ACIT CENTRAL CIRCLE 2 (2), CHENNAI V. R P DHARMALINGAM, CHENNAI

ITA 1101/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3975 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 02-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 153A; 6; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.1100, 1101, 1102 & 1103/CHNY/2018 ( )( / ASSESSMENT YEARS : 2009-10, 2011-12, 2013-14 & 201 4-15 THE DEPUTY COMMISSIONER OF INCOME TAX, THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), CHENNAI - 600 034. V. SHRI R.P. DARRMALINGAM, NO.1379, GOLDEN VILLA, 1 ST BLOCK, 6 TH STREET, 18 TH MAIN ROAD, VALLALAR KUDIYERUPPU, ANNA NAGAR (W), CHENNAI - 600 040. PAN : AEAPD 7363 R (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SMT. RUBY GEORGE, CIT -.+, / 0 / RESPONDENT BY : SHRI K.M. MOHANDASS, CA 1 / 2% / DATE OF HEARING : 12.09.2018 3') / 2% / DATE OF PRONOUNCEMENT : 05.10.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE FOUR APPEALS OF THE REVENUE ARE DIRECTED AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-18, CHENNAI, DATED 29.12.2017 AND PERTAINING TO ASSESSM ENT YEARS 2009-10, 2011-12, 2013-14 AND 2014-15. SINCE COMMO N ISSUES 2 I.T.A. NOS.1100 TO 1103/CHNY/18 ARISE FOR CONSIDERATION IN THESE APPEALS, WE HEARD ALL THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON O RDER. 2. LETS FIRST TAKE REVENUES APPEALS FOR ASSESSMEN T YEARS 2013-14 AND 2014-15. 3. ADMITTEDLY, IN BOTH THESE APPEALS, THE TAX EFFEC T INVOLVED IS LESS THAN 20 LAKHS. THEREFORE, IN VIEW OF THE LATEST CIRCULA R ISSUED BY THE CBDT IN CIRCULAR NO.3/2018 DATED 11.07.2018 FIXING MONETARY LIMIT FOR FILING THE APPEALS BY THE REVENU E BEFORE THE TRIBUNAL AT 20 LAKHS, THESE APPEALS ARE NOT MAINTAINABLE. ACCORDINGLY, THE APPEALS OF THE REVENUE FOR ASSESSM ENT YEARS 2013-14 AND 2014-15 IN I.T.A. NOS.1102 & 1103/CHNY/ 2018 ARE DISMISSED. 4. NOW COMING TO ASSESSMENT YEARS 2009-10 AND 2011- 12 IN I.T.A. NOS.1100 & 1101/CHNY/2018. 5. SMT. RUBY GEORGE, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE CIT(APPEALS) WITHOUT GOING INTO THE MERIT OF THE APPEALS, ALLOWED THE CLAIM OF THE ASSESSEE BY PLACI NG RELIANCE ON THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN A LL CARGO GLOBAL LOGISTICS LTD. V. DCIT (2012) 137 ITD 287. THE LD. D.R. SUBMITTED 3 I.T.A. NOS.1100 TO 1103/CHNY/18 THAT EVEN THOUGH NO MATERIAL WAS FOUND DURING THE C OURSE OF SEARCH OPERATION, WHEN THERE WAS A SEARCH, THE ASSESSING O FFICER WAS EXPECTED TO COMPLETE THE ASSESSMENT UNDER SECTION 1 53A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE LD. D.R. PLACED HER RELIANCE ON THE JUDGMENT OF KERALA HIGH COURT IN CI T V. ST. FRANCIS CLAY DCOR TILES (2016) 70 TAXMANN.COM 234 AND ALSO ON THE JUDGMENT OF KARNATAKA HIGH COURT IN CANARA HOUSING DEVELOPMENT CO. V. DCIT (2014) 49 TAXMANN.COM 98. THEREFORE, A CCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT JUSTIFIED IN ALLOWING THE CLAIM OF THE ASSESSEE ON THE GROUND THAT NO MATERIAL WAS FOU ND DURING THE COURSE OF SEARCH OPERATION. ACCORDING TO THE LD. D .R., EVEN THOUGH THERE WAS NO SEARCH MATERIAL, ADMITTEDLY, THERE WAS SEARCH OPERATION UNDER SECTION 132 OF THE ACT, THEREFORE, THE ASSESSING OFFICER IS EXPECTED TO COMPLETE THE ASSESSMENT UNDE R SECTION 153A OF THE ACT. ON A QUERY FROM THE BENCH, THE LD. D.R . SUBMITTED THAT THE ASSESSEE FILED RETURN OF INCOME IN THE REGULAR COURSE BEFORE THE DATE OF SEARCH, I.E. ON 20.11.2009, AND THE SEARCH WAS ADMITTEDLY ON 03.09.2013 AND THE TIME LIMIT FOR ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT HAD EXPIRED. 4 I.T.A. NOS.1100 TO 1103/CHNY/18 6. WE HEARD SHRI K.M. MOHANDASS, THE LD. REPRESENTA TIVE FOR THE ASSESSEE, ALSO. THE LD. REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGMENT OF APEX COURT IN PCIT V. MEETA GUTGUTI A (2018) 96 TAXMANN.COM 468 AND SUBMITTED THAT THE ASSESSMENT W AS COMPLETED ON THE BASIS OF THE RETURN FILED BY THE A SSESSEE BEFORE THE DATE OF SEARCH. THEREFORE, ACCORDING TO THE LD . REPRESENTATIVE, THE CONCLUDED ASSESSMENT OF EARLIER YEARS CANNOT BE REOPENED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH OPERATION. THEREFORE, ACCORDING TO THE LD. REPRESENTATIVE, THE CIT(APPEALS) HAS RIGHTLY ALLOWED THE CLAIM OF T HE ASSESSEE. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, FOR THE ASSESSMENT YEARS 2009-10 AND 2011-12 UNDER CONS IDERATION, THE ASSESSEE FILED THE RETURN OF INCOME ON 20.11.20 09 AND 05.11.2011 AND THE RETURN WAS PROCESSED UNDER SECTI ON 143(1) OF THE ACT AND NO ASSESSMENT ORDER WAS PASSED UNDER SE CTION 143(3) OF THE ACT. IN THE MEANTIME, THERE WAS SEARCH UNDE R SECTION 132 OF THE ACT ON 03.09.2013. ON THE DATE OF SEARCH, THE TIME LIMIT FOR ISSUING NOTICE UNDER SECTION 143(2) OF THE ACT HAD EXPIRED. THEREFORE, IT IS OBVIOUS THAT THE RETURN FILED BY T HE ASSESSEE BEFORE 5 I.T.A. NOS.1100 TO 1103/CHNY/18 THE DATE OF SEARCH WAS TERMINATED BY OPERATION OF L AW. IN OTHER WORDS, NO ASSESSMENT PROCEEDING WAS PENDING ON 03.0 9.2013 BEING THE DATE OF SEARCH. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSMENT PROCEED ING IS NOT PENDING ON THE DATE OF SEARCH, THE ASSESSING OFFICE R CAN ASSESS OR RE-ASSESS THE INCOME ONLY ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN THIS CASE, ADMITTED LY, THERE WAS NO MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATIO N, THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE JUDGMENT OF APEX COURT IN MEETA GUTGUTIA (SUPRA), THE ASSESSING OFFICER CANNOT INITIATE PROCEEDING UNDER SECTION 153A OF THE ACT. 8. IN VIEW OF THE JUDGMENT OF APEX COURT IN MEETA G UTGUTIA (SUPRA), THE JUDGMENT OF KERALA HIGH COURT IN ST. F RANCIS CLAY DCOR TILES (SUPRA) AND THE JUDGMENT OF KARNATAKA HIGH CO URT IN CANARA HOUSING DEVELOPMENT CO. (SUPRA) REFERRED BY THE LD. D.R. ARE NOT APPLICABLE TO THE FACTS OF THE CASE. IN VIEW OF TH IS, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITY FOR ASSESSMENT YEARS 2009-10 AND 2011-12 AND ACCORD INGLY THE SAME ARE CONFIRMED. 6 I.T.A. NOS.1100 TO 1103/CHNY/18 9. IN THE RESULT, ALL THE FOUR APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH OCTOBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 5 TH OCTOBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-18, CHENNAI-34 4. PRINCIPAL CIT, CENTRAL-2, CHENNAI. 5. 7: -2 /DR 6. ;( < /GF.