTR 172 ( Ahd )(Trib) after referring the judgement of the Apex Court in CIT v. Sinhgad Technical Education Society(2017) 397 ITR 344 (SC) held that it is a jurisdictional requirement for invoking section 153C of the Act that the incriminating material should pertain to that particular year in which it is sought to be invoked. Refer , Dy. CIT v. Late Smt. Puspa Goyal Through Legal Munna Lal Goyal ( 2022) 217 TTJ 65 (UO)(Jaipur ) (Trib) wherein the Tribunal held that just because the builder has approached the settlement commission and agreed for receipt of on money , addition cannot be made in the assessments of the purchasers . In Kishanchand Chellaram v. CIT (1980) 125 ITR 713 (SC), Andaman Timber Industries v. CCE (2015) 127 DTR 241 / 281 CTR 241 (SC) , the Apex Court held that without giving an opportunity of cross examination , addition cannot be made on the basis of the statement of third parties .