TaxTMI 
TaxTMI 
2020 (8) TMI 751
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....t year is the seventh assessment year for which no notice under section 153A can be issued which is mandatory for assessment under section 153A of the Act, due to which assessment becomes void. 2. That the judicial pronouncements relied upon by the assessee, have not been considered by the Ld. CIT(A). 3. That the Ld.CIT(A) has grossly erred in law and on facts of the case in sustaining the assessment order under section 153A of the Act instead of section 153C of the Act made by ACIT when there was no search authorization under section 132 of the Act in the name of the assessee without verifying the record of the revenue. 4. That the Ld. CIT(A) has erred in directing the assessee to file affidavit regarding her claim that no search authorization was in her name instead of verifying the facts from the record of revenue. 5. That the Ld. CIT(A) has grossly erred in not considering the judicial pronouncements relied upon by the assessee in case of joint operation of bank lockers and no search warrant was issued in the name of assessee then the assessing officer can not invoke the provision of section 153A of the Income Tax Act. 6. That the Ld....
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....gs conducted on the assessee and her family members under Sec. 132(1) of the Act. On being queried as regards the source of acquisition of the aforesaid jewellery, the assessee owned 950 grams (approx.) of gold jewellery. It was the claim of the assessee that 950 grams of jewellery (including diamond) was received by her at the time of her marriage from her father (since deceased). In order to substantiate her aforesaid claim, the assessee filed with the A.O a duly attested 'affidavit' of her brother i.e. Sh. Inderjit. However, the A.O was not inclined to accept the aforesaid claim of the assessee. It was noticed by the A.O that neither the assessee had ever filed her wealth tax returns in the earlier years nor furnished any evidence in respect of acquisition of the aforesaid jewellery. Accordingly, in the backdrop of his aforesaid observations, the A.O after giving benefit of 500 grams of gold jewellery as having been received by her as gifts over the years from relatives, therein treated the balance 450 grams of gold jewellery as unexplained. Observing, that the value of jewellery weighing 450 grams (24 carat) as on the date of search was Rs. 3,102/- per gram, the A.O valued t....
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...., for the reasons elaborated by him in his order declined to accept the same. Observing, that the assessment framed by the A.O was pursuant to the notices issued by him u/s 143(2) and Sec. 142(1) of the Act, and the assessee had duly participated in the course of the proceedings before the A.O, the CIT(A) was not persuaded to subscribe to the claim of the assessee that as the A.O had made a mention of Sec. 153A along with Sec. 143(3), therefore, the assessment was liable to be held as invalid and void ab initio. It was observed by the CIT(A), that the Hon'ble Supreme Court in the case of Isha Beevi Vs. TRO (1975) 101 ITR 449 (SC), had held that a mere wrong reference to a section under which an order is made would not vitiate the assessment order, but in fact the validity of the same has to be determined by seeking as to whether or not the A.O had any power to pass such an order. It was noticed by the CIT(A) that the Hon'ble Apex Court had observed that if the power was otherwise available with the A.O, the fact that the source of the power had incorrectly been described would not vitiate the order. Accordingly, on the basis of his aforesaid observation, the CIT(A) was of the view ....
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....r hands. As regards the observations of the A.O that the assessee had not filed any wealth tax returns, failing which her aforesaid claim that the jewellery was gifted to her at the time of marriage could not be accepted, it was submitted by the assessee before the CIT(A) that as her net wealth was below the exemption limit over the years under the Wealth Tax Act, 1957, therefore, there was no obligation for her to file her wealth tax returns. However, the CIT(A) after deliberating on the aforesaid contention of the assessee was not persuaded to subscribe to the same. Observing, that as the assessee had failed to show that the said jewellery was declared to the income tax department either by her or by her father, the CIT(A) was of the view that no infirmity did emerge from the order of the A.O, who in all fairness after allowing the benefit of 500 grams of gold jewellery as having been received by the assessee as gifts from her relatives over the years, had rightly treated the balance gold jewellery of 450 grams as an unexplained investment within the meaning of Sec. 69B of the Act. Accordingly, the CIT(A) sustained the addition of Rs. 13,95,900/- made by the A.O under Sec. 69B of....
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....tly described would not vitiate the order passed by him. Now, in the case before us, we find that the A.O who was duly vested with the jurisdiction to frame the assesement under Sec. 143(3), had inadvertently made a mention of Sec. 153A along with Sec. 143(3) of the Act. In our considered view, the aforesaid mistake cannot be stretched to the extent for rendering the assessment framed by the A.O under Sec. 143(3), as invalid and void ab-initio on the said count. Accordinly, finding no substance in the aforesaid claim of the assesee, we decline to accept the same and uphold the view taken by the CIT(A) who had rightly dismissed the same. Also, we are in agreement with the view taken by the CIT(A), that as a restraint order as regards operation of the bank lockers of the assesee was issued by the ADIT(Inv.), Jalandhar, therefore it could safely be concluded that a search warrant under Sec. 132 was issued in the name of the assesee. The Ground of Appeal No.1 to 5 are dismissed. 7. We shall now advert to the claim of the assessee that the lower authorities had erred in treating 450 grams of gold jewellery (out of 950 grams) as an unexplained investment under Sec. 69B of the Act, ....
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....deliberated at length on the issue under consideration and find substantial force in the claim of the Ld. A.R. As observed by us hereinabove, it is a matter of fact borne from the records that no part of gold jewellery weighing 2272.30 grams that was found in the course of the search proceedings from the residence/bank lockers of the assessee and her family members could be specifically related to the assessee. In fact, it was only pursuant to the claim of the assessee that she had received 950 grams of gold jewellery (including diamond) at the time of her marriage from her father(since deceased), that the A.O on the basis of such standalone statement of her had related the ownership of 950 grams of gold jewellery (out of 2272.30 grams) to the assessee. In sum and substance, the basis for holding the assessee as the owner of 950 grams of gold jewellery (including diamond) was her claim filed before the A.O. In our considered view, if the claim of the assessee which she had supported on the basis of an 'affidavit' of her brother Sh. Inderjit, that she was the owner of 950 grams of gold jewellery (out of 2272.30 grams) was to be accepted, then we find no reason that as to why the sou....
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....exemption limit contemplated in the Wealth Tax Act, 1957, therefore, she was under no obligation to file the returns for the said years. In order to fortify her aforesaid claim, the assessee had furnished the details as regards the value of the 950 grams of gold jewellery, as against the basic exemption limit as was available over the years under the Wealth Tax Act, 1957, as under :- Assessment Year Weight of Jewellery in gram Value of Jewellery at the Market rate of respective Assessment Year and as per method of valuation of Gold Ornaments Initial exemption limit 1993-94 950 GRAMS 3,10,707/- 15,00,000/ 1994-95 950 GRAMS 3,45,980/- 15,00,000/ 1995-96 950 GRAMS 3,51,234/- 15,00,000/ 1996-97 950 GRAMS 3,90,260/- 15,00,000/ 1997-98 950 GRAMS 3,60,240/- 15,00,000/ 1998-99 950 GRAMS 3,03,577/- 15,00,000/ 1999-00 950 GRAMS 3,20,839/- 15,00,000/ 2000-01 950 GRAMS 3,27,969/- 15,00,000/ 2001-02 950 GRAMS 3,06,579/- 15,00,000/ 2002-03 950 GRAMS 3,79,753/- 15,00,000/ 2003-04 950 GRAMS 3,94,763/- 15,00,000/ 2004-05 950 GRAMS 4,54,053/- 15,....
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.... of the Ld. A.R that in the totality of the facts of the case the value of 450 grams of gold jewellery (out of 950 grams) could not have been brought to tax under Sec. 69B of the Act. Before proceeding any further, it would be relevant to cull out Sec. 69B of the Act, which reads as under : "69B. Where in any financial year the assessee had made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year". On a perusal of the aforesaid statutory provision, we find that the same can be invoked only where the assessee had made investment or is found to be the owner of any bullion, jewellery or other valuable article and the A.O f....
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....to the income of the assessee. In our considered view, the very basis for invoking the provisions of Sec. 69B in the case of the assessee before us are found to be seriously amiss viz. (i) that, as the assessee was not maintaining any books of account, therefore, the issue of recording of the investment in the 450 grams of gold jewellery cannot be comprehended; and (ii) that, in the absence of recording of the investment in 450 grams of gold jewellery in the books of account, there could have been no occasion for making of an addition of the excess unrecorded value of such investment under Sec. 69B of the Act. On the basis of our aforesaid deliberations, we are of a strong conviction that in the totality of the facts of the case the A.O could not have made the addition as regards the impugned value of the 450 grams of gold jewellery under Sec. 69B of the Act. As such, we are in agreement with the contention advanced by the Ld. A.R that the impugned addition could not have been made by the A.O under Sec. 69B of the Act. In the backdrop of our aforesaid observations, we herein conclude that the impugned addition of Rs. 13,95,900/- made by the A.O as regards the 450 grams of gold j....
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.... all the Benches of the Tribunal. In the meanwhile (emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is closed for judgment". In the rule so framed, as a result of these directions, the expression "ordinarily" has been inserted in the requirement to pronounce the order within a period of 90 days. The question then arises whether or not the passing of this order, beyond a period of ninety days in the case before us was necessitated by any "extraordinary" circumstances. 12. We find that the aforesaid issue after exhaustive deliberations had been answered by a coordinate bench of the Tribunal viz. ITAT, Mumbai 'F' Bench in DCIT, Central Circle-3(2), Mumbai Vs. JSW Limited & Ors. [ITA No. 6264/Mum/18; dated 14/05/2020, wherein it was observed as under: "Let us in this light revert to the prevailing situation in the country. On 24th March, 2020, Hon'ble Prime Minister of India took the bold step of imposing a nationwide lockdown, for 21 days, to prevent the spread of Covid 19 epidemic, and this lockdown was ext....
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.... rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only in consonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon'ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon'ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed "while calculating the time for dispo....