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Income Tax Appellate Tribunal, DELHI BENCH: B: NEW DELHI
Before: SHRI CHANDRA MOHAN GARG & M.BALAGANESH
ORDER PER CHANDRA MOHAN GARG, J.M. These appeals have been filed against the order of CIT(A)-XXVI New Delhi dated 07.02.2018 for AYs 2010-11 & 2011-12. 2. The application of assessee dated 01.09.2021 under rule 27 of Income Tax Appellate Tribunal Rules 1963. The ld. counsel submitted the assessee in both the appeals seeks permission to raise following grounds before the Tribunal based on the judgment of Hon’ble jurisdictional High Court of Delhi in the case of CIT vs. Kabul Chawla 380 ITR 573 (Del.):- 1. “That having regard to the facts and circumstances of the case Ld. CIT(A) ought to have deleted the addition on the ground that there was no incriminating material found as a result of search and the assessment attained the finality, more so in view of judgment of Hon’ble High Court of Delhi in case of CIT vs. Kabul Chawla, (2016) 380 ITR 0573.” 2. “That in any case and in any view of the matter, action of Ld. CIT(A) innot deleting the addition on the ground that there was no incriminating material found as a result of search, is bad in law and against the facts and circumstances of the case.” & 3271/Del/2018
3. We have heard argument of both the sides. The ld. counsel of assessee pressing into service preposition rendered by Hon’ble Bombay High Court in the case of Jehangir H.C Jehangir vs. ITO (2014) 112 DTR 262 submitted that the issue cannot be refused to be considered by the Tribunal merely because the ld. CIT(A) did not rendered any view over the same issue. The ld. CIT(DR) opposed to the admission of application and grounds of assessee.
4. In our considered view the prayer of assessee deserves to be allowed as the grounds raise by the assessee are based on the judgment of Hon’ble jurisdictional High Court of Delhi in the case of Kabul Chawla (supra) and various judgments/orders of Hon’ble High Court and coordinate benches of the Tribunal including judgment of Hon’ble Gauhati High Court in the case of CIT vs. Sangahmitra Bharali, 361 ITR 481 (Gau.) it has been held that the assessee by way of application under Rule 27 of ITAT Rules 1963 can raise legal grounds which have not been considered and adjudicated by the ld. CIT(A). Accordingly, application of assessee in both the appeals are allowed and above noted grounds are admitted for adjudication.
5. The ld. counsel submitted that the search and seizure operation u/s. 132 of the Act was carried out in Dua Group of cases including the assessee company on 25.04.2014. The ld. counsel further submitted that for AY 2010-11 the assessee filed return of income on 07.10.2010 which was processed u/s. 143(1) of the Act, without any addition. The ld. counsel further submitted that similarly the assessee filed return of income for AY 2011-12 on 17.09.2011 which was also processed u/s. 143(1) of the Act, and hence as on the date of search i.e. 25.04.2014 the assessment for both the AY 2010-11 & 2011-12 was completed/unabated assessment and hence in view of preposition rendered by Hon’ble High Court of Delhi in the case of Kabul Chawla (supra) no addition could have been made in absence of any incriminating material found and seized during the course of search and seizure operation u/s. 132 of the Act.
6. The ld. counsel drawing our attention towards para 5 to 6.3 of assessment order for AY 2010-11 and para 5 to 6.6 of assessment order for AY 2011-12 submitted that the Assessing Officer has made addition on basis of balance sheet and other financial account and statements of assessee without having any incriminating material found and seized during the course of search and seizure operation on the assessee. Therefore no valid and sustainable addition could have been made in the hands of assessee in absence of any incriminating material as per judgment of Hon’ble jurisdictional High Court in the case of CIT vs. Kabul Chawla (supra). He also submitted that the said view has been upheld by Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell P Ltd. judgment dated 24.04.2023 in Civil Appeal No. 6580/2021.
7. Replying to the above the ld. CIT(DR) opposed to the contentions of the ld. counsel of assessee and submitted that the Assessing Officer after verifying and 2 & 3271/Del/2018 examining the balance sheet and other financials, accounts and other statement of assessee made additions which are quite valid and sustainable therefore this ground of assessee is not tenable.
8. Although, the ld. CIT(DR) has supported the order of the authorities below but on being asked by the bench he could not assist the bench and shown his inability to submit any incriminating material in support of the additions made by the Assessing Officer in the hands of assessee for both the assessment years. He also did not dispute that as on the date of search i.e 25.04.2014 the assessments for both the years were completed by way of issuing intimation u/s. 143(1) of the Act, and thus the same were completed or unabated assessment years as on the date of search. As per judgment of Hon’ble jurisdictional High Court of Delhi in the case of Kabul Chawla (supra) in absence of any incriminating material found and seized during the course of search and seizure operation u/s. 132 of the Act no addition can be in the hands of assessee in the case of completed/unabated assessment years. Accordingly grounds raised by the assessee in the application under rule 27 of ITAT Rules 1963 deserve to be allowed and the additions made by the Assessing Officer are directed to be deleted.
9. Since, we have quashed and deleted all the additions made by the Assessing Officer for both the years, on the strength of preposition rendered by Hon’ble High Court of Delhi in the case of Kabul Chawla (supra) and ld. representative of both the side have not submitted any submissions on the grounds raised by the revenue in both the appeals under consideration. Therefore, we don’t find it proper to adjudicate the same in absence of submissions by the parties and thus grounds of revenue are not being adjudicated as having become infructuous.
10. In the result, the appeals of the revenue are disposed of in the manner as indicated above.