TaxTMI 
TaxTMI 
2019 (3) TMI 215
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....The assessee apart from challenging the addition on merits has raised additional ground of appeal challenging jurisdiction of Commissioner of Income Tax (Appeals) in enhancing income from fresh source that has not been subject of assessment. 3. Shri Pramod Shingte appearing on behalf of the assessee submitted that the assessee is engaged in manufacturing of poultry farm products. The assessee filed its return of income on 29-09-2011 declaring total income of Rs. 3,59,56,837/-. In scrutiny assessment proceedings, the Assessing Officer made part disallowance of Rs. 9,66,383/- in respect of assessee's claim of deduction u/s. 80IA of the Act. Aggrieved against partial disallowance of deduction u/s. 80IA, the assessee filed appeal before t....
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....66 ITR 505 no disallowance u/s. 14A(2) is called for. The ld. AR further contended that for making disallowance u/s. 14A r.w.r. 8D it is mandatory to record satisfaction. In this case disallowance u/s. 14A has been made by the Commissioner of Income Tax (Appeals), however, before making disallowance, the Commissioner of Income Tax (Appeals) has not recorded satisfaction. Thus, the addition made u/s. 14A r.w.r. 8D is liable to be set aside. 4. On the other hand Shri Aseem Sharma representing the Department vehemently defended the impugned order. The ld. DR submitted that the Commissioner of Income Tax (Appeals) before enhancing the income of assessee had issued notice to the assessee. The Commissioner of Income Tax (Appeals) has sought re....
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....structure Ltd. Vs. Joint Commissioner of Income Tax (supra) has dealt with issue in detailed and after placing reliance on various decisions has deleted addition made by Commissioner of Income Tax (Appeals) on fresh source of income during First Appellate stage. The relevant extract of findings of Tribunal in the aforesaid case reads as under : "12. In ground Nos. 5 and 6 the assessee has assailed the addition of Rs. 7,37,68,681/- made u/s. 2(22)(e) of the Act by the Commissioner of Income Tax (Appeals). The Assessing Officer in his order has not touched upon the issue of deemed dividend. The Commissioner of Income Tax (Appeals) has observed that the assessee has violated the provisions of section 42 of the Companies Act. The subsi....
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....s also possible. On the other hand, it must not be overlooked that there are other provisions like sections 34 and 33B, which enable escaped income from new sources to be brought to tax after following a special procedure. The assessee contends that the powers of the Appellate Assistant Commissioner extend to matters considered by the Income tax Officer, and if a new source is to be considered, then the power of remand should be exercised. By the exercise of the power to assess fresh sources of income, the assessee is deprived of a finding by two tribunals and one right of appeal. 9. The question is whether we should accept the interpretation suggested by the Commissioner in preference to the one, which has held the field for nearl....
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....e sources of income which have been the subject matter of consideration by the Income tax Officer from the point of view of taxability. In this context " consideration " does not mean " incidental " or " collateral " examination of any matter by the Income tax Officer in the process of assessment. There must be something in the assessment order to show that the Income tax Officer applied his mind to the particular subject matter or the particular source of income with a view to its taxability or to its non taxability and not to any incidental connection". The law laid down by the Hon'ble Apex Court has been reiterated by the full Bench of the Hon'ble Delhi High Court in the case of Commissioner of Income Tax Vs. Sardari Lal & Co. (....
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....te Bench in the cases of M/s. Vijay Builders Vs. Income Tax Officer (supra) and M/s. Jaihind Engineers Vs. Income Tax Officer (supra). 8. The ld. AR has asserted that before invoking the provisions of section 14A r.w.r. 8D no satisfaction has been recorded by the Commissioner of Income Tax (Appeals) as envisaged u/s. 14A (2) & (3). A perusal of impugned order shows that the Commissioner of Income Tax (Appeals) has placed reliance on various decisions of Hon'ble Supreme Court of India and Hon'ble High Courts before invoking the provisions of section 14A r.w.r. 8D. However, no satisfaction per se as contemplated u/s. 14A (2) & (3) has been recorded. The road to Rule 8D passes through sub-section (2) and (3) of section 14A. In catena of jud....