2020 (4) TMI 460 - AT - Income Tax

Assessment u/s 153A - disallowing the claim under Section 80IA(iv)(4) - Whether no incriminating material was seized as claimed by the assessee? - AR has made submissions that the CIT(Appeals) has not adjudicated the ground of appeal on jurisdictional issue where there is no incriminating material seized during the search and therefore claim of deduction under Section 80IA (4)(iv) is bad in law and also submitting the Paper Book to support his submissions - HELD THAT - We found strength in the submissions of learned Authorised Representative and on perusal of the CIT(Appeals) order, there is no adjudication or findings by the CIT(Appeals) on the Ground of appeal No.2.2 as referred in the above paragraph raised by the assessee before the CIT(Appeals). Therefore considering the principles of natural justice, we set aside the order of CIT(Appeals) and restore the disputed issue to the file of CIT(Appeals) to adjudicate the legal ground on the jurisdiction of the Assessing Officer first in assessment made under Section 153A of the Act where no incriminating material was seized as claimed by the assessee. If the assessee does not succeed, the CIT(Appeals) shall pass the order on merits with speaking order on merits with findings. Accordingly, the grounds of appeal of the assessee are allowed for statistical purposes.

Summary

Issues:
Appeals against orders under Section 153A r.w.s. 143(3) r.w.s. 153D and 250 of the Income Tax Act, 1961; Disallowance of deduction under Section 80IA; Jurisdictional issue under Section 153A without incriminating material.

Analysis:
The appeals were filed by the assessee against orders passed by the Commissioner of Income Tax (Appeals) under various sections of the Income Tax Act. The assessee was engaged in business activities related to LPG cylinders, electrical goods supply, and other allied works. A search operation was conducted under Section 132 of the Act, leading to the issuance of a notice under Section 153A. The Assessing Officer disallowed the deduction claimed under Section 80IA, resulting in an increased total income assessment. The CIT(Appeals) upheld the disallowance, prompting the assessee to appeal to the Tribunal.

During the hearing, the Authorized Representative argued that the CIT(Appeals) failed to address the jurisdictional issue under Section 153A without any incriminating material. The Departmental Representative supported the CIT(Appeals) orders. The Tribunal found merit in the Authorized Representative's submissions, noting the lack of adjudication on the jurisdictional issue by the CIT(Appeals). As per the principles of natural justice, the Tribunal set aside the CIT(Appeals) order and remanded the issue for proper adjudication.

In similar cases for other assessment years, the Tribunal followed the same approach of remanding the issues related to jurisdiction of the Assessing Officer under Section 153A without incriminating material back to the CIT(Appeals for proper consideration. The Tribunal also directed the restoration of an appeal for another assessment year to the CIT(Appeals) based on the decision for earlier years. Ultimately, the appeals of the assessee were allowed for statistical purposes, providing relief in the matter.

In conclusion, the judgment primarily focused on the proper adjudication of the jurisdictional issue under Section 153A without incriminating material, highlighting the importance of following due process and principles of natural justice in tax assessments. The Tribunal's decision to remand the issues back to the CIT(Appeals) for appropriate consideration demonstrates a commitment to fairness and procedural correctness in tax matters.