JOTHI NARAYANAN,CHENNAI vs. DCIT, CENTRAL CIRCLE-2(2), CHENNAI

ITA 2569/CHNY/2025Status: DisposedITAT Chennai09 March 2026AY 2011-1246 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assumption of jurisdiction by the Assessing Officer under Section 153A of the Income Tax Act, 1961, for Assessment Year 2012-13 was not valid. The Tribunal reasoned that Section 153A is applicable for assessment in search cases. However, for assessment years that have already concluded prior to the financial year in which the search is conducted, the AO can only make additions if there is any incriminating material found during the search that relates to those concluded assessment years. In this case, the search was conducted on October 4, 2017, which falls in the financial year 2017-18, and the assessment year 2012-13 had concluded long before. The Tribunal found that no specific incriminating material pertaining to AY 2012-13 was brought on record by the revenue to justify the assumption of jurisdiction under Section 153A for this particular year. Therefore, the assessment order passed under Section 153A r.w.s. 143(3) for AY 2012-13 was quashed.

What were the facts?

The assessee, Shri Thanushkodi Narayanan, Managing Director of M/s. Annai Builders Real Estates Pvt Ltd, filed his return for AY 2012-13 declaring Rs. 24,87,430. A search under Section 132 was conducted on October 4, 2017. Subsequently, a notice under Section 153A was issued for AY 2012-13, leading to a revised return declaring Rs. 14,53,440. The Assessing Officer (AO) proposed a special audit under Section 142(2A) due to complexities in the assessee's and the company's accounts, including lack of project-wise financial statements, unclear stock valuation, and misclassification of advances. The assessee agreed to the special audit. The report was submitted on November 11, 2020, after extensions due to COVID-19. The AO issued a show cause notice based on the report. The assessee's settlement application before the Settlement Commission was rejected on January 19, 2021, due to non-payment of full taxes. The AO passed the assessment order under Section 153A r.w.s. 143(3) on January 15, 2022, determining total income at Rs. 2,59,72,170, incorporating various additions and disallowances. The assessee appealed to the CIT(A).

What were the issues?

1. Whether the assumption of jurisdiction by the Assessing Officer under Section 153A of the Income Tax Act, 1961, for Assessment Year 2012-13 is valid, considering the search was conducted on October 4, 2017, and the relevant assessment year ended on March 31, 2012. Assessee's Contention: The assessee argued that the AO lacked jurisdiction under Section 153A as the assessment year 2012-13 had already concluded and no incriminating material was found during the search that related to this specific year, making the initiation of proceedings under Section 153A invalid. Revenue's Contention: The revenue contended that the search operation on October 4, 2017, triggered the provisions of Section 153A, allowing the AO to assess income for the assessment year in which the search took place and for six preceding assessment years, irrespective of whether the assessment year had concluded. The revenue relied on the fact that a revised return was filed in response to the Section 153A notice.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(2),Section 142(1),Section 142(2A),Section 245C(1),Section 245D(1),Section 143(3),Section 17(2),Section 24(a),Section 12.5,Section 12.6,Section 12.7,Section 2(22)(e),Section 14.1,Section 14.13,Section 56(2)(vii)(c),Section 15.1,Section 15.5,Section 11.5

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Cases cited in this judgment(8)Show list

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ITA Nos: 2569, 2570, 2571, 2573 to 2577/Chny/2025

PER BENCH:

ITA No(s). 2571, 2573 - 2577/CHNY/2025 for the Assessment Year: 2012-13 to 2016-17 & 2018-19:

The assessee aggrieved by the order(s) of the Learned Commissioner of Income Tax (Appeals) – (in short “ld.CIT(A)”) for the Assessment Year(s) – (in short "A.Y.”) 2012-13 to 2016-17 & 2018-19 dated 24.07.2025, has filed the present batch of 6 appeals before this Tribunal.

2.

Since, the facts are the identical across all the appeals / for all the assessment years, except for the nature of the additions / disallowances varying in few of the Assessment Year(s) before this Tribunal in the present batch of 6 appeals, the appeal arising from the A.Y. 2012-13 is being taken up as the lead case with the consent of the both the Ld. AR as well as the Departmental Representatives.

3.

The brief fact of the present case is that the assessee, Shri Thanushkodi Narayanan, is the Managing Director of M/s.Annai Builders Real Estates Pvt Ltd. The assessee filed his original return of income for the A.Y. 2012-13 on 27.09.2012 in declaring a total income of Rs.24,87,430/-.

4.

A search and seizure operation was carried out in terms of Section 13

The order continues below.

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