ACIT, CENTRAL CIRCLE, PANAJI vs. SHRI AJIT MITTAL, PANAJI

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ITA 69/PAN/2022Status: DisposedITAT Panaji13 September 2023AY 2015-16Bench: SHRI R.S. SYAL (Vice President), SHRI S.S.VISWANETHRA RAVI (Judicial Member)5 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that for an unabated assessment year, no addition can be made under section 153A if no incriminating material is found during the search. The CIT(A)'s deletion of the addition was upheld.

What were the facts?

The assessee filed a return for AY 2015-16 belatedly. A search was conducted later, and the AO made an addition based on the assessee's statement under section 132(4), despite no incriminating material being found. The CIT(A) deleted the addition.

What were the issues?

Whether additions can be made under section 153A for an unabated assessment year without incriminating material found during search.

Which sections of the Income-tax Act were involved?

Section 139(4),Section 132(4),Section 153A,Section 143(2),Section 147

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Income Tax Appellate Tribunal, PANAJI BENCH, PANAJI

Before: SHRI R.S. SYAL & SHRI S.S.VISWANETHRA RAVI

For Appellant: Shri Shailendra Singh &, Shri Susheel Khandelwal
For Respondent: Shri P.S. Shivshankar

आदेश / ORDER

PER R.S.SYAL, VP :

1.

These two appeals by the Revenue relate to the assessment years 2015-16 and 2016-17. Since a common issue is raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.

2.

Briefly stated, the facts for the A.Y. 2015-16 are that the assessee filed his original return u/s.139(4) on 31-03-2016 declaring total income at Rs.38,29,660/-. Thereafter, a search and seizure action was taken u/s.132 upon the assessee on 24-10-2017. The Assessing Officer (AO) completed the assessment by making an addition of Rs.1,35,42,906/- on account of disclosure made by the assessee in statement u/s.132(4) of the Act. The assessee argued before the ld. CIT(A) that it was a case of unabated assessment and in the absence of any incriminating material found during the course of search, no addition could have been made. The ld. CIT(A) called for the remand report from the AO. Vide the remand report dated 15-02-2022, as reproduced in the impugned order, the AO admitted that though the addition was made on the basis of statement of the assessee u/s.132(4), but no incriminating material was found. He, however, harped on the fact that assessment u/s.153A can be made without there being any incriminating evidence against the assessee.

The ld. CIT(A) concurred with the submissions advanced on behalf of the assessee and ordered to delete the addition. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal.

3.

Having heard the rival submissions and gone through the relevant material on record, it is seen as an admitted position that the assessment year under consideration is 2015-16. Return for this assessment year was filed belatedly u/s.139(4) on 31-03-2016.

Notice u/s.143(2) could have been issued within six months from the end of the financial year in which the return was filed, namely, by 30-09-2016. The assessee was subjected to search on 24-10-2017 and by that time no assessment for the year under consideration was taken up nor could have been taken up by virtue of the limitation u/s 143(2) of the Act. Once the position is so and admittedly no incriminating material was found during the course of search, the addition in respect of such an unabated assessment year could not have been made. Our view is fortified by the recent judgment of the Hon’ble Supreme Court in Pr.CIT Vs. Abhisar Buildwell (P) Ltd. (2023) 454 ITR 212 (SC) holding that if the assessment is not pending and no incriminating material is found during the course of search, no addition can be made in the assessment u/s.153A of the Act. It has further been observed that the completed assessment can be reopened by the AO in exercise of powers u/s.147 subject to the fulfilment of requisite conditions and those powers are saved. We are instantly concerned with the assessment u/s.153A of an unabated assessment year for which no incriminating material was found during the course of search. As such, the decision of the ld. CIT(A), deleting the addition on this score, is unexceptionable. However, the AO is at liberty to take recourse to the appropriate legal provisions in the light of the decision in of Abhisar Buildwell (supra), if permissible under the law.

4.

Both the sides are in agreement that the facts and circumstances of the addition made for the A.Y. 2016-17 and deleted in the first appeal are mutatis mutandis similar to the preceding year. Following the view taken hereinabove, we approve the impugned order on this count.

5.

In the result, both the appeals are dismissed. Order pronounced in the Open Court on 13th September, 2023.

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