SH. RAMESH MITTAL,PANCHKULA vs. ACIT, CHANDIGARH

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ITA 996/CHANDI/2014Status: DisposedITAT Chandigarh11 June 2018AY 2005-065 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the original assessments were concluded and no incriminating material was found during the search, the Assessing Officer was precluded from making additions under Section 153A. The additions were therefore unjustified.

What were the facts?

The assessee's original assessments for AY 2005-06 and 2006-07 were completed before a search action under Section 132. No incriminating material was found during the search, yet additions were made under Section 153A.

What were the issues?

Whether additions can be made under Section 153A when original assessments were concluded and no incriminating material was found during the search.

Which sections of the Income-tax Act were involved?

Section 132,Section 153A,Section 143(1),Section 263

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DIVISION BENCH ‘B,CHANDIGARH

Before: SHRI SANJAY GARG & Dr.B.R.R.KUMAR

For Appellant: Shri Neeraj Jain
For Respondent: Shri Manu Malik, CIT (DR)
Hearing: 07.06.2018Pronounced: 11.06.2018

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘B,CHANDIGARH

BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND Dr.B.R.R.KUMAR, ACCOUNTANT MEMBER

ITA Nos. 996 & 233/CHD/2014 A.Y: 2005-06 & 2006-07 Shri Ramesh Mittal, Vs The ACIT, House No. 515, Central Circle-II, Sector 16, Chandigarh. Panchkula. PAN : AFSPM4366A (Appellant) (Respondent)

Appellant by : Shri Neeraj Jain Respondent by : Shri Manu Malik, CIT (DR) Date of Hearing : 07.06.2018 Date of Pronouncement :11.06.2018

O R D E R Per Bench

The above captioned appeals have been filed by the assessee against the order of the Commissioner of Income Tax (Appeals) Gurgaon [hereinafter referred to as CIT(A)] dated 08.09.2014 and 10.10.2013 for 2005-06 and 2006-07 assessment years respectively.

2.

As the facts, circumstances and issues in both the appeals are identical, therefore, these are being decided by a common order for the sake of convenience.

3.

In both the appeals, apart from challenging the additions made on merits by the AO and further confirmed by the CIT(A), the assessee has raised common legal/additional grounds, which read as under :

1.

That the issue of notice u/s. 153-A and assessment made in pursuant thereto is bad in law and invalid and also no additions can be made, when during search, no document much less incriminating material was found and also no assessment for relevant Assessment Year was pending on the date of initiation of search. 2. That the assessment u/s. 153-A on the basis of search action u/s. 132 cannot be equated to Regular Assessment.

4.

At the outset, the Ld. Counsel for the assessee has

submitted that the facts and issue involved in these appeals

are relating to the additions made which were not based on

any incriminating material found during the search, are

squarely covered by the decision of the Tribunal dated

11.05.2018 in the case of M/s Oasis Distilleries Ltd., Indore

relating to assessment year 2007-08 in ITA No.

1349/CHD/2017.

5.

The Ld. Counsel for the assessee submitted that

original returns for the assessment years under consideration

were processed u/s 143(1) of the Act. That the return for

assessment year 2005-06 was filed on 28.11.2005 and the

notice u/s 143(2) could have been issued by 30.06.2006.

Similarly for assessment year 2006-07, return was filed on

03.10.2006 and the notice could have been issued by

31.10.2007. Thereafter, a search action was carried out at the

premises of the assessee u/s 132 of the Income-tax Act,

1961 (in short 'the Act') on 16.01.2009 and by that time,

the original processing of return/assessment stood

completed. As such the original assessment proceedings

stood concluded on the date of search but no

incriminating material was found during the search.

Thereafter, the assessment proceedings were

carried out u/s 153A of the Act and the Assessing officer

has made the impugned additions but not based on any

incriminating material found during the search action.

The Ld. counsel, has submitted that since the original

assessment proceedings already stood completed in this

case on the date of search and that since no incriminating

material was found during the search action, the

Assessing officer was precluded from making any addition

or opening up an issue, in relation to already concluded

assessment proceedings and, hence, no additions were

warranted in the year under consideration in the

assessment proceedings carried out u/s 153A of the Act.

He in this respect has relied upon various judicial

decisions including the decision of the in the Hon'ble

Bombay High Court in the case of ‘CIT Vs. Murli Agro

Products Pvt Ltd’, (2014) 49 taxman.com 172 (Bom.), ITA

No.36 of 2009 and in the case of ‘CIT Vs. Continental

Warehousing Corporation’ ITA No. 523 of 2013 reported in

(2015) 279 CTR 0389 (Bombay) and of the Hon'ble Delhi

High Court in the case of ‘CIT Vs. Kabul Chawla’ 234

Taxman 300 (Delhi) and subsequent decision of the Delhi

High Court in the case of ‘Principal CIT Vs. Meeta

Gutgutia Prop M/s Ferns ‘N’ Petals”, ITA 306/2017 and

others decided vide order dated 25.5.2017.

6.

The ld. DR has been fair enough to admit that for the

aforesaid assessment years, no addition on the basis of any

incriminating material found during the course of search

action has been made. He, however, has admitted that certain

incriminating material was found during the search action but

the AO did not consider the same while framing the

assessment in question. Thereafter, an order u/s 263 was

passed by the CIT whereby he had set aside the assessment

orders in question and the same had been restored to the file

of the AO for denovo assessment. However, the ld. counsel for

the assessee, at this stage, has brought our attention to the

order of the Tribunal dated 24.04.2017 in ITA Nos. 1009 to

1011/Ind/2014 whereby the Tribunal has quashed the order

passed by the ld. CIT u/s 263 of the Act. Under the

circumstances, we are left with the original assessment framed

by the AO and consequent impugned orders of the CIT(A)

confirming the additions made by the AO.

7.

Admittedly, the assessment for the years under

consideration stood completed on the date of search. No

incriminating material whatsoever was found. It has been

time and again held by the various High Courts that in

relation to the assessments which have already been

concluded, the AO is precluded from making additions on any

other issue except relating or concerning to the incriminating

material found during the search action. The AO cannot

disturb the assessment order or reassessment order which has

attained finality, unless the material gathered in the course of

proceedings u/s 153A of the Act establishes that relief granted

under the final assessment/reassessment was contrary to the

fact unearthed during the course of 153A proceedings.

Reliance in this respect can be placed on the

decisions of the Hon'ble Delhi High Court in the case of

CIT Vs Kabul Chawla (2016) 380 ITR 573 (Del) followed by

the Hon'ble Gujrat High Court in the case of PCIT Vs RSA

Digi Prints 2017 (9) TMI 530. Reliance in this respect can

also be placed upon decision of Hon'ble Bombay High

Court in the case of CIT Vs Continental Warehousing

Corporation (2015) 374 ITR 645 (Bom.), decision of

Hon'ble Calcutta High Court in the case of PCIT Vs

Salasor Stock Broking Ltd. 2016 (8) TMI 1131 and

decision of Hon'ble Delhi High Court in the case of

‘Principal CIT Vs. Meeta Gutgutia Prop M/s Ferns ‘N’

Petals”, ITA 306/2017 and others decided vide order dated

25.5.2017. The aforesaid case laws can be well applied to

the facts and circumstances of the cases in hand. In view

of this, we do not find any justification on the part of the

lower authorities in making the impugned additions and

the same are accordingly set aside.

8.

In view of this, both appeals of the assessee are

hereby allowed.

Order pronounced in the Open Court

Sd/- Sd/- (Dr. B.R.R.KUMAR) ( SANJAY GARG) (ACCOUNTANT MEMBER) JUDICIAL MEMBER Dated: 11th June,2018. ‘Poonam’ Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT,DR

Assistant Registrar ITAT/CHD

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