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Nilay Infrastructure (P) Ltd., Versus Deputy Commissioner of Income Tax, Central Circle-4, New Delhi.

2016 (6) TMI 1131 - ITAT DELHI

Validity of assessment u/s 153A - Held that:- When we examine the facts of the present case, we find that like in the case of Kabul Chawla, [2015 (9) TMI 80 - DELHI HIGH COURT ] in the present case return of income originally filed was processed under section 143(1) of the Act, undisputedly, no notice under sec. 143(2) was issued within the prescribed time limit and thus processing of original return of income under sec. 143(1) of the Act had acquired the status of assessment. On the date of sea .....

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the above cited decision in the case of Kabul Chawla hold that the assessment in question was not valid and it was void ab initio. The same is quashed as such. - Decided in favour of the assessee. - ITA No. 5297/Del/2013 - Dated:- 10-6-2016 - SHRI I.C. SUDHIR AND SHRI PRASHANT MAHARISHI Assessee by: Dr. Rakesh Gupta & Sh. Somil Aggarwal, Adv. Department by: Smt. Renuka Jain Gupta, CIT (DR) ORDER PER I.C. SUDHIR: JUDICIAL MEMBER The assessee has questioned first appellate order on the followi .....

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rd to the facts and circumstances of the case, Learned CIT(Appeals) has erred in law and on facts in making disallowance of ₹ 27,20,000 u/s. 40A(3) and too without considering the submissions/evidences of the assessee, more so when such disallowance could not have been made in the proceedings u/s. 153A of the Act. 3. That in any case and in any view of the matter, impugned disallowance and impugned assessment order are bad in law, illegal, unjustified, barred by limitation, contrary to fac .....

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s. 5. Without prejudice to the above grounds, no disallowance could have been made in the present appeal because no incriminating material has been found as a result of search. 6. That having regard to the facts and circumstances of the case, Learned CIT(Appeals) has erred in law and on facts in not reversing the action of the Ld. A.O. in charging interest 234B of the Income-tax Act, 1961. 2. At the outset of hearing, Learned CIT(DR) requested for adjournment of hearing on the basis that the ack .....

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he filing of return on 14.11.2007 in the first appellate order. She thus wanted to verify the correctness of the claimed filing of return under sec.139(1) of the Act on 14.11.2007 to enable her to counter the submission of assessee on the issue raised in ground Nos. 1 and 2 questioning the validity of assessment framed under sec. 153A/143(3) of the Act. 3. The Learned AR vehemently objected the above request with the submission that the issue raised is fully covered by the decision of Hon'bl .....

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s in public domain on the available site of the department which can be verified on the basis of Electronically Digitalized Code given at the bottom of the acknowledgement. The Learned AR submitted that he is still trying to procure some more documents to support his submission that return of income under sec. 139(1) of the Act was filed on 14.11.2007, which will be furnished during the course of hearing of the appeal itself. He contended that the acknowledgement of return of income has been iss .....

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R filed a copy of the said letter dated 24.1.2012 received by the Office of the Assessing Officer on 25.1.2012 under seal of acknowledgement dated 25.1.2012 addressed to the learned ACIT in reply for notice dated 9.1.2012 under sec. 153A of the Act. In the said letter, the assessee has submitted that original return of income under section 139(1) of the Act filed vide acknowledgement No. 9149110141017 dated 14.11.2007 may be considered as a return of income furnished under provisions of sec. 153 .....

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1.2011, no assessment was pending on the basis of the said return of income filed on 14.11.2007. Since no incriminating material was found during the course of search, the Assessing Officer was not justified in framing the assessment under sec. 153A of the Act, validity of which has been questioned in ground Nos. 1 and 2. In support, he cited the following decisions: 1. CIT v. Kabul Chawla [2016] 380 ITR 573 (Delhi), 2. CIT v. Anil Kumar Bhatia [2013] 352 ITR 493(Del.) 4. The Learned CIT(DR) on .....

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para No. 37 of the decision of Hon'ble High Court. 5. On perusal of the above referred documents as well as the assessment order, we find that the Learned AR has been able to corroborate this fact that return of income under sec. 139(1) of the Act for the assessment year under consideration was filed by the assessee on 14.11.2007. The parties were thus directed to advance their respective arguments on the validity of assessment framed under sec. 153A/143(3) of the Act. 6. The Learned AR rei .....

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ce on the above cited decision of the Hon'ble jurisdictional High Court of Delhi in the case of Kabul Chawla (supra) with this further submission that in that case also return was filed and processed under sec. 143(1) of the Act and no notice under sec. 143(2) was issued within the prescribed time limit. The Learned CIT(Appeals) has decided the issue against the assessee following the decision of Hon'ble jurisdictional High Court of Delhi in the case of Anil Bhatia, which has been distin .....

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id down under sec. 153A will come in operation only when the return originally filed and processed under sec. 143(1) is treated as assessment. 8. Considering the above submissions especially ratios laid down in its recent decision of Hon'ble jurisdictional High Court of Delhi in the case of Kabul Chawla (supra), we find that the Hon'ble High Court has been pleased to summarized the application of provisions under sec. 153A of the Act as under in para No. 37 of the decision: Summary of th .....

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. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only .....

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the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are conc .....

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