2022 (2) TMI 497 - HC - Income Tax

Court affirms ITAT decision, upholds additions to taxable income, rejects Assessee's appeal.

P. Aruna Kumari Patro Versus Income Tax Officer and Others

The Court upheld the ITAT decision in favor of the Department, dismissing the appeal. The Court found that the Assessee's failure to raise jurisdiction ... Reopening of assessment u/s 147 - unexplained investment - Appellant - Assessee submitted that even if the explanation offered by the Appellant was not satisfactory the authorities should have applied their discretion properly and ought not to have made the addition mechanically - HELD THAT:- The Court is unable to agree with the above submission of learned counsel for the Appellant that the additions were made mechanically. At every stage the AO, the CIT(A) and the ITAT have granted the Appellant some relief. As regards the addition of ₹ 5,01,000/- there have been concurrent findings by the AO, the CIT(A) and the ITAT. Each of their orders is well reasoned, giving complete reasons. The Court is, therefore, not persuaded to interfere with their concurrent findings. On a careful perusal of the entire record, the Court is of the view that there was justification for the Department invoking Section 147 of the IT Act. The Court finds no reason to interfere. - Decided against assessee. Issues Involved:Appeal arising from ITAT order for AY 2004-05; Questions on jurisdiction, additions made under Section 68, application of Section 68, and correctness of ITAT decisions.Jurisdiction Question (Section 147):The issue raised was whether the ITAT was correct in ignoring the jurisdiction question of law under Section 147 of the IT Act. The Respondent argued that since the Assessee did not press this issue before the ITAT, they should be precluded from raising it now. The Assessee also did not press the issue regarding disallowance under Section 40A(3) of the IT Act. The Court found that since the Assessee did not file for rectification or review, they cannot raise these issues at this stage. Consequently, the Court decided this issue in favor of the Department due to the Assessee giving up the plea regarding Section 147 before the ITAT.Additions Made and Application of Section 68:The total additions made by the AO to the taxable income of the Assessee were challenged. The AO made additions totaling Rs. 9,41,000 treated as 'unexplained' investment. The CIT(A) further deleted an addition of Rs. 2,40,000, sustaining a total addition of Rs. 7,01,000. The ITAT reduced the addition to Rs. 5,01,000. The Assessee argued that the authorities should have applied discretion properly and not made the addition mechanically. However, the Court found that at each stage, the authorities granted some relief to the Appellant. The Court upheld the concurrent findings of the AO, CIT(A), and ITAT, stating that the additions were not made mechanically, and there was justification for invoking Section 147 of the IT Act.Merits of the Case and ITAT Decisions:The Appellant's counsel argued that the addition was made based on surmises and conjectures despite a satisfactory explanation being given. The Court disagreed, stating that each order by the AO, CIT(A), and ITAT provided well-reasoned decisions with complete justifications. The Court refused to interfere with their concurrent findings. The Appellant's reliance on decisions from the Madras High Court was deemed irrelevant. The Court upheld the decisions against the Assessee and in favor of the Department, dismissing the appeal accordingly.