PARVEEN KUMAR KAPOOR,FARIDABAD vs. DCIT, CENTRAL CIRCLE- 2, FARIDABAD

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ITA 2656/DEL/2018Status: DisposedITAT Delhi30 January 2023AY 2008-095 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since no incriminating material was found during the search and the assessment proceedings were not pending on the date of the search, the assessment framed under section 153A was bad in law. The Tribunal followed its own earlier order in the assessee's own case for subsequent assessment years.

What were the facts?

A search was conducted, and a notice under section 153A was issued to the assessee for AY 2008-09. The Assessing Officer made an addition of Rs. 3,24,000/- on account of cash deposits in the bank, treating it as income from undisclosed sources.

What were the issues?

Whether additions can be made under Section 153A in the absence of any incriminating material found during a search, and whether the assessment is valid if no proceedings were pending on the date of the search.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI BENCH “F”: NEW DELHI

Before: N.K. BILLAIYA & MS. ASTHA CHANDRA

For Appellant: Shri Somil Agarwal, Advocate
For Respondent: Shri Vivek Vardhan, Sr. DR
Hearing: 30/01/2023

The appeal filed by the assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals)-2, Gurgaon (“CIT(A)”) dated 19.01.2018 pertaining to Assessment Year (“AY”) 2008-09.

2.

The assessee has raised the following grounds of appeal:-

1. That having regard to the fact and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction and issuing of notice u/s 153 A of the Act.

Praveen Kumar Kapoor vs. DCIT 2 2. That in any case and in any view of the matter, the assessment framed under section 153A(l)(a) of the Act, is bad in law and against the facts and circumstances of the case.

3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of the Ld. A.O. in making addition of Rs. 3,24,000/- on account of cash deposited in the bank account as alleged income from undisclosed sources and that too in the proceedings u/s 153A of the Act.

4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs. 3,24,000/- is bad in law and against the facts and circumstances of the case.

5. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned order without giving adequate opportunity of being heard.”

3.

Briefly stated, it is a search case. search under section 132 of the Income Tax Act, 1961 (“Act”) was conducted at the residential and business premises of M/s. SRS Group on 09.05.2012. Notice dated 06.08.2013 under section 153A (1) (a) of the Act was issued and served upon the assessee requiring him to file return for AY 2008-09. In response to the said notice the assessee filed his return on 01.09.2013 declaring income of Rs.2,51,920/-. During assessment proceedings, the Ld. Assessing Officer (“AO”) found from the assessee’s bank account statement that there were cash deposits on various dates during the year aggregating to Rs.3,24,000/- . According to the Ld. AO the assessee failed to explain the source of the said deposit. He therefore, treated the same as the income of the assessee from undisclosed sources. Accordingly, the assessment was completed on total income of Rs. 5,75,920/- on 27.02.2015 under section 153A read with section 143(3) of the Act.

4.

Aggrieved, the assessee filed appeal before the Ld. CIT(A) who passed a consolidated order for A.Y. 2008-09 to 2011-12 on 19.01.2018 wherein following his order for A.Y. 2011-12, he dismissed the assessee’s appeal for A.Y. 2008-09. In A.Y. 2011-12 similar addition of Rs. 2,45,000/- being unexplained cash deposit was made by the Ld. AO. During appellate proceedings, the assessee filed written submission which has been recorded

Praveen Kumar Kapoor vs. DCIT 3 by the Ld. CIT(A) in para 5 of his order. Considering the said submissions, the Ld. CIT(A) declined to interfere with the order of the Ld. AO by observing inter alia that the decision of Hon’ble Delhi High Court in CIT vs. Kabul Chawla 380 ITR 573 (Delhi) relied upon by the assessee was distinguishable on facts.

5.

Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

6.

The Ld. AR submitted that the issue is covered in favour of the assessee by the order dated 26.07.2021 of the Tribunal in assessee’s own case in and ITA No. 2658/Del/2018 for A.Y. 2009- 10 and 2010-11 respectively, copies of which are placed at pages 41-46 of the paper book. He submitted that no incriminating material was found and that the assessment is abated in the relevant A.Y. 2008-09. He relied on the decisions of Hon’ble Delhi High Court in Kabul Chawla’s case (Supra) and in the case of Pr. CIT vs. Meeta Gugutia (2017) 395 ITR 526 Delhi ; the SLP filed by the revenue against which stands dismissed in Pr. CIT vs. Meeta Gugutia (2018) 257 taxman 441 (SC). The Ld. AR further submitted that the Ld. CIT(A) has not correctly appreciated the decision in Kabul Chawla’s case (supra).

7.

The Ld. DR supported the orders of Ld. AO/CIT(A).

8.

We have considered the submissions of the parties and perused the records. We observed that identical issue came up for consideration in assessee’s own case for A.Y. 2009-10 and 2010-11 and the Tribunal in its order (supra) allowed the appeal of the assessee by observing in para 7 thereof as under :- “7. We have heard the Ld. DR and perused all the relevant material available on record. The Hon’ble Delhi High Court in case of CIT(A) vs. Kabul chawla 380 ITR 573 held that no additions to be made in assessment framed u/s 153A of the Act in the absence of any incriminating material, their assessment were not abated. In the present Assessment Year 2009-10, the return was filed on 12th November, 2009 and the due date of issuing of notice u/s 143(3) is 30th September, 2009 the date of search is 9/5/2012 and date of filing of return post search is 10/09/2013. Thus,

Praveen Kumar Kapoor vs. DCIT 4 from the above, it can be observed that no proceedings were pending on the date of search for Assessment Year 2010-11. The date of filing original returns u/s 139(1) was on 6/8/2010, the date of search was 9/5/2012. The return filed u/s 153A was on 10/9/2013 and due date of issuance of notice was 30th September, 2010. As the date of search is 9/5/2012. Thus, in Assessment Year 2010-11 as well no proceedings were pending as on the date of search. Thus, the applicability of decision of the Hon’ble Delhi High Court in case of Kabul Chawla is relevant in the present case as no incriminating material was found and there is no mention in the assessment order as well as in the order of the CIT(A) relating to the reliance of any material for making specific addition in the assessment. Thus, assessment itself becomes void ab initio. In result, both the appeals of the assessee are allowed.”

9.

Since, admittedly the facts and circumstances of the case remain the same in A.Y. 2008-09 under consideration, respectfully following the order of the Tribunal supra, we allow the appeal of the assessee.

10.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 30th January, 2023. sd/- sd/- (N.K. BILLAIYA) (ASTHA CHANDRA) ACCOUNTANT MEMBER JUDICIAL MEMEBR Dated: 30/01/2023 Copy forwarded to- 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi

Praveen Kumar Kapoor vs. DCIT 5

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