TMI Blog2019 (3) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... uring search qua this assessment year - Decided in favour of assessee - I.T(SS).A. No. 88/Kol/2017 - - - Dated:- 8-3-2019 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM For the Appellant : Shri A. K. Singh, CIT, DR For the Respondent : Shri A. K. Tulsyan, FCA Ms. Shikha Agarwal, ACA ORDER PER SHRI A.T.VARKEY, JM This appeal preferred by the revenue is against the order of the Ld. CIT(A)-20, Kolkata dated 21.03.2017 for AY 2009-10. 2. This appeal of revenue is time barred by 26 days and a condonation application dated 07.07.2017 has been filed by the Revenue explaining the reasons for condonation of delay. After perusing the condonation application and hearing both the sides, we condone the delay in filing the appeal of the revenue. 3. At the outset itself, it has been brought to our notice that this case is covered in assessee s own case for AYs 2008-09 and 2010-11 by this Tribunal. According to Ld. AR, there was a search u/s. 132 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) which was conducted on 18.02.2013 at the residence, offices, factories and other business concerns of the M/s. Rashmi Group and the assessment for thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search and seizure, when the assessment for the Assessment Years in question have not abated. In the case on hand, the assessee filed its original return of income on 29/09/2008 for the Assessment Year 2008-09 and on 24/09/2010 for the Assessment Year 2010-11. The time limit for issual of notice u/s 143(2) of the Act, was 30/09/2009 and 30/09/2011 respectively for Assessment Year 2008-09 2010-11. The search and seizure operation was conducted in this case on 18/02/2013. The statutory period for issual of notice u/s 143(2) of the Act, in the case of both the Assessment Years had expired prior to the date of search operation. Hence the assessment for the impugned Assessment Years have not abated. The Assessing Officer made the addition in question by observing as under at page 14 15 of the assessment order:- I) Names of the companies appealing m statements of the entry providers given to investigation wing figure as applicants to shares in the assessee company. II) Perusal of the operating bank a/c shows that the a/c of most of the investing companies is in the same bank as that of the assessee company. III) There is no justification on record whatsoever as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, the Honorable Jurisdictional High Court observed that the Ld. ITAT, Kolkata was of the opinion that the assessing officer had no jurisdiction u/s 153A of the I.T. Act to reopen the concluded cases when the search seizure did not disclose any incriminating material. In taking the aforesaid view, the Ld. ITAT relied upon the judgments of Delhi High Court in the case of CIT(A) Vs. Kabul Chawla in ITA No. 707/2014 dated 28.08.2014. The Court also observed that more or less an identical view has been taken by this Bench in ITA No. 661/2008 in the case of CIT Vs. Veerprabhu Marketing Limited. Considering the above facts, the Honorable High Court did not admit the appeal filed by the Department. It held as follows:- Subject matter of challenge is a judgement and order dated 18th December, 2015 by which the learned Tribunal dismissed an appeal preferred by the Revenue registered as ITA No.1775/Kol/2012 and allowed a cross-objection registered as CO-30/Kol/2013 both pertaining to the assessment year 2005-06. The learned Tribunal was of the opinion that the Assessing Officer had no jurisdiction under Section 153A of the Income Tax Act to reopen the concluded cases whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra), the Hon'ble Court after discussing the issue threadbare and analysing the various judgments of different High Courts laid down the following legal proposition in terms of scope of addition which can be made u/s. 153A(1) which are as under:- 37. On a conspectus of Section 153A (1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62. Subsequently, in Principal Commissioner of Income Tax-1 v. Devangi alias Rupa {supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Principal Commissioner of Income Tax v. Saumya Construction P. Ltd. {supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in CIT v. IBC Knowledge Park P. Ltd. {supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. {supra), too, followed the decision of this Court in Kabul Chawla (supra). In CIT v. Gurinder Singh Bawa {supra), the Bombay High Court held that: 6...once an assessment has attained finality for a particular year, i.e., it is not pending then the same cannot be subject to tax in proceedings under section 153A of the Act. This of course would not apply if incriminating materials are gathered in the course of search or during proceedings under section 153A of the Act which are contrary to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The Revenue has filed the appeal against an order dated 14.11.2014 passed by the Income Tax Appellate Tribunal (ITAT) in 3761/Del/2011 pertaining to the Assessment Year 2002-03. The question was whether the learned CIT (Appeals) had erred in law and on the facts in deleting the addition of ₹ 89 lacs made by the Assessing Officer under Section 68 of the Income Tax Act, 1961 ('ACT') on bogus share capital. But, the issue was whether there was any incriminating material whatsoever found during the search to justify initiation of proceedings under Section 153A of the Act. 2. The Court finds that the order of the CIT(Appeals) reveals that there is a factual finding that no incriminating evidence related to share capital issued was found during the course of search as is manifest from the order of the AO. Consequently, it was held that the AO was not justified in invoking Section 68 of the Act for the purposes of making additions on account of share capital. 3. As far as the above facts are concerned, there is nothing shown to the court to persuade and hold that the above factual determination is perverse. Consequently, after considering all the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Supreme Court in the case of Kishinchand Chellaram vs. CIT, 125 ITR 713 (SC) had held that the opportunity of cross-examination must be provided to the assessee. The Jurisdictional High Court in the case of CIT Vs Eastern Commercial Enterprises (1994) 210 ITR 103 (Kol HC) held as follows:- As a matter of fact, the right to cross-examination a witness adverse to the assessee is an indispensable right and the opportunity of such crossexamination is one of the cornerstones of natural justice. 9.1. The Judgment of the Hon ble Kerala High Court in the case of E.N. Gopakumar vs. CIT (Supra) lays down a proposition, contrary to the propositions of law laid down by the Hon ble Jurisdictional High Court in the case of CIT vs. Veerprabhu Marketing Ltd. (supra) and PCIT vs. Salasar Stock Broking Limited (supra). 9.2. Even otherwise, it is not clear as to which of these statements were recorded during the course of search operation u/s 132 of the Act or whether the statements were recorded during the course of any survey operations u/s 133A of the Act. It is well settled that a statement recorded during the course of survey operation cannot be used as evidence under the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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