Meghna Banga Vs. DCIT, Central Circle-7

Parties Involved

Facts Summary

A search and seizure operation under section 132 of the Income Tax Act, 1961 was conducted in the Jindal Bullion Ltd (JBL) Group on 05.01.2017. Digital data maintained in a software called Hazir Johri was seized at the residential cum business premises of Sh. Kusharg Jindal (promoter and director of JBL) at Plot No.25, Vaishali Enclave, Pitampura, Delhi. The digital data pertains mainly to FYs 2014-15, 2015-16 and 2016-17. The analysis of the said soft data clearly showed that JBL had been systematically engaged in cash transactions with a number of entities, mostly bullion traders and jewellers. The JBL books of accounts as maintained in the Hazir Johri software, contained both cash transactions of JBL as well as its transactions through banking channels. The transactions through banking channels are reflected in the Tally books of accounts of JBL whereas the cash transactions are not reflected in the same. The returns of income have been filed by JBL on the basis of books of accounts maintained on Tally software.…

Legal Issues

• 1. Whether the impugned order passed u/s 250 by CITA-24, dismissing appeal of assessee and sustaining impugned assessment order of Ld AO is liable to be quashed as there is no prior valid sanction u/s 153D of the Act 1961 received by the AO before passing assessment order u/s 153C of the Act on dated 24.12.2021 which is received only on 25.12.2021.
• 2. Whether the impugned order passed u/s 250 by CITA-24, dismissing appeal of assessee and sustaining impugned assessment order of Ld AO is liable to be quashed as there is no valid approval u/s 153D of the Act 1961 which is given in mechanical manner without taking on board crucial reply of show cause notice by the assessee filed on dated 19.12.2021 approving defective and incomplete draft assessment order in haste without application of mind.
• 3. Whether the impugned order passed u/s 250 by CITA, upholding the validity of action u/s 153C and satisfaction note in dismissing jurisdictional ground of appellant of absence of mandatory certificate u/s 65-B(4) of the Indian Evidence Act for admissibility of sole digital data found from premises of third party without which the entire assessment made on the basis of reliance on digital evidence is null and void.
• 4. Whether the impugned order passed u/s 250 by CITA, dismissing the appeal of the assessee is unlawful as no assessment order passed u/s 153C has been served on assessee via email or post which is evident from the evidence supplied by the AO in response to RTI Application.
• 5. Whether the impugned order passed u/s 250 by CITA, dismissing the appeal of the assessee and sustaining impugned assessment order of Ld AO is unlawful as in violation of principles of natural justice.
• 6. Whether the Ld CIT(Appeals) has not appreciated the contention of the appellant that presumption of section 292C cannot be applied to the appellant in case any document is found from premises of the third person.

Judgment Outcome

Decided in favour of Assessee.

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