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TMI Blog2014 (10) TMI 489X X X X Extracts X X X X X X X X Extracts X X X X ..... t the income assessed in this case had escaped and therefore he reopened the assessment u/s 147 of the Act. If an act of making additions u/s 153A on the ground of maintaining consistency in the stand of the Revenue and for keeping the issue alive, is allowed or not condemned, it may lead continuous harassment of assessee and never ending litigation on the same issue, such as, if the said additions are deleted by the higher judicial authorities even up to the level of Apex Court, the AO still would reopen the assessment and make additions on the same issue and on the basis of same facts u/s 147 of the Act - If the appeals also meet the same fate of setting aside of additions, then the Commissioner would step into to make the same additions on the same issue again, by way of invoking the provisions of section 263 of the Act and so on - there will not be any end to litigation on the same issue in the case and also to the harassment, loss and agony of the assessee. In their zeal to protect the interest of the department, the officers should not cross the "Laxman Rekha’ which we here mean the line of limit of their legal jurisdiction; doing so may not only prove to be detrimental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal. 3. The brief facts of the case are that the assessee firm is engaged in the business as builders and developers. For the relevant Assessment Year (AY), the assessee in its return of income declared the total income of ₹ 38,190/- (Rupees Thirty Eight Thousand One Hundred Ninety only) after claiming deduction u/s. 80IB(10) in respect of housing projects Veena Sur and Veena Sarang amounting to ₹ 18,74,410/- (Rupees Eighteen Lakhs Seventy Four Thousand Four Hindered Ten Only) and ₹ 96,72,540/- (Rupees Ninety Six Lakhs Seventy Two Thousand Five Hundred forty only) respectively. The assessee firm had also commenced another housing project titled as Veena Santoor eligible for deduction u/s 80IB(10) of the Act, for which no deduction was claimed for the relevant year. The Assessing Officer (hereinafter referred to as the AO) in the assessment proceedings u/s 143(3) disallowed the claim of the assessee u/s 80IB(10) of the Act, in toto. Being aggrieved against the said disallowance, the assessee firm filed an appeal before CIT(A), who gave part relief to the assessee allowing proportionate deduction in respect of the income derived from the residential a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the identical issue is pending with the Hon ble Supreme Court. 13. After considering the issue of claim of deduction u/s.80IB(10), the decision of which is pending, deserves to be negated and accordingly, the claim of deduction u/s 80IB(10) at ₹ 1,15,46,950/- of the assessee cannot be entertained and is hereby rejected. Penalty u/s. 271(1)(c) is here by initiated for furnishing of inaccurate particulars in the return of income. 4. The assessee, being aggrieved from the order of the AO, filed appeal before the CIT(A). The ld. CIT(A) after going through the facts and circumstances of the case observed that the disallowance in assessment proceedings u/s 153A was not justified merely because the department has preferred an appeal before the Supreme Court in relation to the additions made in original assessment order u/s 143(3) of the act. The relevant observations of the ld. CIT(A) are extracted as under: 4. I have carefully considered the facts on record and submission of ld. AR from the facts of the case, it is noticed that no new material or evidences have been found and/or seized during the course of search in respect of claim of deduction u/s.80IB(10) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 153A and not the pending appeal against the assessment or reassessment which has been completed. It has also been held that regular assessment proceedings which have become final will not also abate. (iv) Hon ble judicial ITAT in the case of Guru Prerna Enterprices vs. ACIT(2011) 57 DTR 465 (Mum) (Trib) as also considered the similar issue and held that only the assessment pending before the A.O. for completion shall abate and u/s.153A, the issue decided in assessments cannot be reconsidered or re-adjudicated, unless there is a fresh material found during the course of search in relation to such points. 4.1 In view of the above discussion and legal position, thus, it is abundantly clear the assessment or re-assessment pending on the date of search shall only abate and appeal or revision proceedings which are pending on the date of search shall not abate. In the cases under consideration, the appeal proceedings before Hon ble High Court and Hon ble Supreme Court on the issue of allowability of deduction 80IB(10), are pending which under the provisions of section 153A, cannot be considered as abated and hence the issue already adjudicated and pending for consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ready been decided by the Tribunal and thereafter upheld by the Hon ble Jurisdictional Bombay High Court in assessee s own case for the very same assessment year in favour of the assessee. The Assessing Officer in complete disregard and disobedience to the orders of the Tribunal as well as of the Hon ble High Court again confirmed the disallowance while framing assessment under section 153A of the Act without any incriminating material being found during the search. Since it was a prima-facie case of disregard and disobedience to the order of the higher authorities i.e. of this Tribunal as well as of the Hon ble High Court, hence concerned D.R. was asked to call the Assessing Officer personally to explain his position in this respect and the case was adjourned for today. Today, the ld. D.R. has produced a letter on the file and submitted that he has already requested to the concerned CIT (Central), Pune to instruct the concerned Assessing Officer namely Shri Omnakuttan to appear before the Tribunal for the said purpose. He has further requested for grant of at least one month s time for the compliance of the instructions of the Tribunal. The ld. A.R. during the hearing has furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefits no one and rather defeats larger public interest. The Hon ble High Court taking strong note of such an act has imposed cost of ₹ 50,000/- upon the Revenue. In another case CIT vs. M/s. Kishan Ratilal Choksey Share Securities Pvt. Ltd. in ITA No.1001 of 2011 decided on 17th April, 2014 the Hon ble High Court strongly discouraged the attitude of the Revenue for filing appeals on the issues which have already been settled and decided in the appeals pertaining to prior assessment years in the case of the very assessee. The Hon ble High Court observed that it was a gross abuse of process of law and imposed ₹ 1,00,000/- as cost. However, later on the assurance of the ld. counsel of the Revenue that hereafter the judicial orders and directions would be abided by in all matters and appropriate averments will be made to the effect that the order of the Tribunal for prior assessment years in the case of very assessee have been challenged or decided and the outcome of the decision thereof also will also be indicated. The Hon ble High Court upon the such assurance of the ld. counsel of the Revenue re-called the direction to pay cost of ₹ 1,00,000/-. The Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion to disobey and disrespect the orders of their higher judicial authorities. http 7. However we deem it necessary to point out here that once an issue is adjudicated and settled by the higher judicial authority, it is not open to the lower income tax authorities to reopen, make assessment or reassessment on the basis of same facts and circumstances and in the absence any incriminating or new material, information or evidence or of a contrary decision of superior judicial authority in order of hierarchy. If the Revenue officials choose to do so, then it is to be treated as not only the misuse but also abuse of their authority and in such an event defenses like protecting the interest of Revenue, keeping the issue alive etc. will not be sufficient to absolve them of the likely penal consequences against them. It reminds us of another case titled as ITO V/s M/s. Deepa Restaurant Bar P. Ltd., ITA No.1336/M/2012 decided on 05.02.2014. In the said case the assessee had disputed the legality of the notice issued by the AO u/s 143(2) of the act. The Tribunal had upheld the order of the CIT(A) vide which he had annulled the assessment made by the AO u/s 143(3) by holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of same facts u/s 147 of the Act. If the further appeals also meet the same fate of setting aside of such additions, then the ld. Commissioner would step into to make the same additions on the same issue again, by way of invoking the provisions of section 263 of the Act and so on. In such circumstances, there will not be any end to litigation on the same issue in the case and also to the harassment, loss and agony of the assessee. No doubt, under the Income Tax Act, vast powers have been given to the Revenue Officers to detect the escapement of income required to be taxed and to reopen or make assessments or reassessments, but such powers are required to be used in a legal manner with due diligence in appropriate cases. In their zeal to protect the interest of the department, the officers should not cross the Laxman Rekha which we here mean the line of limit of their legal jurisdiction; doing so may not only prove to be detrimental to the interest of the Revenue but also to them personally. 10. Coming back to the merits of the present case, we hold that in the facts and circumstances of the case, there is no infirmity in the order of the CIT(A) in deleting the additions m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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