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TMI Blog2021 (4) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... S)A Nos. AYs. Original return filed u/s.139(1) Due date for issuance of Notice u/s.143(2) Whether noticed u/s.143(2) issued Date of Search 58/CTK/19 2009-10 30.09.09 30.09.10 No 28.05.14 59/CTK/19 2010-11 02.10.10 30.09.11 No 28.05.14 60/CTK/19 2011-12 29.09.11 30.09.12 No 28.05.14 61/CTK/19 2012-13 27.09.12 30.09.13 No 28.05.14 4. First we shall take up the appeals of the assessee for assessment years 2009-2010 to 2012-2013 in IT(SS)A Nos.58-61/CTK/2019, wherein the issue involved in all the appeals are similar. Since similar and identical grounds have been taken in the appeals for A.Y.2009-2010 to 2012-2013, therefore, for the sake of convenience and brevity, first we decide IT(SS)A No.58/CTK/2019 filed for the assessment year 2009-2010 and the decision of the same shall apply mutatis mutandis to the other appeals also. 5. The grounds raised by the assessee in its appeal for A.Y.2009-2010 read as under :- 1. That on the facts and in the circumstances of the case the Ld. CIT(A)-2, Bhubaneswar is erred in law and facts in upholding the assessment order passed by the Ld. ACIT, Central Circle-1, Bhubaneswar U/S 153A in spite of the facts that no incri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153D has been granted by the Learned Joint commissioner of Income tax, Central Range, Bhubaneswar and the approval obtained as mentioned in the impugned assessment order under section 153A/144 of the I.T.Act,1961 by the Ld. A.O is no approval in the eye of law, and hence the assessment order rendering it to be held illegal and void ab-initio. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) is erred in law and facts in upholding the assessment order passed by the Ld. A.O u/s 153A/144 of the I.T.Act;1961 in spite of the facts that no incriminating documents and on concealed income whatsoever has been found and seized by the search team during the search u/s 132 of the IT. Act, 1961 which is sine qua non for making the assessment u/s 153A/144 thus making the assessment arbitrary, excessive, contrary to facts and bad in law. That, the First ground has been raised for the first time and the second ground has already been raised before the Ld. CIT(Appeals)-2, Bhubaneswar which may kindly be admitted by your Honours and in this context I rely on the decision of The Honourable Supreme Court in the case of National Thermal Power co. Ltd Vs. CIT, (1998),2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration. The total deposits made in the following accounts has been worked out and mentioned against each account No., which is as follows :- SI. No. Bank a/c. No. Name of the bank Amount credited (Rs.) 1 1085937309 SBI 1,11,242/- 2 3058181017 SBI 78,43,319/- 3 10443024808 SBI 2,34,62,01 11- Total 3,14,16,572/- The AO found that the assessee could not furnished the details and sources for above deposits in the above accounts, therefore, the AO treated the same as unexplained bank deposits and added the same to the total income of the assessee. Accordingly, the AO completed the assessment determining the total income of Rs. 3,34,18,940/-. 9. Against the above order of AO, the assessee filed appeal before the CIT(A) and the CIT(A) deleted the addition made by the AO on account of unexplained bank deposits and upheld the lumpsum disallowance of 20% made by the AO of the expenditure incurred in respect of films, drugs & chemicals and salary to staff. Accordingly, the CIT(A) partly allowed the appeal of the assessee 10. Ld. AR before us reiterated the submission made before the authorities below. He also filed his written submissions cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drew our attention to the para 2 of the assessment order and submitted that the AO in the last two lines has mentioned that case of the assessee was discussed during the assessment proceedings with the AR of the assessee with reference to the books of accounts seized relating to the group of the cases as a whole. For the completeness of our order, we would like to reproduce the para 2 of the assessment order, which reads as under :- "02. Notice u/s.153A was issued on 31.01.2017. The A.R. of the Assessee, Ms. Swati Kejirwal, FCA appeared and submitted a copy of the Return u/s.153A filed on 10.03.2017 showing a Total income at Rs. 2,05,420/-. Here Total Income u/s.153A is equal to that shown in the Return u/s.139(1). Accordingly, notices us/s.143(2) & u/s.142(1) are issued and served. The A.R., Ms. Swati Kejirwal, FCA appeared from time to time and the case is discussed with her with reference to the facts in the return of income and also with reference to the books of accounts seized relating to the group of the cases as a whole." 9. Further, the ld. AR drew our attention to the Panchanama filed in the paper book at pages 8 to 23 and submitted that no such books of accounts has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that in an assessment made u/s.153A of the Act for an assessment year for which assessment has not been abated, then the jurisdiction of the Assessing Officer to make addition in such an assessment, is confined to such incriminating search material and no addition dehors the search material can be made. 11. Undisputedly, in the instant case, the assessment for the assessment years in question have already been completed on the date of search in the cases of both the assessees and since no incriminating material was unearthed during the search, as is evident from the panchanama prepared during the course of search, no additions can be made to the income already assessed. To support our view, we shall rely on the decision of Hon'ble Delhi High Court in the case of Kabul Chawla, [2015] 61 taxmann.com 412 (Delhi), wherein the Hon'ble High Court has held as under :- "On a conspectus of section 153A(1), read with the provisos thereto, and in the light of the law explained in various decisions, the legal position that emerges is as under: (i) Once a search takes place under section 132, notice under section 153A(1) will have to be mandatorily issued to the person searched requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oduced or not already disclosed or made known in the course of original assessment. [Para 37] The present appeals concern assessment years 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. [Para 38] The revenue's appeals are accordingly dismissed.[Para 40]" 12. In the present case, we find that there is nothing on record to suggest that any material was found in the course of search which would show any connection on addition made by AO with the seized material which is the subject matter of dispute in assessment order. Nothing is found contrary to the stated position of the assessee. We also find that there is no material referred to by the AO to say that any incriminating material was unearthed during the search. Therefore, in the factual background, we do not find any justification for the AO to make the impugned additions/disallowance in an assessment finalized u/s 153A of the Act in the absence of any incriminating material having been found during the course of search, qua the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income at Rs. 9,56,200/-and Rs. 2,95,840/- and MATY of Rs. 21,90,642/-. 24. In pursuance to search conducted on 6.8.2014, proceedings u/s.153A was initiated in the case of the assessee for the assessment years under consideration. In pursuance to these proceedings, the impugned orders of assessment was passed on 28.12.2016, where, additions of Rs. 9,94,50,000/- and Rs. 15,00,000/- were made on account of unexplained cash credit by invoking the provisions of section 68 of the Act. It is not in dispute that the time limit of issuance of notice u/s.143(2) of the Act with reference to the original return filed by the assessee on 29.9.2011 for the assessment year 2011-12 and on 27.9.2012 for the assessment year 2012-13, respectively expired on 30.9.2012 for the assessment year 2011-12 and on 30.9.2013 for assessment year 2012-13 and no such notice was issued to the assessee by the said dates. Thus, the original return of income became final on 30.9.2011 and 30.9.2012 for the assessment years 2011-12 and 2012-13, respectively i.e. before the date of relevant search. In other words, the assessment years under consideration were not abated. 25. Further, the other related facts which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the search then the Tribunal was right in holding that the power u/s.153A of the Act 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, (ii) Jai Steel (India) Ltd. Vs. ACIT, [2013] 36 axmann.com 523 (Raj.HC), wherein the Hon'ble Rajasthan High Court has held that the plea raised on behalf 0 the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and 'reassess' has been used for completed assessment proceedings, which would not abate as they are not pending on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly data of the assessee company was found which shows that the assessee has received cash credit from (i) Runicha Merchants Pvt Ltd., (ii) Sankalp (iii) Scope Vyapar, Event Developers Pvt ltd.,(v) Scope Vyapar, Harman Hire Purchase Pvt Ltd.(vi) Scope Vyapar Sarwati Vincom Ltd., (vi) Scope Alfha Properties Pvt Ltd., (vii) Signet Vinimay Pvt Ltd., (viii) Signet Country Wide Tradecom Pvt Ltd., (ix) Srijan Vypar Pvt Ltd., (x) Srijan Vyapar Caplin Marketing pvt Ltd., (xi) Srijan Tantia Agrochemicals Pvt Ltd.,(xii) West Line, Economy Advisory Services Pvt Ltd., (xiii)Winall Vinimay Pvt Ltd., (xiv) Winall Electro Cock Fuels Pvt Ltd and (xv) Yogiraj aggregating to Rs. 9,94,50,000/- for the assessment year 2011-12 and Rs. 15,00,000/- for the assessment year 2012-13. 30. In the instant case, we find that the addition was made by the Assessing Officer on the sole ground that amount received on sale of investment of Rs. 9,94,50,000/- for the assessment year 2011-12 and Rs. 15,00,000/- for the assessment year 2012-13 were unexplained cash credit of the assessee. Thus, there is not reference to any search material by the Assessing Officer based on which such additions were made in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years and no any incriminating material referred by the AO, therefore, the argument advanced by the ld. CITDR is not accepted. 17. Therefore, considering the above facts of the case and also the observations of both the lower authorities and the decision of the coordinate bench of the Tribunal referred above, we are of the substantive opinion that the assessment is unabated and the Tribunal is bound by the judicial precedence and, hence, applying the ratio of above decisions to the present case, we allow legal ground raised by the assessee for the assessment years 2009-2010 to 2012-2013 challenging the assessment framed u/s.153A of the Act in the absence of any incriminating materials nor observed by the AO while framing the assessment order. Accordingly, we set aside the orders of both the authorities below and held that assessment framed u/s.153A of the Act for all the four years under consideration are not sustainable being unabated assessment and, therefore, also no addition can be made while framing the assessment under section 153A of the Act having no incriminating material found during the course of search, which is clear from the assessment order. Hence, IT(SS)A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d-hoc disallowance of Rs. 3,61,079/-, being 20% of total expenditure of Rs. 18,05,394/- (i.e. Expenses of Rs. 11,32,050/- for Films, Drugs & Chemicals & Rs. 6,73,344/- for salary to staffs) made by the Ld. Assessing Officer alleging the same to be unverified without considering the nature of profession of the appellant and without considering the submissions during the proceeding. 5. That the appellant may add, alter, delete or modify any of the grounds at the time of hearing of the matter with the leave of the Hon'ble ITAT. 21. The assessee has also filed additional grounds in all the above three appeals, which read as under :- 1. That on the fact and circumstances of the case, no prior approval under section 153D has been granted by the Learned Joint commissioner of Income tax, Central Range, Bhubaneswar and the approval obtained as mentioned in the impugned assessment order under section 153A/144 of the I.T.Act,1961 by the Ld. A.O is no approval in the eye of law, and hence the assessment order rendering it to be held illegal and void ab-initio. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) is erred in law and facts in upholding the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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