Tribunal partially allows assessee's appeals on jurisdiction and notice issues, directs deletion of additions.

The tribunal partly allowed the assessee's appeals, dismissing the grounds related to jurisdiction under Section 147 and non-issuance of notice under Section 143(2). However, the tribunal allowed the grounds concerning additions under Section 69A and violation of natural justice and fairness principles, directing the deletion of the additions made by the Assessing Officer.

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Issues Involved:
1. Validity of the jurisdiction assumed by the Assessing Officer (A.O.) under Section 147 of the Income Tax Act.
2. Validity of the assessment framed without issuing a notice under Section 143(2) of the Income Tax Act.
3. Legitimacy of the addition of Rs. 4,05,000/- and Rs. 1,27,75,000/- made by the A.O. under Section 69A of the Income Tax Act.
4. Allegations of violation of the principles of natural justice and fairness by the CIT(A).

Issue-wise Detailed Analysis:

1. Validity of the jurisdiction assumed by the A.O. under Section 147 of the Income Tax Act:
The assessee contended that the A.O. wrongly assumed jurisdiction and initiated proceedings under Section 147 without obtaining the necessary sanction under Section 151(2). The tribunal admitted this legal ground based on the Supreme Court decision in National Thermal Power Co. Ltd. vs. CIT. However, the A.O. provided evidence of obtaining the necessary sanction, and the tribunal found no violation of Section 151(2). Consequently, the tribunal dismissed this ground, stating that the assessee should have consulted the assessment record before raising this issue.

2. Validity of the assessment framed without issuing a notice under Section 143(2) of the Income Tax Act:
The assessee argued that the A.O. erred in law by framing the assessment without issuing a notice under Section 143(2). The tribunal noted that the assessee participated in the assessment proceedings without raising any objection about the non-issuance of the notice. Citing the Supreme Court decision in ACIT vs. Hotel Blue Moon and the Punjab & Haryana High Court decision in CIT vs. Ram Narain Bansal, the tribunal held that non-issuance of notice under Section 143(2) is not fatal if the assessee participated in the proceedings. Thus, the tribunal dismissed this ground as well.

3. Legitimacy of the addition of Rs. 4,05,000/- and Rs. 1,27,75,000/- made by the A.O. under Section 69A of the Income Tax Act:
The A.O. made additions of Rs. 4,05,000/- and Rs. 1,27,75,000/- to the assessee's income, considering them as unexplained money under Section 69A. The assessee argued that these amounts were transferred from the bank account of M/s. Meghna Impex, owned by Sh. Satbir Singh, and that the cheque books were stolen and misused by unknown persons. The tribunal found that the A.O. did not make proper inquiries to ascertain the real ownership of the funds and relied on the statement of Sh. Satbir Singh without substantial evidence. The tribunal held that the amounts should not be taxed in the hands of the assessee, as the deposits were explained to have originated from M/s. Meghna Impex. Therefore, the tribunal directed the deletion of the additions.

4. Allegations of violation of the principles of natural justice and fairness by the CIT(A):
The assessee claimed that the CIT(A) acted in gross violation of the principles of natural justice and fairness by sustaining the assessment based on assumptions and presumptions. The tribunal noted that the CIT(A) dismissed the assessee's objections without proper consideration of the evidence and explanations provided. The tribunal found the CIT(A)'s approach arbitrary and not supported by concrete material. Consequently, the tribunal allowed the assessee's grounds related to the violation of natural justice and fairness.

Conclusion:
The tribunal concluded that the appeals filed by the assessee were partly allowed. The tribunal dismissed the grounds related to the jurisdiction under Section 147 and the non-issuance of notice under Section 143(2). However, the tribunal allowed the grounds related to the additions under Section 69A and the violation of the principles of natural justice and fairness, directing the deletion of the additions made by the A.O.

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