TaxTMI 
TaxTMI 
2017 (10) TMI 1009
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.... to have been initiated under section 158 BD, the provision that concerns the undisclosed income belonging to some person other than the one regarding whom the search was made. 3. Acting on the Appellate Commissioner's direction, the Assessing Officer, on 28 July 2005, passed orders afresh: He determined the total undisclosed income at Rs. 2,02,71,670/-. On appeal, the Appellate Commissioner confirmed the assessment order. Aggrieved, Premkumar approached the Appellate Tribunal, which reversed the findings and ruled in Premkumar's favour. Now, the Revenue came in appeal before this Court. 4. The Tribunal had "no hesitation to quash the 158BD assessment in the case." But it dismissed the surcharge issue covering Rs. 20,67,710/- as "not pressed" by assessee-Premkumar. The Adjudicatory Ambit: 5. The Assessing Officer, to his credit, reassessed the case on remand and passed an order solid on facts and sound in reasoning. The Assessing Officer has, overall, done an impeccable job-its correctness not counting here. When the matter finally reached the Tribunal, it allowed the second appeal, excluding the issue 'not pressed' by Premkumar. 6. Here, we must observe that, more than merit....
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....ck period: Assessment Year AY Undisclosed Income Rs. AY 1991-92 8,400 AY 1992-93 10,739 AY 1993-94 28,608 AY 1994-95 14,48,762 AY 1995-96 13,40,567 AY 1996-97 12,24,797 AY 1997-98 18,53,241 AY 1998-99 36,14,112 AY 1999-2000 45,43,633 AY 2000-01 46,01,2011 AY 2001-02 (Part) 15,97,600 Total Undisclosed Income 2,02,71,670 13. Finally, Assessing Officer directed Premkumar to pay, on the above undisclosed income, tax as follows: 14. Income Tax: Rs. 1,21,63,002/-; surcharge (at 17%): Rs. 20,67,710/-; Addl. Interest (u/s.158BFA for 18 months):Rs. 26,32,679/-. Total tax and interest payable was rounded to Rs. 1,68,63,390/- The Tribunal's Findings: (A) About the Properties: (i) Immovable: 15. Only two properties, out of nine, were in the assessee's name. The residential property was purchased in 1990-91 and was shown in the regular return filed for the relevant assessment year. About the 1/3rd share in the land at Mundaveli, the assessee explained that he used his 'chit' amount to buy it. (ii) Movable: 16. The movable properties belong to the family members, all of whom are individual assessees (B) About the Income: 17. All the records were seized o....
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.... ""Binani Zinc Diary"" found because of such simultaneous action, though seized by the CBI, is "evidence found a s result of search" within the meaning of section 158BB and can be used for computation of undisclosed income under section 158BC or 158BD, as the case may be, asserts the learned Senior Counsel. Assessee"s: 25. Sri K. I. Mayankutty Mathar, the learned counsel for assessee-Premkumar, has supported the Tribunal"s findings in their entirety. According to him, both the Assessing Officer and the Appellate Commissioner have misdirected themselves. And the Tribunal has corrected what he terms the glaring adjudicatory lapses and, so, quashed the proceedings, justly. 26. According to Sri Mather, the Appellate Commissioner"s direction to the Assessing Officer to reassess Premkumar under section 158 BD amounts usurpation of his legitimate adjudicatory powers as a primary authority. So he asserts that the resultant reassessment has been vitiated. To repel the Revenue"s contention that Premkumar ought to have challenged the Appellate Commissioner"s findings-remand and direction to reassess under a particular provision-Sri Mather submits that once an authority lacks power, the or....
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....1) (a) has an appendage: "or he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given by the Commissioner (Appeals) and after making such further inquiry as may be necessary, the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment;". 31. Sri Mather relies on a CBDT"s circular to drive home how the amendment has affected the Appellate Commissioner"s powers. He has cited the circular in his written submissions. Para 78 of the clarificatory circular notes that the power of the Appellate Commissioner does not include the power to set aside the assessment. It was to finalize the assessment early and to avoiding prolonged litigation. The Appellate Commissioner will not set aside the assessment and refer the case back to the Assessing Officer for making fresh assessment. But the Appellate Commissioner continues to have the powers under Section 250 to inquire further, or to direct the Assessing Officer to inquire and report the result to him. After receiving the Assessing Officers" ....
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....y holds in Dhirendra Nath that where the court acts without inherent jurisdiction, a party affected cannot by waiver confer jurisdiction on it, which it has not. Where such jurisdiction is not wanting, a directory provision can obviously be waived. But a mandatory provision can only be waived if it is not conceived in the public interests, but in the interests of the party that waives it. 37. A distinction exists between the provisions that confer jurisdiction and those that regulate procedure. Jurisdiction can neither be waived nor created by consent, holds a Constitution Bench of the Supreme Court in Supdt. of Taxes, Dhubri v. Onkarmal Nathmal Trust AIR 1975 SC 2065. A procedural provision may be waived by conduct or agreement. Quoting with approval Kammins Ballrooms Co. Ltd. v. Zenith Investments (Torquay) Ltd., 1971 A.C. 850. Onkarmal, per C. N. Ray, C.J., further observes that waiver arises where a person is entitled to alternative rights inconsistent with one another. A person is sometimes said to have "waived" " the alternative right, as for instance a right to forfeit a lease or to rescind a contract of sale for wrongful repudiation or breach of condition. This is also som....
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.... strictly conform with the statutory mandate, he has, at best, exercised his power irregularly-or even illegally. But, by no stretch, he acted without authority; nor has his order become nullity. 44. When an order under section 271 (1) (C) is passed in violation of section 274 (1), it is statutory violation, observes the High Court of Andhra Pradesh in Thakur V. Hari Prasad. The order may have violated a statute, and it may amount to an illegal order. But it can be corrected under section 254 of the Act. The order does not, thereby, become void. Uncorrected in appropriate proceedings, the order continues to hold good and remains in currency. 45. In Sea Pearl Industries the Supreme Court examined Section 80-HHC of the Act. The Court observed that the object of Section 80- HHC is to grant an incentive to earners of foreign exchange. The matter will, therefore, must be considered by referring to this object. In other words, Sea Pearl advocates the well-entrenched rule of purposive interpretation. 46. In Okayti Tea, relied on by the Revenue, the Calcutta High Court has held that it is not open to a party to make a grievance about applying a rule unless he comes up with appropriate p....
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....atisfaction in writing. It finally holds that the validity of assessment is not affected from the Assessment Officer"s failure to record his satisfaction under Section 158BD; it is only to transfer the file. Once the file is transferred, the transferring officer becomes functus officio and the jurisdiction for all purposes is transferred to the officer to whom file is transferred and who has jurisdiction to assess the Assessee about whom details are obtained while searching another assessee. 50. Contrary to Panchajanyam are the Supreme Court"s precedents. While dealing with a taxing provision, the principle of "strict interpretation" should be applied. The court shall not, observed the Supreme Court in Sneh Enterprises v. Commr. of Customs (2006) 7 SCC 714, interpret the statutory provision in such a manner as would create an additional fiscal burden on a person. It is also trite that while two interpretations are possible, the court ordinarily would interpret the provisions in favour of a taxpayer and against the Revenue. 51. Quoting Sneh Enterprises with approval, another Division Bench of the Supreme Court in Manish Maheshwari v. CIT (2007) 3 SCC 794 has held that section 158-....