TMI Blog2017 (9) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,485/- which was declared voluntarily as additional income by the assessee in return of income filed u/s 153A of the 1961 Act and to prove that the same do not constitute income of the assessee which could be brought to tax within framework and mandate of the 1961 Act. We have observed that the assessments for assessment year 2007-08 to 2009-10 are all unabated assessments as the assessments were not pending on the date of initiation of search u/s 132 of the 1961 Act and our above decision for assessment year 2006-07 shall apply to appeals for assessment year 2007-08 to 2009-10 mutatis mutandis. We have also observed that the assessment for A.Y. 2010-11 was abated assessment as the assessment was pending on the date of initiation of search u/s 132(1) of the 1961 Act as time limit for issuance of notice u/s 143(2) of the 1961 Act has not expired and the ratio of decision of the Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (2015 (5) TMI 656 - BOMBAY HIGH COURT) is not applicable to the assessment year 2010-11 and the AO was required to compute total income of the assessee while framing assessment u/s 153A r.w.s. 143(3) of the 1961 Act whether or n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed without jurisdiction and invalid. 1.2 The learned CIT(A) failed to take note of the important fact that the appellant had submitted herself to the assessment jurisdiction under protest vide letter dated 06-11-2012. 1.3 The learned CIT(A) failed to appreciate the ratio laid down by the High Courts in various case laws cited before her wherein the right of the assessee to challenge the validity of the search before the appellate authorities under the IT Act has been confirmed. 1.4 The learned C!T(A) erred in justifying the rejection of the right of challenge to the validity of the search based on the reasons unacceptable in law. 1.5 Consequent upon the foregoing, the learned C!T(A) failed to appreciate that the assessed income ought to have been restricted to the income of ₹ 3,12,232/- as declared vide return of income filed on 01-11-2006. Alternative ground In the facts of the case and in law, the learned CIT(A) failed to appreciate the challenge to the subject wise jurisdiction of the AO to conduct the assessment for the assessment year under consideration in spite of the fact that the appellant vide her letter 06-11-2012 submitted h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w 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 ₹ 5,16,485/- is included voluntarily in the computation of income from other sources. However, the assessee did not submit the proof/details of the source of income. The A.O. observed that the assessee has not shown the said other income of ₹ 5,16,485/- in the original return of income originally filed by the assessee u/s 139(1) of the Act. The A.O. accepted returned income of ₹ 8,30,318/- declared by the assessee in the return of income filed in pursuance to notice u/s 153A of the Act, while framing the assessment order dated 25-03-2013 u/s 143(3) r.w.s. 153A of the Act. In-nutshell, no additions were made by the AO in the assessment order dated 25-03-2013 framed u/s 143(3) r.w.s. 153A of the 1961 Act rather returned income as voluntarily declared by the assessee in the return of income filed in pursuance to notice u/s 153A of the 1961 Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 246A. The said authorization as issued under s. 132(1) is certainly not an order as stipulated in section 246A(1). The appellant seeks to make out a case stating that the search conducted on the appellant was based only on surmises and suspicion. It is well settled that the reasons to believe on the basis of which search is authorized need not be communicated to the assessee. In the case of a search under s. 132, the information is gathered through informers or other sources confidentially. Needless to state, secrecy is the main ingredient of a successful action under s. 132. If the secrecy is broken before the search, the search would be a failure and if the secrecy is broken after the search, it would create serious threat to the life and security of informers. Also, it is when there are cogent reasons and relevant material to justify the formation of belief with regard to the conditions laid down in clauses (a), (b) and (c) of sub section 1 of section 132 that the competent authority grants authorization for conducting the search action. The very fact that the assessee itself had, in the return of income filed, disclosed the sum of ₹ 5,16,485/- is a pointer to the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the AO in the order of assessment for the captioned year; the amounts as disclosed by the appellant herein has been accepted by the AO. Thus, there can be no grievance on this score. Besides, the reliance placed by the appellant on the judgment of the Bombay HC in the case of Murli Agro products Ltd. is misplaced. It is not as though the AO has on his own disturbed an assessment that had earlier attained finality. In the instant case, it is the appellant himself who has disclosed the sum of ₹ 5,16,485/ - in pursuance to the return filed under s.153A which sum was not earlier disclosed in the return that had been filed under s.139(1). That being so, the question of the AO disturbing an earlier finalized assessment does not arise; if any disturbance has been made, it has been made by the assessee himself. Further, even during the course of hearing of the appeal the appellant could not give any explanation as regards the nature and source of the creditors in the assessee's bank account. In the circumstances, it is held that the assessment as made by the AO for the impugned year is valid and no interference is required. 8. In the result, the appeal is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn 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 place on 11th February, 2011. It is submitted that the assessee had shown other income under the head income from other sources of ₹ 5,16,485/- which was mainly in the nature of gift from his father who was settled in Bahrain and having substantial earnings and his father has transferred the amounts from time to time out of natural love and affection towards gifts and/or contribution to family expenditure which amount was declared in the return of income filed in response to notice u/s 153A of the Act. It was also submitted that there were few other credits in the bank account wherein no details were available with the assessee and hence the same were offered for taxation. It was submitted that the said sum s of amount were offered to taxation by the assessee voluntarily to avoid protracted litigation with Revenue and to buy peace . It is submitted that the assessee has not retracted such voluntary declaration of income by the assessee and the income continued to be declared and offered for taxation in return of income filed in pursuance to not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal 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 assessment framed u/s 153A r.w.s. 143(3) of the 1961 Act be restored to the original income of ₹ 3,12,230/-. as declared vide return of income originally filed u/s 139(1) of the Act. It is submitted that w.r.t. assessment year s 2007-08 to 2009-10 also, all the assessments are unabated assessments as no assessment was pending on the date of initiation of search for the said assessment years and similar position shall apply to said assessment years as is applicable for assessment year 2006-07 . With respect to the A.Y. 2010-11 it is submitted that this is an abated assessments as time limitation for issue of notice u/s 143(2) had not expired on the date of search on 11-02-2011 and the assessment can be said to be pending on the date of initiation of search. It is submitted that the bank account wherein remittance from the father stood credited was already declared to the Revenue. It is submitted that the father of the assessee expired on 8th October, 2011. 8. The ld. CIT D.R. submitted that the A.O. has accepted the income declared a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee, in the rejoinder, submitted that during the course of search operations u/s 132(1) of the 1961 Act, no incriminating material was found by the Revenue which is now admitted by Revenue as learned CIT DR was directed to bring all records before tribunal wherein statement of the assessee u/s 132(4) is produced by learned CIT DR wherein there is no mention of any incriminating material found by Revenue during search operations u/s 132(1) of the Act. The ld. counsel relied on the decision of Mumbai Tribunal in the case of Gurinder Singh Bawa v. DCIT, [2012] 28 taxmann.com 328 (Mumbai Trib.) . The learned counsel for the assessee would also rely on judgment of Delhi-tribunal in the case of DCIT v. Aggarwal Entertainment Private Limited reported in (2016) 72 taxmann.com 340( Del.-trib.) 10. We have considered rival contentions and also perused the material available on record including case laws cited by the parties. We have observed that the assessee is a salaried person working as director in PGA Shipping Logistics Pvt. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 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 operations u/s 132(1) (pb/1) by relying on decision of Special Bench of the Mumbai-tribunal in the case of All Cargo Logistics Limited(supra) . The assessee however did not retracted before the AO from the additional income of ₹ 5,16,485/- voluntarily declared by it in return of income filed by the assessee in pursuance to notice u/s 153A during the course of assessment proceedings. The A.O. accepted the income of ₹ 8,30,318/- as voluntarily declared in the said return of income filed in pursuance to notice u/s 153A of the 1961 Act and no addition was in-fact made by the A.O. in the assessment order dated 25.03.2013 passed u/s 153A r.w.s 143(3) of the 1961 Act rather the AO accepted the returned income declared in the return of income filed in pursuance to notice u/s 153A of the 1961 Act. The said assessment order was upheld by the ld. CIT(A) vide appellate order dated 04-02-2015. The assessee had voluntarily surrendered an amount of ₹ 5,16,485/- in the return of income filed u/s 153A p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance 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 which the tax-payer of his own voluntary contemplation deem it fit to disclose as the said income was not earlier declared in return of income filed u/s 139 of the 1961 Act as also enable tax-payer to declare such additional income which has nexus with and is based on incriminating material found during search operations . Thus, this window is made available to tax-payers to come forward and declare total income whether or not the same was earlier declared in return of income filed u/s 139 as also whether or not the same was based on the incriminating material found during the searches u/s 132(1), but the income which the assessee believes to be his total income within the provisions and mandate of the 1961 Act, persuant to searches. In the instant case, the assessee voluntarily came forward and declared additional income of ₹ 5,16,485/- under the head income from other sources in return of income filed in pursuance to notice u/s 153A of the 1961 Act which income was stated to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me 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 1961 Act. In our considered view end of justice will be met in the instant case if the matter is set aside and restored to the file of the AO for denovo adjudication on merits of this issue wherein one more opportunity is required to be granted to the assessee to furnish details/ evidences before the AO to prove that the said additional amount of ₹ 5,16,485/- voluntarily declared by the assessee in return of income filed in pursuance to notice u/s 153A of the 1961 Act is not income which could be brought to tax within the provisions and mandate of the 1961 Act, and hence we are inclined to set aside and restore the matter back to the file of the A.O. for denovo adjudication of this issue on merits in accordance with law. The assessee is directed to produce evidences showing the breakup of income of ₹ 5,16,485/- which was declared voluntarily as additional income by the assessee in return of income filed u/s 153A of the 1961 Act and to prove that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
