AI Insights
The case involves an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) which had quashed the assessment made under section 153A r.w.s. 143(3) of the Income Tax Act, 1961. The assessment was related to the alleged undisclosed foreign bank account of the assessee, Shri Arvind N Nopany, for the assessment year 2007-08. The Tribunal examined whether the assessment was completed within the statutory time limit and whether there was any incriminating material found during the search that could justify the additions made to the assessee's income. The Tribunal found that the assessment was indeed time-barred and that no incriminating evidence was found during the search, leading to the dismissal of the Revenue's appeal and the acceptance of the assessee's cross objection.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 302607 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 20 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
04-04-2023
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
06-02-2023
Assessment Year
2007-2008
Appeal Filed On
14-03-2021
Judgement Text
INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Shri Waseem Ahmed, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The DCIT, Central Circle-2, Vadodara Shri Arvind N Nopany 11/A, Nilamber-1, Saiyed Vasna Octroi Naka, Baroda-390015 PAN: AAAJM0991N (Appellant) Vs Vs Shri Arvind N Nopany 11/A, Nilamber-1, Saiyed Vasna Octroi Naka, Baroda-390015 PAN: AAAPN8927F The DCIT, Central Circle-2, Vadodara (Respondent) Assessee Represented : Shri M .K. Patel, Ad v. Revenue epresented : Shri A.P. Singh, CI T DR Date of hearing : 07-02-2023 Date of pronouncement : 05-04-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the Appellate order dated 15.09.2020 passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad arising out of the assessment order IT(SS)A No. 67/Ahd/2020 & C.O. No. 13/Ahd/2021 Assessment Year 2007-08 I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 2 passed under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2007-08. Cross Objection is filed by the Assessee as against the above Revenue appeal. 2. The Registry has noted that there is a delay of 02 days in filing the above appeal. The appeal is filed on 23.12.2020. This period falls under COVID-Pandemic situation, thus following Hon’ble Supreme Court judgment dated 23.3.2020 in suo moto Writ Petition (Civil) No.3 of 2020, vide Hon’ble Supreme Court has extended time limit for filing appeals w.e.f. 15.3.2020. Thus, there is no delay in filing the above appeal and we take the appeal filed by the Revenue for adjudication. 3. The brief facts of the case is that a search action under section 132 of the Act was conducted at the residential and business premises of the assessee on 29-09-2011 both at Vadodara and Mumbai. Since the assessee was out of India, Prohibitory orders were placed at the residence of the assessee. When the Assessee had returned from abroad on 04-10-2011 in the morning, immediately search action re-commenced and no rest was permitted to the assessee and the search proceedings continued till very late in the night. Primary statement u/s.131 was recorded during the day time and then the statement u/s.132(4) was recorded till late in the night. 3.1. Thus the search proceedings, commenced on 29 th September 2011 and were concluded on 15 th November 2011. During the course of search, various places were searched including the Bank I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 3 lockers of the assessee, his family members and all the business premises of the assessee. However NO incriminating document/ paper/statement/evidence were found and seized by the department during the course of Search proceedings. 3.2. Assessment proceedings commenced on 07th February 2012 by issuance of notice u/s.153A requiring the assessee to furnish Returns of Income for six assessment years. In response the assessee filed his Returns of Income on 27.02.2012 declaring the same income as filed originally u/s. 139(1) of the Act. However three years later, a show cause notice dated 2 nd February 2015 was issued by the Ld Assessing Officer which reads as follows: “.... In connection with search assessment proceedings for A.Y. 2006-07 to 2012-13, you were earlier issued show cause notice dated 21.01.2015. You have filed reply to the show cause vide letter dated 23.01.2015. As per your above mentioned reply you have stated that you are not in possession any HSBC bank account in Geneva in contrast to what has been stated by you in a statement u/s 132(4) of the Income Tax Act dated 04.10.2011. But as per the information received by Income Tax Department under Double Taxation Avoidance Conveyance (DTAC) between India and France, you have a bank account in HSBC, Geneva with following details mentioned: “Name Nopany Arvind Narayanprasad Date of Birth 29.03.1965 Address 11-A, Nilambar Bunglows, Vasna Road, Vadodara, 390015, Gujarat, India (legal address) Date of creation 26.09.2006 BUP_ SIFIC_PER_ID 5090189906 PER_ID 151190 PER_NO 189906 As per the above information indicated herein above, you are in possession of bank account in HSBC, Geneva, with the above mentioned details. In this connection you are requested to furnish details of above mentioned account which will include amount of deposit, withdrawals made from this account, year wise accretion." I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 4 3.3. Except for the narrative in the above show cause notice, the Ld AO has not shared the purported data which according to the AO was received under Double Taxation Avoidance Conveyance (DTAC) between India and France. Further the Ld AO has not shared the purported information in her possession, which is heavily relied by her in coming to the conclusion that the assessee had an Offshore Bank Account at Geneva. It is only during the course of Appellate Proceedings before the Ld CIT(A), a Remand Report dated 17-12- 2015, a Confidential Report was furnished by the Ld AO, out of which certain portion of the same was shared by the Ld CIT (A) to the Assessee, so as to enable him to rebut the same. Copy of the reference made by the Ld Commissioner of Income tax (Central)-II, Ahmedabad on 19th December 2012 to the Joint Secretary (Foreign Tax & Tax Research-1) Division of the CBDT under DTAA was also furnished. 3.4. The said Remand Report also contained a letter dated 31st December 2012 received from Under Secretary [Foreign Tax & Tax Research Division-III(2)] which states that a request for information under "Exchange of Information" made to Switzerland Tax Authorities. As and when any information is received, the same shall be forwarded to you [CIT, Central-II, Ahmedabad]. The ld AO has attached a Photo copy of "Base Document" with respect to issue of foreign bank account. However the Ld. AO in the show cause notice dated 02-02-2015 referred to the above and states that the information was received by Income Tax Department under Double Taxation Avoidance Conveyance (DTAC) between India and I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 5 France to the effect that the assessee had a bank account in HSBC, Geneva with the aforesaid details. 3.5. The Ld AO has heavily relied on the so called "base document" and concluded that the assessee has an Off Shore Account with HSBC Bank, Geneva and that the amount of Rs. 7.5 Crores was invested by the assessee in the said purported bank account. The so called "base document" does not contain anything which says that the same indicated the ownership of the assessee in the HSBC Bank, Geneva and that the amount invested therein is US$ 1.5 million. It is important to note that the "base document" is the photocopy of a piece of paper which, though according the learned AO is a Base document, which suggests the assessee is the owner of an Off Shore Account with HSBC Bank Geneva, which mentions the name and certain personal details of the assessee. The piece of paper relied by the Ld. AO does not contain any reference to the source from which it is found/received, it is unauthenticated and unverifiable and it does not even mention that it pertains to which Bank it relates to. 3.6. In the above circumstances the assessee vide its letter dated 22.10.2013 replied to the Assessing Officer as follows: “... Purported Disclosure of Rs. 7.5 Crores As regards the purported disclosure of Rs.7.5 crore, I have to bring to your kind knowledge that a search was conducted at my residence on 29.09.2011. On 29 September 2011 Officers of the Income Tax Department, Vadodara, conducted search/survey at my residence and business premises of Rishi FIBC Solutions P Limited, Garrison Polysacks Private Limited and Dan Cement Trading Private Limited. The Officers arrived at the residence at about 8 am and around the same time at the business premises of the various factories and offices and sought to examine various records. There were various teams deputed at the same time at I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 6 difference premises, assisted by subordinate staff members. The various officers of the department who the factories had a standard set of questions which they asked the stat at the factories includes question as to the purchase details of mocks and sales etc. The officers also collected from the factories details of books and stocks. Since I was abroad on the date of search at my residence, a prohibitory order was placed and the search was recommenced on my return, my primary statement was recorded on October 2011 and the search proceedings continued till late in the night. During the course of recording of my statement at my residence, the ADIT Shri Mahit Mrinal and Shri Ashish Kumar were asking various question turn by turn. The questioning continued till late night. Variou questions were out to me and since had returned after a long foreign travel and was exhausted, I answered the questions to the best of my ability but under duress I state that, at none of the factories did the officers find anything incriminating against the conduct of the Companies, so far as the provisions of Income Tax Act, 1961 are concerned. I explained to them that none of the factories generate unaccounted income. I also explained to them that RISHI FIBC Solutions Private Limited was entitled for deduction under section 30% of the Income Tax Act, 1961 and hence one can see no reason for the company to generate such unaccounted Income. I further explained to the officers that the companies other than RISHI FIBC Solutions Private Limited were subjected to scrutiny assessment for years together and that except for a few standard additions the company's books of accounts were accepted by all the assessing officers. Since was tired. I wanted to get over with the proceedings and answered the questions in the manner in which the ADIT's wanted them to be answered, it now occurs to me that the objective of the various questions asked by the officers was to obtain somehow a disclosure from me of purported unaccounted Income. Since they could not find any incriminating documents against me during the search action, they pressurized me to make a substantial disclosure of unaccounted Income of myself and my group of a sum equivalent to USD 15 million which according to them came from my father in an account of HSBC Bank, Geneva. In view of disclosure made under duress as stated above, I had executed an Affidavit on 1 February 2012 before Mr. Devendrasinh M. Raj, Advocate & Notary to the effect that the said disclosure made by me as regards the said bank was not an voluntary statement and was made under duress and that by the Affidavit have retracted the same. The same Affidavit, copy of which is enclosed, was made an enclosure to various returns of income filed by me under section 153A on 27 th July I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 7 2012 and the note attached to the computation of total income very clearly discloses this fact. I state that I have no income from undisclosed sources amounting to Rs.7.5 crore. As regards the second part of your question, you have asked me to furnish the details of my account with HSBC Bank Switzerland to you. In this regard, I have to state that the DDIT(Inv.)-II, Vadodara who had given to mix a consent waiver letter which was requested to sign and hand it back to them to enable them to forward the same to the concerned authority for obtaining the information from the foreign bank through diplomatic channels. After this letter was received by me on 21 st February 2013, and since do not have a bank account as stated, replied to the DDIT(Inv.)-II, Vadodara, on 24 th February, 2013 where, I have stated as under: To The Deputy Director of Income Tax (Inv.)-II Room No. 322, 3 rd Floor Aayakar Bhavan Race Course, Boroda Respected Sir, Sub: Consent in regard to obtaining of HSBC Foreign Bank Account details. Kindly refer to the consent form in regard to obtaining of HSBC Foreign Bank Account details which was handed over to me personally on 21.02.2013 by your office. In this regard, I have to state that I do not have any account as stated in the said consent from I, therefore, express my inability to give any consent in regard to obtaining Information from HSBC. Thanking you, Yours faithfully, Sd/- (Arvind Nopany) A copy of the letter (which was received by Shri Shibu Varghese, Inspector on 25 th February. 2013) is attached for your ready reference. This fact was also brought to the knowledge of JCIT, Central Circle, Baroda Shri Lala Philip by my AR Shri CA. Mayur Parmar during the recent conversation with him when a copy of the letter was given to him. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 8 In view of the above facts, regret, cannot furnish to you details sought by you in item (i), (ii). & (iii) of Part (o) of your questionnaire. 3.7. The Assessing Officer in the assessment order dated 27.02. 2015 made the impugned addition as follows: “So as per the information exchanged through Double Taxation Avoidance Conveyance(DTAC) between India and France, assessee is in possession of Foreign bank account vide account number stated above. The name, address, date of birth mentioned are of assessee only as can be found out from the return of income. And during the course of search when assessee was confronted with this fact, he had accepted the presence of foreign bank account in HSBC. So this is more than sufficient evidence to prove that assessee has HSBC foreign bank account. Assessee was specifically provided with this information during the course of assessment proceedings and was asked to reply the same. But assessee has again repeated the arguments made by him as per the affidavit. Assessee in his reply to show cause has stated that department has not given him a shred of evidence to support its claim of having an account with HSBC(para 2.6 of letter dated 23.01.2013). Further assessee in this submission has repeatedly asking for copy of evidences which led department to believe that assessee is in possession of HSBC, foreign bank account. So as per assessee's request he has been furnished the details with respect his account in HSBC, Switzerland. The principle of natural justice has been followed by furnishing assessee the details with respect to his HSBC bank account in GENEVA. But even after receipt of this evidence, assessee has been repeating the stand that he does not have any account in HSBC, Geneva. 8.7. Thus on the basis of above discussion, it is concluded that as per the information available with this office, assessee is in possession of HSBC, bank account in GENEVA with the account details as mentioned in para 8.6. Further this fact has been admitted by assessee in his statement recorded on oath u/s 132(4) of the 1 T Act dated 04.10.2011. In this statement assessee has given various details with respect to this account including the amount of deposit as on Sept 2006 at US $1.5 million. Further retraction made by assessee is an afterthought act which is made after the long gap of almost 4 months hence loses its validity. Further it is not corroborated by any strong evidence to prove that the statement recorded on oath as erroneous Assessee has not discharged the onus cast upon him to prove the validity of retracted statement. So considering the factual and legal position, it is held that assessee has a HSBC bank account in Geneva with the deposit of US$1.5 million during FY.2006-07 which in Indian Rupees comes to Rs 7.5 crore. Thus, I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 9 assessee has unaccounted deposit/ investment of Rs. 7.5 crores which he has not disclosed in his income tax return and he offers no explanation about nature and source of this investment/deposit. 8.8 Thus, the amount of Rs 7.5 crore is added to the total income of the assessee as his unexplained investment/deposit for the year under consideration. Penalty proceedings u/s 271(1)(c) of the Act are being initiated separately for concealment of income. “ 4. Aggrieved against the assessment order, the assessee filed an appeal before LdCIT[A] and during the course of appellate proceedings, the assessee raised the Additional Grounds of Appeal as follows: Additional Grounds of appeal No.1 a. On the facts and in the circumstances of the case and in law, the learned AO has erred in completing the assessment beyond the time limit for completion of assessment u/s 153A as stipulated by the provisions of section 153B(1)(viii) of the Income Tax Act, 1961. b. The learned AO on the facts and in the circumstances of the case and in law has erred in stating that the time limit for completion of assessment u/s 153 was extended by virtue of provision as per section 153B(1)(viii) of the Income Tax Act, 1961. c. The learned AO on the facts and in the circumstances of the case has erred in relying on the documents/evidences without granting adequate opportunity to your appellant to rebut the same. Additional Ground of appeal No.2 a. That on facts and in law, the learned AO has grievously erred in making addition of Rs.7.5 Crores in respect of alleged foreign bank account in the assessment u/s. 153A of the Act, as there is no incriminating material/evidence found during the course of search regarding this addition. The appellant craves leave to add, omit or alter grounds of appeal before or during the hearing of the appeal. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 10 4.1. The Ld CIT[A] admitted the 1 st Additional Ground namely “Assessment Order is time barred” and adjudicated the same in a very detailed manner as follows: “... 3.13 As per the information available during the Appeal Proceedings, a reference to competent authority was made for exchange of information on 19.12.2012 as confirmed by FT & TR division vide their letter dated 31.12.2012 to Pr. CIT (Central). Accordingly, as per Explanation (viii) to the Section 153B the limitation for completion of the assessment shall be deemed to be excluded for a period of Six Months i.e. Period commencing from the date on which a reference for exchange of information is made ending with the date on which the information so requested is received by the Commissioner or a period of six months, whichever is less, shall be excluded. Since no information in this case has been received by the Pr. CIT, the upper limit of six months exclusion would be available to the AO for completion of assessment. 3.14 The above situation is once again reiterated as under: - Financial Year: 2006-07 - Assessment Year: 2007-08 - Return of income under section 153 A: 27.07.2012 - Date of Reference to Competent Authority: 31.12.2012 - Period of extension from the date of reference (Six Months) to end on 30.06.2013 - Due Date of completion of assessment: 31 March 2014. - Time available after the date of extension from 30.06.2013 to 31.03.2014 = 274 days In such a case the assessment order was to be passed by 31 March 2014 as the period available after the period of extension from the date of reference to competent authority is 274 days in view of proviso to Explanation of Section of 153 B of IT Act. However, in the instant case the assessment "was completed on 27 February, 2015 which was beyond the statuary time limit as noted above. 3.15 Further Provided in Section 153B that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clause (b) of this sub-section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. Now in the case six months period to be excluded begins on 31.12.2012 and ends on 30.06.2013.This period falls well I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 11 before the period of limitation which ends on 31.03.2014. Therefore the Period of Limitation would be 31.03.2014. The last date for completion of the assessment as per the provisions of section 153B was 31.03.2O14. The period of six months for which the extension would have been available to the AO expired before this date and therefore there is no question of automatic extension of time. In view of the above the assessment completed by the AO on 27 th February 2015 was way beyond due date i.e. 31.03.2014 for completion of assessment proceedings for AY 2007-08. 3.16 WITHOUT PREJUDICE TO THE ABOVE even assuming without granting that the period to be excluded while calculating the period of limitation available to the AO is a period of One Year (Not as per the amendment made by Finance ACT 2011 but held by AO), the following picture emerges: - Financial Year: 2006-07 - Assessment Year: 2007-08 - Return of income under section 153 A: 27.07.2012 - Date of Reference to Competent Authority: 31.12.2012 - Period of extension from the date of reference (One Year) to end on 31.12.2013 - Due Date of completion of assessment: 31 March 2014 - Time available after the date of extension from 31.12.2013 to 31.03.2014 = 90 days In such a case the assessment order would have been passed by 31 March 2014 as the period available after the period of extension from the date of reference to competent authority was 90 days in view of proviso to Explanation 153 B of IT Act. 3.17 To summarize the issue, it is noticed that as per Explanation (viii) to section 153B, the period to be excluded begins from the date of reference made, till the date of Six Months (or one year as per AO) or the receipt of the information whichever is earlier. Since, in the instant case on reference no information has been received from foreign authorities, therefore the maximum available time would be six months (or one year as per AO). Accordingly if the above period of reference is excluded, then the following picture emerges: 1. If period of six months is considered then the period to be excluded would be from 31st December 2012 till 30 th June 2013. Thus period of 274 days were available (from 30.06.2013 to 31.03.2014). As per the proviso to the explanation (viii) to section 153 B which states that if the period I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 12 available to the AO is less than 60 days for the purpose of limitation then the period available would get extended to 60 days or deemed to be extended accordingly. Thus no benefit of 60 days period as per the said proviso would be available to the AO for completion of the assessment as it was already having 274 days left with him for completion of assessment. OR 2. If period of One Year is considered then the period" to be excluded would be from 31 st December 2012 till 31 st December 2013. Thus period of 90 days were available (from 31.12.2013 to 31.03.2014). As per the proviso to the explanation (viii) which states that if the period available to the AO is less than 60 days for the purpose of limitation then the period available would get extended to 60 days or deemed to be extended accordingly. Thus, no benefit of 60 days period as per the said proviso would be available to the AO for completion of the assessment as it was already having' 90 days left with him for completion of assessment. In both the situations, the limitation expired on 31st March 2014. Accordingly, the benefit of the said proviso was not available to the assessing officer and the assessment order passed after the statutory timeline i.e. 31.03.2014 is barred by limitation and thus making assessment void ab-initio. 4.2. The Ld. CIT[A] also dealt with the second limb of the argument namely the exclusion period would be computed “from the date of reference made” or ‘time barring period of assessment” and the same was disposed by very detailed order as follows: “... 3.18 Now with regard to question no. 2, whether the exclusion time of six months (or one year as per AO) for completion of the assessment would start from the date of reference for exchange of information i.e. 31.12.2012 or from time barring date of assessment i.e. 31.03.2014. It may be pointed out that the interpretation of the AO regarding the extension of the period beyond the date of limitation i.e 31st March 2014 by adding a period of one more year and extending the limitation up to 31st March 2015 is not in line with the harmonious interpretation of the provisions of section 153B. If the same is considered, then it would lead to the Proviso appended to the Explanation of Section 153 B redundant and infructuous as under no circumstances the period of sixty days mentioned in the said proviso would become applicable due to availability of extended period of one year from the normal time barring date as per Section 153 B(a) or (b) of IT Act. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 13 Similarly, if the exclusion period of six months is counted from the date of limitation of assessment i.e. 31.03.2014 then also the limitation expires on 30.09.2014 while the assessment in the case has been completed on 27.02.2015 which is much beyond the limitation date hence, assessment became barred by limitation. Moreover, the proviso to explanation of Section 153 B for availability of 60 more days' time for completing the assessment would become infructuous and redundant as under no circumstances the period of sixty days mentioned in the said proviso would become applicable due to availability of extended period of six months from the normal time barring date as per Section 153 B(a) or (b) of IT Act. Thus, the working/counting of the limitation date for exclusion period (six months or one year) in view of Explanation (viii) of Section 153 B from the time barring date i.e. 31.03.2014 is not in consonance with the provisions of law as in that case the proviso to Explanation would become redundant/non workable and thus the same would not be in accordance with the provisions of law as intended by the legislature. The relevancy/applicability of the said proviso to explanation has been emphasized by the Hon'ble Delhi High Court in the case of CIT Vs. U Like Promoters Pvt. Ltd. in ITA No. 1528/2010, 1529/2010, 1530/2010 and 1532/2010 dated 24.01.2005. For ready reference the observations of the Hon'ble Court are reproduced as under: (i) Date of limitation for completing assessment under Section 153A in normal course was 31st March, 2006. (ii) On 22nd March, 2006 an order under Section 142(2A) was passed. (iii) On 31st March, 2006, the assessment proceedings were stayed by an interim order in W.P. (C) No. 4954/2006. (iv) On 18th December, 2006, the stay order was vacated with liberty to the Revenue to issue a fresh notice and after considering the reply, pass an order under Section 142(2A). (v) On 19th January, 2007, an order under Section 142(2A) was passed (the special audit was to be completed within 105 days, i.e., by 4th May, 2007). (vi) On 29th June, 2007, the assessment order was passed. 17. From the aforesaid dates, it is clear that as per the proviso to Explanation to Section 153B, the assessment order could have been passed on or before 3rd July, 2007, i.e., period of 60 days after the special audit report was to be submitted to the Assessing Officer. 18. The proviso quoted above has an object and purpose. It stipulates that the Assessing Officer should have a minimum period of 60 days to complete the assessment, in case after exclusion of period under the Explanation, the I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 14 period for completing the assessment is less than 60 days. Every time this situation occurs, the proviso comes into play and has to be applied. The proviso can come into operation on one, two or more occasions in the same assessment/reassessment proceedings. In the present case, the respondent assessee had filed a writ petition. Because of the stay order passed, the period during which the stay order was in operation in the High Court has to be excluded. Thereafter, the Assessing Officer passed an order under Section 142(2A) of the Act and the period for conducting special audit has to be excluded. The proviso to Explanation stipulates that the Assessing Officer can pass the assessment order within 60 days, if after excluding the time mentioned in the Explanation, the time for completing the assessment is ess than 60 days. In terms of the said proviso, the Assessing Officer had the extended period to complete the assessment proceedings. The Assessing Officer had to complete the assessment within 60 days from the date on which the special audit report was to be submitted to him." In view of the above decision there had been the breach of the period of/ limitation while passing the assessment order. Thus, the assessment is quashed. In view of the above Additional Ground of Appeal raised by the applicant is Allowed.” 4.3. The Ld. CIT[A] admitted the 2 nd Additional Ground namely “No seized material during the course of search” and disposed of the same by a very detailed order as follows: 4.32. I have considered the material on record and various case Laws relied upon by the appellant and legal precedents laid down by the jurisdictional High Court and other High Courts as also by several Benches of the Hon'ble ITAT. The crux of the finding is that, Clause (a) of sub-section (1) of section 153A mandates the AO to issue notice in respect of the preceding six assessment years. Clause (b) mandates the AO to assess or reassess the income in respect of these years. A combined reading of both the provisions indicates that where a pending assessment has abated, the total income will comprise of the normal income on the basis of returned income plus the income escaping assessment on the basis of seized material found in the course of search. Where the assessment has reached finality and hence not abated, the income under section 153A shall be determined on the basis of the material found in search. In any case, the income to be determined u/s. 153A has to be on the basis of material found in the course of search. If no incriminating material is found in the course of search, then no adverse I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 15 inference can be drawn. Thus, incriminating material is sine qua non for making assessment U/S.153A. It cannot be on the basis of any material or information which is dehors the search. This established matrix has been held by various decisions/judgments discussed in preceding paras besides in the following judicial precedents of jurisdictional High Court as also other Courts. (I) Dr. CIT v. Devangi alias Rupa 394 ITR 184 (Guj.) (II) PCIT vs Meeta Gutgutia 96 taxmann.com 468 (SC) (III) CIT (Cen)-III vs. Kabul Chawla[2015] 61 taxmann.com 412 Delhi (IV) CIT v. IBC Knowledge Park (P.) Ltd. 385 ITR 346 (Kar.) (V) Pr. CIT-2 v. Salasar Stock Broking Ltd. [ITA No. 264/2016 (VI) CIT v. Gurinder Singh Bawa [2017] 386 ITR 483 (Bom.), (VII) Pr. CIT v, Mahesh Kumar Gupta [ITANo. 810/2016 (VIII) Pr, CIT v. Ram Avtar Verrna [2017] 395 ITR 252 (IX) Pr.CIT v. Sunrise Fin lease (P.) Ltd. [2018] 89 taxmann.com 4.33 Now, coming to the facts and circumstances of the present case, the search revealed nothing incriminating. Further, the post search proceedings also revealed nothing incriminating. The AO failed to retrieve any authentic data from the custodians of the information / data. Thus, it can be inferred that, the assessment is finalized, and addition has been made on the presumption that the appellant is holding a foreign bank account. It is also seen that, even if the material in possession of Investigation Wing prior to search, is treated as incriminating, still there is substantial force in the argument of the AR that, the very fact that the Assessing Officer sought clarification of such information from the foreign agencies, in order to authenticate the said information, she failed to retrieve such clarification from the custodians of such information. This proves that the assessing officer herself was not sure about the authenticity of the said information. Under, the circumstances it is difficult to term the information in possession of the AO as evidence, much less incriminating. This proposition finds ample support from the various rulings referred supra, more particularly that of the jurisdictional High Court in the case of Saumya Construction Pvt. Ltd. supra. 4.34 In this case no such information was found during the search and hence in view of the principle laid down by the jurisdictional High Court in the case of Pr. CIT vs. Saumya Construction Pvt. Ltd. 387 ITR 529 and other decisions/judgments cited above, addition cannot be roped in the assessment u/s 153A particularly when it has not abated. This decision of jurisdictional High Court is binding and one acting under the same jurisdiction as a subordinate authority, is bound to follow the decision rendered by highest Court of the state. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 16 4.35 Further my above view on legal aspect is also in consonance with the principle laid down by Hon'ble Gujarat High Court and various courts. Under the circumstances, the addition not based on the incriminating document, be sustained in the assessment order passed u/s 153A if such document was not found in the possession of the assessee during the course of search operation. In view of the above discussion, as also after considering the relevant judicial pronouncements, the addition made by the AO cannot survive. Thus, this additional ground of appeal is allowed. 5.1. Aggrieved against the appellate order the Revenue is in appeal before us raising the following Grounds of Appeal: (1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the exclusion period of six months or even twelve months as per the Explanation (viii) of Section 153B{1) of the Act in the instant case has expired before the before the limitation period date of 31-03-2014 and the assessment order u/s. 153A r.w.s. 143(3) dated 27.02.2015 is barred by limitation. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the provision of section 153B(1) of the Act as amended by the Finance Act, 2011 would be applicable and not the provision of section 153B(1) of the Act as amended by the Finance Act, 2012. (3) On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in quashing the assessment order u/s. 153A r.w.s. 143(3) of the Act dated 27.02.2015. (4) On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that no incriminating evidence were found during the course of search action despite the fact that assessee has admitted in his statement recorded u/s. 132(4) of the Act that assessee is having foreign bank account and the same is not disclosed. (5) On the facts and in the circumstance of the case, the Ld. CIT(A) has grossly erred in ignoring the settled proposition of law that deposition made u/s. 132(4) of the Act is having evidentiary value which cannot be retracted by merely filing affidavit. (6) On the facts and in the circumstance of the case, the Ld. CIT(A) has erred in ignoring the fact that assessee has not brought on record any evidence to support his retraction though at the end of I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 17 the statement recorded u/s. 132(4) of the Act assessee has clearly made deposition that the above stated facts are true and was given without any coercion, pressure or undue influence. (7) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in deleting the addition of Rs.7.50 crores made on account of unexplained investment towards the peak balance in an alleged offshore bank account with HSBC. (8) It is, therefore, prayed that the order the Ld. CIT(A)-4, Surat may be set aside and that of the AO may be restored to the above extent. 5.2. The assessee filed Cross Objection on the following Grounds of Appeal: 1. That on facts and in law, the Ld. CIT(A) has grievously erred in not deciding the ground of appeal on merits relating to the addition of Rs. 7.50 crores made as investment in alleged foreign bank account. 2. That on facts and in law, the Ld. CIT(A) ought to have decided the said ground on merits, instead of treating it as academic and infructuous. 6. Heard both parties extensively and have carefully perused the records, Paper Books, case laws filed by the assessee. As it can be seen from the grounds of appeal raised by the Revenue, Ground Nos. 1 to 3 are interconnected with each other questioning the time barring period for completion of assessment order by the A.O. Ground Nos. 4 to 6 are also interconnected to each other namely can the Ld. CIT(A) delete the additions, in the absence of any incriminating material/evidence, statements recorded under 132(4) during the course of search and retraction of the same at a later period. Ground no. 7 is on the quantum of the addition deleted by the Ld. CIT(A). I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 18 6.1. To deal with Ground Nos. 1 to 3, after going through the submissions of the parties, the issue and the relevant dates are tabulated as follows: Particulars Pre Amended Provision of Six Months (applicable upto 30-06-2012] Post Amended Provision by Fina nce Act, 2012, 12 Months period [wef 01-07-2012] Asst. to be completed (2 years from the end of relevant F Yr 31-03-2012) 31-03-2014 31-03-2014 Period to be excluded 31-12-12 to 30-06- 13 31-12-12 to 31- 12-13 No of Days available 274 days (30-06- 2013 to 31-03-2014) 90 days (31-12- 2013 to 31-03- 2014) As per Explanation (viii) of sec. 153B namely less than 60 days available Not Applicable since 274 days available Not Applicable since 90 days available Asst. Order passed on 27-02-2015 (clearly Time barred) 27-02-2015 (clearly Time barred) 6.2. It is an undisputed fact the normal period of limitation under section 153 of the Act for completion of assessment in this case is 31 st March 2014. Since a reference was made to Competent Authority namely Joint Secretary (FT & TR-I) Division on 19-12- 2012 by Ld. CIT (Central)-II, Ahmedabad. As per the Pre Amended Proviso, six months namely (upto 30.06.2013) is available to the I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 19 Assessing Officer. However as this period is less than 60 days of the actual time barring period of 31.03.2014, therefore the extended period is not applicable for completion of assessment. Even as per the Amended Provisions of Finance Act 2012, the period of limitation of one year namely 31.12.2013 is available. Even in that case regular time barring period is on 31.03.2014, which is less than 60 days for the purpose of limitation. There also this Amended Proviso is also not applicable for completion of assessment. 6.3. But without adhering to the above time limits prescribed both under the Pre Amended Proviso and Post Amended Proviso, the Ld. Assessing Officer completed the assessment order on 27.02.2015 which is clearly time barred u/s. 153 B of the Act. Since in both the situations, the limitation period expires on 31.03.2014, but the Assessing Officer passed the assessment orders only on 27.02.2015 which is clearly time barred. However our Jurisdictional High Court in the case of Anil Kumar Gopikishan Agrawal -Vs- ACIT IN 106 Taxmann.com 137 [Guj] has held that it is the Date of Search that has to be considered to be relevant date for purpose of applying amended provisions of section 153C[1] of the Act. Therefore, we have no hesitation in confirming the findings of the Ld. CIT(A) on the issue of assessment order passed as time barred. Thus the Ground Nos. 1 to 3 raised by the Revenue are devoid of merits and against the provisions of law, therefore the same are liable to be dismissed. 7. Ground no. 4 to 6, it is an admitted fact that there is no seized material by the Revenue regarding the Off Shore Bank Account I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 20 namely HSBC Bank, Geneva during the course of search on 29.09.2011 both at Vadodara and Mumbai and various business premises of the assessee and his relatives. Since the assessee was out of India prohibitory order of Search was placed at the residence of the assessee. When the assessee returned back to India on 04.10.2011 in the morning, search action was recommenced immediately and the assessee was not allowed to take rest and the search proceedings continued till very late night and statements u/s. 132(4) were recorded till mid night. The Investigation Officers were asking various questions turn by turn to the assessee. However the Revenue could not found any unaccounted income in the business premises of the assessee. Since the assessee was physically and mentally tired due to his foreign travel and got exhausted, therefore the assessee answered the questions in the manner in which the Investigation Team wanted them to be answered. Further there was no incriminating documents were found during the continuation of the search in the residential premises of the assessee. Therefore Investigation Team pressurized the assessee to make substantial disclosure of unaccounted income, both in the hand of the assessee as well as the Group of companies equivalent to USD 15 million. However the assessee filed Notarized Affidavit on 01.02.2012 retracting that the disclosure and statements made by the assessee regarding the bank account was not voluntary statement and was made under duress by the Investigation Team. It is for this reason, the assessee has not given any “Consent Form” vide letter dated 24-02-2013 for getting the bank account details from HSBC Foreign Bank Account. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 21 7.1. Thus it is a fact that no incriminating document was found during the course of search proceedings. Further it appears that the Income Tax Department is also not sure of its own source of information and the veracity of the information, on which heavy reliance is placed. It is common knowledge, from the press reports, that the information received by the Department from France was based on stolen unverified/leaked documents. The search undertaken by the Department at various premises of assessee was a shot in the dark to try to recover something to give substance to the unverified data received by it from France. Thus the department was not able to find anything either at the residence or the various business premises of the assessee, relating to the offshore bank account. It is self-contradictory to note here that though the information was purportedly received from France, but the JS(FT&TR-1) Division of the CBDT had sought information from Switzerland, which is placed at Page No.162 of Paper Book II, which is reproduced as follows: To The Commissioner of Income-tax (Central)-II, Room No. 301, Annexe to Aayakar Bhavan, Ashram Road, Ahmedabad-380009 Subject : Request for information under “Exchange of Information” Article Of Indo – Switzerland Double Taxation Avoidance Agreement –Enquiry. In case of Mr. Nopany Arvind Narayanprasad – Regarding. Sir, This is to acknowledge receipt of your request reference No. CIT[C]- IL/FTD/2012-13, dated 19.12.2012 on the above mentioned subject. 2. A formal request has been made to Switzerland Tax Authorities for providing the requisite information in the matter. 3. As and when any information is received, the same shall be forwarded to you. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 22 Yours Faithfully, (P.S. Sivasankaran) Under Secretary (Ft & TR-III(2) ) 7.2. Thus the IT Department has not been able to find/unearth any information regarding the purported Offshore Bank Account held by the assessee. As on date of this appeal, the JS (FT&TR-l) Division of the CBDT has not been in a position to supply any positive information to the CIT(Central) in regard to the purported HSBC Bank account at Geneva held by the assessee, that is after the passage of almost ten years, since the date of reference made by the Ld CIT (Central)-II, Ahmedabad on 19-12-2012 to the JS (FT&TR-1) Division of the CBDT under DTAA. It is further seen from page 22 of the assessment order the assessee was requested to send a letter dated 10-12-2011 to the Accounts Manager, HSBC Bank, Geneva, Switzerland asking about the details of the account, however there is no response from the said Bank. Therefore, in the absence of any incriminating materials and based only on the statements recorded during the course of search u/s. 132(4), which was also later retracted by the assessee, therefore the statement cannot be the basis for additions. 7.3. In this connection, Jurisdictional High Court of Gujarat in the case of Kailashben Manharlal Chokshi Vs. CIT reported in [2008] 174 taxmann.com 466 (Guj.) held that merely on the basis of admission of the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such addition. When the statement recorded at such odd hours cannot be considered to be a voluntary statement, when I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 23 the same is retracted by the assessee. Therefore the addition made is liable to be deleted. Operative portion of the above judgement reads as follows: “...26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary statement, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has committed an error in ignoring the retraction made by the assessee. 27. In the above view of the matter, addition of Rs. 1 lakh made on account of unaccounted cash is confirmed and the addition of Rs. 6 lakhs is hereby deleted.” 7.4. It is appropriate to consider the Co-ordinate Bench of Delhi Tribunal in the case of Bhushan Lal Sawhney Vs. DCIT, Central Circle-7, New Delhi reported in [2021] 127 taxmann.com 642 wherein it was considered the temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland, thereby, such information could be provided from 1-4- 2011. As per Notification dated 27-12-2011 between India and Switzerland Confederation for avoidance of double taxation, which clearly show that these are applicable after assessment years under I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 24 appeals and as per information provided vide letter Dated 26-6- 2015 no such information could be provided prior to 1-4-2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011-2012. Thus, there is no incriminating material available on record to make any addition in any assessment years. It may also be noted here that assessee since the very beginning denied to have maintained any such bank accounts with HSBC, Geneva, Switzerland. There is no material available on record that assessee made deposits in HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any interest in remaining assessment years under appeals. Operative portion of the decision reads as follows: “... 5.1 We have heard both the parties who have also filed written submissions which are also taken into consideration. 6. Learned Counsel for the Assessee submitted that it is an undisputed fact that search was conducted on 28-7-2011 on the assessee. Learned Counsel for the Assessee referred to paper book filed by the Ld. D.R. containing letter Dated 22-8- 2019 of ACIT, Central Circle-7 [ A.O.] to the CIT-DR in which it was categorically stated that last panchanama was drawn on 26-9-2011. He has, therefore, submitted that in F.Y. 2011-2012 search is executed and last panchanama drawn. Learned Counsel for the Assessee, therefore, submitted that impugned assessment orders passed on 2-3-2015 are barred by limitation because of search took place on 28-7-2011 as mentioned in the assessment orders and thus the limitation to pass assessment orders expire on 31-3-2014 as per Section 153B(1)(a) of the I.T. Act, 1961. But, the impugned orders have been passed on 2- 3-2015. The Ld. CIT(A) did not appreciate the above issue. He has submitted that reason of passing the assessment orders Dated 2-3-2015 advanced by the Ld. CIT- DR was that since a reference under section 90 of the I.T. Act, 1961 was made to Swiss Authority and no information was received till the time of passing of the assessment orders, hence, the time limit was extended by one year under Explanation-IX of Section 153B of the I.T. Act, 1961. He has submitted that the Ld. CIT-DR has furnished a letter Dated 26-6-2015 together with information asked for in relation to the assessee received from Swiss Authority. It may be seen that I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 25 as per A.O's admitted case, reference was made under section 90 of the I.T. Act, 1961 under the provisions of "Exchange of Information", Article of Indo Switzerland Double Taxation Avoidance Agreement [DTAA] and such information was required for the period from 1-4-1995 to 31-3-2012 seeking information under the provisions of "Exchange of Information" Article 26 of Indo-Switzerland Double Taxation Avoidance Agreement [DTAA]. He has submitted that the above stated such reference made under section 90 is bad in Law and Revenue could not have made any such reference for seeking information for the period prior to 1-4-2011 and hence such illegal reference could not have been made in Law, could not have lead to extension of time limit for passing the assessment orders. Thus, the time limit in passing the impugned assessment orders in the case of the assessee expired on 31-3-2014 itself. He has further submitted that in fact the Revenue could not have made reference for the period prior to 1-4-2011 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 taxes on income as modified by Notification No. S.O.2903(E) Dated 27-12-2011. Copy of Notification No. S.O.2903(E) Dated 27-12- 2011together with amended protocol filed to show it apply to later period. Therefore, reliance is placed on the following judicial decisions which hold that if the Reference based upon which the limitation is sought to be extended is held bad, limitation so extended would also be bad in law. 6.1.11 Learned Counsel for the Assessee, therefore, submitted that since no information could have been provided for assessment years under appeals i.e., 2006-2007 to 2011-2012 and the protocol also started from 1-4-2011, therefore, no reference could be made by the Revenue Authorities for assessment years under appeals i.e., 2006-2007 to 2011-2012. The Reference is, therefore, invalid and no limitation could have been extended to pass the assessment orders after 31-3-2014. He has, therefore, submitted that limitation extended on the basis of I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 26 such Reference which could not have been made in Law in the instant case for the period prior to 1-4-2011 i.e., for A.Ys. 2006-2007 to 2011-2012 is bad and impugned assessment orders are barred by limitation. 6.1.12 Learned Counsel for the Assessee has also submitted that the assumption of jurisdiction under section 153A of the I.T Act, 1961 for assessment years under appeals is also bad in Law when there was no incriminating material found as a result of search relevant to assessment years under appeals. In support of his contention he has relied upon Judgments of Hon'ble Delhi High Court in the case of CIT v. Kabul Chawla [2015] 61 taxmann.com 412/234 Taxman 300/380 ITR 573 and Pr. CIT v. Meeta Gutgutia [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526 (Delhi) in which the Departmental SLP have been dismissed by the Hon'ble Supreme Court Pr. CIT v. Meeta Gutgutia [2018] 96 taxmann.com 468/257 Taxman 441 (SC). He has also referred to panchanama executed in the 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 addition could be made. 7. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below. The Ld. D.R. submitted that assessee challenged that assessments in these cases were time barred. In this regard, it is relevant to note that time barring date as per provisions of Section 153B is 31-3-2015 as against 31-3-2014 because the exclusion of the time period as provided by Clause-ix of Explanation to Section 153B of the I.T. Act, 1961 as applicable in the case of the assessee. He has submitted that in this case information was called for from Foreign Competent Authority under Exchange of Information through Reference Dated 5-12-2012 and the information thereto was received back as on 10-7-2015. As per the Explanation, the time barring date would got extended by one year if response could not have been received within one year. The Ld. D.R. however, did not dispute that last panchanama was drawn on 26-9-2011 as is also confirmed by the A.O. vide his letter Dated 22-8-2019. The Ld. D.R. also filed copies of the I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 27 panchanama in these cases on record. The Ld. D.R. also did not dispute the letter Dated 26-6-2015 referred to by the Learned Counsel for the Assessee during the course of arguments. The Ld. D.R. further submitted that Son of the Assessee Mr. Praveen Sawhney admitted that assessee has maintained bank account with HSBC, Geneva, Switzerland in his statement recorded on 28-7-2011. Seized document Annexure-A1 of Party-SR-1 was found and seized during the course of search proceedings at the residence of the assessee which reflects details of Swiss Bank Account which document was confronted to the assessee, but, assessee did not reveal any information. The Ld. D.R, therefore, submitted that addition have been rightly made in the case of the assessee and decisions of the Hon'ble Delhi High Court in the cases of Kabul Chawla (supra) and Meeta Gutgutia (supra) are not applicable in this case. 8. We have considered the rival submissions and perused the material on record. It is not in dispute that search was conducted in the case of assessee on 28-7- 2011. Both the parties have placed on record copies of the panchanama drawn in the case of assessee at the time of search and thereafter, but, the same did not disclose if any, incriminating material much less than the material was found during the course of search to connect the assessee with maintenance of any bank account with HSBC, Geneva, Switzerland. The Ld. D.R. also placed on record letter of the A.O. Dated 22-8-2019 in which it is clearly mentioned by the A.O. that last panchanama was drawn on Dated 26-9-2011. Learned Counsel for the Assessee also placed on record letter Dated 26-6-2015 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 1-4-2011. 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 26-6-2015 no such information could be provided prior to 1-4-2011. Therefore, Swiss Authorities have not provided any information to Revenue Authorities in India about assessee's bank account with HSBC, Geneva, Switzerland for assessment years under appeals i.e., A.Ys. 2006-2007 to 2011-2012. Thus, there is no incriminating material available on record to make any addition in any assessment years. It may also be noted here that assessee since the very beginning denied to have maintained any such bank accounts with HSBC, Geneva, Switzerland. There is no material available on record that assessee made deposits in HSBC Bank A/c in A.Y. 2006-2007 or thereafter earned any interest in remaining assessment years under appeals. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 28 8.1 Considering the totality of the facts and circumstances of the case above, it is also clear that during the course of search no incriminating material was found against the assessee for maintaining any such bank accounts with HSBC, Geneva, Switzerland. Whatever information was supplied by the Swiss Authorities subsequently to the Revenue Authorities in India, no such information was provided for the period prior to 1-4-2011. Therefore, it is clear that no information have been provided by the Swiss Authorities that assessee maintained any bank account with HSBC, Geneva, Switzerland in assessment years under appeals i.e., 2006-2007 to 2011-2012. Therefore, it is clear that no incriminating material was found against the assessee so as to make any addition against the assessee. The Hon'ble Delhi High Court in the case of, Kabul Chawla (supra) held as under: "vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment" 8.2 The Hon'ble Delhi High Court in its recent decision in the case Meeta Gutgutia (supra) in paras 69 to 72 has held as under : "69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material 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.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 29 (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. In view of the above, we set aside the Orders of the authorities below and delete the entire additions. In view of the above, there is no need to decide the remaining grounds of appeals which are left with academic discussion only. Accordingly, all the appeals of the Assessee are allowed. 9. In the result, all the appeals of the Assessee are allowed.” 7.5. Another Co-ordinate Bench of Kolkata Tribunal in the case of Bishwanath Garodia Vs. DCIT, Central Circle-3(3), Kolkata reported in [2016] 76 taxmann.com 81 has considered similar HSBC Bank foreign account and deleted the additions made by the AO as no seized materials was found during the search operation. Operative portion of the decision reads as follows: “....8. We have considered the rival submissions and also perused the relevant material available on record. It is observed that the returns of income originally filed by the assessee for both the years under consideration were duly processed by the Assessing Officer under section 143(1) well before the date of search conducted on 28.07.2011. The said search was conducted in the case of the assessee on the basis of information received by the Assessing Officer from CBDT relating to the undisclosed account maintained by the assesese with HSBC Bank, Geneva, Switzerland. During the course of search, no incriminating material, however, was found relating to the transactions reflected in the said Bank account of the assessee with HSBC Bank or any income relating thereto and this position was categorically admitted by the Assessing Officer during the course of appellate proceedings before the ld. CIT (Appeals) as is evident from the relevant order-sheet entry dated 21.12.2015 recorded by the ld. CIT (Appeals) (copy at page no. 22 of the paper book). The question that arises now is whether in the absence of such incriminating material, any addition to the total income of the assessee can be made on account of the transactions reflected in the Bank account of the assessee with HSBC Bank or any income relating thereto in I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 30 assessments completed under section 153A of the Act for both the years under consideration. 9. As per the provisions contained in Section 153A, if the search or requisition is initiated after 31.03.2003, the Assessing Officer is under an obligation to initiate proceedings under section 153A for six years immediately preceding the year of search. The Assessing Officer is then required to assess or reassess the total income of the said six years and if any assessment or reassessment out of the said six years is pending on the date of initiation of the search, the same would abate, i.e. pending proceeding qua the said assessment year would not proceed thereafter and the assessment has to be made under section 153A(1)(b) of the Act read with the 1st Proviso thereunder. As regards the other years for which assessments have already been completed and the assessment orders determining the assessee's total income are subsisting at the time when the search or requisition is made, the scope of assessment under section 153A is limited to reassess the income of the assessee on the basis of incriminating material found during the course of search. 10. At the time of hearing before us, the ld. D.R. has contended that the processing of returns of income filed by the assessee as made by the Assessing Officer under section 143(1) could not be regarded as assessment and it is, therefore, not a case where the assessments for both the years under consideration could be said to have been completed. He has also contended that the conclusion of such alone is sufficient to give jurisdiction to the Assessing Officer to proceed against the assessee under section 153A of the Act. In support of this contention, he has relied on the unreported decision of the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra). In the said case, a question was posed by the Hon'ble Delhi High Court in paragraph no. 12 of its order as to whether the Assessing Officer was empowered to reopen the proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search where an assessment order had already been passed in respect of all or any of those six assessment years either under section 143(1) or section 143(3) of the Act and such order was already in existence having been passed prior to the initiation of search/requisition. Although this question was not finally answered by the Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (supra), it is quite clear from the said question raised by the Hon'ble Delhi High Court that there was no distinction made by Their Lordships in the assessments completed under section 143(1) and section 143(3) for determining the scope of the proceedings under section 153A. However, the said question arose specifically for the consideration of Mumbai Bench of this Tribunal in the case of Pratibha Industries Ltd. (supra) and after referring to the discussion made by the Hon'ble Delhi High Court in this context in the case of Anil Kumar Bhatia (supra), the Tribunal held that the only logical conclusion which could be traced out by harmonizing the legislative intendment and the judicial decision was that where the assessments had already become final prior to the date of search, the total income has to be determined under section 153A by clubbing together the income already I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 31 determined in the original assessments and the income that is found to have escaped assessment on the basis of incriminating material found during the course of search. To arrive at this conclusion, reliance was placed by the Tribunal on the decision of Special Bench, Mumbai in the case of All Cargo Global Logistics Ltd. (supra), wherein it was held that even though all the six years shall become subject matter of assessment under section 153A as a result of search, the Assessing Officer shall get the free hand through abatement only on the proceedings that are pending. But in a case or in a circumstances where the proceedings have reached finality, assessment under section 143(3) read with section 153(3) has to be made as was originally made and in a case certain incriminating documents were found indicating undisclosed income, then addition shall only be restricted to those documents/incriminating material. 11. Keeping in view the discussion made above, we hold that the additions as finally made to the total income of the assessee on account of transactions reflected in the Bank account of the assessee with HSBC, Geneva, Switzerland and income relating thereto for both the years under consideration are beyond the scope of section 153A as the assessments for the said years had become final prior to the date of search and there was no incriminating material found during the course of search to support and substantiate the said addition. The said additions made for both the years under consideration are, therefore, deleted allowing the relevant grounds of the assessee's appeals. 7.6. In fact the ld. CIT(A) in Para 4.32 and 4.33 as has discussed in detail [which is reproduced in Para 4.3 of this order) that No incriminating materials was found and following Jurisdictional High Court judgement in the case of Saumya Construction held that the addition made by the Assessing Officer cannot be survive. Thus the Ld CIT[A] upheld that the assessment order is against the provision of section 153A of the Act and deleted all the additions made by the Assessing Officer. 7.7. We are in full agreement with the findings of the Ld. CIT(A) on this count. Therefore Ground Nos. 4 to 6 raised by the Revenue are found to be devoid of merits and the same are hereby dismissed. I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 32 8. Ground no. 7 is on the quantum of addition made by the Assessing Officer, as we have already held that the assessment order itself is time barred and quashed the assessment order, the additions made thereon is consequential in nature. Therefore this ground does not require any separate adjudication, hence the same is also dismissed. 9. Ground no. 8 is general in nature. Hence no adjudication required, hence the same is also dismissed. 10. In the result, the appeal filed by the Revenue in IT[SS]A No. 67/Ahd/2020 is hereby dismissed. 11. The ground raised by the assessee in its Cross Objection No. 13/Ahd/2021 is to adjudicate the addition made of Rs. 7.5 crores on merits of the case. Since the assessment order itself is quashed as Time barred and No seized materials found by the Revenue, therefore there is No specific adjudication is required for the addition made in the assessment order. Therefore the Cross Objection filed by the Assessee becomes infructuous. 12. In the result, both the appeal filed by the Revenue and the Cross Objection filed by the Assessee are hereby dismissed. Order pronounced in the open court on 05-04-2023 Sd/- Sd/- (WASEEM AHMED) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 05/04/2023 I.T(SS.A No. 67/Ahd/2020 & C.O. 13/Ahd/2021 A.Y. 2007-08 Page No DCIT vs. Shri Arvind N Nopany 33 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद
