Case Number: ITA 969/DEL/2021
Appellant: Om Prakash Jakhotia, Telangana
Respondent: ACIT, CC-26, New Delhi
Assessment Year: 2010-11
Case Filed on: 2021-08-12
Order Type: Final Tribunal Order
Date of Order: 2022-02-21
Pronounced on: 2022-02-21
The case of Om Prakash Jakhotia vs. ACIT revolves around the assessment year 2010-11. A search and seizure operation was conducted on January 20, 2012, at the residential and business premises of the appellant, located in Hyderabad, Telangana. The appellant, Om Prakash Jakhotia, is associated with several companies involved in the manufacturing of High-Density Polypropylene (HDPP) bags and woven sacks.
The primary issues in this case include the validity of the search operation, the assessment procedure followed by the Assessing Officer (AO), and the additions made to the appellant’s income based on the seized documents. The appellant challenged the assessment orders passed under section 153A/143(3) for the assessment years 2009-10 to 2011-12 and under section 143(3) for the assessment year 2012-13.
The appellant raised several grounds of appeal, including:
The appellant argued that the assessment orders passed by the AO under section 143(3) were erroneous since no return of income was filed, and thus, the AO should have invoked the provisions of section 144 to make a best judgment assessment.
The appellant contended that the search conducted under section 132 was not valid, as the conditions provided under clauses (a) to (c) of sub-section (1) of section 132 were not fulfilled.
The appellant retracted the disclosure made during the search operation, claiming it was not voluntary and was obtained under coercion. The CIT(A) rejected this retraction, leading to one of the grounds of appeal.
The appellant challenged the sustenance of various additions by the CIT(A), including:
The appellant argued that the penalty proceedings initiated under sections 271AAA and 271F were invalid and should have been dropped.
The hearing was conducted through video conference before Shri Amit Shukla, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member. The case was heard on January 13, 2022, and the order was pronounced on February 21, 2022.
The Tribunal observed that the assessment orders for the years 2009-10, 2011-12, and 2012-13 were invalid as they were made under section 143(3) despite no returns being filed. The correct procedure would have been to make the assessments under section 144. This constituted a jurisdictional defect.
The Tribunal scrutinized the seized documents, particularly the diaries A/OPJ/03 and A/OPJ/01, which contained ledger accounts of various transactions. The entries in these diaries were found to pertain to the businesses of the group companies associated with the appellant and not to the appellant personally.
Based on the detailed analysis of the grounds of appeal, the Tribunal quashed the assessment orders for the years 2009-10, 2011-12, and 2012-13 due to the jurisdictional defect. The Tribunal also directed the AO to assess the income in the hands of the correct entities, i.e., the group companies, based on the evidence provided.
This case highlights the importance of following proper assessment procedures and ensuring that income is taxed in the hands of the correct person. The Tribunal’s decision emphasizes that procedural lapses can render assessments invalid, protecting taxpayers’ rights against improper taxation.
Om Prakash Jakhotia vs. ACIT: A Comprehensive Analysis of ITA 969/DEL/2021
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