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TMI Blog2022 (5) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the Assessing Officer u/s 143(3) r.w.s. 153A of the I.T.Act, cannot deny the claim of deduction u/s 80IB of the I.T.Act (in absence of incriminating material), the Pr.CIT in a revisionary proceeding cannot direct the AO to disallow the claim of deduction. In other words, there is no error in the assessment orders completed u/s 143(3) r.w.s. 153A (since there is no incriminating material found during the course of search pertaining to the claim of deduction u/s 80IB of the I.T.Act), warranting interference by Pr.CIT u/s 263. In the light of the aforesaid reasoning and the ITAT order in the case of Shri S.R.Ravishankar v. Pr.CIT [ 2022 (2) TMI 1238 - ITAT BANGALORE] we quash the impugned orders u/s 263 of the I.T.Act, since the assessment orders passed u/s 143(3) r.w.s. 153A of the I.T.Act cannot be stated to be erroneous. Appeal of assessee allowed. - ITA No.409/Bang/2021 And ITA No.336/Bang/2021 - - - Dated:- 13-5-2022 - Shri George George K, JM And Shri Laxmi Prasad Sahu, AM For the Appellant : Smt.Pooja Maru, CA For the Respondent : Sri.Sumer Singh Meena, CIT-DR ORDER PER GEORGE GEORGE K, JM : These appeals at the instance of the assessee are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T.Act. The assessments were completed u/s 143(3) for the assessment years 2011-2012 and 2012-2013 on 10.05.2013 and 14.08.2014, respectively, accepting the claim of deduction u/s 80IB of the I.T.Act. Thereafter, consequent to search u/s 132 of the I.T.Act, the assessments u/s 143(3) r.w.s. 153A of the I.T.Act was passed on 22.12.2017. Thereafter, Pr.CIT issued notice u/s 263 of the I.T.Act directing the assessee to explain why deduction claimed u/s 80IB of the I.T.Act for assessment years 2011-2012 and 2012-2013 should not be denied. The assessee filed objections to the show cause notice issued by the Pr.CIT. However, the Pr.CIT rejected the objections of the assessee and passed the impugned orders u/s 263 of the I.T.Act. The Pr.CIT set aside the orders passed u/s 143(3) r.w.s. 153A of the I.T.Act (order dated 22.12.2017 for both the assessment years, namely, 2011-2012 and 2012-2013) and directed the A.O. to reexamine the claim of deduction u/s 80IB of the I.T.Act. 4. Aggrieved, the assessee has filed these appeals before the ITAT. The learned AR has filed paper books for each of the assessment years enclosing therein the statement recorded u/s 131, 132(4) and 133A of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s regards assessment u/s 153A of the Act, as follows:- 37. On a conspectus of Section. 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six A Ys immediately preceding the previous year relevant to the A Y in which the search. takes place. ii. Assessments and reassessments pending on the date of the search shall abate The total income for such AYs will have to be computed by the AOs as afresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income of the aforementioned 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. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessments completed u/s 143(3) of the I.T.Act (for assessment year 2011-2012 the assessment completed vide order dated 10.05.2013 and for assessment year 2012-2013, the assessment u/s 143(3) was concluded on 14.08.2014) cannot be denied unless incriminating material is found during the course of search, warranting disallowance. Therefore, on the fact of the instant case, in an assessment completed u/s 143(3) r.w.s. 153A of the I.T.Act, pursuant to search u/s 132 of the I.T.Act, the A.O. could not have disallowed the claim of deduction u/s 80IB of the I.T.Act. The Pr.CIT is seeking to revise the assessment orders completed u/s 143(3) r.w.s. 153A of the I.T.Act. When the Assessing Officer u/s 143(3) r.w.s. 153A of the I.T.Act, cannot deny the claim of deduction u/s 80IB of the I.T.Act (in absence of incriminating material), the Pr.CIT in a revisionary proceeding cannot direct the AO to disallow the claim of deduction. In other words, there is no error in the assessment orders completed u/s 143(3) r.w.s. 153A of the I.T.Act (since there is no incriminating material found during the course of search pertaining to the claim of deduction u/s 80IB of the I.T.Act), warranting interf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied by any material found in the course of search. The following were the relevant observations of the Hon ble High Court: 30. Thus, it is clear that the Assessing Office: while passing the order under Section 153A read with Section 143[3] of the Act, ordinarily cannot disturb the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings establishes that the finalized assessments are contrary to the material unearthed during the course of 153A proceedings, as held by the Coordinate Bench of this Court in the case of IBC Knowledge Park (P) Ltd., supra. A concluded assessment could net be disturbed without there being any basis for doing so which is impermissible in law. Even in cast of a searched person, the same reason would hold good. As observed in Canara Housing Development Company supra, the Assessing Officer is empowered to assess or reassess the total income of six assessment years i.e., the income which was returned in the earlier return, the income which was unearthed during search and also any income which was not disclosed in the earlier return or which was not unearthed during the search by separate ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act which mandates recording of satisfaction. 10. In view of the above proposition and considering the facts of the present case, the learned assessing officer himself could not have added any amount invoking section 50C of the Act and the assessing officer could not have disturbed the carry forward of capital loss while framing assessment u/s. 153A of the Act, as no material whatsoever was found in the course of search warranting an enquiry into these aspects in an assessment u/s.143(3) read with sEc.153A of the Act. Hence, the order u/s. 153A in not doing so cannot be said to be erroneous and prejudicial to the interests of the revenue. In the assessment order made u/s. 153A of the Act dated 30.11.2016 for AY 2011- 12, no reference is made to any seized materials and the income assessed in original assessment order dated 28.06.2013 was reiterated. Hence, the learned assessing officer could not have made any addition in 153A order for the assessment year 2011-12 in respect of capital gains as there were no incriminating seized materials suggesting that the capital gains has been wrongly computed. Hence, provisions of section 263 of the Act cannot be invoked to revise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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