2017 (7) TMI 1412 - HC - Income Tax

Assessment u/s 153A - Whether ITAT was justified in not deciding the issue on merits holding that it was not open for the Assessing Officer to make additions in the assessment under Section 153A read with Section 143(3) without the existence of any incriminating documents found or seized during the search action under Section 132? - HELD THAT - We find that the impugned order of the Tribunal has dismissed the Revenue's appeal before it by following the decision of this Court in CIT Vs All Cargo Logistic Ltd Corporation 2015 (5) TMI 656 - BOMBAY HIGH COURT and CIT Vs Gurinder Singh Bawa 2015 (10) TMI 1761 - BOMBAY HIGH COURT - Thus, no fault can be found with the impugned order of the Tribunal in following binding order of this Court, Revenue states that as the Revenue has filed an Special Leave Petition against the order of this Court in All Cargo Logistics Ltd. (supra) and in Gurinder Singh Bawa (supra) in the Hon'ble Apex Court, this appeal has been filed to keep the issue alive. In any case as there is no stay brought to our notice as to the two orders passed by this Court. Thus, no substantial question of law arise at this stage.

Summary

Issues:
1. Challenge to order of Income Tax Appellate Tribunal (Tribunal) for Assessment Years 2005-2006 and 2006-2007.
2. Justification for not deciding the issue on merits under Section 153A read with Section 143(3) without incriminating documents.
3. Consideration of decision of Pune ITAT in the case of Kranti Realtors P. Ltd.
4. Appeal filed by Revenue against orders of Bombay High Court in All Cargo Logistics Ltd. and Gurinder Singh Bawa cases.

Analysis:

1. The appeal challenges the order of the Tribunal for Assessment Year 2006-2007 under Section 260A of the Income Tax Act, 1961. The Revenue has raised two questions of law for consideration by the High Court.

2. The first issue questions the Tribunal's decision not to decide on the merits of the case under Section 153A read with Section 143(3) without the presence of incriminating documents. The Revenue argues that the decision of the High Court in All Cargo Logistics Ltd. case has not been accepted by the Department, and a Special Leave Petition (SLP) is pending in the Apex Court.

3. The second issue pertains to the Pune ITAT's decision in the case of Kranti Realtors P. Ltd., which held that assessments can be completed under Section 153A/153C of the Act even without incriminating documents if no assessment has been completed under Section 143(1). The High Court notes the importance of this decision in the current appeal.

4. The counsel for the Revenue mentions the SLP filed against the High Court's orders in All Cargo Logistics Ltd. and Gurinder Singh Bawa cases. As there is no stay on these orders, the High Court finds no substantial question of law arising at this stage and dismisses the appeal.

In conclusion, the High Court upholds the Tribunal's decision based on the binding orders of the Court in previous cases. The legal arguments presented by the Revenue regarding the absence of incriminating documents and the relevance of decisions by other tribunals are duly considered, but the appeal is dismissed due to the pending SLPs and lack of substantial questions of law at the current stage.