Appeal Dismissed: No Substantial Legal Question, Invalid Jurisdiction & Assessment for AY 2011-12 in Tax Case.

The appeal was dismissed as no substantial question of law was involved. The HC upheld the concurrent findings of the CITA and ITAT, declaring the proceedings under Section 153C of the Income Tax Act invalid due to lack of jurisdiction. The AO's addition of Rs. 9,63,00,000/- under Section 68 was deemed untenable, as no undisclosed assets were found. Furthermore, the failure to issue a mandatory notice under Section 143(2) invalidated the assessment for AY 2011-12.

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Issues Involved:
1. Validity of the proceedings initiated under Section 153C of the Income Tax Act.
2. Requirement of jurisdictional fact for invoking Section 153C.
3. Validity of additions made under Section 68 of the Income Tax Act.
4. Requirement of issuing mandatory notice under Section 143(2) of the Income Tax Act.

Summary:

1. Validity of the proceedings initiated under Section 153C of the Income Tax Act:
The assessment was conducted for the year 2018/2019, and notices were issued under Section 153A assuming the respondent was searched, which was incorrect. The assessee raised objections challenging the validity of the notices issued under Section 153C for AY 2011-12, arguing that it was beyond the normal period of six assessment years and reopening the ninth AY was beyond jurisdiction. The AO did not provide details of the 'unexplained asset' found during the search, leading to the conclusion that the proceedings initiated under Section 153C were invalid.

2. Requirement of jurisdictional fact for invoking Section 153C:
The assessee contended that the AO could not have assumed jurisdiction under Section 153A without possessing undisclosed/unaccounted assets valued at Rs. 50 lacs or more. The ITAT observed that the satisfaction note did not reveal any 'asset' that had escaped assessment. The AO's case was based on journal and bank ledgers, which were part of regular books of accounts, and no undisclosed assets were found. The concurrent decisions of the CITA and ITAT concluded that the addition made by the AO was without jurisdiction.

3. Validity of additions made under Section 68 of the Income Tax Act:
The AO added Rs. 9,63,00,000/- as unexplained cash credit under Section 68, despite the assessee's explanation that the transaction was disclosed in regular books of accounts. The ITAT held that the addition was made without jurisdiction as no undisclosed assets were found. The addition on account of unexplained 'cash credit' could not be made unless there was an initial addition of undisclosed 'asset' valued at Rs. 50 lacs or more.

4. Requirement of issuing mandatory notice under Section 143(2) of the Income Tax Act:
The learned CIT(A) found that the AO had not issued the mandatory notice under Section 143(2) after the assessee filed the return of income, which vitiated the assessment for AY 2011-12. The ITAT upheld this finding, reinforcing that the assessment was invalid.

Conclusion:
The appeal was dismissed as it did not involve any substantial question of law, and the concurrent findings of the CITA and ITAT were upheld. The AO's action of adding Rs. 9,63,00,000/- under Section 68 was found to be untenable in law, and the proceedings under Section 153C were deemed invalid for want of jurisdiction.

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