2022 (5) TMI 1155 - AT - Income Tax

Assessment u/s 153A - incriminating material found in search or not? - non inclusion of income in the return of income filed in pursuant to search conducted by Revenue u/s 132(1) . - HELD THAT - The assessee was required to disclose the total income for the impugned assessment, in the said return of income filed on 11.10.2012 which shall include both the disclosed income as well income detected due to search conducted by Revenue u/s 132(1), but the assessee failed to include this income of Rs. 6,26,650/- in the said return of income filed on 11.10.2012 in pursuant to search, more so the aforesaid additions as was made in original assessment order passed by AO u/s 143(3), dated 21.12.2010 were accepted by the assessee as no appeal was filed by the assessee before ld. CIT(A) against the said additions made by AO vide assessment order originally framed u/s 143(3), dated 21.10.2010, and hence the assessment order dated 21.12.2010 attained finality. Thus, the assessee erred in not including the aforesaid income of Rs. 6,26,650/- in the return of income filed on 11.10.2012 in pursuant to search conducted by Revenue u/s 132(1). The AO has now included the said income of Rs. 6,26,650/- in the assessed income vide assessment order dated 30.03.2013 passed u/s 153A read with Section 143(3) of the 1961 Act. There is no duplication or double addition perse made by the AO, as the fault lies with the assessee in not including the said accepted income of Rs. 6,26,650/- in the return of income filed on 11.10.2012. Of course, the assessee will be entitled for credit of all taxes paid on regular assessment , if any , pursuant to these accepted additions of Rs. 6,26,650/- made by the AO vide assessment order dated 21.12.2010 passed u/s 143(3), and hence no double jeopardy is been done to the assessee,as is alleged by the assessee. Thus, we hold that contentions of the assessee lacks merit and are hereby dismissed. - Decided in favour of revenue.

Issues Involved:
1. Legality of the assessment made under Section 153A.
2. Validity of additions made without incriminating material.
3. Reiteration of additions from original assessment.
4. Double addition and finality of original assessment.
5. Interest charged under different sections of the Act.

Detailed Analysis:

1. Legality of the Assessment Made Under Section 153A:
The appellant contested the assessment made on an income of Rs. 78,82,390/- against the returned income of Rs. 30,24,550/- under Section 153A read with Section 143(3). The appellant argued that the assessment was bad both on facts and in law. The Tribunal noted that the assessment was initiated following a search and seizure operation under Section 132, and statutory notices were duly issued. The Tribunal upheld the assessment's legality, referencing the second proviso to Section 153A(1), which mandates the reassessment of total income for six assessment years immediately preceding the search.

2. Validity of Additions Made Without Incriminating Material:
The appellant argued that no incriminating material was found during the search, and thus, additions made were outside the purview of Section 153A. The Tribunal referenced the decision in ACIT v. Sunshine Infraestate Private Limited, where it was held that the scope of Section 153A includes reassessing the total income, including both disclosed and undisclosed income, irrespective of whether incriminating material was found. The Tribunal followed the jurisdictional High Court's view, which allows reassessment based on material available at the time of the original assessment.

3. Reiteration of Additions from Original Assessment:
The appellant contended that the addition of Rs. 6,26,650/- was unjustified as it was already made in the original assessment proceedings and accepted by the appellant. The Tribunal noted that Section 153A mandates reassessment of total income, including both disclosed and undisclosed income. The Tribunal found that the assessee failed to include the accepted addition of Rs. 6,26,650/- in the return filed pursuant to the search. Therefore, the AO's inclusion of this amount in the reassessment was justified, and there was no duplication or double addition.

4. Double Addition and Finality of Original Assessment:
The appellant argued that the addition of Rs. 6,26,650/- constituted a double addition since it was already included in the original assessment. The Tribunal clarified that the reassessment under Section 153A merges the original assessment with the reassessment, resulting in a single assessment order. The Tribunal held that the appellant's failure to include the accepted income in the return filed post-search necessitated the AO's action, and thus, there was no double jeopardy.

5. Interest Charged Under Different Sections of the Act:
The appellant claimed that the interest charged under different sections was highly unjustified. The Tribunal found this ground to be consequential and did not require separate adjudication, thereby dismissing it.

Conclusion:
The Tribunal dismissed the appeal filed by the assessee, upholding the reassessment made under Section 153A read with Section 143(3). The Tribunal found that the AO acted within the legal framework, and the appellant's contentions regarding the legality of the assessment, the validity of additions without incriminating material, and claims of double addition were without merit. The Tribunal's decision was pronounced on 19/05/2022 at Allahabad in open Court.

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