DY. COMMISSIONER OF INCOME TAX , CIRCLE-3(1), HYDERABAD V. SEW INFRASTRUCTURE LIMITED , HYDERABAD

ITA 1416/HYD/2019

AI Insights

The case involves multiple appeals by the Revenue against SEW Infrastructure Limited concerning the deduction claimed under Section 80IA(4) of the Income Tax Act, 1961, for various assessment years. The primary issue was whether the assessee was eligible for the deduction on profits derived from infrastructure projects, particularly when the projects were awarded to a Joint Venture (JV) or Consortium and not directly to the assessee. The Tribunal examined the provisions of Section 80IA(4), the agreements entered into by the assessee, and the judicial precedents cited by both parties. The Tribunal concluded that the assessee was entitled to the deduction as it met all the statutory requirements, including the execution of the projects and the agreements with the relevant government bodies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 38124 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2016-2017
• Other Referred Cases: Transstroy (India) Ltd. vs. ITO, PNC Construction Co. Ltd. vs. DCIT, CIT vs. PNC Construction Co. Ltd., Jai Steels (India) vs. ACIT, DCIT vs. SEW Infrastructure Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B.BALAKRISHNA
• Assessee Lawyers: MV PRASAD
• Keywords: Set aside; Revised return; Reassessment proceedings; Question of law; TDS; Search and seizure; Tangible material; CHAPTER XIVB
• Section: 147; 148; 143(2); 143(1); 153; 132; 153A; 139(1); 43; 13; 139; 153C; 2; 44AB; 10B; 10AA; 80IA; 80G; 139(5); 158B(b)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “A” BENCH : HYDERABAD BEFORE SHRI MANJUNATHA G, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA.Nos.1721, 1722, 1723/Hyd/2017 Assessment Years 2013-2014, 2014-2015 & 2015-2016 The DCIT, Central Circle-2(2), 6th Floor, Aaykar Bhavan, Basheerbagh, Hyderabad. Telangana. vs. M/s. SEW Infrastructure Limited, 6-3-871, Snehalata, Greenlands Road, Begumpet, Hyderabad. Telangana. PAN AADCS4061P (Appellant) (Respondent) ITA.No.1416/Hyd./2019 Assessment Year 2016-2017 The DCIT, Circle-3(1), Room No.714, 7th Floor, Singature Towers, Opp. Botanical Gardens, Kondapur, Hyderabad. Telangana. vs. M/s. SEW Infrastructure Limited, 6-3-871, Snehalata, Greenlands Road, Begumpet, Hyderabad. Telangana. PAN AADCS4061P (Appellant) (Respondent) For Revenue : Shri B. Bala Krishna, CIT-DR For Assessee : CA MV Prasad And Shri K S Rajendra Kumar Date of Hearing : 11.12.2024 Date of Pronouncement : 26.02.2025 2 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 ORDER PER MANJUNATHA G, A.M. : The above four appeals ITA.Nos.1721, 1722, 1723/ Hyd/2017 and ITA.No.1416/Hyd./2019 are filed by the Revenue against the respective orders of the learned CIT(A)- 12, Hyderabad for the assessment years 2013-2014, 2014- 2015, 2015-2016 and 2016-2017, respectively. Since common issues are involved in all these appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity. We, therefore, first take-up ITA.No.1721/Hyd./2017 as the “lead” appeal. ITA.No.1721/Hyd./2017 – A.Y. 2013-2014 : 2. Facts of the case, in brief, are that the assessee company is carrying on business of Infrastructure Projects. In the original return of income filed on 28.11.2013 for the impugned assessment year 2013-2014, the assessee declared income at Rs.104,87,01,480/-, but has not claimed any deduction u/sec.80IA(4) of the Act. In this case, 3 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 a search and seizure operation u/sec.132 of the Act was conducted and in response to notice u/sec.153A of the Act, the assessee had made claim of deduction u/sec.80IA(4) of the Act at Rs.79,25,89,837/- for the first time. Therefore, the Assessing Officer issued show cause notice calling the assessee to show cause as to why the fresh claim of deduction u/sec.80IA(4) should not be disallowed. In response thereto, the assessee has furnished project wise details to the Assessing Officer. After examining the project details furnished by the assessee, the Assessing Officer noted that the unambiguous conditions laid down in the provisions of Section 801A(4) of the Act is that an assessee will be entitled for deduction u/sec.80IA, only if it undertakes either Development work or Operation & maintenance works or both in respect of a Project. On perusal of the works executed by the assessee, the Assessing Officer noted that most of the project works relate to providing irrigation/water supply works, road projects etc., awarded by various government authorities. Therefore, the Assessing Officer asked the assessee to furnish details 4 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 as to how these projects relate to either development or operation and maintenance works. The assessee was further asked to furnish the agreement copies in support of its argument. In response to the notice, the assessee submitted the copies of agreements and letters of acceptance, contract agreements and agreements entered with Central/State Governments and Local Authorities in respect of the Projects executed. The Assessing Officer after examining the details of each of the project in light of provisions of sec.80IA of the Act and the judicial precedents noted that the criteria to be satisfied for an assessee to be treated as a “Developer” in respect of any specific project are – i. The duty of the developer shouldn't be restricted only to the civil works. ii. The developer is under obligation to 'design' a project and get it approved by the owner of the project. iii. Though the ownership of the site rests with the owner, the developer exercises complete domain 5 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 over the land or project during the process of development. iv. The developer doesn't raise bills at each and every step of construction. v. The developer is authorized to raise funds by private placement or by financial institutions. vi. No material is supplied by the owner. The expenses for the materials are to be borne by the developer itself. vii. The developer is expected to undertake risks. 2.1. The Assessing Officer, after examining the project-wise details furnished by the assessee noted that 32 projects have been fulfilled the criteria for claiming deduction u/sec.80IA and the projects mentioned at Sl.Nos.16 to 32 [at pages37 and 38 of the assessment order] are in fact awarded to JV/Consortium Agreements and as per provisions of sec.80IA of the Act only an enterprise which enters into an agreement with the Government/ Statutory Body is eligible for deduction u/sec.80IA of the 6 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Act. Whereas in case of JV/Consortium, the agreement was entered into by JV and the deduction u/sec.80IA was claimed by it’s constituent member i.e., the assessee in the present appeal as JV Member. Therefore, the Assessing Officer again asked the assessee to show cause as to why the projects awarded JVs should not be disallowed u/sec.80IA of the Act. In response to the said show cause notice, the assessee furnished it’s submissions. After examining the submissions of the assessee, the Assessing Officer noted that in all the Projects where agreements were entered with Government authorities by Joint Ventures, it is seen that the assessee is a constituent of Joint Ventures but not a SPV specifically formed for this purpose and the works were carried out by the assessee in proportion to its share as per the Joint Venture Agreement. However, as per the provisions of sec.80IA of the Act only an enterprise which enters into an Agreement with the Government/Statutory body is eligible for deduction u/s.80IA. Hence, the Assessing Officer treated the J. V. Projects i.e., from S.No.16 to 32 noted in the assessment order 37 and 38 involving a 7 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 sum of Rs.30,16,78,531/- out of the total claim of Rs.79,25,89,837/- are not entitled for deduction u/sec.80IA of the Act since the Department has filed an appeal before the Hon’ble High Court on identical issue which is pending for adjudication. The Assessing Officer accordingly noted that the assessee had entered into agreement with Government directly for development of projects which are noted at Sl.Nos.1 to 15 at pages 36 and 37 of the assessment order and thereby, the assessee was entitled to claim deduction u/sec.80IA of the Act only to the extent of Rs.49,09,11,306/- and the rest of the deduction claimed by the assessee on account of JVs at Rs.30,16,78,531/- shall not be allowed till the outcome of the case filed by the Department before the Hon’ble High Court in the case of Transtroy India Limited. Accordingly, the Assessing Officer made an addition of Rs.79,25,89,837/- to the total income of the assessee u/sec.80IA of the Act. However since the assessee has made a claim of deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued u/sec.153A of the Act, the 8 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Assessing Officer disallowed the entire claim of deduction of Rs.79,25,89,837/- including the profits derived from eligible projects for which the assessee has entered into direct agreement with the Central Government/State Government/Local Authority on the ground that assessee has not satisfied the condition of entering into agreement with the Central Government/State Government/Local Authority, besides making addition of Rs.32,30,355/- u/sec.40A(3) of the Act and determined the total income of the assessee at Rs.119,59,86,390/- vide order dated 31.03.2016 passed u/sec.143(3) r.w.s.153A of the Income Tax Act, 1961. ITA.No.1722/Hyd./2017 – A.Y. 2014-2015 : 2.2. For the impugned assessment year also, the Assessing Officer, after examining the project-wise details furnished by the assessee noted that 32 projects have been fulfilled the criteria for claiming deduction u/sec.80IA and the projects mentioned at Sl.Nos.16 to 40 [at pages-38 and 39 of the assessment order] are in fact awarded to 9 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 JV/Consortium Agreements and as per provisions of sec.80IA of the Act only an enterprise which enters into an agreement with the Government or Statutory Body is eligible for deduction u/sec.80IA of the Act. Whereas in case of JV/Consortium, the agreement was entered into by JV and the deduction u/sec.80IA was claimed by it’s constituent member i.e., the assessee in the present appeal as JV Member. Therefore, the Assessing Officer again asked the assessee to show cause as to why the projects awarded JVs should not be disallowed u/sec.80IA of the Act. In response to the said show cause notice, the assessee furnished it’s submissions. After examining the submissions of the assessee, the Assessing Officer noted that in all the Projects where agreements were entered with Government or Statutory Body by Joint Venture Consortium, it is seen that the assessee is a constituent of Joint Venture Consortium, but not a SPV specifically formed for this purpose and the works were carried out by the assessee in proportion to its share as per the Joint Venture Agreement. However, as per the provisions of sec.80IA of the Act only an 10 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 enterprise which enters into an Agreement with the Government or Statutory Body is eligible for deduction u/s.80IA. Hence, the Assessing Officer treated the J. V. Projects i.e., from S.No.16 to 40 noted in the assessment order at pages 38 and 39 involving a sum of Rs.42,56,24,216/- out of the total claim of Rs.85,61,17,707/- are not entitled for deduction u/sec.80IA of the Act since the Department has filed an appeal before the Hon’ble High Court Andhra Pradesh in the case of Transtroy India Limited on identical issue which is pending for adjudication. The Assessing Officer accordingly noted that the assessee had entered into agreement with Government or Statutory Body directly for development of projects which are noted at Sl.Nos.1 to 15 at pages 37 and 38 of the assessment order and thereby, the assessee was entitled to claim deduction u/sec.80IA of the Act only to the extent of Rs.43,04,93,491/- and the rest of the deduction claimed by the assessee on account of JVs at Rs.42,56,24,216/- shall not be allowed till the outcome of the case filed by the Department before the Hon’ble High 11 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Court of Andhra Pradesh in the case of Transtroy India Limited. Accordingly, the Assessing Officer noted that out of the taxable income of Rs.48,63,26,895/- [after 80G and 80GGB], the deduction u/sec.80IA is allowable to the extent of Rs.43,04,93,491/- only and the balance amount of Rs.5,58,33,404/- is disallowed u/sec.80IA of the Act and made the addition accordingly and assessed the total income of the assessee at Rs.5,58,33,404/- vide order dated 31.03.2016 passed u/sec.143(3) r.w.s.153A of the Income Tax Act, 1961. 2.2.1. It was the submission of the Learned Counsel for the Assessee that since the assessee has made a claim of deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued u/sec.153A of the Act, the Assessing Officer disallowed the entire claim of deduction of Rs.42,56,24,216/- including the profits derived from eligible projects for which the assessee has entered into direct agreement with the Government or Statutory Body on the ground that assessee has not 12 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 satisfied the condition of entering into agreement with the Government or Statutory Body. ITA.No.1723/Hyd./2017 – A.Y. 2015-2016 : 2.3. For the impugned assessment year also, the Assessing Officer, after examining the project-wise details furnished by the assessee noted that out of 35 projects only 15 projects have been fulfilled the criteria for claiming deduction u/sec.80IA and the projects mentioned at Sl.Nos.16 to 35 [at pages-32 and 33 of the assessment order] are in fact awarded to JV/Consortium Agreements and as per provisions of sec.80IA of the Act only an enterprise which enters into an agreement with the Government or Statutory Body is eligible for deduction u/sec.80IA of the Act. Whereas in case of JV/Consortium, the agreement was entered into by JV and the deduction u/sec.80IA was claimed by it’s constituent member i.e., the assessee in the present appeal as JV Member. Therefore, the Assessing Officer again asked the assessee to show cause as to why the projects awarded JVs should not be disallowed 13 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 u/sec.80IA of the Act. In response to the said show cause notice, the assessee furnished it’s submissions. After examining the submissions of the assessee, the Assessing Officer noted that in all the Projects where agreements were entered with Government or Statutory Body by Joint Venture Consortium, it is seen that the assessee is a constituent of Joint Venture Consortium, but not a SPV specifically formed for this purpose and the works were carried out by the assessee in proportion to its share as per the Joint Venture Agreement. However, as per the provisions of sec.80IA of the Act only an enterprise which enters into an Agreement with the Government or Statutory Body is eligible for deduction u/s.80IA. Hence, the Assessing Officer treated the J. V. Projects i.e., from S.No.16 to 35 noted in the assessment order at pages 32 and 33 involving a sum of Rs.157,96,36,447/- out of the total claim of Rs.195,36,03,522/- are not entitled for deduction u/sec.80IA of the Act since the Department has filed an appeal before the Hon’ble High Court Andhra Pradesh in the case of Transtroy India Limited on identical issue which is 14 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 pending for adjudication. The Assessing Officer accordingly noted that the assessee had entered into agreement with Government or Statutory Body directly for development of projects which are noted at Sl.Nos.1 to 15 at page 32 of the assessment order and thereby, the assessee was entitled to claim deduction u/sec.80IA of the Act only to the extent of Rs.37,39,67,075/- and the rest of the deduction claimed by the assessee on account of JVs at Rs.157,96,36,447/- shall not be allowed till the outcome of the case filed by the Department before the Hon’ble High Court of Andhra Pradesh in the case of Transtroy India Limited. Accordingly, the Assessing Officer noted that out of the taxable income of Rs.316,81,26,66/-; the deduction u/sec.80IA is allowable to the extent of Rs.37,39,67,075/- only and the balance amount of Rs.157,96,36,447/- is disallowed u/sec.80IA of the Act and made the addition accordingly and assessed the total income of the assessee at Rs.316,81,26,66/- vide order dated 31.03.2016 passed u/sec.143(3) of the Income Tax Act, 1961. 15 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 2.3.1. It was the submission of the Learned Counsel for the Assessee that since the assessee has made a claim of deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued u/sec.153A of the Act, the Assessing Officer disallowed the entire claim of deduction of Rs.157,96,36,447/- including the profits derived from eligible projects for which the assessee has entered into direct agreement with the Government or Statutory Body on the ground that assessee has not satisfied the condition of entering into agreement with the Government or Statutory Body. ITA.No.1416/Hyd./2019 – A.Y. 2016-2017 : 2.4. For the impugned assessment year, the Assessing Officer, after examining the project-wise details furnished by the assessee noted that out of 36 projects only 1 to 17 projects have been fulfilled the criteria for claiming deduction u/sec.80IA and the projects mentioned at Sl.Nos.18 to 36 [at pages-44 and 45 of the assessment order] are in fact awarded to JV/Consortium Agreements 16 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 and as per provisions of sec.80IA of the Act only an enterprise which enters into an agreement with the Central/State Governments and Local Authorities is eligible for deduction u/sec.80IA of the Act. Whereas in case of JV/Consortium, the agreement was entered into by JV and the deduction u/sec.80IA was claimed by it’s constituent member i.e., the assessee in the present appeal as JV Member. Therefore, the Assessing Officer again asked the assessee to show cause as to why the projects awarded JVs should not be disallowed u/sec.80IA of the Act. In response to the said show cause notice, the assessee furnished it’s submissions. After examining the submissions of the assessee, the Assessing Officer noted that in all the Projects where agreements were entered with Central/State Governments and Local Authorities by Joint Venture Consortium, it is seen that the assessee is a constituent of Joint Venture Consortium, but not a SPV specifically formed for this purpose and the works were carried out by the assessee in proportion to its share as per the Joint Venture Agreement. However, as per the provisions of sec.80IA of the 17 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Act only an enterprise which enters into an Agreement with the Central/State Governments and Local Authorities is eligible for deduction u/s.80IA. Hence, the Assessing Officer treated the J. V. Projects i.e., from S.No.18 to 36 noted in the assessment order at pages 44 and 45 involving a sum of Rs.156,08,30,022/- out of the total claim of Rs.191,80,22,209/- are not entitled for deduction u/sec.80IA of the Act since the Department has filed an appeal before the Hon’ble High Court Andhra Pradesh in the case of Transtroy India Limited on identical issue which is pending for adjudication. The Assessing Officer accordingly noted that the assessee had entered into agreement with Central/State Governments and Local Authorities directly for development of projects which are noted at Sl.Nos.1 to 17 at pages 42 and 43 of the assessment order and thereby, the assessee was entitled to claim deduction u/sec.80IA of the Act only to the extent of Rs.35,71,92,187/- and the rest of the deduction claimed by the assessee on account of JVs at Rs.156,08,30,022/- shall not be allowed till the outcome of the case filed by the Department before the Hon’ble High 18 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Court of Andhra Pradesh in the case of Transtroy India Limited. Accordingly, the Assessing Officer noted that out of the taxable income of Rs.306,54,91,165/- as against the returned income of the assessee filed on 30.11.2016 declaring income at Rs.192,17,99,834/-; the deduction u/sec.80IA is allowable to the extent of Rs.35,71,92,187/- only and the balance amount of Rs.156,08,30,022/- is disallowed u/sec.80IA of the Act and made the addition accordingly and assessed the total income of the assessee at Rs.306,54,91,165/- vide order dated 18.12.2018 passed u/sec.143(3) of the Income Tax Act, 1961. 2.4.1. It was the submission of the Learned Counsel for the Assessee that since the assessee has made a claim of deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued u/sec.153A of the Act, the Assessing Officer disallowed the entire claim of deduction of Rs.156,08,30,022/- including the profits derived from eligible projects for which the assessee has entered into direct agreement with the Central/State Governments and Local Authorities on the 19 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 ground that assessee has not satisfied the condition of entering into agreement with the Central/State Governments and Local Authorities. 3. Aggrieved by the above assessment orders passed by the Assessing Officer, the assessee carried the matter in appeals before the learned CIT(A). The learned CIT(A) after considering the submissions of the assessee-company in respect of disallowance of claim made by it u/sec.80IA of the Act and the judicial precedents thereto, the learned CIT(A) allowed the relief to the assessee by holding that the assessee is entitled for claiming deduction u/sec.80IA(4) of the Act even in the return of income filed in response to notice u/sec.153A of the Act if the profits on which the deduction claimed is otherwise entitled for deduction u/sec.80IA(4) of the Act. The learned CIT(A) while allowing the claim of assessee followed decision of the Coordinate Bench of Visakhapatnam Tribunal in the case of Transstroy (India) Ltd., vs. ITO, Ward-2(2), Guntur [2011] 16 taxmann.com 24 (Visakhapatnam); M/s. KNR Constructions Ltd., Hyderabad ITA.No.946/Hyd./2015; decision of ITAT, 20 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Agra Bench, Agra in the case of PNC Construction Co. Ltd., vs. DCIT [2013] 44 ITD 577 (Agra-Tribu.) and on the Revenue’s appeal against the Order of ITAT, Agra Bench, Agra in the case of CIT vs. PNC Construction Co. Ltd., [2015] 55 taxmann.com 21 (Allahabad-HC) dismissed the appeal of the Revenue by holding that assessee would be entitled to deduction u/sec.80IA even if project was not awarded solely to assessee but to joint venture with the assessee. The learned CIT(A) had also referred to the decision of Hon’ble Rajasthan High court in the case of Jai Steels (India), Jodhpur vs., ACIT [2013] 36 taxmann.com 523 (Raj.) (HC). However, upheld the additions made by the Assessing Officer towards entire claim of disallowance u/sec.80IA(4) of the Act for Rs.79,25,89,837/- and for Rs.195,36,03,522/- for the A.Ys. 2013-2014 and 2015- 2016, [ITA.Nos.1721 & 1723/Hyd./2017 in appeals filed by the assessee before the Tribunal] respectively on the ground that when return of income was not filed u/sec.139(1) of the Act it not only contravenes Sec.80IA(4) and, therefore, unless the assessee files its return of income 21 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 u/sec.139(1) of the Act, it cannot claim deduction u/sec.80IA(4) of the Act and, therefore, by following certain judicial precedents, upheld the additions made by the Assessing Officer. The learned CIT(A), accordingly, directed the Assessing Officer to disallow the entire claim of deduction of Rs.79,25,89,837/- made u/sec.80IA(4) of the Act in absence of return of income filed u/sec.13991) of the Act and the return of income filed in response to notice u/sec.153A of Income Tax Act, 1961. ITA.No.1722/Hyd./2017 – A.Y. 2014-2015 : 3.1. For the impugned assessment year, the learned CIT(A)-12, Hyderabad partly allowed the claim of the assessee vide order dated 31.07.2017 on similar grounds where the learned CIT(A) allowed deduction u/sec.0IA(4) of the Act in respect of projects on which the assessee has entered into agreement with the Central/State Governments or Local Body and also the projects on which JV agreement entered into with the Central/State Governments or Local Body and works were executed by the assessee. However the 22 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 learned CIT(A) partly allowed the claim of deduction of the assessee u/sec.80IA(4) of the Act in respect of projects on which the JV has already claimed deduction i.e., Rs.16,90,062/- out of the total claim of Rs.85,61,17,707/- u/sec.80IA(4) of the Act vide order dated 31.07.2017 passed u/sec.143(3) r.w.s.153A of the Income Tax Act, 1961. ITA.No.1416/Hyd./2017 – A.Y. 2016-2017 : 4. For this impugned assessment year, the learned CIT(A) allowed the deduction claimed by the assessee u/sec.80IA(4) of the Act on the entire profits derived by the JVs as the constituent of the JV Member. While allowing the claim, the learned CIT(A) noted that the assessee entered into direct agreement with Government/Statutory Body through it’s J V Consortium and also projects on which agreement was entered into by the J V to execute the work through the Member of the JV. The learned CIT(A)-3, Hyderabad accordingly passed his order dated 29.07.2019 u/secx.143(3) of the Income Tax Act, 1961. 23 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 5. Aggrieved by the orders of the learned CIT(A), the Revenue carried in appeals before the Tribunal and has raised the following grounds and additional grounds in it’s “lead” appeal ITA.No.1721/Hyd./2017 for the assessment year 2013-2014 as under : i. “Although the Id. CIT(A) has confirmed the disallowance of deduction u/s 801A(4) in terms of provision of section 80AC, the Id CIT(A) has erred in law in giving her finding that deduction not claimed in original return u/s 139(1) cannot be denied if claimed pursuant to notice u/s 153A. ii. Whether on the facts and circumstances of the case, and in law, the Id. CIT(A) erred in holding that the assessee is eligible for deduction u/s 80-IA which was made first time in the return filed u/s 153A without appreciating the fact that the provisions of section 153A could not operate to advantage of the assessee, who chose not to make a claim in the manner lawfully open to it u/s 139(1) or 139(5) of the Act. 24 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 iii. Whether on the facts and circumstances of the case, and in law, the Id. CIT(A) erred in not holding that the Provisions of sections 153A to 153C cannot be interpreted to be further innings for AO and/or assessee beyond provisions of sections 139, 147 and 263, as such no fresh claim or deduction could be claimed by the assessee or allowed by AO. iv. Whether on the facts and circumstances of the case, and in law, the Id. CIT(A) erred in not following the principle laid down by the Hon'ble Supreme Court in the case of CIT v. Sun Engineering Works (P) Ltd. (1992) 198 ITR 297 (SC) wherein the Hon'ble Supreme Court has held that in reassessment proceedings the assessee cannot claim deduction which was neither claimed nor allowed in original assessment and it is not open to the assessee to seek a review of concluded items. Since the proceedings under section 153A of the Act are analogous to proceedings under section 147 of the Act to the extent that these proceedings are for the benefit of Revenue and not of the assessee, the Id CIT(A) should 25 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 have upheld the disallowance of deduction claimed u/s 801A. v. Whether on the facts and circumstances of the case, and in law, the Id. CIT(A) failed to appreciate that in this case already original assessment was completed u/s 143(3) which has become final and it is not open for the assessee to use another proceedings under section 153A of the Act to reopen the concluded assessments. vi. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary. ADDITIONAL GROUNDS FOR THE AY 2013-2014 OF REVENUE : 1. “Since, the Ld.CIT(A) vide order in M.A.NO.506/2017- 18, dated 07.02.2018 (to be read with in conjunction with the Appellate order in ITA No.0030/2016-17 dated 31.07.2017) has allowed the deduction u/s 801A(4) of Rs.79,23,82,187/-, the grounds of appeal [from (ii) to (v)] earlier filed by appellant before Hon'ble ITAT vide F.NO.DCIT/CC-(2)/ITAT/2017-18, dated 05.10.2017 26 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 may kindly be considered as substantial and be adjudicated on merits. 2. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in a holding that the provision of deduction u/s 801A(4) is applicable to constituent of the JV/Consortia without appreciating that the assessee has not entered into an agreement with the Central Government or a State Government or a Local Authority or any other Statutory Body. 3. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in not appreciating that the assessee herein is not a developer but merely a contractor in respect of the profit related to JVs. 4. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) ought to have confirmed the disallowance of entire deduction claimed U/s 801A(4), Rs.79,25,89,837/ which is related to profit attributable to works carried out by JVs and should not have restricted the same only to the extent double deduction 27 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 claimed in the hands, JVs Rs.2,07,650/- as well as that of the assessee. 5. Whether on the facts and circumstances of the case, and in law, the Ld. CIT(A) erred in not appreciating that the facts of the case are not in conformity with clarificatory amendment to Section 801A of IT Act Explanation 2 to Section 801A vide Finance Act 2007) which was introduced to unambiguously explain that only those enterprises that have entered development agreement with Central or State or Local authorities and invest their own funds to develop such facilities will only be eligible for benefit of deduction. 6. The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary.” 6. Learned CIT-DR Shri B. Bala Krishna submitted that learned CIT(A) was erred in law and in facts in holding that provisions of Section 80IA(4) of the Act is applicable to the constituent of the JV Consortium without appreciating 28 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 the fact that assessee has not entered into any agreement with the Central/State Governments or Local Authority or any Other Statutory Body. The learned CIT-DR further submitted that assessment for the A.Y. 2013-14 is “unabated/concluded” as on the date of search and as such, the assessee cannot make fresh claim of deduction/ exemption under any provisions of the Act including u/sec.80IA(4) of the Act, in the return of income filed in response notice issued u/sec.153A of the Act. The learned CIT(A) without appreciating the relevant facts simply allowed relief to the assessee by following the decision of ITAT Hyderabad Bench, Hyderabad in the case of KNR Construction Ltd., ITA.No.946/Hyd./2015 and the decision of ITAT Visakhapatnam Bench decision in the case of Transtroy India vs. ITO (supra), even though the Revenue not accepted the decisions of Tribunal and has filed further appeals before the Hon’ble High Court of Andhra Pradesh and Telangana which are pending for adjudication. Learned CIT-DR further submitted that in order to claim deduction u/sec.80IA(4) of the Act, the assessee should fulfil certain 29 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 conditions and one of such condition is the person who claims deduction shall enter into an agreement with Central/State Governments or any Local Authority or Statutory Body. In the present case, all the projects, on which, the assessee has claimed deduction u/sec.80IA(4) of the Act, are infrastructure projects, but, the fact remains that in few of the projects the assessee has not entered into agreement with Central/State Governments or any Local Authority or Statutory Body. Therefore, the Assessing Officer has rightly denied the benefit of deduction u/sec.80IA(4) of the Act for the impugned assessment years. Learned CIT(A) without appreciating the relevant facts simply allowed the relief to the assessee. The Learned DR, therefore, submitted that order of the learned CIT(A) should be set-aside and the additions made by the Assessing Officer in all these impugned assessment years should be sustained. 7. Learned Counsel for the Assessee, on the other hand, submitted that assessment for the A.Y. 2013-2014 is “abated” as on the date of search which is evident from the 30 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 notice issued u/sec.143(2) of the Act dated 02.09.2014 which is before the date of search i.e., dated 18.12.2014 in the present case. Once the proceedings are initiated by issuing notice under section 143(2) of the Act, before the date of search, then, as per the proviso to section 153A, the assessment shall “abate” and the Assessing Officer shall have power to “assess or re-assess the total income including undisclosed income, if any, found as the result of search”. Therefore, once assessment is abated, it is open for the assessee to make any claim of exemption/deduction in the return of income filed, in response to notice u/sec.153A of the Act. In this regard, he relied upon the decision of ITAT Hyderabad Special Bench in the case of DCIT vs., SEW Infrastructure Ltd., [2024] 167 taxmann.com 446 [Hyderabad-Trib.] [SB]. The Learned Counsel for the Assessee accordingly pleaded that the deduction claimed by the assessee u/sec.80IA(4) of the Act is in accordance with law and the addition made by the Assessing Officer and partly sustained by the learned CIT(A) should be allowed in the interest of justice. 31 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 8. We have heard the rival submissions of both the parties, perused the orders of the authorities below and paper books, written submissions placed on record. The Assessing Officer denied deduction u/sec.80IA(4) of the Act, on the ground that assessee has not made claim u/sec.80IA(4) of the Act in the return of income filed u/sec.139(1) of the Act. However, for the first time the assessee has claimed deduction in the return filed, in response to notice u/sec.153A of the Act. Therefore, the Assessing Officer denied deduction u/sec.80IA(4) of the Act. We find that this issue is squarely covered by the decision of ITAT Hyderabad Special Bench in the case of DCIT vs. SEW Infrastructure Ltd., 167 taxmann.com 446 (Hyderabad- Trib.) (SB) wherein an identical issue has been considered by the Tribunal and after considering relevant facts, by following plethora of judicial precedents held that “an assessee cannot make a fresh claim for deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued under section 153A of the Act, pursuant to search conductor u/sec.132 of the Act 32 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 in an unabated/completed assessment as on date of search”. The relevant findings of the Special Bench of the Tribunal are as under. “17. We have heard both the parties, perused the material available on record, and gone through the orders of the authorities below. We have also carefully considered various case laws cited by both parties. The solitary issue for our consideration is whether an assessee can make a claim for deduction under Chapter VI-A of the Income Tax Act, 1961, for the first time in the return of income filed in response to the notice issued under Section 153A of the Act, pursuant to a search conducted under Section 132 of the Income Tax Act, 1961. It is an admitted fact that the assessee is carrying on the business of developing infrastructure projects and is otherwise eligible for deduction under Section 80IA(4) of the Act, provided all other conditions are satisfied. However, the fact remains that the assessee did not make any claim towards deduction under Section 80IA(4) of the Act in the return of income filed under Section 139(1) of the Income Tax Act, 1961, for all five assessment years. Further, the appellant has made a claim for deduction under Section 80IA(4) of the Act, for the first time, in the return of income filed in response to the notice issued under Section 153A of the Act, in pursuant to search and seizure operation conducted under Section 132 of the Income Tax Act, 1961. Therefore, to answer the questions referred to, this Special Bench, it is necessary to understand the provisions of Section 132 and the consequent procedure of assessment under Section 153A of the Act etc. 18. The provisions relating to assessment in the case of a search under Section 153A, etc., were inserted by the Finance Act 2003, effective from 01-06-2003. These provisions are successor to the special procedure for the assessment of search cases under Chapter XIVB, starting with the provisions of Section 158B of the Income Tax Act, 1961. The special procedure for the assessment of search cases under Chapter XIVB required the assessment of undisclosed income as a result of search, which has been defined in Section 158B(b) of the Act. The new provisions of assessment in the case of a search under Section 153A came into force w.e.f 01-06-2003 and the said provisions require the AO to determine the total income and not the undisclosed income. Therefore, before going deeper into the issue, it is necessary to consider the provisions of Section 153A of the Act, which are reproduced below: 33 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 “153A. Assessment in case of search or requisition. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required 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 : 34 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 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 for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless— (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.—For the purposes of this sub- section, the expression \"relevant assessment year\" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.—For the purposes of the fourth proviso, \"asset\" shall include immovable property being land or building or both, shares and 35 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 securities, loans and advances, deposits in bank account. (2) If any proceeding initiated or any order of assessment or reassessment made under sub- section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.—For the removal of doubts, it is hereby declared that,— (i) 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; (ii) in an assessment or reassessment 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.” 19. A plain reading of Section 153A of the Act shows that, it starts with a non obstante clause, which states that notwithstanding anything contained in Sections 139, 147, 148, 149, 151 and 153, in the case of a person where a search is initiated under Section 132, or books of accounts or other documents, or any assets are requisitioned under Section 132A, after 31st day of May 2003, the AO shall issue notice to such person requiring him to furnish, within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in Clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly, as if such return were a return required to be furnished under Section 139. The AO shall further assess or reassess the ‘total income’ of six assessment years immediately preceding the assessment year relevant to the 36 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 previous year in which such search is conducted, or requisition is made. Further, as per the second proviso to Section 153A, 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 such search under Section 132 or making of a requisition under Section 132A, as the case may be, shall abate. The scope and effect of insertion of the new Section 153A of the Act by the Finance Act, 2003 has been explained by the CBDT in the Department's Circular No. 7 of 2003, dated 5-9-2003, reported in (2003) 184 CTR (ST) 33. On a combined reading of the provisions of Section 153A of the Act coupled with Circular No.7 of 2003, it is undisputedly clear that when a search is initiated under Section 132 of the Act, the AO shall issue a notice to such person for six assessment years and assess or reassess the total income for those six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted. The first proviso is nothing but a reiteration of the provisions contained in Clause (b) of Section 153A(1) wherein it is provided that the AO shall assess or reassess the total income for each of the six assessment years as mentioned above. The second proviso contemplates that if any assessment relating to any assessment year falling within the period of six assessment years is pending on the date of initiation of the search, the same shall abate. However, there is no provision stating that even the completed assessments for the six assessment years shall abate. Therefore, a distinction has been made between completed assessments and pending assessments. Further, under the proviso contained in Sub- section (2), the assessment or reassessment relating to any assessment year which has been abated under the second proviso, and if such an assessment is annulled in appeal or any other legal proceedings, it shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Further, such revival ceases to have effect if such order of annulment is set aside. Therefore, insofar as the completed assessments are concerned, they do not abate, and the pending assessments, abate. Thus, the completed assessments become final unless some incriminating material is found during the course of the search. If we go by the provisions contained in Section 153A of the Act, the intention of the legislature is to restrain the Assessing Officer to undo what has already been completed and has become final. Therefore, no reassessment in respect of completed assessment is contemplated under this provision in case no incriminating 37 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 material is found as a result of the search. Insofar as the pending assessments are concerned, the jurisdiction to make an original assessment and the assessment under Section 153A merge into one, and only one assessment for each assessment year shall be made separately on the basis of findings of search and any other material existing or brought on the record of the Assessing Officer. In respect of non-abated assessments, i.e., the assessments that have been concluded on the date of search, the assessments shall be made on the basis of incriminating material unearthed during the course of the search. 20. The provisions of Section 153A, relating to the procedure of assessment in pursuant to search conducted under Section 132 of the Act, have been examined by various courts, including the Hon'ble Supreme Court, in many cases. Although few High Courts have taken a contrary view on the issue, but the majority of the High Courts have taken a consistent view on the issue and held that insofar as pending assessments are concerned, the jurisdiction to make original assessment and the assessment under Section 153A merges into one and only one assessment for each assessment year shall be made and insofar as non-abated assessments, the assessment shall be made on the basis of incriminating material unearthed during the course of the search. One leading case on this issue is from the Hon'ble High Court of Delhi in the case of Kabul Chawla Vs. CIT reported in [2015] 61 Taxmann.com 412, wherein it has been categorically held that in respect of non-abated assessments, the AO shall assume jurisdiction and the assessment shall be made based on incriminating material unearthed during the course of the search, and in case, there is no incriminating material, then the Assessing Officer cannot tinker with the completed assessment. Insofar as pending assessments are concerned, the AO shall assume jurisdiction to assess the total income of those assessment years on the basis of regular books of accounts and any incriminating material found as a result of the search. The Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) approved the ratio laid down by various High Courts, including the decision of Hon'ble Delhi High Court in the case of Kabul Chawla (supra) and held that, in the case of a search under Section 132 or requisition u/s 132A of the Act, the Assessing Officer assumes jurisdiction u/s 153A and further, in case, any incriminating material is found as a result of search, even in case of unabated/completed assessment, the Assessing Officer would assume jurisdiction to assess or reassess the total income, taking into consideration the incriminating 38 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 material found during the course of search and other material available with the Assessing Officer, including the income declared in the return. In case no incriminating material is found during the search, the Assessing Officer cannot assess or reassess, taking into consideration other material in respect of completed assessment/unabated assessment. Meaning thereby, in respect of completed assessments, no additions can be made by the AO in the absence of incriminating material found during the search under Section 132 of the Act. The sum and substance of the ratio laid down by various High Courts, including the Hon'ble Supreme Court, in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) is that when a search is conducted under Section 132, all pending assessments within the block of six assessment years immediately preceding the assessment year in which such search is conducted abates and the Assessing Officer shall have jurisdiction to assess or reassess the total income of those assessment years on the basis of incriminating material found as a result of the search and any other material or information provided in the returns. In case no incriminating material found, the completed assessment/ unabated assessment is final and the Assessing Officer shall not have the power to make any additions. 21. Having analyzed the legal position as enumerated under Section 153A of the Act in respect of assessments pursuant to search action under Section 132 of the Act, now let us come back whether the assessee is entitled to make a fresh claim under Chapter VI-A, which has not been claimed in the original return of income under Section 139(1). It is seen that the Department resists any new or subsequent claim in the return filed under Section 153A of the Act, primarily on the plea that such assessments are for the benefit of the Revenue rather than the assessee. The predominant view of the Department in this regard is the return filed under Section 153A of the Act is a consequence of search action taken under Section 132 on the assessee and, thus, cannot be for the benefit of the assessee and moreover, the proceedings under Section 153A are analogous to proceedings under Section 147 of the Act to the extent that these proceedings are for the benefit of the revenue and not for the assessee. The submission on behalf of the Revenue is that the assessee cannot be permitted to use reassessment proceedings as appeal or revision in disguise and seek relief in respect of items not claimed in the original return of income. The revenue has also taken support from various judicial precedents, including the decision of the Hon'ble Bombay High Court in the case of K. Sudhakar S. Shanbhag Vs. 39 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 ITO, reported in (2000) 241 I.T.R. 865 (Bom), which was rendered by taking note of the principle laid down by the Hon'ble Apex Court in the case of CIT Vs. Sun Engineering Works (P) Ltd (supra) to the effect that in the reassessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return. According to the department a search under Section 132 of the Act, also cannot be utilized by the assessee to seek relief not claimed earlier. The Department, while disallowing such claims had also taken support from the decision of Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (supra), wherein it has been laid down that the AO cannot entertain a claim for deduction otherwise than by filing a revised return. Since the assessee neither made any such claim in the original return filed under Section 139(1) of the Act, nor in any regular assessment proceedings by way of filing any revised return and, therefore, return in response to notice under Section 153A of the Act is not a substitution of a revised return for making claim of such benefits. Further, the Department also took support from the provisions of Section 80A(5) and Section 80AC of the Act to deny such claims on the ground that, as per the provisions of Section 80AC, where the assessee fails to make any claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of this Chapter under the Head “C- Deductions in respect of certain income”, no deduction shall be allowed to them. Further, the provisions of Section 80AC deal with deductions not to be allowed unless return of income is furnished and as per the said provisions, no deduction under Section 80IA or other deductions/exemption provisions as contemplated are admissible unless the assessee furnishes a return of income for such assessment year on or before the due date specified under Section 139(1) of the Act. Although the return filed in response to notice under Section 153A of the Act partakes the nature of a return required to be furnished under Section 139, that is provided for the limited purpose of filing the return and consequent limitation provided under various provisions of the Act and thus, same cannot be construed as the original return filed under Section 139(1) of the Act for the purpose of deductions/exemptions. 22. Per contra, the primary contention of the appellant to substantiate the fresh claim is that Section 153A mandates the AO to assess or reassess the total income of six assessment years falling within six assessment years immediately preceding the assessment year, in which such search is conducted under Section 40 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 132 and further, as per second Proviso, all pending assessments on the date of initiation of search would stand abated and return of income filed by the person concerned for six assessment years in terms of Section 153A(1)(a) would be construed to be a return of income filed under Section 139(1) of the Act. Therefore, in view of the second Proviso to Section 153A of the Act, once the assessment got abated, it means that it is open for both parties, i.e., for the assessee as well as the revenue to make claims for allowances or deductions. The appellant further contended that the reliance placed by the AO on the case of CIT Vs. Sun Engineering Works (P) Ltd is misplaced, because the said decision was rendered in the context of reassessment proceedings initiated under Section 147 of the Act, and if we go by the words used in the said provision, it refers to such income i.e., income escaping assessment under Section 147 of the Act. The appellant further claims that the department's reliance on the case of Goetze (India) Ltd. Vs. CIT (supra) can be distinguished as being not applicable in case of raising the fresh claim in the return of income filed under Section 153A, since the return filed under Section 153A should be treated as a return filed under Section 139 of the Act. 23. We have given thoughtful consideration to the various arguments advanced by the learned counsel for the assessee and also, the counter-arguments advanced by the Senior Standing Counsel for the Revenue in light of the provisions of Section 153A of the Act, coupled with relevant case laws referred to by both parties. We find that it is well settled from the decision of various High Courts and the decision of the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) that in case of search assessments, where search is conducted under Section 132 of the Act, all pending assessments within the block of six assessment years immediately preceding the assessment year in which such search is conducted shall abate and the AO shall have power to assess or reassess the ‘total income’ of those assessment years on the basis of incriminating material found as a result of the search and any other material available with the AO, including the information provided by the appellant in the return of income filed for those assessment years. In case of unabated/concluded assessments, the AO shall have the power to reassess the total income, but such reassessment should be confined only to the incriminating material found as a result of the search. In other words, in case there is no incriminating material found as a result of the search, the completed assessment cannot be disturbed. 41 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 24. Having said so, now let us come back to the question in the present appeals i.e., whether an assessee can make a claim for deduction under Chapter VI-A of the Income Tax Act, 1961, for the first time in the return of income filed in response to the notice issued under Section 153A of the Act, pursuant to search conducted under Section 132 of the Act. This legal position is no longer res integra. The Hon'ble High Court of Rajasthan in the case of Jai Steel (India) Vs. ACIT had considered an identical question of law in light of search conducted u/s 132 of the Act and the fresh claim made by an assessee for the first time in the return filed u/s 153A of the Act and after considering the relevant facts and also by analyzing various case laws, including the decision of Hon'ble Delhi High Court in the case of CIT Vs. Anil Kumar Bhatia reported in (2012) 211 Taxmann.com 453 (supra), which is in favour of the revenue held that it is not open for the assessee to seek deductions or claim expenses which have not been claimed in the original return for which assessment has already been completed only because assessment u/s 153A in pursuance of search or requisition is required to be made. Even otherwise, if we go by plain reading of provisions of Section 153A, it is analogous to erstwhile provisions of Section 158B(1) of the Act. From the above provisions, it is undisputedly clear that the purpose of assessment in relation to search cases is to assess undisclosed income, if any, on the basis of incriminating material found as a result of the search, but not to disturb the completed/unabated assessment. Further, if we go by the argument of the counsel for the assessee, in light of the provisions of Section 153A(1)(a) of the Act, once return is filed in response to a notice under Section 153A of the Act, the said return shall be treated as return which was furnished under Section 139 of the Act, in our considered view, it defeats the whole purpose of initiation of search and consequent assessments. In our considered view, although provisions of Section 153A make it very clear that return filed in response to a notice under Section 153A of the Act, partakes the nature of return filed u/s 139 of the Act, said interpretation cannot be enlarged so as to say that even in case where the assessee has filed a regular return under Section 139 and not made any claim towards deduction and further for the first time, the assessee has made a claim of deduction under Section 80IA(4) in the return of income filed in response to notice under Section 153A of the Act, also to be considered as if the assessee has made a claim on or before filing the return under Section 139(1), and further, it is contrary to the scheme of regular assessment and search assessment and is devoid of merits. Further, the argument of the counsel for 42 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 the assessee that ITR Form provides for separate schedule for claiming deduction under Section 80IA of the Act is also devoid of merit, because, unlike the erstwhile special procedure for the assessment of undisclosed income of the block period, a separate form is provided for filing return of income for a block period, in the present scheme of assessment of search cases, there is no separate form prescribed by the legislature, which means in a new scheme assessment of each assessment year in consequent to search, the appellant has to file his return of income under very same ITR 6 which is used for filing regular return of income and the return filed under ITR Form 6 provides for various information including deductions under Section 80IA of the Act. Therefore, in our considered view, merely because, separate schedule is provided for deductions under chapter VI-A, it cannot be construed that even in a case of filing return of income under Section 153A of the Act, the appellant can make a fresh claim. Further, once the assessment is abated, the original return which has been filed loses its originality, and the subsequent return filed u/s 153A of the Act takes the place of the original return. In such cases, the return of income filed u/s 153A(1) of the Act, would be construed to be one filed u/s 139(1) of the Act and the provisions of the Act, shall apply to the same and accordingly, all legitimate claims would be open to the assessee to raise in the return of income filed u/s 153A)(1) of the Act. Therefore, the argument advanced by the learned counsel for the assessee in light of judicial precedents, including the decision of the Hon'ble Supreme Court in the case of V.D.M.Rm.M.Rm. Muthaiah Chettiar Vs. CIT fails. 25. Further, in our considered view, the requirement of assessment or reassessment under the provisions of Section 153A has to be read in the context of Section 132 or Section 132A of the Act, inasmuch as, in case if no incriminating material is found as a result of the search or requisition, the question of reassessment of the concluded assessment does not arise, which would require mere reiteration and it is only in the context of the abated assessment under the second proviso, which is required to be assessed. The underlying purpose of making the ‘total income’, under Section 153A of the Act is, therefore, to assess income which was not disclosed or would not have been disclosed. The purpose of the second proviso is also very clear, in as much, as once assessment or reassessment is pending on the date of initiation of the search or requisition, and in terms of Section 153A, a return is filed, and the AO is required to assess the same, 43 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 there cannot be two assessment orders determining the total income of the assessee for the said assessment year and therefore, the proviso provides for the abatement of such pending assessments and reassessment proceedings, and it is only the assessment made under Section 153A of the Act that would be the assessment for the said year. The necessary corollary of the above provision is that the assessments or reassessments which have already been completed and the assessment orders have been passed, determining the assessee's total income and such orders are subsisting at the time when the search or requisition is made, there is no question of any abatement since no proceedings are pending. In such cases, when the assessment has already been completed, the AO can reopen the assessment or reassess the assessment already made without following the procedure under Section 147 or Section 148 of the Act and determine the total income of the assessee. The arguments raised by the counsel for the assessee, in light of the provisions of Section 153A(1)(a) and Form ITR-6, that the moment the assessee files a return in response to Section 153A, it partakes the nature of the return filed under Section 139(1) of the Act and it satisfies all the conditions, including the provisions of Section 80A(5) and Section 80AC of the Act, is devoid of merit and is rejected. 26. We further note that, although the ratio laid down by the Hon'ble Supreme Court in the case of PCIT Vs. Abhisar Buildwell (P.) Ltd (supra) is in the context of additions made by the AO in the assessments which are unabated/concluded on the date of the search in the absence of any incriminating material found as a result of the search, the Hon'ble Apex Court has in fact approved the ratio laid down by the Hon'ble High Court of Rajasthan in the case of Jai Steel (India) Vs. ACIT, which directly addresses the issue of a fresh claim made by the assessee for the first time in the return of income filed in response to the notice issued under Section 153A of the Act. From the observation of the Hon’ble Supreme Court in Para 8, it is clear that it has approved the ratio laid down by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of PCIT Vs. Saumya Constructions reported in (2016) 387 ITR 529 (Guj) and the Hon’ble High Court of Rajasthan has followed or considered the ratio of these two cases while deciding the issue in the case of Jai Steel (India) Vs. ACIT (supra). Therefore, in our considered view, once the matter has been finally concluded by the Hon’ble Apex Court and held that in unabated or concluded 44 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 assessment, the AO cannot make any additions in the absence of any incriminating material found as a result of the search, in our considered view, particularly in the case of unabated or concluded assessments, and since the AO cannot tinker with unabated or concluded assessments in the absence of any incriminating material, with equal force, the same ratio should be applicable to the assessee as well. Thus, based on the findings of the Hon'ble Apex Court, in our considered view, the appellant also cannot make any fresh claim of deduction or expenditure for the first time in the return of income filed in response to the notice issued under Section 153A of the Act. Insofar as the abated assessment is concerned, the assessee can make all claims, provided the return of income is filed in adherence to the timeline to furnish as per notice under Section 153A of the Act, failing which the assessee shall not be able to claim any deduction in view of Section 80A of the Act. 27. At this stage, it is necessary to consider the decisions relied upon by the learned counsel for the assessee and the learned senior standing counsel appearing for the Revenue. The learned counsel for the assessee placed reliance on the decision of the Hon’ble High Court of Bombay in the case of PCIT Vs. JSW Steel Ltd (2020) 422 ITR 71, CIT Vs. D.G. Shirke Construction Technology Pvt. Ltd. (2017) 79 Taxmann.com 306 and the Hon’ble Karnataka High Court in the case of G.M.R. Infrastructure Limited Vs. DCIT in ITA No.1036 of 2017 dt.06.07.2021. We have gone through the decisions rendered by the Hon’ble Bombay High Court in the case of PCIT Vs. JSW Steel Ltd (supra), and we find that, the Hon’ble High Court held that once the search is conducted u/s 132 of the Act and the original assessment was pending and was not completed as on the date of search, in view of the second proviso of section 153A, assessment got abated, and thus, it was open for the assessee to lodge a new claim for deduction etc., which remain to be claimed in his earlier/regular return of income. The Hon’ble High Court has discussed the issue in Paras 12 and 13 of the order, which reads as under: “12. In this perspective we are called upon to decide the question projected by the revenue as substantial question of law arising from the order of the Tribunal. We have considered the grounds of appeal and the orders passed by the AO, CIT(A) and the Tribunal with the assistance of learned counsel for the Appellant. From a reading 45 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 of the above it is clear that Section 153A of the said Act, provides for the 34 of 39 procedure for assessment in search cases. As alluded to hereinabove, the said section starts with a non- obstante clause stating that it is, “notwithstanding anything contained in section 147, 148 and 149………..” Further sub Section(a) of Section 153A(1) provides for issuance of notice to the persons searched under Section 132 of the Act to furnish a return of income. However, the second proviso to Section 153 A of the said act makes it clear that assessment relating to any assessment year filed within a period of the six assessment years pending on the date of search under Section 132 of the Act shall abate. Thus if on the date of initiation of search under Section 132, any assessment proceeding relating to any assessment year falling within the period of the said six assessment years is pending, the same shall stand abated and the Assessing Authority cannot proceed with such pending assessment after initiation of search under section 132 of the said Act. 13. In the present case, search was conducted on the assessee on 30.11.2010. At that point of time assessment in the case of assessee for the assessment year 2008-09 was pending scrutiny since notice under Section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to Section 153A of the said Act, once assessment got abated, it meant that it was open for both the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim 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 46 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 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).” 28. In the case of CIT Vs. D.G. Shirke Construction Technology Pvt. Ltd., (supra), the Hon’ble High Court of Bombay once again examined the question of law raised before the Court which is similar to the question before the Special Bench and after considering relevant provisions of Section 153A(1) of the Act, held that consequent to notice under section 153A of the Act, the earlier return filed for the purpose of assessment which is pending would be treated as non-est in law. Further, Section 153A(1) of the Act itself provides filing of the return consequent to notice, the provisions of the Act will apply to the return of income so filed. Consequently, the return filed under Section 153A(1) of the Act is a return furnished under Section 139 of the Act. Consequently, the respondent/assessee is being assessed in respect of abated assessment for the first time under the Act. Therefore, the provisions of the Act, which would be otherwise applicable in case of return filed in the regular course under Section 139(1) of the Act, would also continue to apply in the case of return filed under Section 153A of the Act. The relevant finding of the Hon’ble High Court is as under : “11. In the present facts for the subject assessment years, it is an undisputed position that the pending assessment before the Assessing Officer consequent to return filed under Section 139(1) of the Act for the subject Assessment years had abated. This was on account of the search and as provided in the second proviso to Section 153A(1) of the Act. The consequence of notice under Section 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has been issued. It is this return which is filed consequent to the notice which would be subject of assessment by the Revenue for the first time in the case of abated assessment proceedings. Consequent to notice under Section 153A of the Act, the earlier return filed for the purpose of assessment which is pending would be treated as non est in law. Further, Section 153A(1) of the Act itself provides on filing of the return 47 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 consequent to notice, the provision of the Act will apply to the return of income so filed. Consequently, the return filed under Section 153A(1) of the Act is a return furnished under Section 139 of the Act. Consequently, the respondent-assessee is being assessed in respect of abated assessment for the first time under the Act. Therefore the provisions of the Act which would be otherwise applicable in case of return filed in the regular course under Section 139(1) of the Act would also continue to apply in case of return filed under Section 153A of the Act and the case laws on the provision of the Act would equally apply.” 29. In the case of GMR Infrastructure Limited Vs. DCIT (supra), the Hon’ble High Court of Karnataka had occasion to consider a similar question of law before the Court, which is similar to the question for this Special Bench and after considering relevant facts and also by following the decision of Hon’ble Rajasthan High Court in the case of Jai Steel (India), Jodhpur Vs. ACIT (supra) has held that the assessment or reassessment made in pursuance to section 153A of the Act, is not a denovo assessment and, therefore, it was not open to the assessee to claim and be allowed such deduction or allowance of expenditure which it had not claimed in the original assessment proceedings which in the case of assessee stood completed vide order dated 15.01.2009 passed under section 143(1) of the Act. If we go by the observations of the Hon'ble High Court of Bombay and Hon'ble High Court of Karnataka in the above-mentioned case, it is only in the context of abated assessments which are pending as on the date of search under section 132 of the Act, the return filed in response to notice under section 153A of the Act partakes the nature of return filed under section 139 of the Act and the assessee can make/lodge any claim which otherwise, it would have raised in the return of income to be filed under Section 139 of the Income Tax Act, 1961. In other words, in case of unabated/concluded assessments like the AO, who cannot make additions in the absence of any incriminating material, the assessee cannot make any fresh claim, including the claim of deduction under Chapter VI-A of the Act. Therefore, we are of the considered view that the assessee cannot make any fresh claim of deduction or allowance of the expenditure for the first time in the return of income filed under section 153A of the Income Tax Act, 1961. 48 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 30. Coming back to another important argument of the learned counsel for the assessee, in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd. (supra). The learned Senior Advocate Shri K.K. Chaitanya appearing for the assessee submitted that the decision in the case of CIT Vs. Sun Engineering Works (P) Ltd. (supra) is distinguishable on facts, because the said issue was rendered in the context of reassessment proceedings u/s 147 of the Act and the said provision only deals with assessment or reassessment of income escaping assessment, which is very clear from the use of the words “and also any other income chargeable to tax …” in Section 147 and Explanation 3 thereto, as it stood prior to substitution vide Finance Act 2021”. On the contrary, Section 153A deals with the assessment or reassessment of ‘total income’, as against assessment or re- assessment of such income i.e., income escaping assessment u/s 147 of the Act, and therefore, the Revenue cannot rely upon the decision of Hon'ble Apex Court to deny fresh claim of deduction under Section 80IA(4) of the Act. In our considered view, the argument of the learned counsel for the assessee in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd. (supra) are fallacious for the simple reason that the provisions of Section 147 are analogous to provisions of Section 153A of the Act. Section 147 deals with income escaping assessment, and as per the said provisions, if any income chargeable to tax in case of an assessee has escaped assessment for any assessment year, the AO shall assess or reassess such income for such assessment year. Further, Section 147 makes it very clear that in order to invoke provisions of Section 147 of the Act, there should be income which has escaped assessment, and such escapement should be based on fresh tangible material which comes to the possession of the AO subsequent to the completion of the original assessment and further, the formation of belief of escapement of income should have a live nexus with reasons to believe and fresh tangible material. Similarly, the provisions of Section 153A deal with assessment in case of search or requisition, and as per the said provisions, notwithstanding anything contained in certain provisions of the Act, in case of a person where search is initiated after 31st day of May 2003, the AO shall issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year in which such search is conducted or requisition is made. According to the provisions of Sections 147 and 153A 49 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 of the Act, although both operate in different fields, the purpose is the same. Section 147 deals with income escaping assessment, and Section 153A deals with assessment consequent to search and seizure under Section 132, where any money, bullion, jewellery, valuable article or things found as a result of the search. Therefore, in our considered view, when the Hon’ble Supreme Court, in very categorical terms, held in light of the provisions of Section 147 of the Act that said provisions are for the benefit of revenue, and the assessee cannot make any fresh claim of deduction towards any income or expenditure, then going by the scheme of assessment under Section 153A, there is no doubt that said provisions are only for the purpose of detection of undisclosed money, bullion, jewellery, or any other article or thing. and said provisions are also for the benefit of revenue, and the assessee cannot take to its advantage. Therefore, the reliance placed by the revenue on the decision of the Hon’ble Supreme Court in the case of CIT Vs. Sun Engineering Works (P) Ltd (supra) is justified. Thus, we reject the arguments taken by the learned counsel for the assessee. 31. Having said so, let us come back, what is the scope of Section 80A(5) and Section 80AC of the Income Tax Act, 1961. The learned counsel for the assessee vehemently argued that, once return is filed in response to notice under Section 153A of the Act, as per provisions of Section 153A(1)(a), such return should be considered as return filed under Section 139 of the Act, 1961, and further, it is treated as if, the appellant has satisfied all the conditions prescribed under Section 80A(5) and Section 80AC of the Act, 1961. We do not subscribe to the arguments advanced by the learned counsel for the assessee for the simple reason that, the provisions of Section 80AC are very clear, inasmuch as deduction shall not be allowed to any assessee, unless he furnishes return of income for such assessment year on or before the due date specified under Section 139(1) of the Act. Similarly, Section 80A(5), in clear terms, states that when the assessee fails to make a claim in the return of income for any deduction under the heading “C- Deductions in respect of certain incomes,” no deduction shall be allowed to him thereunder. A combined reading of Section 80A(5) and Section 80AC makes it very clear that, in order to make any claim including deduction under Section 80IA(4) of the Act, the assessee must file his return of income under Section 139(1) of the Act and further, the said deduction should be claimed in the return furnished for relevant assessment years. Therefore, in our considered view, the argument of the counsel for the assessee that in view of 50 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 the specific provisions of Section 153A of the Act, even in case of a return filed in response to notice under Section 153A of the Act, the assessee satisfies all the conditions prescribed under Section 80A(5) and 80AC is devoid of merit and cannot be accepted. If we accept the argument of the learned counsel for the assessee that even after search, an assessee can make a claim for the first time towards deduction under Section 80IA(4) of the Act in the return of income filed under Section 153A, then in our considered view, the provisions set out under Section 80A(5) and Section 80AC become redundant, and in our considered view, this is not the intention of the Legislature. Further, if we accept the arguments of the learned counsel for the assessee, it discriminates the persons, who file the return of income and make a claim in the said return of income on or before the due date u/s 139 and the persons who do not file any return of income and also do not make any claim in the said return of income. Therefore, in our considered view, going by the wording of the provisions of Section 80A(5) and Section 80AC of the Act, in order to claim any deductions under Section 80IA(4) of the Act, the assessee should file its return of income on or before the due date prescribed under Section 139(1) of the Act and further, the said claim should be made in the return furnished. Further, in order to claim deduction under Section 80IA(4) of the Act, as per Section 80IA(7), furnishing of the audit report on or before the specified date referred to in Section 44AB of the Act is mandatory and not directory as argued by the learned counsel for the assessee. At this stage, we are taking support from the decision of the Hon'ble Supreme Court in the case of Commissioner of Customs (Imports), Mumbai Vs. Dilip Kumar and Company, (supra) wherein the Hon'ble Supreme Court clearly held that beneficial provisions like, deductions/ exemptions provisions are required to be strictly interpreted and any perceived ambiguity would necessarily ensure to the benefit of the revenue. We further note that the Hon'ble Supreme Court, in the case of PCIT Vs. Wipro Ltd (supra) has also considered the interpretation of provisions of Section 10B of the Act and held that such an option should be exercised before the due date under Section 139(1) by way of filing a declaration. Although the said decision was in the context of withdrawal of exemption under Section 10B of the Act, in our considered view, when it comes to the interpretation of exemption and deduction provisions, the said provisions should be strictly interpreted so as to achieve the larger intent of the Legislature. Therefore, we are of the considered view that the arguments of the learned counsel for the assessee that when the appellant filed its return of income in response to a notice under Section 153A of the Act, it partakes the nature of 51 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 the return filed under Section 139 of the Act and thus, all the conditions prescribed under Section 80A(5) and Section 80AC are satisfied is contrary to law and devoid of merit and cannot be accepted. 32. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the assessee cannot make a fresh claim of deduction under Chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to notice issued under Section 153A of the Act, pursuant to search conducted under Section 132 of the Act, in unabated/completed assessment as on the date of search. In case of abated assessments, like the AO who can make assessment based on incriminating materials and any other information made available to him, including information furnished in return of income, the assessee may claim all deductions towards any income or expenditure, as if it is a first return of income and fresh assessment. In view of the above, the questions referred are answered as under. i) Whether an assessee can make a claim for deduction under Chapter VIA of Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act ? YES ii) If Yes, under which circumstances? I. In case of unabated/ completed assessment/s, no fresh claim can be made under chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, 52 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 pursuant to a search conducted under section 132 of the Act. II. In case of abated assessment/s, fresh claim can be made under chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act. 33. The present discussion hereinabove is with reference to the questions referred to on the issue, i.e. whether a fresh claim of deduction under Chapter VI-A of the I n c o m e T a x A ct, 1 9 6 1 could be maintained for the first time in the return filed pursuant to a notice under Section 153A of the Act or not. The learned counsel for the assessee and the Senior Standing Counsel appearing for the Revenue did not argue on the merits as to whether the assessee is eligible for such a claim or not. Therefore, the present appeals filed by the Revenue are posted for hearing on the issue of deduction claimed under Section 80IA(4) of the Act on merits. The Registry is directed to list the appeals in due course and inform both parties.” 8.1. In the present case there is no dispute with regard to the fact that the assessment year in question for the A.Y. 2013-2014 is “abated” as on the date of search i.e., 18.12.2014 because the Assessing Officer has issued notice u/sec.143(2) of the Act for having considered the case for 53 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 scrutiny on 02.09.2014 before the date of search and, therefore, in our considered view, the assessment is “abated’ and as per first proviso to sec.153A of the Act once assessment is abated, the Assessing Officer has power to “assess or re-assess the total income including undisclosed income, if any, found as the result of search.” Similarly, by following the same analogy the assessee is also entitled to make fresh claim of any deduction/exemption in the return of income filed in response to notice u/sec.153A of the Act, consequent to search u/sec.132 of the Act and this principle is fully supported by the decision of ITAT Special Bench in the case of DCIT vs. SEW Infrastructure Ltd., (supra). Therefore, we are of the considered view that the claim made by the assessee for deduction u/sec.80IA(4) of the Act in the return of income filed in response to notice issued u/sec.153A of the Act is in accordance with law and further supported by the decision of ITAT, Special Bench in the case of DCIT vs. SEW Infrastructure Ltd., (supra) and, therefore, we are of the considered view that there is no 54 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 error in the reasons given by the learned CIT(A) to allow the deduction claimed by the assessee. 8.2. Coming back to A.Ys. 2014-2015, 2015-2016 and 2016-2017. The assessment for these assessment years are “unabated/concluded” as on the date of search and, therefore, the assessee cannot make a fresh claim of deduction u/sec.80IA(4) of the Act for the first time in the return of income filed in response to notice issued under section 153A the Act, pursuant to search conducted under section 132 of the Act. To this extent we reverse the findings of the learned CIT(A) for these A.Ys. 2014-2015, 2015-2016 and 2016-2017. 8.3. Having said so, let us come to the issue on hand. The assessee has claimed deduction u/sec.80IA(4) of the Act in respect of profit derived from development of infrastructure projects. There is no dispute with regard to the fact that the assessee-company is in the business of development of infrastructure projects and has entered into agreements with various Central/State Governments, Local 55 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Authorities or Statutory Body etc for development of infrastructure projects as defined u/sec.80IA(4) of the Act. The assessee has claimed deduction u/sec.80IA(4) of the Act in respect of profits derived from eligible projects. The Assessing Officer though in principle has accepted the claim of the assessee that all the projects developed by the assessee are infrastructure projects and are eligible to claim deduction u/sec.80IA(4) of the Act, but allowed deduction in respect of profits derived from projects, where the assessee has entered into agreement directly with Central/State Governments, Local Authority or Statutory Body etc., However, the Assessing Officer has rejected the deduction of claim towards profits derived from eligible projects, where the JV entered into agreement with Central/State Governments, Local Authority or Statutory Body etc., We note that in all these projects the assessee has developed the project and offered the relevant income to tax. It is the claim of the assessee that once the projects on which deduction has been claimed u/sec.80IA(4) of the Act are eligible projects, then, merely because of the reason that 56 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 assessee had not entered into direct agreement with Central/State Governments, Local Authority or Statutory Body etc., the benefit of deduction cannot be denied. 8.4. We have given our thoughtful consideration to the reasons given by the Assessing Officer to deny deduction claimed u/sec.80IA(4) of the Act, in light of arguments advanced by the Learned Counsel for the Assessee and we ourselves do not subscribe to the reasons given by the Assessing Officer for the simple reason that, once the projects developed by the assessee are infrastructure projects as defined u/sec.80IA(4) of the Act and the assessee has developed the projects, in our considered view, merely for the reason of not entering into direct agreement with Central/State Governments, Local Authority or Statutory Body etc., the deduction towards profits from eligible project cannot be denied. Further the benefit of deduction provided u/sec.80IA(4) of the Act is a “project specific” but not “assessee specific”. If we go by the plain reading of the provisions of Sec.80IA(4) of the Act, it is very clear that any enterprise carrying in the business of 57 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 development or operating and maintaining or developing operating and maintaining any infrastructure facility which fulfils certain conditions, such an “eligible assessee” is entitled to claim deduction u/sec.80IA(4) of the Act . Therefore from a plain reading of the above provision, it is undisputedly clear that deduction is allowable only for a “project specific” but not “an assessee specific” which is further fortified by the proviso provided therein, where the statute allowed deduction to a successor entity for the remaining period of exemption in case the project is transferred to any other entity for the purpose of operation and maintenance of the project. Therefore, we are of the considered view that once the Assessing Officer having satisfied that all the projects developed by the assessee are infrastructure projects and are eligible for deduction u/sec.80IA(4) of the Act, the Assessing Officer erred in disallowing the claim of deduction merely on the ground of not entering into direct agreement with Central/State Governments, Local Authority or Statutory Body etc. In our considered view, the purpose of forming J V is, it used to 58 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 make sure that the conditions imposed by the principals are met by the Consortium of J V Members. Further as per the J V Agreement it is informed to the principals that the project is executed by the Individual Members of the J V Consortium. Therefore, in our considered view, once J V entered into agreement, it is as good as the agreement was entered by constituent of the J V Consortium Member(s) itself. Therefore, wherever the projects on which the JV has entered into agreement, in our considered view, it is as good as the assessee has entered into agreement with Central/ State Government, Local Authority or Statutory Body etc., for development of the projects and thus, in our considered view, the assessee is eligible for deduction u/sec.80IA(4) of the Act. 8.5. In so far as deduction claimed u/sec.80IA(4) of the Act, on the profits derived from development of infrastructure projects where the assessee is not directly entered into agreement with Central/State Governments, Local Authority or Statutory Body etc., but entered into agreement as a constituent J V Consortium, we find that 59 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 this issue is squarely covered in favour of the assessee by the decision of ITAT, Hyderabad Bench in the case of ACIT vs. Megha Engineering and Infrastructure Limited vide ITA.No.1499/ Hyd./2019 vide order dated 15.02.2019, where under identical set of facts and also on identical projects on which the assessee has claimed deduction u/sec.80IA(4) of the Act, as a constituent of JV/Consortium Member, the Tribunal after considering relevant facts and various judicial precedents allowed the deduction claimed by the assessee towards profits derived from “eligible projects” u/sec.80IA(4) of the Act. The relevant findings of the Tribunal are as under : “10. We have heard both parties, perused the material on record and gone through the orders of the authorities below. There is no dispute with regard to the fact that the appellant has executed several development projects as enumerated in the assessment order and among the works, some projects were directly awarded to the appellant as main developer / builder, while some projects were awarded to the JVs/Consortium, but executed by assessee company, as constituent partner of the said JV in proportion to their share. It is also not in dispute that the appellant has satisfied all the conditions except clause (b) of Section 80IA(4), as noted by the Assessing Officer. In other words, the AO accepted the fact that the projects executed by the appellant, including those projects which were awarded to JVs/ Consortiums, but executed by the assessee are infrastructure projects, as defined under Section 80IA(4) of the Act and thus, on being satisfied with the relevant provisions therein, the assessee is eligible for deduction under Section 80IA(4) of the Act. The only dispute is with regard to not satisfying clause (b) of Section 80IA(4)(1), which states that in order to claim deduction under Section 80IA(4) of the Act, the enterprises shall enter into an agreement with the Central government 60 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 or State Government or local authority or any authority for developing, operating and maintaining or developing, operating and maintaining a new infrastructure facility. The appellant claims that it has satisfied clause (a) of Section 80IA(4) of the Act, because as a constituent partner of JV /Consortia, it has signed agreement with relevant Central or State Government or local authority for development of infrastructure project. Further, as per clause (a) of Section 80IA(4) of the Act, in order to claim deduction under Section 80IA(4), the enterprise should be owned by a company registered in India or by a consortium of such companies. Further, Clause (a) makes it clear that a company registered in India, or a consortium of such company registered in India should be owned the undertaking and Clause (b) states that such entity should be entered into agreement with the relevant authorities. Going by the above provisions, in our considered view, the assessee being one of the constituent partners of JV / Consortia has signed the agreement with the Central or State Government or local government for development of infrastructure project. Therefore, in our considered view, once the appellant, being a constituent partner JV / Consortia has entered into an agreement with relevant authorities, then it is as good as the appellant has entered into agreement in its individual capacity for development of infrastructure project. This fact has been further strengthened by the relevant JV / Consortium agreement between the JV partners, wherein it has been clearly specified that this JV / Consortia has been constituted for the purpose of preparing or submitting qualification document and joint bid for the project. The said agreement further states that in the event of the contract being awarded to the JV / Consortium, being the members of the said JV / Consortium, the development works as contemplated by the above contract shall be executed as per the development and scope of works, but for no other purposes. We further noted that the JV / Consortia agreement between members clearly specify the scope of undertaking, its exclusivity, role and responsibility of the JV partners and risk to be undertaken by each of the JV partners. Further, immediately after JV / Consortium, the same has been informed to relevant authorities and also the plan of action has been submitted to the principles for execution of development projects. Further, in few cases, the appellant, being the constituent partner of the JV has directly submitted bills to the authorities and the principles has directly paid to appellant, instead of JV / Consortia, after deducting the TDS applicable as per law in the name of the appellant. From the above, it is undisputedly clear that although the JV/Consortium is a separate entity for the purpose of assessment, but all other activities, including designing, development, and maintenance of the project are undertaken by the assessee. Therefore, we are of the considered view that once the assessee, being a constituent partner of the JV/Consortium, has executed the project and also undertaken relevant risks, including financial risks, the assessee becomes a developer of the infrastructure project and also as a constituent partner of the 61 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 JV/Consortium, satisfied the condition of entering into an agreement with relevant Central or State government or any authority as specified in clause (b) of Section 80IA(4)(1) of the Act. This is further fortified by the provisions of Section 80IA(4) of the Act and as per the proviso, the deduction is allowed to a successor entity in case one enterprise developed such infrastructure facility and after development, transfer such infrastructure facility to another Enterprise for the purpose of operating and maintaining the infrastructure facility on its behalf in accordance with agreement with the Central / State Government or local authority or statutory body, the provisions of this section shall apply to the transferee enterprise as if it were the enterprise to which this clause applies and the deduction from profits and gains would be available to such transferee enterprise for the unexpired period. Going by the above provisions, when the law itself allowed the benefit to successor entity in case of transfer, then there is no reason as to why such deduction shall not be allowed to constituent partner JV / Consortium, more particularly, when the facts of said JVs / Consortium clearly established the fact that the appellant has carried out all the activities, including design and development of project and maintaining of said project. 11. The appellant has relied upon the decision of Income Tax Appellate Tribunal, Hyderabad in assessee’s own case for assessment years 2010-11 to 2015-16, in ITA No.607 to 601/Hyd/2016 dt.15.02.2019. We find that the co-ordinate bench of ITAT for earlier years has considered very similar issues and by following the decision of Income Tax Appellate Tribunal, Visakhapatnam in the case of M/s. Transstory (India) Ltd. Vs. ITO (supra) has held that the assessee is entitled for deduction under section 80IA(4) of the Act on the profits earned from the execution of the projects awarded to JV / Consortium. The relevant findings of the Tribunal are as under. “9.2 With regard to other issue, i.e. contracts awarded to JVs and whether the assessee can claim the same as a constituent of the above JVs, the coordinate bench of ITAT, Visakhapatnam in the case of Transstory (India) Ltd. (supra) held that the constituents of JVs are eligible to claim deduction u/s 80IA. For the sake of clarity, we reproduce the findings of the Bench in the said case, as under: \"Undisputedly the joint venture or the consortium was formed only to obtain the contract from the Government bodies. At the time of execution of the joint venture or the consortium, it has been made clear that work/project awarded to the joint venture would be executed by the joint venturers or the constituents. As per mutually agreed terms and conditions between them, it was also agreed that each party shall be responsible for the provisions of contract without limitation on resources required for 62 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 the purpose of fulfilment of the scope and also solely responsible for the performance of its scope of work and shall bear all technical, commercial and facing risk involved in performing its scope of work. It was also agreed that none of the party shall assign its rights and obligations to any other party without written consent of other party. From a careful perusal of this joint venture agreement and the consortium agreement, it is evidently clear that the joint venture and the consortium was formed only with an object to bid contract. Once the project or contract is awarded to the joint venture or the consortium, it is to be executed by its constituents or the joint ventures in a ratio agreed upon by the parties. In the instant case in case of a joint venture agreement, the assessee was entitled to execute the 40 per cent of total work awarded by the Andhra Pradesh Government to the joint venture and in case of a consortium it was agreed that the entire work is to be executed by the assessee itself. Therefore for all practical purposes, it was the assessee who executed the work contract or the project awarded to the joint venture. No doubt the joint venture is an independent identity and has filed its return of income and was also assessed to tax but it did not offer any profit or income earned on this project/works awarded to it nor did he claim any exemption/deduction under s. 80 - IA(4). These facts clearly indicates that the joint venture was only a de jure contractor but in fact the assessee was a de facto contractor. There is no dispute with regard to the fulfilment of other requisite conditions. The dispute was only raised that the contract was awarded only to the joint venture and not to the assessee and therefore assessee is not entitled for deduction. Joint venture and the consortium was formed only to obtain the contract from the Government body and they in fact did not execute the work awarded to it. In a joint venture agreement or a consortium agreement, it was agreed that the awarded work had to be executed by the joint venturers or parties to the agreement in an agreed manner. The work was Megha Engg. & Infrastructure Ltd. awarded by the Andhra Pradesh Government and the KSHIP, a body of the State Government of Karnataka to the JV and consortium but the work was executed by the assessee and the other constituents. In case of joint venture agreement, 40 per cent works were 63 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 executed by the assessee and in case of consortium, the 100 per cent work was executed by the assessee. Whatever bills were raised by the assessee for the work executed on JV and consortium, the joint venture and consortium in turn raised the further bill of the same amount to the Government. Whatever payment was received by the joint venture, it was accordingly transferred to their constituents. Therefore, the joint venture or the consortium was only a paper entity and has not executed in contract itself. They have also not offered any income out of the work executed by its constituents, nor did they claim any deductions under s. 80 -IA(4). Therefore, in all practical purposes, the contract was awarded to the constituents of the joint venturers through joint venture and the work was executed by them. As per provisions of s. 80-IA(4), the benefit of deduction under this section is to be given only to the enterprise who carried on the classified business. Therefore, in the light of this legal proposition, the assessee is entitled for the deductions under s. 80 - IA(4) on the profit earned from the execution of the work awarded to JV and consortium.\" Respectfully following the above decision, we dismiss the ground raised by the revenue in this regard.” 12. A similar view has been taken by ITAT, Lucknow Bench in the case of PMC Constructions Co. P. Ltd Vs. DCIT (supra), wherein it has been held that the appellant is eligible for deduction under Section 80IA(4) in respect of the profits derived from the projects awarded to JV / Consortium but executed by the appellant. The decision of the ITAT Lucknow Bench has been upheld by the Hon’ble Allahabad High Court. The sum and substance of the ratios laid down by the various benches of the Tribunal is that when the appellant has satisfied all the conditions prescribed under Section 80IA(4) of the Act, but merely for the reason that the agreement is entered into by JV / Consortium, the deduction under Section 80IA(4) cannot be denied. 13. Coming back to case laws relied upon by the ld.DR for the Revenue. The ld.DR relied upon the decision of ITAT, Hyderabad Bench in the case of DCIT Vs. HES Infra Pvt. Ltd (supra), We have gone through the decision of ITAT, Hyderabad Bench in the above case, and we find that, the Tribunal has gone on sole premise of interpretation of statutory provisions in light of the decision of Hon'ble Supreme Court in the case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company (supra) and held that in case of a person claiming deduction under the 64 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 provisions of Section 80IA(4), the onus is on the assessee to prove that the assessee has fulfilled all the parameters laid down by the statute for claiming deduction. Since the appellant has not entered into agreement with these Government / statutory authorities, there is a violation as laid down by the statute and the assessee is not entitled to claim deduction. With due respect, we are unable to follow the decision relied upon by the ld.DR for the simple reason that, in the above case, the Tribunal has not discussed whether the appellant is otherwise eligible for deduction under Section 80IA(4) of the Act or not. Secondly, while deciding the issue, the Tribunal has not considered the decision of co-ordinate bench in appellant's own case for earlier years and other decisions rendered by the co- ordinate bench of the Tribunal. Further, the Hon'ble Supreme Court, in a subsequent decision in the case of Government of Kerala and another Vs. Mother Superior Adoration Convent in Civil Appeal No.202 of 2012, after considering its earlier decision in case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company (supra) held that the 5-Judge Bench did not refer to line of authority which made a distinction between exemption provisions generally and exemption provisions which have a beneficial purpose. The Court further held that they cannot agree with Shri Gupta's contention that sub-silentio the line of judgments qua beneficial exemptions has been done away with by this 5- Judge Bench. It is well settled that a decision is only an authority for what it decides and not what it matters logically follow from it. This being the case, it is obvious that the beneficial purpose of exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of those cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand should be eschewed. Going by the subsequent decision of the Hon’ble Supreme Court in the above case, it is undisputedly clear that exemption provisions should be interpreted liberally in order to achieve the objectives of the legislature and going by the above ratio, in our considered view, there is no dispute with regard to the fact in the present case, the appellant is engaged in the business of developing infrastructure project like irrigation project, water supply system, hydropower plants and roads and railway lines and the statute provides for specific exemption under section 80IA(4) of the Act in respect of infrastructure projects, in our considered view, going by the liberal interpretation of the statute, the assessee must be given the benefit of deduction, having been satisfied all the conditions, including the condition of entering into an agreement with the State Government or Central Government or with any local authority, as a constituent partner of the JV/Consortium, more particularly, except entering into agreement, all other activities were carried out by the assessee. Further, the earlier order of ITAT in assessee’s own case was dt.15.02.2019 and order of the Hon'ble Apex Court in Commissioner of Customs 65 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 (Import), Mumbai Vs. M/s. Dilip Kumar and Company (supra) is dated 31.07.2018. The Co-ordinate Bench of the ITAT had also taken note of the Judgment of the Hon'ble Apex Court in Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company (supra) while adjudicating the issue of deduction u/s 80IA(4) of the Act. Therefore, in our considered view, the arguments of the learned counsel for the revenue in light of the order of ITAT in the case of DCIT Vs. HES Infra (P) Ltd., that the earlier order of the Tribunal in assessee’s own case, has not considered the Hon'ble Apex Court’s decision in the case of Commissioner of Customs (Import), Mumbai Vs. M/s. Dilip Kumar and Company (supra), is not correct. Therefore, we prefer to follow the decision of ITAT, Hyderabad Bench in assessee’s own case, rather than the decision relied upon by the ld. D.R. in the case of DCIT Vs. HES Infra Pvt. Ltd (supra). 14. In this view of the matter and considering the facts and circumstances of the case, and also by following the case laws discussed herein above, we are of the considered view that the assessee is eligible for deduction under Section 80IA(4) of the Act towards profits derived from infrastructure project awarded to JV / Consortium, but executed by the appellant. The ld.CIT(A) after considering relevant facts, has rightly allowed the deduction under Section 80IA(4) of the Act. Thus, we are inclined to uphold the findings of ld.CIT(A) and reject the grounds taken by the Revenue.” 8.6. In respect of A.Ys. 2013-2014, 2014-2015, 2015- 2016 and 2016-2017 the assessee claimed deduction u/sec.80IA(4) of the Act in respect of development of infrastructure projects, where the assessee has entered into agreement directly with Central/State Governments Local Authority or Statutory Body etc., and also where the assessee has entered into agreement with Central Government/State Governments, Local Authority or Statutory Body etc., as a constituent of JV Consortium. In 66 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 light of the discussions made in the preceding paragraphs, we are of the considered view that the learned CIT(A) has erred in sustaining the addition made by the Assessing Officer. Thus, we reverse the findings of the learned CIT(A) on this issue and direct the Assessing Officer to delete the additions made towards disallowance of deduction claimed by the assessee u/sec.80IA(4) of the Act for A.Ys. 2013- 2014, 2014-2015, 2015-2016 and 2016-2017. 9. In the result appeals filed by the Revenue ITA.Nos.1721, 1722, 1723/Hyd/2017 and ITA.No.1416/ Hyd./2019 for assessment years 2013-14, 2014-15, 2015- 2016 and 2016-17 are dismissed. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 26.02.2025. Sd/- Sd/- [K. NARASIMHA CHARY] [MANJUNATHA G] JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated 26th February, 2025 VBP 67 ITA.Nos.1721, 1722 & 1723/Hyd./2017 And ITA.No.1416/Hyd./2019 Copy to 1. The appellant 2. The respondent 3. The CIT(A)-12, Hyderabad 4. The CIT, Hyderabad concerned 5. The DR ITAT ‘A” Bench, Hyderabad 6. Guard File //By Order// //True Copy// Sr. Private Secretary : ITAT : Hyderabad Benches, Hyderabad. "