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Income Tax Appellate Tribunal, DIVISION BENCH ‘B,CHANDIGARH
Before: SHRI SANJAY GARG & Dr.B.R.R.KUMAR
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.
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.
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 :
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.
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.
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.
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.
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.
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