ACIT CIRCLE-19, NEW DELHI vs. PUNAM KANSAL, NEW DELHI

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ITA 4055/DEL/2019Status: DisposedITAT Delhi28 June 2022AY 2010-118 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the Commissioner (Appeals)'s decision, stating that in the absence of incriminating material found during search, additions cannot be made to a completed assessment. The Tribunal relied on the jurisdictional High Court's decision in CIT vs. Kabul Chawla.

What were the facts?

A search operation was conducted on the assessee, leading to a notice under section 153A. The Assessing Officer (AO) made significant additions to the assessee's income. The Commissioner (Appeals) granted substantial relief, holding that completed assessments could not be interfered with without incriminating material.

What were the issues?

Whether additions can be made under section 153A in the absence of incriminating material when the assessment is already completed. Whether a completed assessment can be reopened without any incriminating evidence found during search.

Which sections of the Income-tax Act were involved?

Section 153A,Section 143(3),Section 68,Section 143(2)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, DELHI BENCHES “F” : DELHI

Before: SHRI ANIL CHATURVEDI & SHRI N.K. CHOUDHARY

Hearing: 14.06.2022Pronounced: 28.06.2022

ORDER PER ANIL CHATURVEDI, A.M.

The above appeals by the Revenue are directed against the separate orders of the Ld. CIT(A)-27, New Delhi, dated 26.02.2019 relating to the A.Ys. 2010-11 & 2012-13. Since common issues are involved in both the appeals, the appeals were heard together and are being disposed of by 2 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. this consolidated order. Both the parties are agreed that the decision taken in the A.Y. 2012-13 may be applicable for the other assessment year A.Y. 2010-11. We, therefore, take-up the appeal for the A.Y. 2012-13 as under.

ITA.No.4656/Del./2019 – A.Y. 2012-13 :

2.

The relevant facts as culled from the material on records are as under :

2.1. The assessee is an individual. The A.O. noted that a search and seizure operation under sections 132/133A of the I.T. Act, 1961 was conducted on 08.07.2015 in the case of the assessee along with other cases of KR Pulp & Papers Ltd., Group at various residential and business premises of the assessee. Consequently, notice under section 153A of the I.T. Act, 1961 was issued on 03.03.2017 and in response to which, the assessee filed her return of income for the A.Y. 2012-13 on 06.04.2017 declaring total income at Rs.11,31,540/-. Thereafter, the case was selected for scrutiny and consequently, assessment was framed under section 153A read with Section 143(3) of the I.T. Act, 1961

3 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. vide order dated 29.12.2017 and the total income of the assessee was determined at Rs.1,98,21,110/-.

2.2. Aggrieved by the order of the A.O. assessee carried the matter in appeal before the Ld. CIT(A) who vide order dated 26.02.2019 in Appeal No.331/17-18 granted substantial relief to the assessee.

3.

Aggrieved by the order of the Ld. CIT(A), the Revenue is now in appeal before the Tribunal and has raised the following grounds :

1.

The Ld. CIT(A) has erred in law in relying on the ratio held in Kabul Chawla 61 taxman.com 412 (Delhi) and in holding that completed assessment could not be interfered by the AO without incriminating material. On the contrary, for making the assessment u/s 153A of the Act, 1961, the Act does not stipulates any such conditionality on A.O.

2. Whether Ld. CIT(A) has erred in law by relying on the ratio held in Kabul Chawla 61 taxman.com 412 (Delhi) and deleting the following additions :

4 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. (i) Addition of Rs.10,50,000 /- on account unexplained cash credit u/s 68 of Act (ii) Addition of Rs.l0,21,000/- on account of agriculture income (iii) Addition of Rs.1,66,18,570/- on account of Long Term Capital Gain on sale of agriculture land.

3. Whether the ld. CIT(A) erred in law and fact of the case in admitting the additional evidence under Rule 46A contrary to the fact that sufficient opportunities were provided to the assessee during the assessment proceedings. 4. (a) The order of the CIT (Appeals) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal.”

4.

Before us, the Ld. D.R. at the outset, submitted that though the Revenue has raised various grounds of appeal, but, the issue is with respect to holding that no 5 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. addition can be made under section 153A without any incriminating material.

4.1. He has also placed reliance on the decision of Hon’ble Allahabad High Court in the case of Rajkumar Arora reported in [2014] 211 Taxman 453 (Alld.) and the decision of Hon’ble Kerala High Court in the case of Dr. A.V. Sreekumar vs., CIT reported in [2018] 404 ITR 642 (Kerala).

4.2. Before us, the Ld. D.R. took us through the order of A.O. and supported the order of the A.O. He further submitted that the time limit for issue of notice under section 148 had not expired and, therefore, the Ld. CIT(A) had erred in holding that the time limit for issue of notice had expired and had erred in following the decision of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla [2015] 380 ITR 573 (Del.).

5.

The Learned Authorised Representative for the assessee, on the other hand, pointed-out to the findings of Ld. CIT(A) at paras 7.1 and 7.2 of the order and submitted that on the date of search i.e., on 08.07.2015 the 6 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. assessment order for the A.Y. 2012-13 was a completed assessment as the time period for issuing notice under section 143(2) of the I.T. Act, 1961 had already been expired and thus, the assessment was not abated. He further pointed to the findings of the Ld. CIT(A) wherein he has noted that no incriminating material was found in the case of assessee during search proceedings and, therefore, no disallowance could have been made by disturbing income disclosed in the return filed by the assessee. He, thus, supported the order of the Ld. CIT(A) and also relied on the decision of Hon’ble jurisdictional Delhi High Court in the case of CIT vs., Kabul Chawla [2015] 380 ITR 573 (Del.) and other decisions. He, therefore, supported the order of the Ld. CIT(A).

6.

We have heard the Learned Representatives of both the parties and perused the material on record. The issue in the present case is with respect to deletion of addition by the Ld. CIT(A) by holding that in the absence of any incriminating material, the completed assessment could not be interfered with. We find that the Hon’ble Delhi High

7 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. Court and the Delhi Benches of the Tribunal by following the decision of Hon’ble Delhi High Court in the case of CIT vs., Kabul Chawla (supra), has been consistently holding that in absence of any incriminating material, no addition could be made when the assessment orders have attained finality. Considering the totality of the facts and circumstances of the case and in absence of any contrary binding decision of jurisdictional High Court we find no reason to interfere with the order of Ld. CIT(A) and thus, we dismiss the ground raised by the Revenue.

In the result, ITA.No.4056/Del./2019 for the 7. A.Y. 2012-13 is dismissed.

8.

Since identical grounds have been raised and the facts are similar in ITA.No.4055/Del./2019 for the A.Y. 2010-11, respectfully following the decision taken in the A.Y. 2012-13 in ITA.No.4056/Del./2019 hereinabove and for similar reasons we dismiss the grounds raised by the Revenue for the A.Y. 2010-11.

8 ITA.No.4055 & 4056/Del./2019 Ms. Punam Kansal, New Delhi. ITA.No.4055/Del./2019 is 9. In the result, dismissed.

To sum-up, both the appeals of the Revenue 10. are dismissed.

Order pronounced in the open court on 28.06.2022.

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