2018 (10) TMI 1584 - AT - Income Tax

Tribunal upholds reassessment validity and addition under Section 69C, dismisses appeal

Sushil Bansal Versus ACIT, Circle 57 (1), New Delhi

Sushil Bansal Versus ACIT, Circle 57 (1), New Delhi - TMI Issues Involved:1. Validity of the reassessment proceedings under Section 147/148.2. Jurisdiction of the Assessing Officer to issue notice under Section 148.3. Proper service of notice under Section 148.4. Application of mind by the Assessing Officer in recording reasons for reopening.5. Sanction for issuance of notice under Section 151.6. Merits of the addition of Rs. 23,00,000 under Section 69C.Detailed Analysis:1. Validity of the reassessment proceedings under Section 147/148:The assessee challenged the reassessment proceedings on multiple grounds, including the lack of proper service of notice, non-application of mind by the Assessing Officer, and the absence of sanction from the competent authority. The Tribunal found that the information received by the Assessing Officer was specific and detailed, containing the name, address, and payment details related to the capitation fee. The Tribunal held that the Assessing Officer had a prima facie reason to believe that income had escaped assessment, justifying the reopening of the case under Section 147.2. Jurisdiction of the Assessing Officer to issue notice under Section 148:The assessee contended that the notice under Section 148 was issued without jurisdiction. The Tribunal noted that the address used by the Assessing Officer was the last available address provided by the assessee during the admission of his son to the medical college. The Tribunal held that the assessee did not question the jurisdiction of the Assessing Officer during the assessment proceedings and thus could not challenge it at the appellate stage.3. Proper service of notice under Section 148:The assessee argued that the notice was not properly served. The Tribunal found that the notice was sent to the last available address and was received by the tenant, who handed it over to the assessee's brother. The Tribunal concluded that the notice was duly served, as the assessee appeared before the Assessing Officer and participated in the proceedings.4. Application of mind by the Assessing Officer in recording reasons for reopening:The assessee claimed that the Assessing Officer did not independently apply his mind and merely relied on the information from the Investigation Wing. The Tribunal observed that the information received was specific and detailed, and the Assessing Officer had recorded reasons based on this information. The Tribunal held that the Assessing Officer had applied his mind and formed a prima facie belief that income had escaped assessment, thus justifying the reopening.5. Sanction for issuance of notice under Section 151:The assessee contended that no proper sanction was obtained under Section 151 before issuing the notice under Section 148. The Tribunal found that the notice was issued within the period of four years from the end of the relevant assessment year, and thus, the requirement for sanction under Section 151(2) did not apply. The Tribunal held that the decisions relied upon by the assessee on this issue were not applicable to the present case.6. Merits of the addition of Rs. 23,00,000 under Section 69C:The assessee did not argue on the merits of the addition. The Tribunal noted that the assessee and his father-in-law did not provide any evidence to disprove the payment of capitation fee. The Tribunal found no infirmity in the conclusions reached by the authorities below and upheld the addition of Rs. 23,00,000 under Section 69C.Conclusion:The Tribunal dismissed the appeal, holding that the reassessment proceedings were valid, the notice under Section 148 was properly served, and the Assessing Officer had applied his mind in recording reasons for reopening. The Tribunal also upheld the addition of Rs. 23,00,000 under Section 69C.