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TMI Blog2017 (9) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Murlidhar P. Sutrave and the sixth appellate order dated 14-01-2015 (for A.Y. 2008-09) passed by learned CIT(A), the appellate proceedings before learned CIT(A) has arisen out of six different assessment orders, all dated 25-03-2013 passed by the learned Assessing Officer (hereinafter called "the A.O") u/s 143(3) r.w.s. 153A of the Income-tax Act,1961( hereinafter called "the Act") respectively . The issues involved in these three appeals are common; the same have been heard together and are being disposed of by this single consolidated order for the sake of convenience. 2. The grounds of appeal raised by the assessees in all these six appeals for all the assessment years are common (only difference in amount) which read as under. First, we shall take up appeal in ITA No. 2987/Mum/2015 for A.Y. 2006-07 in the case of the assessee namely Mr Muralidhar P. Sutrave: "1. Validity of search In the facts and circumstances of the case and in law: 1.1 The learned CIT(A) erred in rejecting the appellant's ground of appeal that in the absence of satisfaction of ingredients of search prescribed under section 132(1) of the Act; the assessment be declared without jurisdiction and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO, asking the assessee to file return of income for A.Y. 2006-07. In response to the aforesaid notice u/s 153A of the Act, the assessee filed return of income for A.Y. 2006-07 on 7th November, 2012, declaring total income at Rs. 8,30,318/-. The assessee had shown other income of Rs. 5,16,485/- under the head 'income from other sources' in the computation of total income filed in response to notice u/s 153A of the 1961 Act. The assessee, in response to notice u/s 142(1) of the 1961 Act during the course of assessment proceedings u/s 153A of the 1961 Act had filed reply on 4th December, 2012, wherein the note on the 'income from other sources' was mentioned, which reads as under:- "Income from other sources comprises of interest received on savings bank account. Further, my father late Mr. Prakash Sutrave was settled in Bahrain and had earned substantial income from his occupation as a Head of a garment factory. Out of his earning and out of natural love and affection he gave/transferred to me from time to time amounts towards gifts and/or contribution to family expenditure. Unfortunately in view of his sudden demise on 8 October, 2011 it is difficult to compile the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s very clearly seen from the order of assessment that in response to notice under s. 153A the appellant had filed the return of income and as per the said return the appellant had disclosed income under the head 'Other Sources' amounting to Rs. 5,16,485/-. Therefore, the very foundation of the appeal that the AO had made addition which is not valid has to certainly fail. It is a case where the assessee had disclosed the said sum to tax in the return of income filed in pursuance to notice under s. 153A. After having disclosed the sum of Rs. 5,16,485/- being credits in the bank account for which no explanation has been offered, the appellant makes a turnaround stating that the search itself is not valid. The grounds of appeal as filed challenge the search undertaken under s. 132(1) of the I.T. Act. In this regard, it has to be stated here that section 246A stipulates what are the "appealable orders" before the CIT(A). The authorization issued by the competent officers as prescribed under s. 132(1) to conduct search and seizure is not an order appealable under s. 246A. The said authorization as issued under s. 132(1) is certainly not an order as stipulated in section 246A(1). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant herein to question the legality and validity of search and seizure proceedings either before the AO or in appeal before the CIT(A). In the case of Virender Bhatia vs. DCIT (2001) 79 ITD 340 (Del-Trib), it has been observed that the question of validity of search is beyond the pale of power of the AO as well as the appellate authorities. The Tribunal has further stated that even if the search is declared invalid, the revenue cannot be legally stopped from making use of material and information which came into possession in the course of search. Also, in the case of Abhay Kumar Shroff vs. CIT (2007) 290 ITR 114 (Jharkhand), the court did not accept the contention that the Tribunal has the power to sit in judgment over the validity of authorization of search. The appellant has placed reliance on the judgment of the Rajasthan High Court in the case of Chitra Devi Soni. The ratio laid down in the case of Chitra Devi Soni is not applicable to the appellant's case for the simple reason that in the case of the appellant herein no addition has been made by the AO in the order of assessment for the captioned year; the amounts as disclosed by the appellant herein has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this ground no 1(1.1 to 1.5) of appeal raised by the assessee in memo of appeal filed with the tribunal as being withdrawn by the assessee.We order accordingly. 7. However, the assessee has raised alternative ground challenging the jurisdiction of the A.O. to frame the assessment on the ground that no incriminating material was found by the Revenue during the course of search operation u/s 132(1) of the Act. Hence, it was prayed that the income as declared in the return of income filed u/s 139(1) of the Act be accepted. The ld. counsel for the assessee submitted before us that this alternate ground of appeal was raised in all the assessment years . It is submitted that the search was conducted by Revenue u/s 132(1) on 11th February, 2011 and during course of search operations conducted by Revenue u/s 132(1) no incriminating material was found . It is submitted that the assessee was Director in a company i.e. PGA Shipping and Logistics Pvt. Ltd. and the assessee had earned salary income and also income from house property. It is submitted that the return of income u/s 139(1) of the Act for A.Y. 2006-07 was originally filed on 1st November, 2006, while the search u/s 132(1) took pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the asssessee originally u/s 139(1) of the 1961 Act on 01-11-2006 and time limitation for issue of notice u/s 143(2) of the 1961 Act expired on 30-11-2007 while no notice u/s 143(2) of the 1961 Act was issued by the AO before the said date . The assessee relied on the decision of the Hon'ble Bombay High Court in the case of CIT v. Continental Warehousing Corporation reported in (2015) 374 ITR 0645 (Bom) and also the decision of Hon'ble Rajasthan High Court in the case of Jai Steel (India), Jodhpur v. ACIT, 259 CTR 281 (Rajasthan) and submitted that in absence of incriminating material found during the course of search operations u/s 132(1), no additions can be made by the AO in the unabated assessments while framing assessment u/s 143(3) r.w.s. 153A of the 1961 Act. It is stated that the assessee has not retracted voluntary income of Rs. 5,16,485/- declared in return of income filed with the Revenue on 07-11-2012 which was filed in pursuance to notice u/s 153A of the 1961 Act. The assessee also relied on the decision of the Mumbai-Tribunal in the case of DCIT v. Saraswat Co-operative Bank Ltd. [2017] 79 taxmann.com 305 (Mumbai-Trib) and prayed that the assessed income in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pt some jewellery and insurance policies which stood explained and no additions have been made by the AO on that account. The statement recorded by Revenue of the assessee on 08-03-2011 u/s 132(4) of the 1961 Act was placed on record by learned CIT DR. It is also submitted by learned CIT DR that the assessee has not given breakup of other income of Rs. 5,16,485/- declared in return of income filed u/s 153A of the 1961 Act before the A.O. and the ld. CIT(A) during relevant proceedings. It is submitted that no such details/break-up are furnished even before the tribunal and bald statements are made as to amount being received from father settled in Bahrain and the said father having substantial income in Bahrain. It is submitted that there is no iota of evidence filed by the assessee to prove its contention about status of his father in Bahrain, his substantial earnings as well whether remittance was made by him at all to the assessee. It is submitted that even no details as to prove creditworthiness, identity of the remitter as also nothing has been brought on record to prove genuineness of the said remittances by father has been brought on record. 9. The ld. counsel for the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upation as a Head of a garment factory. Out of his earning and out of natural love and affection he gave/transferred to me from time to time amounts towards gifts and/or contribution to family expenditure. Unfortunately in view of his sudden demise on 8 October, 2011 it is difficult to compile the relevant Information and supporting. Also several credits for which details are not readily available due to loss of past records have been declared as income. Hence out of abundant caution and with view to avoid potential litigation and to buy peace Rs. 5,16,485/- is included voluntarily in the computation of income from other sources." The assesse submitted that the income of Rs. 5,16,485/- was declared in the return of income filed u/s 153A of the 1961 Act to avoid litigation with Revenue and to buy peace. The assessee has, however, contended at the time of filing of return of income on 07-11-2012 vide letter dated 06-11-2012 filed on 07-11-2012 (pb/page1) that no incriminating material was found during the course of searches u/s 132(1) of the 1961 Act and the assessment u/s 153A of the 1961 Act can be framed only on the basis of incriminating material found during the search operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminating material found during the course of search while framing assessment u/s 153A r.w.s. 143(3) in case of unabated assessments which were not pending on the date of initiation of search u/s 132 of the 1961 Act, but in this case the assessee voluntarily declared additional income of Rs. 5,16,485/- of his own volition in the return of income filed in pursuance to notice u/s 153A. In case of searches conducted by Revenue u/s 132(1) of the Act after the 31-05-2003, the assessee is required vide Section 153A(1)(a) of the 1961 Act to file return of income afresh in pursuance to notice u/s 153A of the 1961 in respect of each of assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted, wherein a fresh opportunity and window is made available to the tax-payer to declare true and correct income pursuant to the searches u/s 132 of the 1961 Act, which return of income now filed in pursuance of notice u/s 153A of the 1961 Act give could include not only declared in the return of income originally fled u/s 139 of the 1961 Act but also enable tax-payer to declare such additional income whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1961 Act, while the said additional income stood voluntarily declared by the assessee himself in return of income filed in pursuance to notice u/s 153A of the 1961 Act. Based on peculiar facts of the case as discussed above, we are of the considered view that now it is incumbent on the assessee to give breakup of said additional income of Rs. 5,16,485/- offered voluntarily for taxation by the assessee in return of income filed in pursuance to notice u/s 153A of the 1961 Actand bring on record evidences to prove that this amount of Rs. 5,16,485/- offered for taxation voluntarily by the assessee itself does not constitute income of the assessee and the same cannot be charged to tax within the provisions and mandate of the 1961 Act. It is also now agreed by both the rival parties that no incriminating material was found during the course of searches u/s 132(1) of the 1961 Act conducted by Revenue. The onus is now on the assessee to prove that the said additional income offered for taxation voluntarily in return of income filed u/s 153A of the 1961 Act did not had the character of income chargeable to tax and the same cannot be brought to tax by Revenue, within the frame work of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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