9911796707
TMI Blog2019 (3) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... ure Group'. The assessee is an individual having a business income, rental income and other sources. After conducting the search, the A.O. has issued notices u/s 153A of the Income Tax Act, 1961 (hereinafter called as 'the Act') dated 12.9.2014 were issued to the assessee to file the return of income for assessment years 2008-09 to 2013-14. In response to the notice issued by the A.O. u/s 153A of the Act, the assessee has filed return of income for A.Yrs. 2008-09 to 2013-14 on 7.11.2014. The details of the returns of income for A.Y. 2008-09 to 2013-14 are as under: A.Y. Date of filing of return u/s 139(1) Returned income (in Rs.) Date of filing of return by the assessee against notice u/s 153A Income declared in return u/s153A (in Rs.) Additional Income offered by the assessee (in Rs.) 2008-09 12.1.2009 1,35,860 7.11.2014 1,35,860 Nil 2009-10 8.1.2010 3,10,380 7.11.2014 3,10,380 Nil 2010-11 04.2.2011 7,68,640 7.11.2014 7,68,640 Nil 2011-12 1.10.2011 13,33,780 7.11.2014 13,33,780 Nil 2012-13 17.11.2012 16,38,250 7.11.2014 16,38,250 Nil 2013-14 22.11.2013 8,36,860 7.11.2014 8,36,860 Nil 3. In the assessment order, the A.O. observed that once ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obvious from the fact that no addition has been made in the assessment, which may be based on nothing made in any seized paper. Ld. CIT(A) after considering the explanation of the assessee, he has observed that once the assessee participated in the assessment proceedings before the A.O., the assessee cannot claim that the issue of notice u/s 153A r.w.s. 143(3) of the Act for A.Yrs. 2008-09 to 2013-14 is not in order. Once the assessee put to notice had filed a return of income in response to the notices and has attended the assessment proceedings, it cannot be said that the issue of notice u/s 153A of the Act is not in order and the legal plea raised by the assessee rejecting the order of the A.O. is confirmed. 5. On being aggrieved, assessee filed an appeal before the Tribunal. The assessee has raised following grounds: 1. That on the facts and in the circumstances of the case of the assessee the Ld. CIT(A) was not justified in holding that the Ld. A.O. was not justified in making addition in the years where the assessment proceedings were not pending and no incriminating material was found during the course of search. 2. That on the facts and in the circumstances of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years i.e. assessment years 2008-09 to 2012-13 and assessments are completed u/s 143(1) of the Act. Subsequently, a search action was conducted u/s 132 of the Act in the business group of the assessee and A.O. has asked the assessee to file returns of income for all the assessment years by issue of notice u/s 153A of the Act on 12.9.2014. In response to that, assessee has filed returns of income for A.Yrs. 2008-09 to 2013-14 on 7.11.2014. The case of the assessee is that the return for A.Y. 2012-13 was filed on 7.11.2012. As per section 143(2) of the Act, the last date on which notice for assessment would have been issued was 30.9.2013. All the other returns are filed on earliest date and the time limit for issue of notice u/s 143(2) of the Act in all those cases has expired. The search was initiated in the business premises of the assessee on 29.1.2014 and therefore the time limit for issue of notice u/s 143(2) of the Act is lapsed. All the assessment years from 2008-09 to 2012-13 are concluded and non abated assessments. The A.O. cannot reopen the assessments u/s 153A of the Act. In so far as the above submission is concerned from the assessment order and even from the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the scope of enquiry there of not confined essentially revolves around the search or the requisition u/s 132A of the Act as the case may be. The proviso deals with the cases where the assessment or reassessment, if any relating to assessment years falling within the period of 6 assessment years refer to in sub section 1 of section 153A of the Act were pending. If they were pending on the date of initiation of search u/s 132 of the Act or making requisition u/s 132A of the Act as the case may be, they abate. It is only binding precedence that would abate and not where there are orders made on assessment or reassessment and which are in force on the date of initiation of the search or making the requisition. 13. In the case of Commissioner of Income Tax (Central)-3 Kabul Chawla (2015) 61 Taxman.com 412 (Del.), the Hon'ble Delhi High Court has considered the scope of section 132 of the Act and 153A(1) observed as under: 14. From the above decision, it is very clear that in respect of concluded assessments additions cannot be made without incriminating material. 15. The Hon'ble Delhi High Court in the case of PCIT Vs. Meeta Gutgutia 395 ITR 296 (Delhi) has held that it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... without incriminating material, additions cannot be made by reopening u/s 153A of the Act. There are two decisions, one is of Hon'ble Kerala High Court in the case of E.N. Gopakumar (supra) and the second one is of Hon'ble Karnataka High Court in the case of Canara Housing Development Company Vs. DCIT Central Circle-1, Bangalore (supra) in favour of the revenue in which it was held that no incriminating material is necessary to reopen the assessments and to make an addition. In the present case, decisions of Hon'ble Delhi, Gujarat and Bombay High Courts are in favour of the assessee. The decisions of Hon'ble Kerala High Court and Karnataka High Court are against the assessee. We find that after examining the facts and circumstances of the case, the judgement of the Hon'ble Supreme Court in the case of Vegetable Products (supra) has to be followed. The Hon'ble Supreme Court in the above case has held that "if two reasonable constructions of a taxing provisions are possible, then that construction, which favours the assessee must be adopted." 22. In the interest of justice, the decision of the Hon'ble Supreme Court in the case of Vegetable Products (supra) h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble courts on the issue in question before us favouring the assessee. 9. The Hon'ble High Court of Gujarat in the case of PCIT Vs. Desai Construction (supra) confirmed the view taken by the Tribunal upholding the contention of the assessee that as no incriminating material was found during the course of search which could have enabled the Assessing Officer to re-examine its claim for deduction u/s 80IB which was part of the assessment prior to the search and such assessment unabated. Similarly Hon'ble High Court of Bombay in the case of Continental Warehousing Corporation and All Cargo Global Logistics Ltd (Supra) confirmed the view taken by the Special Bench of I.T.A.T. Mumbai Bench decided in favour of assessee dismissing the revenue's appeal holding that there was no incriminating material found during the course of search, the Tribunal was right in holding the power conferred u/s 153A being not expected to be exercised routinely, should be exercised if the search revealed any incriminating material. If that was not found then in relation to the second phase of three years, there was no warrant for making an order within the meaning of this provision". 10. Similar v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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