Karshni Metals Pvt. Ltd. Vs ITO (ITAT Delhi)
Conclusion: Since there was no failure on the part of assessee to fully and truthfully disclose material facts therefore, assessment under sections 147-148 was not valid as the specific provisions of Section 153C were deemed to take precedence over the general provisions of Section 147.
Held: Assessee appealed against an order under Section 250 passed by CIT(A) on the issue arose from an assessment made under Sections 147/143 by the ITO. CIT(A) upheld the addition of Rs. 1,00,00,000 made by AO under Section 68, regarding receipt of share application money, along with an additional Rs. 2,00,000 for commission at 2% on the unexplained investment. The addition stemmed from a search conducted on the Surendra Kumar Jain Group, leading to the assessment in the present case under Section 147 based on material found during the search. Assessee contended that the jurisdiction under Section 147 was illegally exercised instead of Section 153C, citing the non-obstante clause in Section 153A and the principle of abatement within search assessments, asserting that the assessment should be concluded under Section 153C only. Department relied on the judgment in Saloni Kumar Prakash Vs. ITO, defending the AO’s decision to complete the assessment under Section 147 based on information found during the search. It was held that the judgment cited by the Department from the Madras High Court had already been reviewed by the Rajasthan High Court in the case of Nishit Gupta Vs. ACIT. They determined that the jurisdictional prerequisites for invoking Sections 147-148 were not satisfied, as there was no failure on the part of assessee to fully and truthfully disclose material facts. As a result, the specific provisions of Section 153C were deemed to take precedence over the general provisions of Section 147, leading to the allowance of the assessee’s appeal.
