DCIT, CHENNAI vs. SHEELA MOHANDAS, CHENNAI

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ITA 1685/CHNY/2016Status: DisposedITAT Chennai20 June 2018AY 2008-097 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the CIT(A) had not considered relevant High Court decisions. Both parties agreed to a fresh consideration of the matter. Therefore, the appeals and cross-objections were remitted back to the AO for de-novo consideration.

What were the facts?

The Revenue appealed against the CIT(A)'s orders which deleted additions made by the AO. The CIT(A) held that additions under Section 153C/153A could only be based on incriminating documents seized during a search.

What were the issues?

Whether additions under Section 153C/153A can be made solely based on incriminating documents seized during a search, and the applicability of certain High Court decisions.

Which sections of the Income-tax Act were involved?

Section 153C,Section 153A,Section 143(3),Section 148

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Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI

Before: SHRI A.MOHAN ALANKAMONY & SHRI DUVVURU RL REDDY

For Respondent: Smt. Ruby George, CIT
Pronounced: 20.06.2018

Heard together (2 matters)

C.O. No.174/Chny/2016
ITA No. 1683/Chny/2016

Read from the judgment's own cause title. This page is filed under one of them.

आदेश / O R D E R

Per BENCH:-

These appeals by the Revenue in respect of Shri K.V.

1.

Mohandas are directed against the orders passed by the learned Commissioner of Income Tax (Appeals)-18, Chennai dated 11.03.2016 & 21.06.2016 in & 151/2014-15 for the assessment years 2007-08 & 2008-09 respectively both passed U/s.250(6) r.w.s. 153C & 153A of the Act and 21.06.2016 in ITA No.153/2014-15 for the assessment year 2010-11 passed U/s.250(6) r.w.s. 143(3) of the Act and the appeals in respect of Smt. Seela Mohandas are directed against the orders passed by the Ld. Commissioner of Income Tax (Appeals)-18, all dated 11.03.2016 in ITA No.155/14-15, 158/14-15, 159/14-15 & 160/14- 15 for the assessment years 2005-06, 2008-09, 2009-10 & 2010-11 respectively all passed U/s.250(6) r.w.s 153C & 153A of the Act 2011-12 passed U/s.250(6) r.w.s. 143(3) & 148 of the Act.

2.

The assessee Shri K.V. Mohandas has raised a cross objection against the order of the Ld.CIT(A) for the assessment year 2007-08. The assessee Smt. Sheela Mohandas has also raised cross objections against the orders of the Ld.CIT(A) for the assessment years 2005-06, 2008-09, 2009-10 & 2010-11.

3.

Since the issues involved in all the Revenue’s appeals are identical, the Revenue’s appeals as well as the cross objections of both the assessees are taken up together for hearing and disposed off by this common order.

4.

The cross objections were filed by the assessee Smt.

Sheela Mohandas in CO Nos.168 to 171 of 2016 for the assessment years 2005-06 & 2008-09 to 2010-11 with a delay of 141 days. The Ld. AR submitted that the delay had occurred due to the oversight of the Counsel of the assessee. It was therefore pleaded that the assessee may not be penalized for the fault of her counsel. The Ld. DR strongly objected to the submission of the Ld. arguments advanced by the Ld.AR, in the interest of justice, we hereby condone the delay of 141 days in filing the cross objection by the assessee and proceed to hear the appeals on merits.

5.

Though the Revenue has raised several grounds in its appeals in respect of the assessee’s Shri K.V. Mohandas and Smt.

Sheela Mohandas, the crux of the issue is that the Ld.CIT(A) has erred in holding that additions can be made only based on the incriminating documents seized during the course of search while assessing the income U/s.153C / 153A of the Act when as per Section 153C /153A of the Act the Ld.AO is required to assess the total income of the assessee for any relevant assessment year afresh. Reliance was placed in the decision of the Hon’ble Karnataka High Court in dated 25.07.2014 in the case M/s. Canara Housing Development Company and in the decision of the Hon’ble Kerala High Court in the case CIT vs. St.

Francis Clay Décor Tiles reported in 70 taxmann.com 234.

6.

The identical and relevant ground raised by both the assessees in the cross objections is that “in the event the appeal Act, the assessee should not be denied the opportunity of being heard on the various additions made by the Ld.AO on merits in the proceedings U/s.153A & 153A r.w.s. 153C of the Act.”

7.

At the outset, the Ld.DR submitted before us that the Ld.CIT(A) has erred in not considering the decision of the Hon’ble Karnataka High Court and the Hon’ble Kerala High Court cited supra and thereby deleted the addition made by the Ld.AO by holding that in assessment U/s.153C / 153A of the Act addition can be made only based on incriminating documents seized at the time of search. The Ld.DR further pleaded that the matter may be remitted back to the file of Ld.CIT(A) in order to consider the issue afresh after examining the ratio laid down by the Hon’ble Karnataka and Kerala High Court mentioned herein above. The Ld.AR did not raise any serious objections for the same however pleaded that in the event the appeal filed by the Revenue is upheld on the jurisdiction issue, then the assessee should not be denied an opportunity of being heard on the various additions made by the Ld.AO on merits. the materials on record. From the arguments advanced by both the parties, it is evident that the counsel for the assessee pleads for one more opportunity before the Ld.AO with respect to the additions made by the Ld.AO on merits if the matter is remitted back to the file of Ld.CIT(A) to decide the issue on the applicability of the ratio laid down by the Hon’ble Karnataka and Kerala High Court cited supra in the case of the assessee and the Ld.DR is aggrieved by the orders of the Ld.CIT(A) who has not considered the decision of the Hon’ble Karnataka High Court and the Hon’ble Kerala High Court cited supra while deciding the case of the assessee. Considering the prayer of both the parties we are of the view that the entire matter is required to be remitted back to the file of Ld.AO for de-nova consideration to decide the matter on merits as well as the applicability of the ratio laid down by the Hon’ble Kerala and Karnataka High Court cited supra in the case of the assessee. Both the counsels also conceded for the entire matter to be remitted back to the file of Ld.AO for fresh consideration with respect to all their respective appeals. Accordingly the appeals of the Revenue as well as the cross objections of the assessees are hereby remitted back to the file of Ld.AO for fresh consideration.

9.

We also hereby direct the Ld.AR / Assessee to co-operate before the Ld.Revenue Authorities in the proceedings in order to expedite their orders failing which the Ld.Revenue Authorities shall be at liberty to pass appropriate order in accordance with merit and law based on the materials on record.

10.

In the result the appeals of the Revenue as well as the cross objections of the assessees are allowed for statistical purposes.

Order pronounced on the 20th June, 2018 at Chennai.

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