TMI Blog2022 (4) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating material found during search qua the assessee qua the AY 2014-15. In such a scenario, no addition was legally sustainable as held by the Hon ble Delhi High court in Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT] Thus unless there is incriminating material qua each of the A Y s in which additions are sought to be made, pursuant to search and seizure operation, the assumption of jurisdiction under Section 153A of the Act would be vitiated in law for an unabated assessment. - Decided in favour of assessee. - I.T.A. No. 324 And 325 And 326/GAU/2019 - - - Dated:- 7-4-2022 - Shri A. T. Varkey, JM And Shri Manish Borad, AM For the Appellant : Shri P S Thuingaleng, ACIT For the Respondent : Shri Somnath Ghosh, Advocate ORDER PER SHRI A. T. VARKEY, JM: The captioned three appeals preferred by the revenue against the orders passed in respect of the three different assessee s by the Ld. CIT(A)-1, Guwahati all dated 08.04.2019 for assessment year 2014-15. 2. At the outset itself, since both the representatives of the revenue as well as the assessee submitted that the facts involved in all the three appeals are the same and the grounds of app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income filed originally u/s. 139(1) of the Act). Thereafter, the AO passed the scrutiny assessment u/s. 153A/143(3) of the Act dated 31.12.2018 whereby the income has been assessed at ₹ 4,25,30,080/-. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) which was allowed by the Ld. CIT(A). Hence, the revenue is in appeal before us. 7. Taking up the issue no. 1 raised by the Revenue regarding the impugned finding of the Ld. CIT(A) that assessment pertaining to AY 2014-15 was abated as per section 153A of the Act. The facts pertaining to the abatement of the proceedings is that it is undisputed that the assessee had filed the original return of income u/s. 139(1) on 31.07.2014 declaring income of ₹ 2,00,080/-. It is also undisputed that the time limit to issue mandatory notice before scrutiny for AY 2014-15 u/s. 143(2) of the Act was 30.09.2016. It is an undisputed fact that no notice u/s. 143(2) of the Act was issued by the AO in respect of the return filed by the assessee u/s. 139(1) of the Act on 31.07.2014 or that is the case of the revenue. The undisputed fact is that the assessee s return u/s. 139(1) of the Act was processed u/s. 143(1)(a) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n only on the basis of incriminating materials. Therefore, when tested as the touch stone of this judicial precedent on the facts of this case it is clear that when the return of income u/s. 139(1) of the Act was filed by the assessee on 31.07.2014 declaring income of ₹ 2,00,080-/- and when the statutory notice u/s. 143(2) of the Act was not issued by the AO dated 30.09.2015 proposing scrutiny of the assessee and the time bar for not issuance of section 143(2) notice has expired, then the necessary corollary is that assessment pertaining to AY 2014-15 is not pending on the file of the AO when the search happened on 02.06.2016. Therefore, the finding of the Ld. CIT(A) on this issue that on the date of search i.e. on 02.06.2016 the assessment pertaining to AY 2014-15 was not pending before the AO and, therefore, the assessment is an unabated assessment has been rightly decided by the Ld. CIT(A) which finding is in line with the judicial precedents which will be discussed infra. 9. The Ld. CIT, DR Shri P S Thuingaleng has however, submitted that in assessee s case the return u/s. 139(1) of the Act was processed only u/s. 143(1)(a) of the Act [ intimation] and, therefore, cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the aforesaid facts, and by relying on the decision of the Hon ble Delhi High Court in Kabul Chawla (supra) the Ld. CIT(A) held that since there was no incriminating material against the assessee in respect of the share transaction in question, no addition could have been made and deleted the addition. This action of Ld. CIT(A) has been challenged by the Revenue. 12. The Ld. CIT(A) has held as under: For the above assessment year, I note that the Appellant had filed a return of income under Section 31/07/2014 wherein the Appellant had duly disclosed the impugned capital gain and claimed the exemption accordingly. Admittedly there was no regular assessment made on the Appellant for the above assessment year. Also the time limit for issuance as well as service of notice under Section 143(2} of the Act in the case of the Appellant for the above assessment year had already expired on 30/09/2015. Thus as on the date of Search in the case of the Appellant, i.e. on 02/06/2016, the assessment for the above assessment year 2014-15 was a completed assessment and therefore following the ratio of the above judgments as discussed earlier, in the absence of any incriminating documents or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument while making the impugned addition in the hands of the Appellants and thus the impugned addition, in the absence of reference to any incriminating material and considering that in view of the ratio of the judgment in the case of Kabul Chawla, discussed per supra, the proceedings for the impugned assessment year were completed and could not have been disturbed. 13. In Kabul Chawla (supra) the Hon ble Delhi High court has held as under: 34. In Kabul Chawla (supra) the legal position was summarised thus: 37. On a conspectus of Section 153A (I) 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 153A(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 ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as alleged coercion/duress of obtaining it (refer page 19 of paper book)]. It is noted that other than the statement of his father which has been obtained under threat/coercion/duress [ which has been retracted within few days] the AO has made the addition as undisclosed income the assessee s LTCG to the tune of ₹ 4,40,50,000/-. However we find that other than the retracted statement there was no iota of evidence/material to substantiate the impugned additions. The Ld. CIT(A) has given a finding of fact that other than the assessee s father s statement regarding the LTCG of assessee, there was no incriminating material found during search qua the assessee qua the AY 2014-15. In such a scenario, no addition was legally sustainable as held by the Hon ble Delhi High court in Kabul Chawla (supra) and in this context it is noted that similar ratio was agreed upon in the case of Meeta Gutgutia (supra) Delhi High Court. And it is noted that several other High Courts have also come to similar conclusion either by following Kabul Chawla (supra) or otherwise. This includes the decisions of the Hon ble Gujarat High Court in Pr CIT v. Soumya Construction (P.) Ltd. [2016] 387 ITR 529/[201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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