Section 234B Interest Not Leviable When Seized Cash Exceeds Tax Liability: ITAT Jabalpur

Chaitram Alonkar Vs ITO (ITAT Jabalpur)

The appeal before the ITAT Jabalpur arose from an assessment order passed under Sections 143(3) read with 153A for AY 2017-18. The assessee, an individual identified as a non-filer, filed a return in response to a notice under Section 142(1), declaring income that included long-term capital gains (LTCG). During assessment, the Assessing Officer (AO) made an addition of ₹32.90 lakh by recomputing LTCG based on the stamp duty valuation of land sold and also referred the matter for possible penalty under Section 271D for an alleged violation of Section 269SS. The CIT(A) partly granted relief by adopting the fair market value (FMV) determined by the Departmental Valuation Officer (DVO), reducing the addition. The assessee challenged the order before the Tribunal.

The assessee first raised legal grounds challenging the jurisdiction of the AO, arguing that the assessment should have been conducted by a different authority and not by the Income Tax Officer. The Tribunal admitted the legal grounds but rejected them on merits. It held that the assessee had not challenged jurisdiction during assessment proceedings, had participated in the proceedings after receiving notices, and was barred from raising the objection at this stage by Section 124(3). The Tribunal relied on judicial precedents holding that participation in proceedings without timely objection amounts to acceptance of jurisdiction. Accordingly, the jurisdictional grounds were dismissed.