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Facts
The assessee's appeals (ITA Nos. 479 & 480/Del/2017 and related penalty cases) challenge assessments made without clear-cut findings on whether additions were based on seized material. The Revenue's appeals concern penalty proceedings where the CIT(A) deleted penalties because the underlying additions were reversed.
Held
The Tribunal restored the assessee's appeals concerning assessments for AY 2006-07 and 2007-08 back to the CIT(A) for fresh adjudication, as the original orders lacked clear findings on the basis of additions. The Revenue's appeals were dismissed as the CIT(A) had deleted penalties based on reversed additions.
Key Issues
Whether additions made during assessment proceedings under Section 153A/143(3) were based on specific incriminating material found during the search. Whether penalties levied under Section 271(1)(c) are sustainable when the related quantum additions are reversed.
Sections Cited
153A, 143(3), 271(1)(c), 132(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH: ‘F’ NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA
ORDER
PER SATBEER SINGH GODARA, JM
The instant batch of seven cases involves the single assessee herein, namely, Sh. Charu Shekhar Gupta. All other relevant details thereof stand tabulated as under:
Sl. Appeal No. Appellant Respondent Order Appealed against No.
1. ITA No. Sh. Charu ACIT, CC-3, CIT(A)-23, New Delhi’s order 479/Del/2017 Shekhar New Delhi dated 29.11.2016 in case for AY: 2006-07 Gupta no. 286 & 287/14-15 involving proceedings under Section 153A/143(3) of the Act.
ITA No. Sh. Charu ACIT, CC-3, CIT(A)-23, New Delhi’s order 480/Del/2017 Shekhar New Delhi dated 29.11.2016 in case for AY: 2007-08 Gupta no. 286 & 287/14-15 involving proceedings under Section 153A/143(3) of the Act.
3. ITA No. Sh. Charu ACIT, CC-3, CIT(A)-23, New Delhi’s order 6358/Del/2019 Shekhar New Delhi dated 27.05.2019 in case for AY: 2006-07 Gupta no. 287/15-16 involving proceedings under Section 271(1)(c) of the Act.
ITA No. Sh. Charu ACIT, CC-3, CIT(A)-23, New Delhi’s order 6365/Del/2019 Shekhar New Delhi dated 27.05.2019 in case for AY: 2007-08 Gupta no. 288/15-16 involving proceedings under Section 271(1)(c) of the Act.
C.O. No. Sh. Charu ACIT, CC-3, CIT(A)-23, New Delhi’s order 73/Del/32017 Shekhar New Delhi dated 29.11.2016 in case [Arising out of Gupta no. 288 to 292/14- proceedings under 499/Del/2017] Section 153A/143(3) of the for AY: 2012-13 Act.
ITA No. ACIT, CC-3, Sh. Charu Shekhar CIT(A)-23, New Delhi’s order 1154/Del/2017 New Delhi Gupta dated 14.12.2016 in case for AY: 2009-10 nos. 289 to 293/15-16 involving proceedings under Section 271(1)(c) of the Act. 2 | P a g e & 480/Del/2017; 6358 & 6365/Del/2019; & 1156/Del/2017; C.O. No.76/Del/2017
ITA No. ACIT, CC-3, Sh. Charu Shekhar CIT(A)-23, New Delhi’s order 1156/Del/2017 New Delhi Gupta dated 14.12.2016 in case for AY: 2011-12 nos. 289 to 293/15-16 involving proceedings under Section 271(1)(c) of the Act. 2. We notice at the outset that the assessee’s twin appeals & 480/Del/2017 involving section 153A proceedings and his instant as many consequential penalty(ies) cases & 6365/Del/2019, raise the first and foremost legal issue challenging correctness of the Assessing Officer’s relevant assessments for want of any incriminating material found/seized during the search herein, which forms a mandatory condition going by PCIT Vs. Abhisar Buildwell Pvt. Ltd. (2023) 454 ITR 212 (SC). This is for the precise reason that the learned departmental authorities appear to have carried out the search in issue at the assessee’s premises on 13.01.2012 which renders both these assessment years 2006-07 and 2007-08 as “unabated” ones wherein the corresponding seized material must form the basis of additions to be made in his hands.
That being the case, learned CIT(DR) refers to the Assessing Officer’s assessment discussion dated 05.03.2015 placing reliance on the assessee’s section 132(4) search statement and other material revealing the foreign bank accounts with HSBC, Zurich (Switzerland). 3 | P a g e & 480/Del/2017; 6358 & 6365/Del/2019; & 1156/Del/2017; C.O. No.76/Del/2017
4. Be that as it may, the fact remains that although the assessee had raised his corresponding legal grounds in the lower appellate proceedings i.e. ground no. III, the learned CIT(A) has not recorded any clear-cut finding as to whether the addition made in his hands is based on the specific seized material or not. That being the case, we hereby deem it appropriate to restore the assessee’s instant twin appeals & 480/Del/2017 along with the consequential as many penalty cases & 6365/Del/2019 back to the learned CIT(A) for his afresh appropriate adjudication as per law preferable within three opportunities of hearing. We order accordingly. These assessee four appeals & 480/Del/2017 and & 6365/Del/2019 accordingly stand accepted for statistical purposes.
5. Next come the Revenue’s twin appeals & 1156/Del/2017 with assessee’s C.O. No.76/Del/2017 in involving section 271(1)(c) penalty proceedings. The Revenue could hardly dispute that the CIT(A) has deleted the impugned penalties levied by the Assessing Officer for the sole reason that the corresponding quantum additions already stood reversed in his lower appellate order which is stated to have 4 | P a g e & 480/Del/2017; 6358 & 6365/Del/2019; & 1156/Del/2017; C.O. No.76/Del/2017 attained finality. We thus find no reason to interfere with the CIT(A)’s clinching findings to the very effect. These Revenue’s twin appeals & 1156/Del/2017 fail in very terms. The assessee’s cross objection C.O. No.76/Del/2017 is dismissed as rendered infructuous.