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$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 1 + ITA 910/2015 COMMISSIONER OF INCOME TAX-(CENTRAL)-I Appellant Through: Mr. Kamal Sawhney, Senior standing counsel with Mr. Raglivendra Singh, Junior standing counsel, Mr. Sharad Agarwal and Mr. Shikhaf Garg, Advocates. versus JAKSON ENGINEERS LTD. Respondent Through Mr. Pranjal Srivasatav, Advocate With + ITA 911/2015 COMMISSIONER OF INCOME TAX-(CENTRAI.)-I Appellant Through: Mr. Kamal Sawhney, Senior standing counsel with Mr. Raghvendra Singh, Junior standing counsel, Mr. Sharad Agamal and Mr. - Shikhar Garg, Advocates. versus JAKSON ENGINEERS LTD. Respondent Through Mr. Pranjal Srivasatav, Advocate With 3 + ITA 912/2015 COMMISSIONER OF INCOME TAX-(CENTRAL)-I Appellant Through: Mr. Kamal Sawhney, Senior standing counsel with Mr. Raghvendra Singh, Junior standing counsel, Mr. Sharad Agarwal and Mr. Shikhar Garg, Advocates. "
versus ITA Nos. 910, 911, 912 & 913/2015 j Digitally Signed By:AMULYA Signature Not Verified
o JAKSON ENGINEERS LTD. 'Respondent Through Mr. Pranjal Srivasatav, Advocate And 4 + ITA 913/2015 COMMISSIONER OF INCOME TAX-(CENTRAL).jl Appellant through: Mr. Kamal Sawhney,', Senior standing counsel with Mr. Raghvendra Singh, Junior standing counsel, Mr. Sharad Agarwal and Mr. Shikhar Garg, Advocates. j ' I I '! versus ' JAKSON ENGINEERS LTD. .....Respondent Through Mr. Pranjal Srivasatavi Advocate CORAM: JUSTICE S.MIJRALIDHAR i JUSTICE VIBHU BAKHRU I ORDER % 07.12.2015 CM APPL No. 29056/015 (for exemptions^ in TTA Qin/7.f>l^ CM APPL Noi 29058/615 Ifor exemptions) in ITA 911/2015 CM APPL No. 29060/015 (for exeniptionsl in ITA 912/2015 CM APPL No. 29062/015 (for exemptions) in ITA 913/2015 1. Exeinptions allowed subject to all just exceptions. 2. The applications ai-e disposed of. CM APPLs 29057/2015 (for delay m re-filing appeall in ITA 910/2015 CM APPLs 29059/2015 (for delay in re-filing a opeall in llTA 911/2015 CM APPLs 29061/2015 ffor delay in re-filipg appealY in ITA 912/2015 CM APPLs 29063/2015 (for del.iv in re-filing anneaH in ITA 913/2015 3. For the reasons stated therein, the delay in re-filing tlie appeal ij condoned. ITANos.m,9ll,912&91J/2015 Page 2 of 5
The applications are disposed of. ITA Nos. 910/2015.911/2015.912/2015 & 5. Notice. Through Mr. Pranjal Srivasatav, Advocate accepts notice for the Respondent. 6. These four appeals by the Revenue under Section 260A of the Income Tax Act, 1961 ('Act') are directed against the impugned order dated 11^ April 2014 passed by the. Income Tax Appellate Tribunal ('ITAT') in the Q ITA Nos. 660/Del/2014, 661/Del/2014, 350/Del/2013 and 352/Del/2013 for the Assessment Years ('AYs') 2006-07, 2007-08, 2007-08 and 2006-07 respectively. 7. The facts in brief are that search and seizui*e operations were conducted on lO*'' February 2010 in the premises of the Jakson group of companies headed by Mr. S.K. Gupta, The Jakson group was manufacturing and trading in p^els, canopies and part of diesel generator sets. According to the Department, during the course of seai'ch, the undisclosed income of Rs. 19.94 crores was found which was been surrendered by Mr. S.K.Gupta. In response to tlie notice issued under Section 153 A of Act, the Respondent Assessee filed a return declaring an income of Rs. 9,89,76,180. Thereafter, notices under Sections 143 (2) and 142 (1) along with detailed questionnaire were issued. An addition of Rs. 35,63,593 was made by the Assessing Officer ('AO') under provisions of Section 14A read with Rule 8D. 8. On appeal, the Commissioner of Income Tax (Appeals) ['CIT (A)'] negatived the contention sought to be urged by the Assessee that the notice under Section 153 A of the Act was invalid. However, tlie CIT (A) granted ITA Nos. 910, 911, 912 & 913/2015' Page 3 of 5 ^ A? 1. ^
r a partial relief as regards the disallowance under Section 14A of the Act and restricted the disallowance to 1.06% of the gross income. 9. The Assessee then appealed to the ITAT which has, in the impugned order dated 11* April 2014, followed the decision of this Court in CTT v. Anil Bhatia 352ITR 493 (Del) and held thus: "13. We thus decide the issue of validity of initiation of proceeding under Section 153A of the Act and the assessment .framed there under in furtherance to the said notice ifi favour of the Assessee. In result, we hold that the notice issued under Section 153 A in absence of incriminating material was invalid and accordingly, the assessment framed in furtherance thereto is held null and void and is quashed. The related grounds I^o. 1 to 5 are thus allowed in favour of the Assessee." - 10. ]Vlr. Kariial Sawhney, learned Senior standing counsel for the Revenue submits that the above CQnclusion of the ITAT is contraiy to the decision of this Court m Comnfissipner of Income Tax v. Kabul Chawla (2015) 234 Taxman 300, 11. Indeed, this Court m Kabul Chawla {supra) after taking note of the decision of this Court in Madugula Venu v. Director of Income Tax [2013] 29 Taxmann.Com 200 (Del), summarized the position of law in relation to notices under -Section 153A and one of the points in. that summary read as under: "(i) Once a search takes place under Section 132 of the Act, notice under Section 153 A (1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in ITA Nos. 910,911,912& 913/2015 ^ ^
^ A y which the search talces place" 12. However, as far as the present appeals are concerned, although the ITAT may have erred in holding that the issuance of notice under Section 153A (1) (a) of the Act was irivalid, it is not in dispute that qua the Respondent Assessee no incriminating material was found during the search so as to justify the addition made in the assessment order passed pursuant to the issuance of such notice. As held in several decisions _ _ I I II I including Kabul Chawla {supra), no assessment can be framed in terms of the Section 153A of the Act ip the absence of the any incriminating material foimd-rduring the.seai'ch. Consequently, the net result is that the assessment order will in any event have to remain quashed. 13. In that yiew of the matter, except to the extent clarified in para 11 above concerning the validity of the notice issued under Section 153 A of \ the Act, no substantial question of law arises as far as the quashing of the assessment itself. I 14. The appeals are dismissed with the above observations. S.MURALIDHAR, J VIBHUBAKHRU,J DECEMBER 7,2015/RA: ITA Nos. 910, 911, 912 & 913/2015 p„gg 5 5