2021 (7) TMI 1236 - AT - Income Tax

Assessment u/s 153C - Addition u/s 69 - CIT-A deleted the addition - HELD THAT - As decided in DHARMEN MARBLE STONE VERSUS ACIT, CENT. CIR. 1 (2) (3) AHMEDABAD. 2021 (7) TMI 1163 - ITAT AHMEDABAD addition made by the AO has already been deleted by the CIT(A) on merit. The order of the CIT(A) has not been challenged by the Revenue in further appeal. Therefore, adjudication of legal issue at this stage would only an academic exercise. It is not going to materially affect the assessee in any manner. No other proceedings, in consequence to this proceeding qua the assessee are pending. Therefore, we do not deem it necessary to devote time energy for resolving an academic litigation

Summary

Issues:
Challenge to notice issued under section 153C of the Income Tax Act, 1961 for assessment years 2011-12 and 2013-14.

Analysis:
The appeals were filed by the assessee against the order of the ld.CIT(A)-11, Ahmedabad for the assessment years 2011-12 and 2013-14, challenging the legality and jurisdiction of the notice issued under section 153C. The Tribunal noted a similar issue in another case and held that since the addition on which the notice was issued had been deleted by the CIT(A) on merit, the question of the legality of the notice was academic and would not prejudice either party. The Tribunal decided to dispose of both appeals concurrently based on this precedent.

The assessee, engaged in building, development, and organizing schemes, had filed returns declaring income for the relevant assessment years. Following a search under section 132, incriminating materials were found, leading to the issuance of a notice under section 153C. The AO made additions to the income based on these materials, which were subsequently deleted by the CIT(A) on appeal. However, the CIT(A) upheld the action of issuing the notice under section 153C, leading the assessee to appeal to the Tribunal.

During the proceedings, both parties reiterated arguments similar to those in the aforementioned case. The Tribunal, considering the deletion of additions by the CIT(A) and the lack of challenge by the Revenue, deemed the legal issue regarding the notice as academic. The Tribunal dismissed the appeal, stating that the issue had become redundant and would not materially affect the assessee. The Tribunal emphasized that the dismissal would not prejudice other assessees challenging similar notices in the future.

In light of the above, the Tribunal found no reason to deviate from the precedent set in the earlier case and rejected the grounds of appeal in the present case. The appeals of the assessee were consequently dismissed, following the observations made in the cited cases.

In conclusion, both appeals challenging the notice issued under section 153C for the assessment years 2011-12 and 2013-14 were dismissed by the Tribunal based on the deletion of additions by the CIT(A) and the academic nature of the legal issue regarding the notice. The Tribunal's decision was in line with the earlier precedent and aimed to prevent any prejudice to the assessee or other potential litigants challenging similar notices.