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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. N.K.CHOUDHRY & DR. A.L.SAINI
ORDER
PER N.K.CHOUDHRY, JM:
The assessee has preferred the instant appeals against the separate orders dated 31.10.2018 passed by the Ld. CIT(A)-5, Ludhiana, u/s 250(6) of the Income Tax Act, 1961 (hereinafter called as ‘the Act’).
In both the appeals the issues are identical, therefore, for the sake of brevity have been taken simultaneously for adjudication by this composite order and the facts of the case of ITA No.128/Asr/2019.
At the outset, it was observed that there is delay of 34 days in filing of the instant appeals, for which the assessee has prayed for condonation of delay on the ground that though the impugned orders were served upon the assessee on dated 09.11.2018 and therefore, the appeals were supposed to be filed on or before 8th January, 2019. Consequently, impugned order and documents related to the appeals were handed over to the assessee’s employee for transmition to assessee’s counsel with direction to file the appeals before the Hon’ble ITAT, Amritsar, however, the impugned orders were misplaced at the assessee employee’s end and after frantic search, the original orders could not be traced, however, later on the same have been procured and provided to the counsel who filed the instant appeals. Consequently delay of around 34 days occurred in filing of the instant appeals. As the assessee was prevented by a reasonable cause for non-filing of the appeals within the prescribed time, therefore, in the interest of justice, the delay is liable to be condoned. The assessee has also filed affidavit in support of his contentions.
The Ld. DR, on the contrary refuted the claim of the assessee and submitted that the assessee is not entitled for any leniency of his latches.
Having considered the submissions of the parties. The assesse has duly filed his affidavit in support of his contention. Delay as explained by the assessee as to handing over the documents to his employee, which could not be transmitted to the assessee’s counsel but later on the orders have been procured and consequently the appeals have been filed with delay. In our considered view, the reasons for not filing the appeal within limitation time seems to be reasonable and beyond the reach of the assessee. Hence, considering the same as genuine and bonafide, we are inclined to condone the delay of 34 days in filing of the instant appeals. Hence, the delay in filling of the appeals under consideration stands condoned.
In Rs.4,07,000/- on dated 30.03.2011 which was processed and completed by the Revenue Department on dated 23.11.2011 u/s 143(1) of the Act. Thereafter, a search was carried u/s 132(1) of the Act at the residence of assessee and his family on dated 05.12.2013. Consequently, the notice dated 18.07.2014 u/s 153A was issued to the assessee and the assessee vide letter dated 21.03.2015 stated that the original return filed may be treated as having been filed in response to the said notice. Thereafter, various statutory notices have been issued which remained un-complied. Ultimately the Assessing Officer made an addition of Rs.2,90,000/- as an agriculture income and Rs.29,65,000/- as unexplained credits in the accounts of the assessee u/s 68 of the Act.
The assessee challenged the said addition before the Ld. CIT(A) and raised various grounds and submitted that assessment in the instant case has already been completed and no incriminating material has been found, therefore, no addition could be made u/s. 153A/144 of the Act. The Ld. CIT(A) vide impugned order on the same footing as held by Assessing Officer partly upheld the order of the Assessing officer and reduced the addition of Rs.29,65,000/- to Rs.22,75,000/- u/s 68 of the Act, against which the assessee is in appeal before us.
The Assesse while relying upon the judgment of Delhi High Court in the case of CIT vs. Kabul Chawla {61 taxmann.com 412}, reiterated the same stand taken by the Asseeee before the authorities below.
On the contrary, the Ld. DR relied upon the various judgments and submitted that though the incriminating material was recovered during the time search operation, however in law there is no necessity of any incriminating material while initiating proceedings u/s 153 of the Act as held by various High Courts and the addition can be made without any incriminating material qua the years covered by Sec.153A.
The Ld. DR further argued that the conclusion drawn by Delhi High Court in the case of CIT vs. Kabul Chawala (supra) is contrary to the principle laid by the same High Court in the case of Anil Kumar Bhatia (24 taxmann.com 98) and Chetan Das Lachman Das (25 taxmann.com 227) and also various decision of other High Courts. Further the decision of Kabul Chawla (supra) is not a good law because the issue relating to material not found during the search was considered to be open in Anil Kumar Bhatia (supra) whereas the same was already decided in that case. Consequently, the case decided in Chetan Das Lachman Das (supra) was not distinguishable from the case of Kabul Chawla (supra).
Having heard the parties at length and perused the material available on record. Though the Asseeee has claimed before the authorities below that where no assessment proceedings for the year under consideration were pending, in that eventuality, in the absence of any incriminating evidence found during the course of search and seizure proceedings, no addition/disallowance can be made qua unabated assessment for the said year, however the authorities below held have held that as per Kerala high Court judgment in the case of Kerala High Court in the case of ‘E.N. Gopal Kumar vs. CIT(Central)’ (Supra), there is no condition that the Department has to unearth some incriminating material to conclude some method against the assessee in events where the assessment is triggered by a notice under Section 153(1)(a) of the Act.
10.1 On the basis of rival claims of the assessee and the revenue department, the question involved in this case relates to the situation " if on the date of search, the assessment proceedings already stood completed and no incriminating material unearthed during the search operation from the assessee's possession or premises, in that eventuality, whether the addition can be made to the income already assessed".
10.2 There are various judgments against the assessee’s contention but we are quoting few on which the Revenue Department relied:-
(i) ‘E.N. Gopal Kumar vs. CIT (Central)’ reported 390 ITR 131(Kerela High Court) (ii) CIT vs. Raj Kumar Arora, 52 Taxmann.com.172 (iii) CIT vs. K.P. Ummaer, Prop. Star Rolling Mill [2019] 413 ITR 0251 (iv) Canara Housing Development Co. vs. DCIT 49 taxmann.com 98, (v) CIT vs. Anil Kumar Bhatia 24 taxmann.com 98 (vi) CIT vs. Chetan Das Luchman Das 25 taxmann.com 227.
10.3 There are many judgments of various High Courts in favour of the assessee’s contention. For the sake of brevity, we are mentioning few.
(1) CIT vs. Kabul Chawala 61 taxmann.com 412 (2) Pr. CIT vs. Dharampal Premchand Ltd. [2018] 408 ITR 0170 (Delhi High Court) (3) Pr. CIT vs. Sunrise Finlease (Pvt.t) Ltd. [2018] 305 CTR (Guj) 421 (Gujrat High Court) (4) CIT vs. Deepak Kumar Agarwal & Ors [2017] 100 CCH 0011 (Mumbai High Court) (5) Pr. Joint CIT vs. Meeta Gutgutia [2017] 395 ITR 526 (Delhi High Court) (6) Pr. Joint CIT vs. Meeta Gutgutia [2018] Taxmann.com 411 (Supreme Court) in SLP (C ) Dairy No. 18121/2018 dated 2nd July, 2018.
10.4 No doubt there are judgments on both sides to the issue, however, as per decision of Hon'ble Apex Court in the case of CIT Vs. Vegetable Products 88 ITR 192 , wherein the Hon'ble Court laid down the proposition to the effects "whenever there are two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted" meaning thereby when two different views of Court are available on an issue then the view which favors the assessee or the judgment which favours the assessee should be followed, we do not have hesitation to follow the judgment of Hon’ble Delhi High Court rendered in the case of CIT(Central-3) vs. Kabul Chawla (supra) wherein clearly held that if on the date of search, the assessment proceedings already stood completed and no incriminating material unearthed during the search, then no addition can be made to the income already assessed. The said dictum of the Hon’ble High Court confirmed by the Hon’ble Apex Court vide order dated 2nd July, 2018 in the case of Pr. Joint CIT vs. Meeta Gutgutia (supra) by dismissing the SLP filed against the judgment of Delhi High Court, wherein the same dictum has been laid down by the Hon'ble Court as laid down in the CIT vs. Kabul Chawla (supra), hence it cannot said that law laid down by Delhi High Court in Kabul Chawla case {supra} is not a good law as claimed by the Ld. CIT DR. Even otherwise the cases relied upon decided by the High Courts have not been confirmed by the Hon’ble Apex Court, hence, the view which favors the assessee and/or the judgments which favours the assessee are required to the respectfully followed .
10.5 While coming to the instant case, though the Ld. CIT DR also relied upon the judgment of apex Court in Dy. CIT Vs Zuari Estate Development and Investment Co. Ltd. [2015] 373 ITR 661 and submitted that any intimation issued u/s 143(1) cannot be considered as assessment, however it is a fact that in this case Income Tax Return filed by the assessee for the relevant assessment year: 2011- 12 has been processed and completed on 23.12.2011 by the Revenue Department u/s 143(1) of the Act and it is not the case of the Revenue Department that the assessment proceedings were still alive as on the date of search operation, therefore the case cited by the Ld. CIT DR is distinguishable on facts.
Even from the orders passed by the authorities below there is nothing to suggest as to what incriminating material has been found on dated 05.12.2013 during the search u/s 132(1) of the Act from the assessee possession or his premises, on the basis of which the additions have been made.
As the issue involved in the instant case is squarely covered by the decisions of Delhi High Court in the case of CIT vs. Kabul Chawla (supra) and CIT vs. Meeta Gutgutia (supra), hence respectfully following the same, we are inclined to delete the addition made by the AO and sustained by the Ld. CIT(A). Consequently, the appeal is liable to be allowed.
In the result, the both the appeals filed by the assessee stands allowed.
Order pronounced in the open Court on 01/01/2020.