2021 (3) TMI 323 - AT - Income Tax

Tribunal upholds revenue's action under Section 153A, sets aside CIT(A) order, dismisses assessee's appeals.

The Tribunal dismissed the assessee's appeals, upholding the validity of proceedings under Section 153A, additions by the Assessing Officer, and the ... Rectification u/s 154 - Assessment u/s 153A - Addition made towards unexplained investment - HELD THAT:- The powers conferred by the statute u/s 154 of the Act on the CIT(A) are very limited and are circumscribed by the restrictions mentioned therein. In the case on hand, on earlier occasion, the CIT(A) has passed his order purely based on facts and material produced before us which alone forms basis for the CIT(A) to decide the issue, where the decision of the CIT(A) is right or wrong is a different issue which cannot be adjudicated by way of proceedings u/s 154 of the Act. The facts remain that the CIT(A) after duly considering all aspects and applying his mind, has taken conclusive and conscious view though in the opinion of the assessee is wrong, cannot be said to be mistake apparent from record since the said view has been arrived at after due application of mind to the facts and circumstances of the case and the relevant material on record. More so, the view of the CIT(A) was confirmed by the Tribunal vide their order dated 14.7.2017. It is well settled that a mistake apparent on record must be an obvious and blatant mistake and not something which could be arrived by a long drawn process of reasoning on accounts on which there may be conceivably two opinions. In the present case, the CIT(A) have categorically decided the issue against the assessee in first round that also confirmed by the Tribunal after considering the materials available on record and applying the mind such finding of the CIT(A) cannot be challenged by way of proceedings u/s 154. Entertaining the application filed by assessee u/s 154 would only amounting to review of the earlier order of the CIT(A) for which the CIT(A) has no power as discussed earlier. In case the assessee is aggrieved against the decision of the CIT(A), the remedy de-facto does not allow by way of proceedings u/s 154 of the Act before CIT(A) to readdress the grievance of the assessee but elsewhere. In view of the above discussion, we are of the opinion that there is no mistake apparent on record in the order of the CIT(A) which can be legally rectified by way of proceedings u/s 154 of the Act by the assessee. Therefore, we are unable to agree with the finding of the CIT(A) in his proceedings u/s 154. Issues Involved:1. Violation of the principle of natural justice.2. Validity of proceedings initiated under Section 153A of the Income Tax Act.3. Additions/reassessments made by the Assessing Officer.4. Jurisdiction of CIT(A) under Section 154 of the Income Tax Act.Detailed Analysis:1. Violation of the Principle of Natural Justice:The assessee contended that the CIT(A) did not provide a proper opportunity for a hearing. The CIT(A) issued multiple notices, which were either not claimed or refused by the assessee. The Tribunal found that the CIT(A) had given sufficient opportunities to the assessee, who avoided the proceedings. The Tribunal upheld the CIT(A)’s view that the assessee was avoiding the notices and was not serious about presenting its case.2. Validity of Proceedings Initiated Under Section 153A:The assessee argued that no incriminating documents were found during the search, making the proceedings under Section 153A invalid. The Tribunal noted that a search was conducted at the assessee’s premises, and an MOU indicating unexplained investments was found. The Tribunal held that the initiation of proceedings under Section 153A was mandatory following a search and seizure action, regardless of whether incriminating material was found. The Tribunal upheld the CIT(A)’s decision, affirming the validity of the proceedings under Section 153A.3. Additions/Reassessments Made by the Assessing Officer:The assessee claimed that they were not given a proper opportunity to present their case on merits. The Tribunal found that the assessee avoided the service of notices and did not cooperate during the proceedings. The Tribunal noted that the CIT(A) had given more than sufficient opportunities to the assessee. The Tribunal upheld the additions made by the Assessing Officer, as the assessee failed to provide any material to counter the findings of the Assessing Officer.4. Jurisdiction of CIT(A) Under Section 154:The CIT(A) had initially upheld the additions made by the Assessing Officer. However, upon a petition under Section 154, the CIT(A) deleted the additions. The Tribunal found that the CIT(A)’s order under Section 154 amounted to a review of the earlier order, which is not permitted under the provisions of Section 154. The Tribunal held that the CIT(A) had no jurisdiction to entertain the application under Section 154, as there was no apparent mistake on record. The Tribunal allowed the revenue’s appeals, setting aside the CIT(A)’s order under Section 154.Conclusion:The Tribunal dismissed the appeals of the assessee and upheld the validity of the proceedings under Section 153A, the additions made by the Assessing Officer, and the initial order of the CIT(A). The Tribunal also ruled that the CIT(A) exceeded his jurisdiction under Section 154, and thus, the revenue’s appeals were allowed. The assessee’s cross-objections and appeal were dismissed as infructuous.