ACIT-CC-2, CHANDIGARH vs. SHRI SUBHASH GOYAL, PARWANOO

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ITA 99/CHANDI/2020Status: DisposedITAT Chandigarh30 December 2022AY 2010-115 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 held that for completed assessments not abated, additions under Section 153A can only be made if incriminating material is found during the search. The AO cannot disturb finalized assessments without such material.

What were the facts?

A search and seizure was conducted at the assessee's premises, leading to assessments under Section 153A for prior years. The CIT(A) deleted additions made by the AO, stating no incriminating material was found during the search.

What were the issues?

Whether additions can be made under Section 153A in completed assessments without any incriminating material found during a search.

Which sections of the Income-tax Act were involved?

Section 153A,Section 132,Section 143(3)

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, “B”

Before: Shri Sanjay Garg & Shri Vikram Singh Yadav

Per Sanjay Garg, Judicial Member:

1.

The present appeal has been preferred by the Revenue against the order dated 20.11.2019 of the Commissioner of Income Tax (Appeals), Gurgaon [hereinafter referred to as ‘CIT(A)’] passed u/s 153A(1)(b)/143(3) of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).

2.

The Revenue is aggrieved by the action of the CIT(A) in deleting the additions made by the AO in the assessment framed u/s 143(3) read with Section 153A of the Act.

Assessment Year: 2010-11 Shri Subash Goyal

3.

The brief facts of the case are that a search and seizure was conducted at the premises of the assessee u/s 132 of the Act. Thereafter the assessment was framed for six assessment years prior to the date of search u/s 153A of the Act. The Ld. CIT(A) deleted the addition vide common order dated 20.11.2019 passed in assessee’s appeal relating to assessment years 2010-11, 2011-12, 2013-14 and 2014-15 on the ground that no incriminating material was found during the search action and that as per the settled law in the case of completed assessment (not abated) on the date of search, in the absence of any incriminating material found during the search action, no additions can be made in an assessment framed u/s 153A of the Act of Act. The Ld. CIT(A) in this respect has relied on the various judicial decisions including the decision of the Hon'ble Bombay High Court in the case of “All Cargo Global Logistics Ltd.” 120 DTR 89 and of the Delhi High Court in the case of “CIT Vs. Kabul Chawla” 234 Taxman 300 ( Delhi) and in “Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’ Petals”, ITA 306/2017 and others decided vide order dated 25.5.2017.

4.

The ld. DR has been fair enough to admit that the additions in this case have not been made on the basis of any incriminating material found during the search action at the premises of the assessee. He has also not disputed that the original assessments for the assessment year under consideration stood completed and not abated as on the date of search i.e.

Assessment Year: 2010-11 Shri Subash Goyal 10.08.2006 and also on the date of subsequent issue of notice u/s 153A of the Act. However, he has relied on the decision of the Hon'ble Allahabad High Court in the case of ‘CIT (Central), Kanpur Vs. Sri Raj Kumar Arora, I.T. Appeal No. 56 of 2011 vide order dated 11.07.2014, wherein, the Hon'ble High Court has held that it is open to the AO to assess / reassess the income of the assessee u/s 153A of the Act even bereft of any incriminating material.

5.

We have heard the rival submissions and perused the material on record. We find that the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Delhi High Court in the case of CIT Vs Kabul Chawla (2016) 380 ITR 573 (Del) followed by the Hon'ble Gujrat High Court in the case of PCIT Vs RSA Digi Prints 2017 (9) TMI 530.

Reliance in this respect can also be placed upon decision of Hon'ble Bombay High Court in the case of CIT Vs Continental Warehousing Corporation (2015) 374 ITR 645 (Bom.), decision of Hon'ble Calcutta High Court in the case of PCIT Vs Salasor Stock Broking Ltd. 2016 (8) TMI 1131 and decision of Hon'ble Delhi High Court in the case of ‘Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’ Petals”, ITA 306/2017 and others decided vide order dated 25.5.2017 wherein the Hon'ble High Courts have been unanimous to hold that in relation to the assessments which have already been concluded, the AO is precluded from making additions on any other issue except relating or concerning to the Assessment Year: 2010-11 Shri Subash Goyal incriminating material found during the search action. The Assessing Officer cannot disturb the assessment order or reassessment order which has attained finality, unless the material gathered in the course of proceedings u/s 153A of the Act establishes that relief granted under the final assessment/reassessment was contrary to the fact unearthed during the course of 153A proceedings. The proposition laid down in aforesaid case laws can be well applied to the present case. In view of this, we do not find any justification on the part of the Assessing Officer for making the impugned addition in the already concluded assessments in the case of the assessee. Therefore, the impugned additions are ordered to be deleted.

In the result, the appeal of the Revenue stands dismissed.

Chandigarh, the 30th December, 2022.

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