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TMI Blog2021 (6) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... legal heir in all he above appeals. The Death Certificate of the assessee along with Affidavit of the Legal Representative are placed on record. In view of the above, the assessee is substituted through Legal Representative Smt. Sneh Lata Sawhney. Before proceeding further, it would be relevant to dispose of the quantum appeals as under : ITA.Nos.427 to 432/Del./2017 - A.Ys. 2006-07 to 2011-12 : 4. Briefly the facts of the case are that in all the assessment years under appeals a search and seizure operation under section 132 of the I.T. Act, 1961 was carried-out on assessee and other Group of cases on 28.07.2011. Warrant of Authorization under section 132 of the I.T. Act, 1961 was also issued in the name of the assessee. Notice under section 153A of the I.T. Act were issued to the assessee requiring him to file return of income for the assessment year under appeal. The assessee in response to the notice filed return of income under section 153A of the I.T. Act, 1961. The A.O. issued statutory notices and asked for the details. The A.O. noted that during the assessment year under consideration, the assessee derived income from other sources, the details of the same are placed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008 to 2011-2012, the A.O. on the similar basis concluced that since assessee has unexplained bank deposits with HSBC, Geneva, Switzerland in A.Y. 2006-2007, therefore, in subsequent A.Ys i.e., A.Ys. 2007-2008 to 2011-2012 assessee has earned interest on the same deposits, therefore, addition was made on account of unexplained interest earned on the aforesaid deposits in HSBC Bank, Geneva, Switzerland. The A.O. passed the assessment orders under section 153A read with Section 143(3) of the I.T. Act, 1961, Dated 02.03.2015. 4.2. The assessee challenged the above addition on merits as well as on legal grounds before the Ld. CIT(A), however, the appeals of the assessee have been dismissed. 5. The assessee in the present appeals have challenged the legality of the assessment orders passed as being time barred as well as since no incriminating material have been recovered during the course of search, therefore, no addition could be made against the assessee. The assessee also challenged the additions made on account of unexplained deposit in the bank account maintained with HSBC, Geneva, Switzerland and interest earned thereon. Various grounds of appeals has been taken by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment orders. Thus, the time limit in passing the impugned assessment orders in the case of the assessee expired on 31.03.2014 itself. He has further submitted that in fact the Revenue could not have made reference for the period prior to 01.04.2011 which is evident from the following :- 6.1.1. Administrative assistance by Swiss Competent Authority in their letter dated 26th June, 2015 addressed to Government of India, MOF, FT & TR and filed by Ld. CIT(DR) on 11.1.2021 through email reads as under: "In accordance with Article 26 DTA CH-IN, administrative assistance for questions concerning the application of domestic law can only be provided for information starting from the financial years 2011/2012 as the prior years are not covered by temporal scope of Article 26 of the amended Double Tax Agreement between India & Swtizerland. Therefore we can only provide you with information from 1 April 2011 (see decision A-4232/2013 of 12 December 2013 of the Swiss Federal Administrative Court). 6.1.1.2. The Learned Counsel for the Assessee submitted that the Agreement between The Republic of India and The Swiss Confederation for avoidance of double taxation with respect to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely. But when an assessment order is challenged, then the different aspects which are integral to the process and ultimate completion of amount can be challenged in Appeal. For example a notice u/s 148 or reasons recorded by the A. O prior to re-opening of assessment cannot be challenged separately. But an assessment order can be challenged in an Appeal before the Ld. CIT(A) or the ITAT on the ground that the re-opening itself is bad in law, as the notice is illegal or not served or that there is no material based on which reasons were recorded etc. Every facet of an assessment can be challenged in appeal to deny once liability to be charged to tax or to challeng the quantum of tax demanded. In the case of hand, the legality of the orders passed u/s 142 (2A) or u/s 142(2C) can be challenged to demonstrate that the order of assessment has been passed beyond the period of limitation. Thus, we reject this contention of the Ld. CIT. DR. 8. In view of the above, discussion, we have no hesitation in holding to hold that the extension of time framed by the A.O for submission of audit report u/s 142 (2C) of the Act vide order dated 28th June, 2004 is bad in law. Consequently the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e out a case for A. Y 2008-09 only and since the order framed u/s 142(2) of the Act also refers to A.Y 2009-10, then the same cannot be used for A. Y 2008-09. 17. The quarrel before us is as to whether the assessment order framed u/s 143(3) is passed within the period of limitation period prescribed under the Act or not. In our considered opinion, for coming to such a conclusion, we can examine whether the order passed u/s 142(2A) of the Act is in accordance with law or not. It is true that the order passed u/s 142(2A) of the Act is not appealable but when an assessment order is challenged, then the different aspects, which are integral to the process and ultimate completion of the amount can be challenged in appeal and since the ground before us is challenged for assessment being barred by limitation, we are well within our rights to consider all material aspects which were considered while framing the assessment order u/s 143(3) of the Act. " 6.1.5. In the case of Sunder Exports vs. DCIT, reported in (2009) 126 TTJ 0853) (Del), the ITAT, Delhi Bench held as under : "Assessment-Limitation-Extension of limitation under Explanation l(iii) to s. 153-As per the proviso to s. 142( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt shall be made u/s 143 or Section 144 at any time after expiry of two years from end of A.Y. in which income was first assessable-Order of assessment had been passed in violation of period prescribed in aforesaid provision, therefore, order passed by AO, CIT and ITAT was set aside-Therefore order passed by lower authorities including Tribunal could not be sustained as facts and circumstances were identical" 6.1.9. In the case of IPF India Property Cyprus (No. I) Ltd. vs. DCIT, ITA No. 6077/2018, (also reported in (2020) 183 ITD 0046) (Mum), the ITAT Mumbai Bench, Mumbai held as under : "7. Coming to the second point, we find that there is no dispute that if no draft assessment order was to be issued in this case, the assessment would have been time barred on 31st December 2017 but the present assessment order is passed on 17th August 2018. Once we hold that no draft assessment order could have been issued in this case, as the provisions of Section 144C(1) could not have been invoked in this case, the time limit of completion of assessment was available only upto 31st December 2017. The mere issuance of draft assessment order, when it was legally not required to be issued, cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of assessee which did not find mention any incriminating material relevant to any assessment years under appeals which could be the basis for making any addition. He has, therefore, submitted that since no incriminating material was found in assessment year under appeals, therefore, no addition could be made against the assessee. Learned Counsel for the Assessee again by referring to the above evidences submitted that since no information could have been provided by the Swiss Authorities to the Revenue Authorities in India for assessment years under appeals, therefore, no incriminating evidence was found to show that additions are based on any incriminating material. Learned Counsel for the Assessee also submitted that assessee since the very beginning has denied to have maintained any bank accounts with HSBC, Geneva, Switzerland. Therefore, onus is upon the A.O. to prove by specific and reliable evidence that assessee maintained any such bank account. Therefore, in the absence of any evidence or material on record against the assessee, even the addition on merit are without any basis. The additions on account of notional interest are based on mere suspicion and as such no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith maintenance of any bank account with HSBC, Geneva, Switzerland. The Ld. D.R. also placed on record letter of the A.O. Dated 22.08.2019 in which it is clearly mentioned by the A.O. that last panchanama was drawn on Dated 26.09.2011. Learned Counsel for the Assessee also placed on record letter Dated 26.06.2015 issued by Swiss Competent Authority addressed to the Government of India in which it is specifically mentioned that information as required could be provided from F.Y. 2011-2012 as the prior years are not covered by temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided from 01.04.2011. Learned Counsel for the Assessee also placed on record Notification Dated 27.12.2011 between India and Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after assessment years under appeals and as per information provided vide letter Dated 26.06.2015 no such information could be provided prior to 01.04.2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee's bank account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs. Conclusion 72. To conclude : (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153 A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04." 8.2.1. The above Judgment is confirmed by the Hon'ble Supreme Court by dismissing the SLP of the Department. Therefore, on this reason alone no addition could be made of any unexplained bank deposits or interest earned thereon in any of the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises." 11.1. He has, therefore, submitted that penalty is not leviable in any of the assessment years under appeals. 12. The Ld. D.R. on the other hand relied upon the Orders of the authorities below. 13. After considering the rival submissions, we are of the view that no penalty is leviable in any of the assessment years under appeals. In assessment years under appeals since quantum addition have already been deleted by us on quantum appeals (supra), therefore, no basis is left for levying of penalty under section 271(1)(c) of the I.T. Act. Further the show cause notices issued by the A.O. on 02.03.2015 prior to levy of the penalty, the A.O. has not mentioned therein specifically for which limb of Section 271(1)(c) of the I.T. Act, 1961, the penalty proceedings have been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of such income. therefore, show cause notices issued by the A.O. are illegal and bad in Law and vitiate the entire penalty proceedings. Thus, no penalty could be levied against t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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