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Sekar Jayalakshmi, Chennai vs. Income Tax Officer - (Income Tax Appellate Tribunal) (21 Dec 2022)

CIT(A) cannot change the provision of law qua the item of which assessment was made


Direct Taxation

The assessee filed her return of income for the assessment year 2011-12 returning total income of ₹.2,35,280. During the course of remand proceedings relating to assessment year 2012-13, the assessee submitted certain working to show "summary for cash transaction", "individual capital account and balance sheet" and copy of bank account statement of Tamilnad Mercantile Bank.

The assessee has submitted before the Assessing Officer that, the 2 entries of ₹.3 lakhs each were given by her husband S. Sekar, but the assessee has not supported by proof. Similarly, the source for ₹.8,28,000 was also not given. Accordingly, the Assessing Officer reopened the assessment under Section 147 of the Income Tax Act, 1961 and after following due procedures, the assessment was completed under Section 143(3) read with Section 147 of the IT Act assessing total income of the assessee at ₹.8,35,280 after making addition of ₹.6,00,000 as unexplained credit in the bank account. On appeal, after considering the submissions and by invoking the provisions of Section 69A of the Act, the learned CIT(A) confirmed the addition.

In present case, the Assessing Officer made addition of ₹.6,00,000 as unexplained credit. However, the Assessing Officer has not mentioned the relevant section under which, the addition was made, but "unexplained credit" comes under Section 68 of the IT Act.

Though the Assessing Officer has not mentioned the Section 68 of the Act in his order, the very fact that he calls it "unexplained credit" and not "unexplained money" as done by the learned CIT(A), while he invoked Section 69A of the Act, it proves that the Assessing Officer invoked Section 68 of the Act. There is no power conferred upon the learned CIT(A) to assess a particular item under different provision of the Act what the Assessing Officer had done without giving a specific notice to the assessee regarding such action. Law does not permit for such change of provision of law.

As per Section 250 of the IT Act, the CIT(A) is empowered to make further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report to the learned CIT(A). As per Section 251(1)(a) of the IT Act, in appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment, but there is no such power provided by the law that learned CIT(A) could change the provision of law qua the item of which assessment was made. Therefore, in the absence of such power, learned CIT(Appeals) could not have treated the addition made under section 69A of the IT Act. Therefore, the addition made by the learned CIT(A) under Section 69A of the Act is liable to be deleted.

When the Assessing Officer found credit of ₹.6,00,000 (₹.3.00 lakhs each) in the bank statement and the assessee's husband Shri S. Sekar has furnished confirmation by way of duly notarized affidavit, the assessee has discharged the onus cast upon her. On perusal of the orders of authorities below, both the Assessing Officer and the learned CIT(A) failed to discharge their onus by getting the details from the bank under section 133(6) of the Act. Considering the entire facts and circumstances of the case, the addition of ₹.6,00,000 made by the ld. CIT(A) under section 69A of the IT Act is deleted. Appeal filed by the assessee is allowed.


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