DANISH MERCHANT,MUMBAI vs. DCIT CEN CIR 25, MUMBAI

These two appeals by assessee are arising out of the different orders of the Pr. Commissioner of Income Tax (OSD) (Appeals)-51 [in short PCIT],

At the outset in regard to AY 2008-09, Ld. Counsel for the Assessee Shri Kirit S Sanghvi raised the issue of jurisdiction assumed by the A.O. for making assessment u/s.143(3) r.w.s 153C of the Act by stating that there is no search material pertaining to the assessee found pursuant to a search u/s.132 of the Act on a third party. For this assessee has raised identically worded ground, the ground as raised in ITA.NO.3613/Mum/2015 for A.Y.2008-09 reads as under:

In view of these facts, Ld. Counsel for the assessee demonstrated before us that for the A.Y.2008-09 assessee has filed return of income originally on 19/11/2008 and no notice u/s 143(2) of the Act was issued up to 30/11/2009 and no proceedings are pending against the assessee for the relevant assessment year. The alleged search on a third party was conducted on 16/12/2010 but there is no incriminating material or seized material relating to this assessee was found during search and even now there is no material linking to this assessment which forms basis for assessment u/s.153C of the Act. In view of these facts, it was argued that the assessment has not been abated and this is a case of non abated assessment. According to Ld. Counsel, the assessment framed u/s.153C of the Act without any search material or incriminating material, the assessment framed is bad in law and hence to be quashed.

On hearing both the parties and on perusal of the orders of the Lower Authorities, we find that there is no whisper about any incriminating material basing on which the above stated additions were made. Once there is no incriminating material for framing the assessment for the relevant A.Y and assessment has not abated, the assessment framed u/s.153C read with section 143(3) of the Act is bad in law and hence quashed.

As we have decided the issue on legal ground and quashed the assessment, we need not to adjudicate the issues on merits because, these becomes academic in nature. Accordingly, this appeal of the assessee is allowed.

At the outset, it is noted that the return of income originally was filed on 12/10/2010 for the A.Y. 2010-11 and search took place u/s.132 of the Act on group cases on 16/12/2010. Hence, the assessment has abated and the A.O can frame assessment under the provisions of section 143(3) of the Act. Accordingly, the assessment framed cannot be quashed on the jurisdictional issue.

We find that the A.O has made the following additions

Now the assessee has made only one argument that the CIT(A) did not consider the arguments of the assessee and summarily rejected the explanation of the assessee by simply stating that, “neither the said explanation were furnished by the AO nor any material /documents placed before him. The appellant is estopped from producing any evidence before the appellant authority that was not placed before the authorities below.” Similar is the findings for all the three grounds on merits. In view of the above, Ld. Counsel for the assessee only requested for remanding the matter back to the file of the CIT(A) for considering the entire submissions and explanations and also consider the evidences.

We have considered the plea of the assessee and accordingly set aside the order of CIT(A). We remand the matter back to the file of the CIT(A) for fresh adjudication after considering the submissions, explanations and evidences whatever is filed by the assessee. We direct the CIT(A) accordingly. The appeal of the assessee partly allowed for statistical purposes.