DCIT CEN CIR 7(3), MUMBAI vs. RADHIKA CHETAN MEHRA, MUMBAI

We have heard the parties, and perused the material on record. 2.1 We may at the outset clarify that the Revenue’s appeal is maintainable u/s. 268A of the Act even as its tax effect is admittedly below Rs.10 lacs, i.e., the extant threshold monetary limit specified by the latest Circular (No. 21/2015 dated 10.12.2015) issued by the Board there-under. This is as, as explained by the ld. Authorized Representative (AR) during hearing, that the instant appeal arises from the (A.Y. 2009-10) Dy. CIT vs. Radhika Chetan Mehra common impugned order by the first appellate authority for A.Ys. 2009-10 and 2010- 11, the combined tax-effect of which (i.e., for both the years) is more than the prescribed limit – that for A.Y. 2010-11 being at Rs.74.39 lacs. In support of its’ claim that the Revenue is also in appeal for A.Y. 2010-11, the ld. Departmental Representative (DR) has placed on record the complete set of the appellate papers qua the Revenue’s appeal for A.Y. 2010-11, which bears the receipt of the Registry of the Tribunal on 02.3.2016. The Revenue’s appeal is thus saved by the exception listed at para 5 of the Board’s Circular afore-referred (copy on record). The appeal was, accordingly, taken up for hearing and heard, and is being decided on merits.

2.2 The common contention of the parties before us was that the appeal would require being decided by the ld. CIT(A) afresh on merits. This is as the assessment in the first instance was framed u/s. 143(3) on 22.12.2011, i.e., after the date of the search on the assessee (forming part of Bharti Shipyard group of cases) by the Investigation Wing of the Department on 24.11.2011. These facts, stated at paras 1 and 2 of the assessment order, also finding mention in the impugned order (refer pgs. 3, 8 and 15), are undisputed. The assessment (or reassessment), therefore, being pending as on the date of search (or requisition), the same would abate in view of the second proviso to section 153A(1). The ld. CIT(A), though observes the said dates, as afore-noted, yet deletes the addition (agitated vide her Grounds 2 and 3 by the assessee before him) on the basis that the same is not maintainable in-as-much as no incriminating material was found during search, i.e., accepting the assessee’s legal plea to that effect, following the decision by the Special Bench of the tribunal in All Cargo Global Logistics Ltd. vs. Dy. CIT [2012] 137 ITD 287 (Mum) (SB), since affirmed by the Hon’ble High Court (reported at CIT vs. Continental Warehousing Corporation [2015] 374 ITR 645 (Bom)). The said decisions, as fairly conceded by the ld. AR before us, would have no application in-as-much as the proviso to section 153A is clearly applicable, operating to abate any assessment pending as on the date of search/requisition. It is only where such assessment (i.e., for any year falling within (A.Y. 2009-10) Dy. CIT vs. Radhika Chetan Mehra the period of six assessment years referred to in section 153A(1)) is not pending as on the date of search, that the assessment u/s. 153A (for that year) would in terms of the said decisions be required to be confined to the findings of the search or requisition. 2.3 Under the circumstances, it is only considered fit and proper that the Revenue’s appeal, raising the issue on merits vide its sole ground, is restored back for a decision afresh on merits to the file of the ld. CIT(A), who shall decide the same per a speaking order after hearing both the sides. We make it clear that we may not be construed as having made any observation with regard to the merits of the case. We decide accordingly.