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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI G. MANJUNATHA
आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT: These four appeals by the assessee are arising out of four different revision orders passed by Principal Commissioner of Income Tax (Central), Chennai-2 u/s 263 of the Income Tax Act, 1961 (hereinafter the ‘Act’) in Revision Nos. PCIT(Central), Chennai- 2/Revision-263/100000172453 , 100000172454, 100000172455 & 100000172456/2021, vide orders of even date 30.03.2021 for the assessment years 2011-12, 2012-13, 2013-14 & 2014-15.
to 466/Chny/2021 2 2. At the outset, it is noticed that these appeals are barred by limitation by 163 days. The orders of PCIT dated 30.03.2021 was received by assessee on 31.03.2021 as per Form 36 but appeals were filed only on 09.11.2021. The ld. AR for the assessee stated that the delay was due to Covid-19 pandemic and the Hon’ble Supreme Court in Miscellaneous Application No.665 of 2021 vide order dated 23.03.2020 has given directions that the delay are to be condoned during this period 15.03.2020 to 14.03.2021 and they have condoned the delay up to 28.02.2022 in Miscellaneous Application No.21 of 2022 vide order dated 10.01.2022. In term of the directions of Hon’ble Supreme Court, we condone the delay in filing of these appeals by assessee and admit the appeals for adjudication.
At the outset, today during the course of hearing, Revenue has filed a letter written by the AO i.e., the DCIT, Central Circle, Salem vide No.ITAT Report/CC/SLM/2022-23 dated 10.05.2022, wherein he admitted the facts and the relevant text of the letter reads as under:- A search u/s l32 of the I.T. Act was conducted in the case of the assessee On 27.12.2016 Consequent to search this case was notified to this circle and notice u/s 153A was issued on 12.06.2018. The search assessments were Completed in the case of the assessee on 29.12.2018 for the A.Ys from 2011-12 to 2014-15. to 466/Chny/2021 3 Later, the assessments were set-aside by the Pr. Commissioner of Income- tax, Central-2, Chennai vide order u/s 263 of the Act dtd. 30.03.2021 to this office to make the order de nova with a direction verify the genuineness of the source cash deposits and verify the income claimed from bank audit fees as reflected in the return of income, after giving due opportunity to the assessee.
Meanwhile, the assessee preferred an appeal before the CIT(A) against the order passed by the A.O. u/s 153A r.w.s. 143(3) of the Act. One common ground raised by the Assessee in all its appeals with respect to jurisdictional issue of the validity of invocation of section 15A of the Act by the A.O. as there was no incriminating material seized during the course of search and, therefore, the assessment order in respect of those AYs ought to be quashed. In support of his claim the a65es666 relied on many case laws and more specifically the decision of the Hon'ble Delhi High Court in the case of PCIT Vs Meeta Gutgutia.
The CIT(A) after verifying all the facts and the decision of the Hon’ble High Court dismissed the appeal of the assessee for the A.Ys. 2011-12 to 2014-15 observing that the SLP filed by the department before the Hon'ble Supreme Court is pending in the above case.
The assessee preferred further appeal before the Hon'ble ITAT, Chennai and Hon'ble ITAT, "B" Bench, Chennai has allowed the appeal of the assessee for the assessment years 2011-12 to 2014-15. In the order of the ITAT a finding has been given that an assessment u/s 153A can be made only on the basis of seized material or incriminating documents found in the course of search. The Hon'ble ITAT has followed the decision of the Hon'ble Suprerne Court in the case of PCIT V Meeta Gutgutia 96 taxmann.com 468 (SC)
In view of the above ITAT order the assessment framed u/s 153A for the above assessment years (2011-12 to 2014-15) got cancelled.
When the original assessment itself has been cancelled, the order u/s 263 passed in respect of such assessment orders also becomes inoperative.
Further, considering the low tax effect involved in this case further appeals were not suggested in the above cases and decision of the Hon'ble ITAT was accepted by the department. The reassessment proceedings initiated as to 466/Chny/2021 4 per the directions of the Pr. Commissioner of Income-tax, Central-2, Chennai, under section 263 of the Act were dropped (for A.Y.s 2011-12 to 2014-15)
4. We noted that the Tribunal has already quashed the assessment in to 388/Chny/2020, order dated 15.11.2021 vide para Nos.7 & 8 as under:- 7. We have heard both the parties, perused material available on record and gone through orders of the authorities below. Admittedly, during course of search no incriminating material was found with respect to additions made by the Assessing Officer towards disallowance of interest expenses u/s.37 of the Income Tax Act, 1961. It is also an admitted fact that there is no reference to any seized material / incriminating material in respect of assessment of income from other sources u/s.68 r.w.s 115BBE of the Act. It is well settled principles of law by the decisions of various Courts, including decision of the Hon'ble Supreme Court in the case of PCIT Vs. Meeta Gutgutia Prop. M/s. Ferns N Petals (supra) that in absence of incriminating material found as a result of search u/s.132 or requisition u/s.153A of the Act, completed assessments cannot be disturbed in the assessment framed u/s.153A of the Income Tax Act, 1961. This legal proposition is supported by plethora of decisions, including decision of the Hon’ble Bombay High Court in the case of CIT Vs.Continental Warehousing Corporation 374 ITR 645 (Bom), the Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla 380 ITR 573(Del) and the Hon’ble High Court of Gujarat in the case of PCIT Vs. Dipak Jashvanthalapunchal 397 ITR 153 (Guj). Further, the Hon'ble Supreme Court has dismissed SLP filed by the Revenue against order of the Hon’ble Delhi High Court in the case of PCIT Vs.Meeta Gutgutia 96 taxmann.com 468 (SC). The sum and substance of ratios laid down by various High Courts is that unabated/completed assessments cannot be disturbed in absence of any incriminating material found as a result of search.
In this case, search took place on 27.12.2016. The assessments for assessment years 2011-12 to 2014-15 are unabated / completed as on date of search, because assessments either completed u/s.143(1) / 143(3) of the Act and further statutory time limit for issue of notice u/s.143(2) has been expired on 30.09.2015 i.e., much before date of search on 27.12.2016. to 466/Chny/2021 5 Therefore, in our considered view, assessments for assessment years 2011- 12 to 2014-15 are unabated / completed. Further, no reference of any incriminating material found as result of search in respect of additions made by the Assessing Officer towards disallowance of interest u/s.37 of the Act and for assessment of income from other sources u/s.68 r.w.s 115BBE of the Income Tax Act, 1961. In absence of any incriminating material found as result of search, completed / unabated assessments cannot be disturbed to make additions towards income which was already disclosed in regular return filed for relevant assessment years. Therefore, we are of the considered view that additions made by the Assessing Officer towards disallowance of interest u/s.37 of the Act and further assessment of income from other sources u/s.68 r.w.s 115BBE of the Act cannot survive under law. Hence, we direct the Assessing Officer to delete additions made towards interest u/s.37 of the Act and assessment of income from other sources u/s.68 r.w.s. 115BBE of the Act for all assessment years.
Since the assessments were already quashed in these four years, these revision orders have become infructuous and inoperative and hence the appeals of assessee are allowed.
In the result, the appeals of the assessee are allowed.
Order pronounced in the open court on 6th July, 2022 at Chennai.