2020 (2) TMI 163 - HC - Income Tax

Assessment u/s 153A - assessee challenged the assessment order before the DCIT. CIT (A) held that that since no additions were made as a result of issuance of notice under Section 153C read with Section 153A, the re-assessment order passed by the Assessing Officer was infructuous and was consequently cancelled - HELD THAT - Revenue does not dispute the fact that no additions were made in the re-assessment proceedings. However, submits that the finding returned by the CIT (A) which has been upheld by the Tribunal to the effect that the re-assessment proceedings should have been dropped, is contrary to the observation made by this Court in CIT Vs. Kabul Chawla, 2015 (9) TMI 80 - DELHI HIGH COURT wherein it observed that in the absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. In our view, the aforesaid submission of Mr. Bhatia is completely academic and need not be gone into since no additions were made even by the Assessing Officer in the re-assessment proceedings - Decided against revenue.

Summary

Issues:
1. Appeal against order passed by Income Tax Appellate Tribunal
2. Assessment Year 2005-06
3. Re-assessment proceedings under Section 153A/153C/143(3)
4. Dispute over cancellation of re-assessment order
5. Interpretation of relevant legal precedent

Analysis:
1. The appeal was filed by the Revenue against the order passed by the Income Tax Appellate Tribunal concerning the Assessment Year 2005-06. The CIT (A) had allowed the respondent assessee's appeal, challenging the order passed by the Assessing Officer under Section 158C/143(3) of the Income Tax Act.

2. The respondent assessee had initially reported a total loss for the Assessment Year 2005-06, based on special audit under Section 142(2A) and Section 143(3). Subsequently, a search at Radhey Group in Ahmedabad led to the initiation of proceedings under Section 153C read with Section 153A against the assessee for various assessment years, including the one in question. The re-assessment was completed at the same loss figure, and the CIT (A) cancelled the re-assessment order as no additions were made due to the notice issued under Section 153C read with Section 153A.

3. The Revenue challenged the cancellation of the re-assessment order before the Tribunal. The Tribunal upheld the CIT (A)'s decision. The appellant argued that the Tribunal's decision contradicted the ruling in CIT Vs. Kabul Chawla, (2016) 380 ITR 573, emphasizing the possibility of reiterating completed assessments in the absence of incriminating material. However, since no additions were made by the Assessing Officer during the re-assessment proceedings, the Court deemed the appellant's submission as academic and dismissed the appeal, stating that no substantial question of law arose for consideration.