9911796707
TMI Blog2024 (6) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, allowing the claim of deduction u/s. 80IA. By way of these grounds, revenue has contested that claim of deduction u/s. 80-IA for the assessment years succeeding the AY 2017- 18 can only be admissible if the deduction u/s 80-IA related to the same project(s) has been allowed in AY 207-18. Claim of assessee has been allowed in AY 2017-18 by the Coordinate Bench (supra). Accordingly, ground nos. 1 and 2 of the revenue are dismissed. Treatment of assessee as a Developer of Infrastructure facility and not a Works Contractor - Once the assessee has been taken as Developer of Infrastructure facility in the preceding years in which the claim of deduction u/s. 80IA has been allowed, in the year under consideration different treatment to the assessee for the same activities cannot be held as a Works Contractor . Accordingly, ground no. 3 taken by the revenue is dismissed. - SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER For the Appellant : Shri Arun Bhowmick, JCIT For the Respondent : Shri S. K. Tulsiyan, Advocate ORDER PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: 1. Appeal filed by the revenue is against the order of Ld. CIT(A), Central NER, Guwahati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that revenue has stated that the assessee had not claimed deduction u/s. 80-IA in its original returns of income for the preceding assessment years i.e. AY 2017-18, 2018-19 and 2019-20 and that all the deductions were claimed from AY 2017-18 onwards only after the search. In ground no. 2, revenue has stated that claim of deduction u/s. 80-IA for the subsequent assessment year i.e. after AY 2017-18 can be admissible only if the deduction relate to the same project has been allowed in the AY 2017-18. In ground no. 3, revenue has claimed that assessee does not fall within the ambit of expression development of infrastructure rather it is to be treated as works contractor . On confrontation of this to both the parties, it was brought to the notice of the bench that the issues in the present appeal have already been decided by the Co-ordinate Bench of ITAT in assessee s own case in ITA Nos. 37, 38 and 39/Ghy/2022 for AYs 2017-18, 2018-19 and 2019-20 as well as ITA No. 43/Ghy/2022 for AY 2014-15 vide consolidated order dated 05.04.2023 holding it in favour of the assessee by allowing the claim of deduction u/s. 80IA. 5. Considering the issue being covered by the decision of the coordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this respect are extracted as under: 7.1. In this observation, Ld. AO has noted in para 4.2 that assessee claimed deduction u/s. 80-IA in AY 2020-21 also in its original return filed u/s. 139 on 15.02.2021. Ld. AO strongly agitated on the claim of the assessee of deduction u/s. 80-IA for AY 2017-18 in the return filed in response to notice u/s. 153A for which he observed as under: 4.9. It is seen that for the AY 2017-18, the assessee e-filed the original return of income on 31.10.2017, which was the last date for filing of original return of income for that assessment year as per the statute. In its submission furnished before me on 24.02.2021, the assessee has claimed that the legal position that the assessee was eligible for claiming deduction u/s. 80-IA of the Act became clear to the assessee only after the decision of the Hon ble ITAT in the case of the assessee company for the AY 2005-06 and 2006-07, which were passed during December 2017 and January 2018. Thus, assuming, but under no circumstances admitting, that the assessee was really entitled to any such deduction, the assessee still had time to e-file a revised return of income for the AY 2017-18 till 31.03.2018. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act can be broadly categorized as under: That, having not claimed the deduction in the Original Income Tax Return filed u/s 139(1) of the Act or by way of a Revised Return, the Assessee was not entitled to claim the deduction u/s 80IA(4)(i) of the Act in in the Returns filed by the Assessee in compliance to the Notice issued u/s 153A of the Act. That, the Audit Reports in Form-10CCB [as referred to u/s 80IA(7) of the Act] were not furnished by the Assessee within the time limit as referred to u/s 139(1) of the Act and, therefore, in the absence of the Audit Report (Form-10CCB) being filed by the Assessee within the time limit as referred to u/s 139(1), the Assessee could not claim the deduction u/s 80IA(4)(i) of the Act. That, for the purposes of Section 80IA, the Assessee was a Works Contractor and NOT a Developer of Infrastructure . 8. The relevant extracts from the said order on the observations and findings given by the Co-ordinate Bench are reproduced for ready reference: 61. The finding of ld. CIT(A) to the effect that for the purposes of Section 80IA of the Act, the assessee shall be treated as a Developer of Infrastructure Facilities and not a Works Contractor has not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A, thus thereby arriving at paradoxical result that being a search case the assessee had derived more benefit which was not claimed in the original return furnished u/s 139. 3) The Ld. CIT(A) also erred in that the assessee never furnished revised return to the original return so as to claim for the deduction u/s 80IA. 66. As stated above, in the instant case, the dispute in the impugned appeal revolves around the fresh claims of deductions made by the assessee u/s 80IA(4)(i) of the Act in its Returns of Income filed pursuant to notices issued u/s 153A of the Act for AYs 2017-18, 2018-19 2019-20 although the said claims were not made in the original returns filed by the assessee u/s 139 of the Act for the said years. The factual matrix and the chronology of events leading to the impugned additions have already been alluded to by us earlier in this order. 67. Admittedly, the assessee company had been claiming similar deductions u/s 80IA(4)(i) of the Act in the past years but as per the assessee, discouraged by the litigation vis- -vis its claim of deductions u/s 80IA of the Act in the past, the assessee company discontinued its claim of deduction since AY 2007-08 till the time it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med deduction u/s 80-IA in the original return of income whereas, in the present case for the impugned years, the Assessee had not claimed deduction u/s 80-IA in its original return of income. (v) That, for the A.Y. 2017-18, the Assessee e-filed the original return of income on 31.10.2017. The ITAT order in respect of A.Ys 2005-06 and 2006- 07 were passed during December 2017 and January 2018. Thus, assuming that the Assessee was entitled to any such deduction, it still had time to e-file a revised return of income for A.Y. 2017-18 claiming such deduction, which was not done. (vi) That, notice u/s 143(2) of the Act for selecting the case of the Assessee in scrutiny for A.Y. 2017-18 was issued on 24.09.2018 whereas the search was conducted in the case of the Assessee only on 20.09.2019, which was almost one year after the notice u/s 143(2) was issued and served on the Assessee.During one year of pending scrutiny assessment proceedings before it was abated, no claim regarding deduction u/s 80-IA was made by the Assessee in any submission before the A.O. The original assessment was to get time barred on 31.12.2019. The Form 10CCB in the case of the Assessee was issued by the auditor o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made [and for the relevant assessment year or years] : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years] : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso) specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 71. Firstly, analysing the provisions of Section 153A of the Act, ld. CIT(A) in his appellate order for the impugned yearshas observed (at pages 168 to 172 and pages 219 to 222 of his order) as under: (i) That, in case of a search or requisition, in terms of section 153A of the Act, the A.O is compulsorily required to issue notices u/s 153A and the searched person is compulsorily required to file Returns of income afresh u/s 153A (and not u/s 139(1) or any other section) for each of the prescribed assessment years [i.e., six A.Ys immediately preceding the A.Y relevant to the P.Y. in which such search is conducted or requisition is made and for the relevant A.Y(s) defined under Explanation 1 to section 153A(2)] (ii) That, the assessment or reassessment, if any, related to any of the prescribed assessment years, which is pending on the date of search or requisition and which is done on the basis of any earlier Return filed u/s 139(1) stands statutorily abated. (iii) That, after filing of the Return u/s 153A, the earlier Return filed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t will be wrong to hold that the Assessee will be barred from filing even a revised return assuming he satisfies the conditions for filing such revised returns. (x) That, from a perusal of the Explanation to Section 153A, the expression save as otherwise provided in this Section, Section 153B and Section 153C, all other provisions of this Act shall apply to the assessment made under this section it is evident that absence of any specific exceptions stipulated in the aforesaid sections, the provisions of all other sections of the Act will mutatis- mutandis apply to the assessment framed u/s 153A. Thus, the A.O is required to permit the legally tenable allowance, deductions, relief, rebates etc. which have been claimed in return filed u/s 153A of the Act. (xi) That, as per the Second Proviso to section 153A(1), any proceedings for assessment or reassessment of an assessee which are pending on the date of initiation of search or making a requisition will abate. Once those proceedings abate, the A.O is required to pass assessment orders for each of those years determining the total income of the assessee which will include both the income declared in the returns, if any, furnished by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpired search any assessm ent was pending? (Yes/No) which assessment was pending the Date off issuance of Notice u/s 143(2)/148 2017-18 31/10/2017 139(1) 30/09/2018 Yes 143(2) 24/09/2018 2018-19 31/10/2018 139(1) 30/09/2019 Yes(##) Not Applicable Not Applicable 2019-20 31/10/2019 139(1) 30/09/2020 Yes(**) Not Applicable Not Applicable 2020-21 15/02/2021 139(1) Yes (**) Not Applicable Not Applicable (##) The assessment was pending since the time limit for service of Notice under Section 143(2) of the Act had not expired (the same would have expired on 30/09/2019). However, a Notice under Section 143(2) of the Act in respect of the AY 2018-19 was issued in the case of the Appellant on 22/09/2019. (**) Since the ITR was filed only after the Date of the Search Thus, in the case of the Appellant, as on the date of the Search (i.e. on 20.09.2019), the time limit to issue a Notice under Section 143(2) of the Act for and in respect of AY 2014-15 to AY 2016-17 had already expired and the assessments for these years could be said to have been completed (unabated) in the case of the Appellant in respect of these assessment years (i.e. AY 2014-15 to AY 2016-17). Further, in the case of the App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 463 of 2016, judgment dated 09/02/2017; 79 Taxmann.com 96] Delhi High Court (iii) Shrikant Mohta vs. CIT [ITAT No.19 20 of 2015, GA No.246 247 of 2015, judgment dated 25/06/2018] Calcutta High Court 76. Further, ld. CIT(A) has relied upon the following case laws wherein after a detailed analysis of the relevant provisions of the Act, it has been unanimously held that the assessee is entitled to make a fresh claim of deduction, exemption, claim of expenses etc. in its Return of Income filed in response to notice u/s 153A of the Act which was not made in the Return of Income originally filed u/s 139 of the Act: (i) CIT vs. B.G. Shirke Construction Technology Ltd. [395 ITR 371; Income Tax Appeal No. 1392, 1531 of 2014, judgment dated 0/03/2017] Bombay High Court (ii) Pr. CIT vs. JSW Steel Limited [422 ITR 071; ITA No. 1934 of 2017, judgment dated 05/02/2020] Bombay High Court (iii) ACIT vs. Shantinath Detergents Pvt. Ltd. [2020 (3) TMI 964 - IT(SS) A No.27 to 32/Kol/2019, order dated 20/03/2020] ITAT Kolkata (iv) Universal Medicare Pvt. Ltd vs. DCIT [2018 (12) TMI 406 - ITA Nos. 2967 to 2971/Mum/2016, order dated 05/12/2018] ITAT Mumbai (v) Narendra Vegetable Products Pvt. Ltd. v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings which stood completed: (i) Jai Steel (India) vs. ACIT (and other connected matters) [(2013) 259 CTR (Raj) 281; ITA No. 53/2011, judgment dated 24/05/2013] Rajasthan HC (ii) GMR Infrastructure Limited vs. DCIT 2021 (7) TMI 527; I.T.A. NO.1036 OF 2017 dated 06/07/2021] Karnataka High Court 79. In light of the aforesaid judgments, ld. CIT(A) has gone on to conclude as under: 1. That, a Return of Income filed in compliance with the Notice issued under Section 153A of the Act substitutes the Original Return filed under Section 139(1) of the Act. 2. That, an Assessee cannot make any Fresh/ New / Revised claim in its Income Tax Return filed in compliance with the Notice issued under Section 153A of the Act, vis- -vis those Assessment Years for which at the time of initiation of Search, assessments were completed (i.e., unabated Assessment Years) 3. That, in respect of the Assessment Years whose assessments were pending / had abated, upon filing Returns of Income in compliance with the Notices issued under Section 153A of the Act, the aforesaid Returns filed in compliance with the Notices issued under Section 153A of the Act NOT ONLY substitute the Original/Earlier Income Tax Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. vs. Commissioner of Income- Tax [1997 (7) TMI 4 - Supreme Court; Other Citation: [1997] 227 ITR 172 (SC) Supreme Court of India (vi) United Commercial Bank vs. Commissioner of Income-Tax [1999 (9) TMI 4 Supreme Court; Other Citation: [1999] 240 ITR 355 (SC) Supreme Court of India (vii) Taparia Tools Limited vs. Joint Commissioner of Income Tax [2015 (3) TMI 853 - [2015] 372 ITR 605 (SC) - Supreme Court of India (viii) Pt. Sheonath Prasad Sharma vs. CIT [(1967) 66 ITR 647 (All)] Allahabad High Court (at page 926 of CIT(A) Order) (ix) S.R. Koshti vs. CIT [276 ITR 165] Gujarat High Court (at page 928 of the CIT(A) Order) (x) CIT (Central) vs. Devi Films Private Limited [1981 (11) TMI 10 - [1983] 143 ITR 386 - Madras High Court (at page 928 of the CIT(A) Order) (xi) Mayank Poddar (HUF) vs. WTO [262 ITR 633] - Calcutta High Court (at page 929 of the CIT(A) Order) 81. Ld. CIT(A) has further referred to (at page 921 of his order) the well settled proposition that ld. CIT(A) and the Hon ble ITAT have power to allow deduction/exemption to an assessee to which he was entitled even though claim was not made by such an assessee in his Original Income Tax Return. In other words, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the search action by virtue of operation of section 153A of the Act, the assessee was duly entitled to make a fresh/revised/new claim of deduction u/s 80IA(4) of the Act in its Returns of Income filed in compliance with notices issued u/s 153A of the Act although the said claim was not made in the original returns filed u/s 139 of the Act. With these observations, the impugned ground has been allowed by the ld. CIT(A) in favour of the assessee. 84. In the course of hearing before us, ld. Counsel for the assessee supported the order of the ld. CIT(A) vis- -vis the deletion of disallowance of fresh claim of deduction u/s 80IA of the Act made in returns filed u/s 153A of the Act. He also filed a detailed written submission to support his assertions. Since the arguments made by ld. Counsel for the assessee apropos the impugned grounds are similar to and in alignment with those advanced by ld. CIT(A) while allowing the claim of the assessee and the same have already been elaborately discussed by us (supra), the same are not reiterated here to avoid repetition. 85. Per contra, ld. D/R vehemently challenged the order of ld. CIT(A) in deleting the disallowance of fresh claim of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the Hon ble Supreme Court in K.P Varghese (supra). 86. We have heard rival contentions and perused the records placed before us and the relevant provisions of the Income-tax Act, 1961 and the case laws relied upon by both the sides. Reiterating the relevant facts in brief, in the instant case a search and seizure operation u/s 132(1) of the Act was conducted in the case of the assessee company on 20.09.2019. Pursuant to the said search, Notices u/s 153A of the Act were issued inter alia for the impugned AYs 2017-18, 2018-19 2019-20 on 04.02.2021[authenticated (i.e., digitally signed) by ld. AO on 05.02.2021], requiring the assessee to furnish its Returns of Income for the said years within 10 days of service of such notices i.e., on or before 15.02.2021. In response to the Notices issued u/s 153A of the Act, the assessee furnished its Returns of Income on 13.02.2021 i.e., well within the time permitted under the Notices u/s 153A of the Act. Vide the said Returns of Income filed in response to Notices u/s 153A of the Act, the assessee claimed deductions u/s 80IA(4)(i) of the Act as per the details compiled in Tables supra. The original Returns of Income u/s 139(1) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years were selected for scrutiny assessment vide Notice u/s 143(2) of the Act dated 24.09.2018 and 22.09.2019 and the case had abated. Further, for AY 2019-20, the original Income-tax Return had not been filed as on the date of search as the due date referred to u/s 139(1) of the Act had not expired. Thus, the proceedings for AY 2019-20 were also pending (i.e., were abated assessments). The above position has thus not been disputed by the Department. 89. Pursuant to the search and seizure operation in the case of the assessee, by virtue of operation of the second proviso to section 153A(1) of the Act, the pending assessments before ld. AO consequent to the original returns filed u/s 139(1) of the Act in respect of the impugned AYs 2017-18, 2018-19 2019-20 had abated. As per the provisions of Section 153A(1)(a) of the Act,the assessee was required to furnish fresh Returns of income for each of the impugned yearsin regard to which the Notices u/s 153A of the Act had been issued. As a result of abatement of pending assessment proceedings, only one fresh Assessment Order could be passed for each of the impugned assessment years on the basis of fresh Return of Income filed u/s 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observed as under: 11. The second proviso of Section 153A reads as under: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. 12. A plain reading of Section 153A would show that where notice under this Section is issued as result of any search under Section 132, assessment or reassessment if any relating to any assessment year falling within the period of six assessment years referred to under Section 153, pending on the date of initiation of search under Section 132 or requisition under Section 132A shall abate. The words, pending on the date of initiation of search under Section 132, or making of requisition under Section 132A, as the case may be, has to be assigned simple and plain meaning. Where the assessment or re- assessment is finalised, there are no pending proceedings to be abated, and restored to the file of the assessing officer. To abate means to diminish or to take away. The word 'abatement' has been defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide for abatement of action/ suit; abatement of legacies; abatement of nuisance; and all actions for such nature, which have the pendency or continuance. The proceedings, which have already terminated are not liable for abatement unless statute expressly provides for such consequence thereof. 14. The word 'pending' occurring in the second proviso to Section 153A of the Act, is also significant. It is qualified by the words 'on the date of initiation of the search', and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate .. . 91. Viewed in the aforesaid light, the expression abatement of proceedings means termination of proceedings. Thus, with the abatement of the pending assessment proceedings for the impugned AYs 2017-18, 2018-19 2019-20 pursuant to the search action, the assessment proceedings were re-started/ re- initiated de-novo on the basis of fresh Returns of Income filed u/s 153A of the Act. In other words, the Returns of Income filed u/s 153A for the impugned assessment years were the subject of assessment for the Revenue for the first time in the case of abated assessment proceedings of the said years. Conseq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate for the appellant, we are of the considered opinion that the view taken by the Tribunal is erroneous. The CIT(A) rightly held that it is not relevant whether any return of income was filed by the assessee prior to the date of search and whether any income was undisclosed in that return of income. In view of specific provision of Section 153A of the I.T. Act, the return of income filed in response to notice under Section 153(a) of the I.T. Act is to be considered as return filed under Section 139 of the Act, as the Assessing Officer has made assessment on the said return and therefore, the return is to be considered for the purpose of penalty under Section 271(1)(c) of the I.T. Act and the penalty is to be levied on the income assessed over and above the income returned under Section 153A, if any. (ii) Shrikant Mohta vs. CIT [ITAT No.19 20 of 2015, GA No.246 247 of 2015, judgment dated 25/06/2018] The Hon ble Calcutta High Courtheld as under: The non obstante clause at the beginning of Section 153A (1) of the Act suspends, for the purpose and to the extent as indicated in such provision, the operation of several other provisions of the Act, including Section 139 and even Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regular course u/s 139(1) of the Act (including deductions under Chapter VI-A) would continue to apply in case of return filed u/s 153A of the Act even though the same may not have been claimed by the assessee in its original return of income u/s 139(1) of the Act. 95. Ld. CIT(A) has referred to a catena of judgments in support of the proposition that the assessee is entitled to make a fresh claim of deduction, exemption, claim of expenses etc. in its Return of Income filed in response to notice u/s 153A of the Act which were not made in the Return of Income originally filed u/s 139 of the Act. The same have been enlisted by us earlier in this order. Upon going through the case laws on the subject cited by ld. CIT(A), we find that these sufficiently address the issue at hand and unanimously uphold the above proposition of law. We would like to quote few judgments rendered in support of the aforesaid proposition including those which directly deal with the allowability of fresh claim of deduction u/s 80IA of the Act in Returns of Income filed in response to notice u/s 153A of the Act despite the same not being made in the original Return of Income filed u/s 139 of the Act: (i) PCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11 that assessee had filed its original return u/s 139(1) of the Act on 13.10.10. The department carried out a search in question in its office and other business premises on 28-29/10/2010. The Assessing Officer issued section 153A notice dated 20.07.2011 for assessment years 2005-06 to 2010- 11 asking for return of income within 15 days of service thereof. This notice stood served on the very day itself. 18. The assessee filed its post-search return on 30.09.11 reiterating the earlier income (supra). It had admittedly not claimed the impugned section 80IA deduction in either of these two returns. The assessee rather chose to file revised return/computation dated 15.03.2013 claiming section 80IA deduction for the first time inter alia pleading therein that the very claim stood accepted in assessment year 2005-06 to 2006-07 in search assessment frames u/s 153A, section 80IA explanation had not been taken into account therein, some of its projects had not been considered as eligible for this relief due to amendment introduced vide Finance Act No.2 of 2009 with retrospective effect from 01.04.2000 and that it had finally considered itself as eligible for the deduction in question as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ges first of all that the impugned section 80IA deduction claim on merits, is already covered by the tribunal common order (supra) in assessment years 2005-06 to 2009-10 dated 01.05.2019 that it is a developer having undertaken business risk in similar infrastructural projects. Revenue s pleadings in the instant appeal nowhere pinpointed any distinction in law and on facts in all these assessment years. It is further noted that the assessee has been deployed its fixed assets and also paid retention money to the payers concerned. All this sufficiently indicates that the assessee s payers nowhere undertook any risk in the corresponding projects. 28. Coming to technical aspect involved in the instant lis regarding the filing of belated revised return, we find that hon ble apex court s judgment in NTPC (supra) settled the law long back that if the assessee is a legally entitled for a deduction claim which is not taxable and the corresponding claim can also be allowed to be raised for the first time even in section 254 proceedings. It has also come on record that the assessee had very well explained the reasons of having not raised the impugned scheme due to the corresponding legislativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued. In response, assessee filed return of income declaring total loss at ₹ 419,48,90,102/- on 29.03.2012. In this return of income assessee made a new claim for treating gain on pre-payment of deferred VAT/sales tax on Net Present Value (NPV) basis for an amount of ₹ 318,10,93,993/- as capital receipt . 4. This new/fresh claim of assessee was disallowed by the Assessing Officer (hereinafter referred to as AO) while finalising assessment under Section 143(3) read with Section 153A of the said Act vide the order dated 25.03.2013 by considering the same as revenue receipt instead of capital receipt . The reasoning given by the AO was that the assessee had availed of sales tax deferral scheme and the State Government had permitted premature re-payment of deferred sales tax liability at the NPV basis. Therefore, according to the AO, assessee treated this as capital receipt even though the same was credited to the assessee s profit and loss account being difference between the deferred sales tax and its NPV. 5. However, the primary question that arose before the AO was whether the claim which was not made in the earlier original return of income filed under Section 139(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng return of income in respect of each assessment year falling within six assessment years, within such time as may be specified and upon such return of income being filed, the provisions of the Act shall apply as if such return were a return required to be furnished under Section 139; and (b) assess or re-assess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. 8.1. In other words, Section 153-A(1) provides that where a person is subjectedto a search under Section 132 or his books of accounts, etc. are requisitioned under Section 132-A after 31.05.2003, the assessing officer is mandated to issue notice to such person to furnish return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Such returns of income shall be treated to be returns of income furnished under Section 139. Once returns are furnished, income is to be assessed or re-assessed for the six assessment years immediately preceding the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years. 8.4. Reverting back to the second proviso what is to be noticed is that as per this proviso, any assessment or re-assessment in respect of any assessment year falling within the said period of six assessment years is pending on the date of initiation of search or making of requisition, those assessment or re- assessment proceedings shall abate. In other words, pending assessment or re-assessment proceedings on the date of initiation of search or making of requisition shall abate. 8.5. That brings us to the crucial expression, which is abate . The ordinary dictionary meaning of the word abate , as per Concise Oxford English Dictionary, Indian Edition, is to reduce or remove (a nuisance). Derivative of abate is abatement. In Black s Law Dictionary, Eighth Edition, abatement has been defined to mean an act of eliminating or nullifying; the suspension or defeat of a pending action for a reason unrelated to the merits of the claim. In Supreme Court on Words and Phrases (19502008), abating has been defined to mean an extinguishment of the very right of action itself ; to abate , as applied to an action, is to cease, terminate, or come to an end prematurely. 9. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim for deduction etc. which remained to be claimed in his earlier/ regular return of income. This is so because assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return filed under Section 153A of the said Act (which is in consequence to the search action under Section 132) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said Act, would be construed to be one filed under Section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1). . 16. From the above we conclude that in view of the second proviso to Section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act, in its Returns filed pursuant to Notices issued u/s 153A for the impugned A.Ys although the same were not claimed in its original Returns u/s 139 of the Act. 97. Reverting to the various counter-arguments/assertions made by ld. D/R vide his written submissions dated 25.01.2023, it is stated that insofar as the reliance placed by ld. D/R on the judgment rendered by the Hon ble Supreme Court in the case of Goetze India Ltd. Vs. CIT (2006) 284 ITR 323is concerned, we find that the said judgment was rendered on completely incongruent set of facts i.e., in the context of deciding whether an assessee could amend a return filed by him for making a claim for deduction by way of a letter before ld. AO other than by filing a revised return in the course of normal assessment proceedings (and not proceedings u/s 153A of the Act pursuant to a search action). On the said question, the Hon ble Apex Court ordained that ld. AO had no power to entertain a claim for deduction not made in the return of income otherwise than by filing a revised return. The aforesaid judgment is clearly inapplicable to the disparate set of facts in the present case wherein pursuant to the search and seizure oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court held as under: The second question is answered thus: When search operations are conducted under Section 132 of the Act, the obligation of the assessee to file any return remains suspended till such time that a notice is issued for such purpose under Section 153A(1)(a) of the Act. If the return is filed by the assessee within the reasonable time permitted by such notice under Section 153A(1)(a) of the Act, such return would then be deemed to have been filed within the time permitted under Section 139 (1) of the Act for the benefit under Section 139(3) of the Act to be availed of by the assessee. 99. Thus, the Returns u/s 153A of the Act wherein the impugned deductions u/s 80IA(4) of the Act have been claimed [and which substitute the original returns u/s 139(1) of the Act] are not delayed and hence the question of filing any condonation of delay does not arise. 100. Next, ld. D/R s reliance on the judgment of the Hon ble Jodhpur Bench of the ITAT in the case of Suncity Alloys (P) Ltd. Vs. ACIT [2009] 124 TTJ 124 to the effect that assessments or reassessments made pursuant to notice u/s 153A of the Act are not de-novo assessments and therefore no new claim of deduction o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see in consonance with the judgment rendered by the Hon ble Apex Court in the case of CIT vs. Vegetable Products Ltd. (88 ITR 192),wherein the Hon ble Court held that when two interpretations are possible, one in favour of the assessee must be adopted. 101. Further, the reliance placed by ld. D/R on the judgment rendered by the Hon ble Delhi ITAT in the case of Charchit Agarwal vs. ACIT [2 9] 34 SOT 348 (Del) also does not lend much credence to the Revenue s case. The said judgment was rendered in the context of specific and distinct set of facts and circumstances of that case vis- -vis valuation of closing stock, wherein the very basis of valuation claimed in Returns filed u/s 153A of the Act was under challenge. The said facts are missing in the present case, making the ratio inapplicable to the present case. Further, insofar as the observation of the Delhi Bench in the above case to the effect that - fresh claims cannot be made u/s 153A of the Act which have the result of lowering income returned earlier considering that search proceedings are for the benefit of the Revenue - is concerned, it is seen that other benches of this Tribunal have taken a divergent view in this regard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h claim un-connected to the income declared but the claim was linked with the income declared. Having regard to the circumstances of the case, we are of the view that the Assessing Officer as well as the Ld. CIT(A) were not justified in disallowing the claim of deduction of ₹ 24,57,965. We direct the Assessing Officer to allow the claim of deduction and recompute the income accordingly. (ii) ACIT vs. VN Devadoss (2013) 57 SOT 67 (Chennai) (URO), ITAT: The Chennai Bench addressed the issue as to whether a search under section 132 is conducted for the benefit of the assessee or department. It also took note of the fact that returns are not voluntarily filed by the assessee within the due date prescribed under section 139(1) but they are filed after the search operation was conducted but before the issuance of notice under section 153A of the Act. In para28 of its order, the Bench has observed as under: 28. Next we have to examine the decision of the Commissioner of Income tax(Appeals) rendered on the alternate ground raised by the assessees before him. The alternate ground was whether the returns filed in response to notices issued under section 153A can be taken as returns fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 16 of the order] 104. In light of the aforesaid discussions, we have no hesitation in holding that the Assessee in the instant case was very well within its rights to claim deductions u/s 80IA(4) of the Act in its Returns filed in compliance to Notices issued u/s 153A of the Act in respect of pending/abated assessment proceedings for the impugned AYs 2017-18, 2018-19 2019-20 although such deductions were not made in the original Returns filed u/s 139(1) of the Act (prior to search) and such claims were also not raised vide revised Returns of Income filed u/s 139(5) of the Act. 105. In view of the above, Ground Nos. 1 3 of the Department s Appeal are dismissed. 9. In respect of ground nos. 1 and 2, we find that coordinate bench has given its finding by concluding it in para 104 extracted above, holding it in favour of the assessee, allowing the claim of deduction u/s. 80IA. By way of these grounds, revenue has contested that claim of deduction u/s. 80-IA for the assessment years succeeding the AY 2017- 18 can only be admissible if the deduction u/s 80-IA related to the same project(s) has been allowed in AY 207-18. Claim of assessee has been allowed in AY 2017-18 by the Coordinat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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