9911796707
TMI Blog2017 (10) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... have been filed by the assessee against separate impugned orders of even date 2/7/2013, passed by the ld. CIT(Appeals)-XXXIII, New Delhi for quantum of assessment passed under section 153A/143(3) for assessment years 2003-04 and 2004-05. 2. Since the facts and the issues involved in both the appeals are common, arising out of identical set of facts, therefore, the same were heard together and are being disposed of by way of this consolidated order. 3. At the outset, both the appeals filed by the assessee are barred by limitation by 262 days. Along with the petition for condonation of delay, the Ld. counsel for the assessee, Shri Sanjay Kumar, C.A. has also filed his sworn affidavit deposing that the delay in filing of the appeals was not on account of latches or fault on the part of the assessee, albeit it was due to renovation work carried out in his office and dislocation of related files of the assessee, the appeals could not be filed on time. In his sworn affidavit, Shri Sanjay Kumar has deposed as under:- Affidavit of Shri Sanjay Kumar, S/o Late Hari Saran Dass, Resident of B- 2/38, Janakpuri, New Delhi-110058. I, Sanjay Kumar, the above named dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. After hearing the rival submissions on the issue of limitation, we find that here in this case, so far as assessee is concerned, there have been no latches or laxity on the part of the assessee for not pursuing the legal remedy, particularly when there is a huge tax liability fastened upon it. The reason which has been stated by the ld. counsel for the assessee that the file of the assessee got dislocated during the renovation of his office and the said files only got located during the re-indexing of all the files, do fall in the realm of probable factors and circumstances. Such an averment of fact, which has been deposed by the ld. counsel for the assessee, not only is plausible reason but also constitute a sufficient and reasonable cause in not filing the appeal within the limitation period. It is trite that the Courts and quasi-judicial authorities while considering the scope of expression sufficient or reasonable cause for condonation of delay, has to see that the litigants are not denied substantial justice when there is no negligence or latches or want of bonafide which can be imputed upon the party. The Hon'ble Supreme Court in the case of N. Balkrishnan vs. M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Supreme Court further observed that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics, but seek the remedy promptly. The Hon ble Court further observed that refusal to condone the delay would result in foreclosing a suitor from putting forth his cause. There is no presumptions that delay in approaching the Court is always deliberate. The Hon'ble Supreme Court in SLP [Civil No. 12980 of 1986, decided on 19th Feb., 1987, in the case of Collector, Land Acquisition v. Mst. Katiji (1987) 62 CTR (Syn) 23 (SC)] has laid down the following guidelines : 1. Ordinarily a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest then can happen is that a cause would be decided on merits after hearing the parties. 3. Every day s delay must be explained does not mean that a pedantic approach should be made, why not every hour s delay, every second s delay. The doctrine must be applied on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are sustainable in the present case. 3. BECAUSE the Id. CIT(A) has erred in law and on facts in confirming the addition of ₹ 2,00,00,000 made under section 68 if the Act on account of share capital received as unexplained cash credit. 4. BECAUSE the learned CIT(A) has erred in law and on facts in sustaining the aforesaid addition under section 68 while the same was made by the learned Assessing Officer without referring to any incriminating material found during the course of search. 5. BECAUSE the learned CIT(A) has erred in merely stating that charging of interest is consequential in nature whereas in the facts and circumstances of the present case, no interest U/s 234A was chargeable at all. 6. BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice. 10. At the outset, the ld. counsel, Shri Sanjay Kumar, argued the legal issue raised in ground no. 2 and submitted that, in the facts and circumstances of the present case, no addition could have been made within the scope of section 153A, because no incriminating material or documents were found or seized during the course of search carried out in the case of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for any of the assessment years in terms of section 153A and, therefore, no addition could have been made for assessment years where assessments are unabated at the time of search. He pointed out that the assessee has raised this precise objection before the Assessing Officer vide letter dated 6/7/2010, the copy of which have been placed in the paper book at pages 12 to 19, wherein the assessee has specifically pointed out this fact that nothing incriminating has been found during the search relating to assessee and therefore, no addition can be made. Despite such objection before the Assessing Officer, the Assessing Officer has not given any rebuttal or counter finding that any incriminating material has been found at the time of search, neither there is any whisper regarding any reference to seized or incriminating material in the assessment order. In fact, the entire basis for making the addition is the figures given in the balance sheet filed alongwith the return of income with regard to the share capital and share premium which was already there on record. He submitted that now it is settled law, specifically in the jurisdiction of Hon'ble Delhi High Court, that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer has all the powers to assess and re-assess the total income for the year and the same cannot be restricted to the seized material only. This is not the purport of section 153A. In support, she relied upon the following decisions and ratios laid down therein:- 1) Anil Kumar Bhatia, Delhi High Court, 24 Taxmann.com 98 2) CIT Vs Anil Kumar Bhatia, Delhi High Court, 24 taxmann.com 98 3) CIT Vs ST. FRANCIS CLAY DECOR TILES, Kerala High Court, 2016] 70 taxmann.com 234 (Kerala) 4) CIT Vs Chetan Das Lachman Das, Delhi High Court, 25 taxmann.com 227 (Delhi) 5) Canara Housing Development Co. Vs DCIT, Karnataka High Court, 49 taxmann.com 98 (Karnataka) 6) CIT Vs Kesarwani Zarda Bhandar Sahson Alld., Allahabad High Court, 2016, ITA No. 270 of 2014 5) Canara Housing Development Co. Vs DCIT, Karnataka High Court, 49 taxmann.com 98 (Karnataka) 6) CIT Vs Kesarwani Zarda Bhandar Sahson Alld., Allahabad High Court, 2016, ITA No. 270 of 2014. 14. We have heard the rival submissions, perused the relevant finding given in the impugned order as well as the material referred to before us at the time of hearing. The assessee for assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars in the course of search. Thus, this fact is completely uncontroverted and also apparent from records. Now it is well settled law that, whence no incriminating material or document has been found during the course of search and assessments falling within the scope of section 153A are unabated, then no addition can be made over and above the income originally assessed. For making any addition for the unabated assessment covered under section 153A, it is sine-quanon that some incriminating material or documents should have been found at the time of search qua that assessment year which warrants additions while reassessing the completed assessments for those years. This proposition of law has been well settled and reiterated by the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in [2016] 380 ITR 573 (Delhi) and has been reiterated in the case of Pr. CIT vs. Meeta Gutgutia reported in [2017] 152 DTR 153 (Delhi). 16. In the case of CIT vs. Kabul Chawla (supra), the Hon'ble High Court, after discussing various judgments and analysing section 153A in-extenso, have laid down the following legal proposition:- i. Once a search takes place under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of original assessment. [Emphasis supplied by us] 17. The Hon'ble High Court has also taken note of the judgment of their earlier judgment in the case of CIT vs. Anil Kumar Bhatia reported in [2013] 352 ITR 493 (Del) and observe that this was not the issue before the Court. Again in the case of Pr. CIT Vs. Meeta Gutgutia s (supra), their Lordships have again reiterated the same principle in a very detailed manner and have also distinguished one of their earlier judgment in the case of Smt. Dayawanti Gupta reported in 390 ITR 496. The relevant observations made by their Lordships are as under:- 56. Section 153A of the Act is titled Assessment in case of search or requisition . It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to reopen at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 {Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section I53A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with. 59. In Kabul Chawla {supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Assn. CIT [2013] 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla {supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. A CIT {supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search or requisition of documents. 18. Thus, the Hon'ble High Court after detail analysis concluded that, whence there is no incriminating material qua each of the assessment year roped in under section 153A, then no addition can be made while framing the assessment under section 153A. 19. The aforesaid principle and ratio are clearly applicable on the facts of the present case also, as admittedly no incriminating material relating to these assessment years or as a matter of fact for any of the assessment years were found during the course of search and accordingly, the originally assessed income, i.e., income disclosed by the assessee in the original return of income and reiterated in the return filed in response to notice u/s 153A deserves to be accepted and the same has to be reckoned as assessment of the income in terms of section 153A and no further addition can be made by the Assessing Officer over and above the returned income. Accordingly, the additions made by the AO are deleted on the ground that they are beyond the scope of assessments u/s 153A. 20. In the result, ground No.2 as raised by the assessee is allowed and consequently all other grounds raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
