THE PR. COMMISSIONER OF INCOME TAX-CENTRAL-3 vs. ALLIED PERFUMERS PVT. LTD.

Allowed, subject to all just exceptions.

The application stands disposed of.

The applications stand disposed of.

Considering the fact that the appeals arise from a common impugned order and raise identical questions of law, the same are being decided by way of this common order. The brief factual matrix giving rise to the present appeals is

On 21.03.2007, a search and seizure operation was conducted, under Section 132 of the Act in respect of Surya Vinayak Group of cases. The Assessing Officer noticed that, the aforesaid group is headed by Sh. Sanjay Jain and his brother Sh. Rajiv Jain. The main allegation against this group was that they had taken a large number of accommodation entries in various group companies by paying cash to various entry operators. Thus, on 29.09.2008, after recording a satisfaction note, notice under Section 153C of the Act was issued to the assessee requiring it to file the ROI in the prescribed form. In response thereto, the assessee submitted that the previous returns declared be deemed as the ROI in response to notice under Section 153C of the Act. Thereafter, assessment orders were framed under Section 153/143(3) of the Act, determining total incomes of Rs. 3,64,74,420/- and Rs. 2,28,13,060/- for AY 2001-02 and AY 2002-03 respectively.

Aggrieved with the aforesaid assessments, the assessee filed an appeal before the CIT(A) challenging the order of the Assessing Officer, on the ground that no addition could be made in absence of any incriminating material found during the course of search. The said appeals were allowed in favour of the assessee on merits and the additions made by the Assessing Officer under Section 68 of the Act were deleted. However, CIT(A) dismissed the challenge as regards the issue of validity of assessment under Section 153A/143(3) of the Act.

Revenue then preferred an appeal before the ITAT, impugning the order of CIT(A). In the said proceedings, Assessee filed cross objections and contended that, the assessment order [hereinafter referred to as ‘AO’] framed under Section 153A/143(3) of the Act was illegal, as consequent upon the search action under Section 132, nothing incriminating was found against the assessee, and therefore re-visiting the prior settled issues was not permissible. The ITAT allowed the cross objections of the assessee and quashed the AO following the decision of this Court in the case of Commissioner of Income Tax Vs. Kabul Chawla, (2016) 380 ITR 573 (Del.). The Revenue has thus preferred the present appeals, assailing the aforesaid impugned order of the ITAT.

Mr. Abhishek Maratha, learned senior standing counsel appearing on behalf of the Revenue contends that the ITAT has failed to take note that in the instant cases, incriminating documents belonging to the assessee were found and seized during the course of search under Section 132 of the Act. Thus, after recording of the satisfaction note, notice under Section 153C was issued by the Assessing Officer. Therefore, this does not happen to be a case wherein no documents were found during search operation. To support his submissions, Mr. Maratha refers to paragraph 1.3 of the AO. The same is reproduced as follows:

Mr. Maratha, therefore, submits that the observations of the ITAT are incorrect and the assumption of jurisdiction by the Assessing Officer, based on incriminating documents seized during the search, was valid and lawful.

We have duly considered the contentions advance by Mr. Maratha, however, are unable to agree with him. The ITAT, after perusing the relevant records, including the orders passed by the Revenue Authorities, observed as follows:

Respectfully following the precedents as aforesaid, as aforesaid, we quash the assessment made u/s.153(C)/143(3) of the I.T. Act, 1961 and decide the legal issue in favour of the Assessee and accordingly, allow the Cross Objection filed by the assessee.

Following the consistent view taken in the assessment year 2001-02 in the Assessee’s Cross objection, as aforesaid, th another Cross objection filed by the Assessee relating to assessment years 2002-03 also stand allowed.”

Upon reading of the aforesaid extracted portion of the impugned order, it is clearly discernable that the ITAT has given a finding of fact that the

In view of the foregoing, we find no question of law, much less substantial question of law, that calls for a consideration. Accordingly, the present appeals are dismissed.