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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER: All the appeals of the Revenue in respect of independent assessees are directed against the respective orders of the Commissioner of Income Tax (Appeals) -18, Chennai, dated 23.02.2018 pertaining to assessment year 2011-12. Since common issue arises for consideration in all these appeals, we heard these appeals together and disposing of the same by this common order.
Smt. Ruby George, the Ld. Departmental Representative, submitted that there was a search in the premises of the assessees on 03.09.2013. According to the Ld. D.R., it was found during the course of search operation that the assessees have received advances in cash during the financial year 2010-11 relevant to assessment year 2011-12. Since no explanation was offered by the assessees, according to the Ld. D.R., the Assessing Officer treated the advances as income of the assessee during the year under consideration. Since the assessees could not produce any substantial evidence, the Assessing Officer assessed the advances as income of the assessee. However, on appeal by the assessees, according to the Ld. D.R., the CIT(Appeals) deleted the addition on the ground that there was no incriminating material found during the course of search operation. In fact, according to the Ld. D.R., incriminating material in the form of audited tally statement was found, therefore, the CIT(Appeals) is not correct in saying that no incriminating material was found. Hence, according to the Ld. D.R.,the decision of Special Bench of this Tribunal in All Cargo Global Logistics Ltd. v. DCIT (2012) 137 ITD 287 and the judgment of Karnataka High Court in Principal CIT v. Smt. Lakshmi Singh (2017) 78 taxmann.com 207 may not be applicable to the facts of the case.
On the contrary, Shri K.M. Mohandass, the Ld. representative for the assessees, submitted that for the assessment year 2011-12, the assessee in filed its return of income on 31.03.2012, the assessees in 1608, 1609, 1610 and 1612/Chny/2018 filed their return of income on 30.09.2011 and the assessee in I.T.A. No.1611/Chny/2018 filed the return of income on 31.03.2012. In all cases, according to the Ld. representative, the search took place on 03.09.2013. The time limit for issuing notice under Section 143(2) of the Act was 31.03.2012. Admittedly, the search took place on 03.09.2013.
Therefore, according to the Ld. representative, the assessment proceeding initiated after filing the return of income on regular course before the date of search, culminated by operation of law on 31.03.2012. Hence, on the date of search, i.e. on 03.09.2013, no assessment proceeding was pending before the Assessing Officer. Therefore, according to the Ld. representative, the pending assessment proceeding or the assessment proceeding which was culminated or terminated by operation of law cannot be reopened by the Assessing Officer. According to the Ld. representative, the Assessing Officer is expected to complete the assessment only on the basis of material found during the course of search operation.
In this case, the Assessing Officer claims that on the basis of audited tally statement, he came to know that the assessees received advances. According to the Ld. representative, the very same tally accounted statements were filed before the Assessing Officer in the return of income. Referring to the order of the CIT(Appeals), more particularly para 10.5, the Ld. representative submitted that the very same audited statements were available before the Assessing Officer along with the return of income filed originally. The returns in respect of all the assessees were processed under Section 143(1) of the Act. Therefore, according to the Ld. representative, what was claimed to be found during the course of search operation is not a new material but it was already available before the Assessing Officer. Hence, that cannot be construed to be a seized material for the purpose of making either assessment or reassessment. In the absence of any new material, according to the Ld. representative, the Assessing Officer cannot reopen the assessment which was already concluded, therefore, the CIT(Appeals) has rightly found that in the absence of any incriminating material, there cannot be any assessment under Section 153A / 153C of the Act.
We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that all the assessees have fled the return of income in the regular course before the date of search which took place on 03.09.2013. The time limit for issuing notice, on the basis of the return of income filed before the search, expired well before the date of search. The Assessing Officer also processed the return under Section 143(1) of the Act and issued intimation before the date of search. Therefore, admittedly, no assessment proceeding was pending on the date of search on 03.09.2013. In other words, the assessment proceeding on the basis of return already filed terminated / culminated by operation of law. Therefore, no assessment proceeding was pending on the date of search, hence, the concluded assessment or the assessment which was terminated by operation of law cannot be reopened by the Assessing Officer.
We have carefully gone through the provisions of Section 153A and 153C of the Act. When the assessment was concluded either by order under Section 143(3) of the Act or otherwise by operation of law cannot be reopened. The reassessment or the assessment has to be made under Section 153A / 153C of the Act only on the basis of the incriminating material found during the course of search operation. In this case, the Revenue claims that audited statement in the form of tally accounts was said to be found during the course of search operation. It is not in dispute that the very same document was already available before the Assessing Officer along with the return of income. Therefore, at any stretch of imagination, it cannot be said that the audited statement in the form of tally accounts is an incriminating material found during search as claimed by the Revenue. In the absence of any incriminating material, this Tribunal is of the considered opinion that there cannot be any assessment under Section 153A / 153C of the Act as found by the CIT(Appeals). This view of ours is fortified by the judgment of Apex Court in Principal CIT v. Meeta Gutgutia (2016) 385 ITR 624. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, all the appeals filed by the Revenue are dismissed.
Order pronounced in the court on 3rd December, 2018 at Chennai.