2021 (12) TMI 1394 - AT - Income Tax

Assessment u/s 153C - HELD THAT - An assessment is valid even in absence of the foregoing incriminating material. Their lordships rather observe that whilst framing an assessment u/s 153A / 153C, AO is nowhere barred from taking cognizance of any other material as well. Whether the assessee s return(s) in issue would be treated as invalid being belated ones or not ? - Our reply is negative in assessee s favour and against the department. This is because of the fact that the assessee had filed its return(s) under the Income Declaration Scheme, 2016 on 04.08.2016 followed by the search in issue dt.04.07.2017. Revenue s argument that it had not filed any return in the corresponding assessment year u/s 139(1) we are of the opinion that the decision as to whether the income sought to be added as under the head undisclosed income has to be seen on the date of search only which purely stands satisfied in the facts of instant appeal. We further wish to observe here that the assessee s returns filed under 2016 scheme stands stood duly accepted as there is no ground in Revenue s pleadings to the contrary. CIT-DR lastly contended that the assessee had not disclosed its IDBI bank account in the computation corresponding to the alleged returns filed in the year 2016 - We find no substances in the instant last argument as well since a perusal of the corresponding account documents indicate that the same had been opened only on 05.08.2016 and therefore, it could not be treated as an undisclosed bank account in assessment years 2010-11 to 2016-17 to say the least. So far as the last A.Y. 2017-18 is concerned, it is made clear that the relevant proceedings therein are in the search year itself only. We therefore decline the Revenue s foregoing arguments in light of all the relevant facts and circumstances forming part of record before us. Revenue s five appeals seeking to reverse the CIT(A) s identical action quashing the impugned section 153C assessments fail accordingly.

Summary

Issues involved:
Delay in filing appeals, validity of CIT(A)'s findings on section 153C proceedings, validity of assessee's returns, disclosure of bank account, dismissal of appeals.

Analysis:
1. Delay in filing appeals: The batch of eleven cases involving M/s. GVK Enterprises faced a delay of 23 days in filing the appeals. The assessee requested the bench to condone the delay, which was granted after considering the reasons provided in the petition, allowing the appeal for hearing.

2. Validity of CIT(A)'s findings on section 153C proceedings: The Revenue's five appeals challenged the correctness of the CIT(A)'s findings quashing section 153C proceedings due to the lack of incriminating material during the search. The Revenue contended that the lower appellate findings were not sustainable, citing various case laws. However, the Tribunal found no merit in the Revenue's argument, stating that incriminating material is necessary for initiating section 153A/153C assessments.

3. Validity of assessee's returns: The assessee's appeals argued that the CIT(A) erred in not deciding various issues on merits. The Tribunal ruled in favor of the assessee, stating that the returns filed under the Income Declaration Scheme, 2016 before the search in question were valid. The Tribunal rejected the Revenue's argument that the returns were belated, as they were filed before the search date.

4. Disclosure of bank account: The Revenue contended that the assessee did not disclose its IDBI bank account in the computation corresponding to the alleged returns filed in 2016. However, the Tribunal found no substance in this argument, noting that the account was opened after the relevant assessment years and could not be considered undisclosed income.

5. Dismissal of appeals: The Tribunal dismissed the Revenue's five appeals seeking to reverse the CIT(A)'s action on section 153C assessments. Additionally, the assessee's six cross appeals were dismissed as withdrawn in light of the Tribunal's findings in the Revenue's appeals. No other grounds were pressed before the Tribunal, leading to the dismissal of the respective appeals.

In conclusion, the Tribunal dismissed the Revenue's appeals while also dismissing the assessee's cross appeals. The order was pronounced on 21st December, 2021, and a copy was directed to be placed in the respective case files.