TMI Blog2019 (3) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... blish the fact that additions are based on any incriminating material, therefore we find that the additions made by the A.O. for all the years are not based on any incriminating material found during the course of search. It is only based on subsequent search by issue of notice u/s 153A calling for the various documents from the assessee additions are made. The assessee in respect of concluded assessments cannot be reopened, we find that in all the assessment years from 2008-09 to 2012-13, there is no scope for the A.O to issue a notice u/s 143(2) of the Act for the reason that the time limit is already over before the date of search itself i.e. on 29.1.2014. Therefore, in our opinion, all the assessment years from 2008-09 to 2012-13 are concluded assessments and non abated assessments and any addition has to be made in respect of those assessment years, there must be an incriminating material. In the present case, there is no incriminating material and therefore, the additions made by the A.O. cannot survive. - Decided in favour of assessee - IT(SS)A Nos.277 to 281/Ind/2017, 283 to 287/Ind/2017 - - - Dated:- 28-2-2019 - SHRI V. DURGA RAO, JUDICIAL MEMBER And SHRI MANISH BOR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,780 Nil 2012-13 17.11.2012 16,38,250 7.11.2014 16,38,250 Nil 2013-14 22.11.2013 8,36,860 7.11.2014 8,36,860 Nil 3. In the assessment order, the A.O. observed that once search is conducted and notice is issued u/s 153A of the Act, the A.O. is bound to issue notice to the assessee to furnish return for each assessment year falling within 6 assessment years, immediately preceding to the assessment year relevant to the previous year in which search is conducted or requisition is made. The A.O. is required to assess or reassess the total income of the aforesaid years. U/s 153A of the Act, the A.O. had been given a power to assess or reassess total income of assessment years in question in separate assessment orders. Consequently, even though assessment order had been passed u/s 143(1A) or 143(3) of the Act, the A.O. required to reopen those proceedings and reassess total income taking notice of undisclosed income or during the course of search seizure operatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has raised following grounds: 1. That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A) was not justified in holding that the Ld. A.O. was not justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search. 2. That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A) was not justified in holding that the Ld. A.O. was not justified in making addition of ₹ 3,00,000/- towards unsecured loans received treating the same as unexplained. 3. That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A) was not justified in holding that the Ld. A.O. was justified in making addition of ₹ 1,20,000/- towards estimated alleged unexplained expenses made on foreign tour. 4. That the assessee craves leave to add, alter, delete or modify any ground(s) of appeal during or before the hearing of the appeal. 6. The Ld. Counsel for the assessee has submitted that for the assessment years 2008-09 to 2012-13, the time limit for the issue of notice u/s 143(2) of the Act has been expired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s 143(2) of the Act in all those cases has expired. The search was initiated in the business premises of the assessee on 29.1.2014 and therefore the time limit for issue of notice u/s 143(2) of the Act is lapsed. All the assessment years from 2008-09 to 2012-13 are concluded and non abated assessments. The A.O. cannot reopen the assessments u/s 153A of the Act. In so far as the above submission is concerned from the assessment order and even from the Ld. CIT(A) s order, there is nothing on the record which says that the additions made by the A.O. are based on any incriminating material. Even when the same was pointed out to Ld. D.R., she is not able to establish the fact that additions are based on any incriminating material, therefore we find that the additions made by the A.O. for all the years are not based on any incriminating material found during the course of search. It is only based on subsequent search by issue of notice u/s 153A of the Act calling for the various documents from the assessee additions are made. In so far as the arguments of the Ld. Counsel for the assessee in respect of concluded assessments cannot be reopened, we find that in all the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Commissioner of Income Tax (Central)-3 Kabul Chawla (2015) 61 Taxman.com 412 (Del.), the Hon ble Delhi High Court has considered the scope of section 132 of the Act and 153A(1) observed as under: 14. From the above decision, it is very clear that in respect of concluded assessments additions cannot be made without incriminating material. 15. The Hon ble Delhi High Court in the case of PCIT Vs. Meeta Gutgutia 395 ITR 296 (Delhi) has held that it was only if during the course of the search u/s 132 of the Act incriminating material justifying the reopening of the assessment years for 6 previous years was found that invocation of section 153A of the Act qua each of the assessment year would justify. 16. In the case of Principal CIT Vs. Soumya Constructions 387 ITR 529 (Guj.) the Hon ble Gujarat High Court has observed that the addition was based on statement of the third person and not based on any incriminating material found during the course of search, therefore the addition deleted by the Tribunal was upheld. 17. In the case of PCIT Vs. Lata Jain 384 ITR 543 (Del) (supra), the Hon ble Delhi High Court has held that the Tribunal was right i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. We find that after examining the facts and circumstances of the case, the judgement of the Hon'ble Supreme Court in the case of Vegetable Products (supra) has to be followed. The Hon'ble Supreme Court in the above case has held that if two reasonable constructions of a taxing provisions are possible, then that construction, which favours the assessee must be adopted. 22. In the interest of justice, the decision of the Hon'ble Supreme Court in the case of Vegetable Products (supra) has to be followed. Therefore, we respectively following the decision of Hon'ble Delhi High Court in the case of Kabul Chawla (supra), Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (supra) and also Hon ble Gujarat High Court in the case of PCIT Vs. Meeta Gutgutia (supra), we hold that no addition can be made in respect of concluded assessments u/s 153A of the Act unless there is any incriminating material found during the course of search. We would like to make it clear that where the assessment is completed u/s 143(1) or 143(3) of the Act unless A.O. has a time to issue notice u/s 143(2) of the Act, A.O. cannot make an add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the Special Bench of I.T.A.T. Mumbai Bench decided in favour of assessee dismissing the revenue s appeal holding that there was no incriminating material found during the course of search, the Tribunal was right in holding the power conferred u/s 153A being not expected to be exercised routinely, should be exercised if the search revealed any incriminating material. If that was not found then in relation to the second phase of three years, there was no warrant for making an order within the meaning of this provision . 10. Similar view was also taken by the Hon'ble High Court of Delhi in the case of Kabul Chawla (2015) 61 taxmann 412. 11. We therefore in the given facts and circumstances of the case and respectfully following the judgments referred and relied by the Ld. Counsel for the assessee are of the considered view that no addition/disallowance was called for Assessment Year 2008-09 to 2010-11 as no incriminating material was found during the course of search at the premises of the assessee as the time limit of issuance of notice u/s 143(2) of the Act stood expired much before the date of conducting search u/s 132 of the Act. Accordingly all the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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