DCIT CC, -7(2), MUMBAI vs. M/S. GLAMOUR HEALTH CARE PVT. LTD, MUMBAI

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ITA 2253/MUM/2021Status: DisposedITAT Mumbai30 October 2023AY 2009-107 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessment order under Section 153C for a concluded assessment year is unsustainable in the absence of any incriminating material found during the search. Furthermore, there was no satisfaction note recorded by the AO for AY 2009-10, which is a prerequisite for issuing a notice under Section 153C.

What were the facts?

The Assessing Officer (AO) made additions to the assessee's income under Section 153C of the Income Tax Act for AY 2009-10. The assessee's appeal to the CIT(A) was allowed, holding that no incriminating material was found during the search. The AO appealed this decision.

What were the issues?

Whether additions under Section 153C are valid without incriminating material in a concluded assessment year and in the absence of a satisfaction note.

Which sections of the Income-tax Act were involved?

Section 153C,Section 132(4),Section 143(3)

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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI

For Appellant: Shri Neelkanth Khandelwal, AR
For Respondent: Shri Dr. Kishor Dhule, CIT DR
Hearing: 28.08.2023Pronounced: 30.10.2023
1.

This appeal is filed by the Dy. Commissioner of Income Tax, Central Circle 7(2), Mumbai, (the learned Assessing Officer) against the appellate order passed by the learned Commissioner of Income-tax (Appeals)-49, Mumbai [the learned CIT (A)] for A.Y. 2009-10 dated 24th August, 2021, wherein the appeal filed by the assessee against the assessment order dated 28th December, 2019, passed under Section 143(3) read with section 153C of the Income Tax Act, 1961 (the Act) by the Asst. Commissioner of Income tax, Central Circle 7(2), Mumbai, (the learned

2.

Learned Assessing Officer is aggrieved and has preferred this appeal before us raising following grounds of appeal:-

“1. Whether on the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in deciding that AO did not have jurisdiction to make additions in an assessment u/s 153C of C the Act in the case of the assessee by ignoring the fact that there was incriminating material/ evidence.

2. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) is justified in deciding that the assessment u/s 153C was done solely on the basis of statement recorded under section 132(4) of the Act by ignoring the fact that incriminating material was available with AO which was duly recorded in the satisfaction note.

3.

On the facts and the circumstances of the case and in law, the Ld. CIT(A) has failed to discuss the merits of the case wherein the assessee has brought its unaccounted income Rs.4,51,86,000/- into its books of account.

The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary.” a. it is unsigned and b. that there is no satisfaction note for A.Y. 2009-10,

Therefore, the assessment order is not sustainable. It was the claim of the learned Authorized Representative on recording of satisfaction note under Section 153C of the Income-tax Act, 1961 (the Act) that the satisfaction note is for A.Y. 2012-13 to A.Y. 2017-18 only. Thus, there is no satisfaction note available for A.Y. 2009-10 and therefore, the assessment order passed without satisfaction note by the learned Assessing Officer is not sustainable.

4.

Ld AR further submitted that even otherwise, for A.Y. 2009-10, there is no incriminating material found during the course of search with respect to impugned addition made by the learned Assessing Officer and therefore, the decision of the Hon'ble Bombay HC in case of CIT Vs. Sinhgad Technical Education Society 63 Taxman.com 14, upheld by the Hon'ble Supreme Court in [2017] 84 taxmann.com 290 (SC) covers the issue.

5.

The learned CIT Departmental Representative produced before us the communication of the learned Assessing Officer extracting the noting in ITBA portal stating that on ITBA portal the learned Assessing Officer has mentioned that satisfaction is proper. He submitted that the learned Assessing Officer has made the addition of ₹4,51,86,000/-

6.

We have carefully considered the rival contentions and perused the orders of the lower authorities. The fact in this case shows that i. Assessee originally filed its return of income on 3rd June, 2010, declaring total income of ₹ Nil. ii. Subsequently, search under Section 132 of the Act, was conducted in case of Thakkar and Ashar Group on 5th July, 2017. iii. Thus, Ay 20009-10 is a concluded assessment which can only be disturbed on the basis of incriminating material and any other material available with ld AO. iv. A notice under Section 153C of the Act, on 26th September, 2019.

v. In response, assessee filed return of income on 11th December, 2019 at ₹ Nil. vi. During the course of search, it was noticed that registered address of the company is a residential premise. It was further noted that other shareholders company of the assessee were searched, which were also found to be non-existing on their respective registered address and which were mere paper vii. Assessment under Section 153C of the Act read with section 143(3) of the Act at ₹4,51,86,000/- was passed on28/12/2019. viii. The assessee challenged the assessment order on the ground that notice under Section 153C of the Act fails to demonstrate the satisfaction of the learned Assessing Officer and further in absence of any incriminating material, the addition has been made in a concluded assessment. ix. The learned CIT (A) asked the learned Assessing Officer to clarify whether the additions were made on the basis of any incriminating material or document found during the course of search. No such material or documents were brought on record by the learned Assessing Officer and therefore, the

7.

We do not find any infirmity in the order of the learned CIT (A) in deleting the addition in absence of any incriminating material found during the course of search. This is so because the Hon'ble Supreme Court in 397 ITR 344 and Hon'ble HC in the case of PCIT vs. Sinhgad Technical Education Society [63 taxmann.com 14 (Bombay)], has categorically held that in absence of any incriminating material qua the assessment year concluded assessment cannot be disturbed.

8.

With respect to the claim that there is no satisfaction note for issuing notice under Section 153C of the Act along with the impugned assessment order, whether on perusal of the satisfaction note produced before us are convinced that A.Y. 2009-10, no satisfaction note was produced.

9.

Only satisfaction note produced before us clearly shows that the learned Assessing Officer has recorded the satisfaction only with respect to the assessment year 2012-13 to A.Y. 2017-18. Thus, in absence of any satisfaction note for A.Y. 2009-10, the assessment order is not sustainable.

10.

Thus the assessment made by the ld AO fails on two counts (i) absence of any incriminating material in concluded assessment year and (ii) absence of satisfaction note for the impugned assessment year.

12.

Accordingly, we find no infirmity in the order of the learned CIT (A) and dismiss appeal of the learned Assessing Officer.

13.

In the result, the appeal of the learned Assessing Officer is dismissed.

Order pronounced in the open court on 30.10.2023.

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