2017 (9) TMI 1465 - HC - Income Tax

Validity of assessment - intimation sent under section 143(1) - assessment u/s 153A - whether intimation sent under section 143(1) for the assessment years 2002-03 to 2004- 05 fall in the category of completed assessments when there was no assessment made under section 143(3)? - Held that - In the first place, question (i) was not raised by the Revenue in its appeals before the Income-tax Appellate Tribunal. Secondly, the fact remains that the Revenue chose the route of section 153A of the Act to proceed against the assessee. Having chosen that route, there had to be some incriminating material qua the assessee to justify the initiation of proceedings thereunder. There was none in the present case. In the circumstances, the question of examining whether the Revenue could instead have validly proceeded under section 147 of the Act is academic and need not be examined. The court declines to frame question (i) either. Additions made in the assessment orders - no incriminating material found during course of search cannot be sustained - Held that - it is not in dispute that arising out of the same search proceedings, additions sought to be made in the hands of Ms. Meeta Gutgutia, wife of the assessee have been deleted by the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal and the said orders were affirmed by this court by dismissing the Revenue s appeal by the decision in Principal CIT v. Meeta Gutgutia Prop. M/s. Ferns N Petals 2017 . Therefore, the court is not inclined to frame question (ii) as urged by the Revenue.

Summary

Issues:
Delay in filing and re-filing appeals under section 260A of the Income-tax Act 1961. Interpretation of completed assessments under section 143(1) and validity of additions made without incriminating material.

Analysis:
1. The High Court addressed the delay in filing and re-filing appeals, condoning the delay and allowing the applications. The appeals by the Revenue were against the common order passed by the Income-tax Appellate Tribunal for the assessment years 2002-03, 2003-04, and 2004-05.

2. The Revenue raised two questions regarding the completed assessments under section 143(1) and the validity of additions made without incriminating material. The Court noted that additions in the hands of the assessee's wife had been deleted in a previous case, indicating a lack of incriminating material in the present case as well.

3. Regarding question (i) on completed assessments, the Revenue argued that the returns were not picked up for scrutiny, and only an intimation was sent under section 143(1). However, the Court observed that the Revenue had chosen to proceed under section 153A, requiring incriminating material, which was absent in this case.

4. The Court declined to frame question (i) as the Revenue did not raise it before the Tribunal, and the chosen route of section 153A necessitated incriminating material. Therefore, the possibility of proceeding under section 147 was deemed academic and not examined.

5. Ultimately, the Court dismissed the appeals, emphasizing the lack of incriminating material to justify the additions made by the Revenue. The judgment highlighted the importance of proper procedures and evidentiary support in tax assessments to ensure fairness and legality in the process.