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TMI Blog2018 (5) TMI 941X X X X Extracts X X X X X X X X Extracts X X X X ..... t of recording satisfaction by the Assessing Officer will be dispensed with. The facts of our case are covered by the mandate in this case inasmuch as the assessee had not offered any disallowance u/s 14A of the Act. In view of the fact that the Assessing Officer properly recorded satisfaction u/s 14A of the Act, despite there being no such requirement as laid down by the Hon'ble Supreme Court in the case of Maxopp Investments Ltd. [2018 (3) TMI 805 - SUPREME COURT OF INDIA], we are convinced that the ld. AR’s contention on this aspect deserves to be jettisoned. We order accordingly. Disallowance u/s 14A gets restricted to the extent of exempt income, even if the provisions of the section are attracted. In view of the above precedents, which are squarely applicable to the facts of the instant case, we limit the disallowance to the extent of exempt income of ₹ 7,72,918/-. The impugned order is modified pro tanto. - ITA Nos.3492 to 3494/Del/2014 - - - Dated:- 25-4-2018 - SHRI R.S. SYAL, VICE PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For The Assessee : Shri Rakesh Gupta And Shri Somil Aggarwal, Advocates For The Department : Ms Rachna Singh, CIT, DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4A and nothing else, we hold that the ground covers challenge to the disallowance under this section on the basis of the legal issue decided in the case of Kabul Chawla (supra) . 7. Turning to the facts of the instant case, it is seen that the search was conducted u/s 132 on 22.03.2011. The assessee filed its return for assessment year under consideration on 30.09.2009. As per section 143(2), notice could have been issued within a period of six months from the end of the financial year in which the return was filed. Going by the prescription of the proviso to section 143(2), notice u/s 143(2) could have been, at the most, issued by 30.09.2010. As the search proceedings were conducted on 20.03.2011, on that date, there was no possibility of issuing notice u/s 143(2) for framing assessment u/s 143(3). In such circumstances, the processing of return u/s 143(1) amounts to completion of assessment within the scheme of section 153A. It cannot be termed as an abated assessment. 8. Turning to the judgment in the case of Kabul Chawla (supra) , the factual matrix of the case is that a search was carried out u/s 132 on 15.11.2007 on BPTP Ltd., a leading real estate developer operating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 1,87,538/- only against ₹ 18,65,739/-; not granting MAT credit of ₹ 1,49,377/- u/s 115JA; and charging of interest u/s 234A in the absence of such direction in the order, respectively. As the ld. CIT(A) has not disposed off these additional grounds, we set aside the impugned order and remit the matter to his file for firstly considering the admission or otherwise of the additional grounds and, thereafter, deciding them on merits, if they are admitted. 12. In the result, the appeal is partly allowed. Assessment Year 2010-11 13. The first issue raised in this appeal is against the confirmation of disallowance u/s 14A at ₹ 33,12,360/-. 14. Briefly stated, the facts of the case are that the Assessing Officer noticed the assessee to have earned exempt income of ₹ 7,72,918/-. No disallowance was offered by the assessee u/s 14A of the Act. On being called upon to explain the reasons, the assessee furnished its point of view, which has been reproduced in the assessment order. Not convinced, the Assessing Officer made disallowance u/s 14A at ₹ 58,90,988/-. The ld. CIT(A) reduced such disallowance to ₹ 33,12,360/-, against whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly covered by the judgment in the case of Indiabulls Financial (supra) and not the other decision relied by the ld. AR in HT Media (supra). 17. Be that as it may, it is found as an admitted position that the assessee did not offer any disallowance u/s 14A. The Hon'ble Supreme Court in Maxopp Investment (supra) has considered the aspect of recording of satisfaction by the Assessing Officer for making disallowance u/s 14A and has laid down in para 41 as under:- 41) Having regard to the language of Section 14A(2) of the Act, read with Rule 8D of the Rules, we also make it clear that before applying the theory of apportionment, the AO needs to record satisfaction that having regard to the kind of the assessee, suo moto disallowance under Section 14A was not correct. It will be in those cases where the assessee in his return has himself apportioned but the AO was not accepting the said apportionment. In that eventuality, it will have to record its satisfaction to this effect. Further, while recording such a satisfaction, nature of loan taken by the assessee for purchasing the shares/making the investment in shares is to be examined by the AO. 18. It is palpable fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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