Issuing notice is a statutory requirement of initiating of penalty as to intimate the assessee about such initiation and to give him an opportunity of being heard. Under the act power are conferred on income-tax authorities to initiate any proceeding and to initiate notice.
Hon’ble Delhi Court in the matter Spice Entertainment (ITA no. 475/2011) give finding on the proposition that completion of assessment in respect of a non-existent company due to the amalgamation would result assessment in the name and in respect of the original assessee company,
It is a trite law as per provision of section and various judicial pronouncement that AO must record satisfaction regarding to non-correctness of the claim of the assessee u/s 14 A. He must ensure that there is an error in calculation of expenditure relating to the income which relates to the exempted income.
The contention of the assessee was that the AO framed the assessment arbitrarily on the basis of assessment order for the assessment year 2002-03 which was set aside by the ITAT in ITA No. 326/Del./2007 vide order dated 25.7.2008.
Karnataka High Court held In the case of K.S. Venkatesh vs. DCIT that The Hon’ble Apex Court in T.S.Balaram Vs Volkart Brothers and others reported in 1971 (82) ITR 50 has observed that a mistake apparent on the record must be obvious and patent mistake and not something
After hearing the rival contentions, ITAT held that that the disallowance made by the assessee, is in excess to the disallowance with the working under 14 A r.w.s.8 D which amounts to Rs 1,32,913. ITAT upheld the contentions of the assessee and deleted the addition.
The learned counsel for the assessee contended that the assesseee was given sufficient opportunity to put forward his arguments with necessaryevidences by appearing in person or by an authorized representative.
Assessing Officer passed an order disallowing the deduction u/s 80IC and also rejected the assessee’s business loss set off against business income by concluding that the income credited to job work was an unexplained cash credit against which claim of set off not available.
While Section 68 certainly enables the AO to bring to tax amounts which are suspect, in a transaction of the present kind, where the identity and the relationship of the donor are known, the AO in our opinion ought not to have concluded that the transaction – by which the assessee received the amount of Rs. 1,84,860/- was ingenuine.
Revenue has to be vigilant in issuing notice to the third party under Section 158 BD, immediately after the completion of assessment of the searched person, this Court is of the opinion that a delay ranging between 10 months of 1 ½ years cannot be considered contemporaneous to assessment proceedings.
