DY. CIT, CENTRAL CIRCLE-2(2), Nagpur V. M/S. SIDHESHWAR COAL CORPORATION, INDORE (M.P.)

ITA 122/NAG/2017

AI Insights

The case involves an appeal by the Revenue against the order of the CIT(A) which had deleted the additions made by the Assessing Officer based on the impounded material during search and seizure operations. The Tribunal found that the CIT(A) erred in applying the ratio of decisions relevant to completed assessments to a case where the assessment was still open (abated assessment) at the time of the search and seizure. The Tribunal highlighted that in cases of abated assessments, any incriminating material found can be considered for making assessments.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136751 (ITAT-NAGPUR)
• Duration Of Justice: 6 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2023
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 29-03-2017
• Other Referred Cases: CIT vs. Kabul Chawla, CIT vs. Continental Warehousing Corporation (Mahava Sheva) Ltd., All Cargo Logistic Ltd. vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAILSH KANOJIYA
• Keywords: Search and seizure
• Section: 132; 143(3); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR – VIRTUAL COURT BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.122/NAG/2017 िनधाᭅरण वषᭅ / Assessment Year : 2010-11 DCIT, Central Circle-2(2), Nagpur. Vs. Sidheshwar Coal Corporation, Dewas Naka, Lasudiya Mori, Near Agrawal Tol Kunta, Indore- 452010. PAN : ABGFS4604R Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the Revenue directed against the order of ld. Commissioner of Income Tax (Appeals)- 3, Nagpur [‘the CIT(A)’] dated 30.01.2017 for the assessment year 2010-11. 2. Briefly, the facts of the case are that the appellant is a partnership firm engaged in the business of trading in coal. The Return of Income for the assessment year 2010-11 was filed on 29.09.2010 declaring total income of Rs.41,340/-. Subsequently, the search and seizure operations u/s 132 of the Income Tax Act, 1961 (‘the Act’) were conducted in the residential and business Revenue by : Shri Kailsh Kanojiya Assessee by : None Date of hearing : 16.10.2023 Date of pronouncement : 18.10.2023 ITA No.122/NAG/2017 2 premises of the assessee on 16.03.2011. It is stated that during the course of search and seizure operations, certain incriminating material was found and impounded in the business premises of the assessee. Based on such impounded material, several additions were made. Accordingly, the assessment was completed by the Assistant Commissioner of Income Tax, Central Circle-1(2), Nagpur (‘the Assessing Officer’) vide order dated 18.03.2013 passed u/s 143(3) r.w.s. 153C of the Act at a total income of Rs.4,97,78,990/-. 3. Being aggrieved by the above disallowances, an appeal was filed before the ld. CIT(A), who vide impugned order deleted the additions made by the Assessing Officer by holding that in the absence of any incriminating material found as result of search and seizure operations, no additions can be made placing reliance on plethora of decisions. 4. Being aggrieved, the Revenue is in appeal before us in the present appeal. 5. It is contended before us that the ld. CIT(A) ought not to have held that in the absence of any incriminating material found as result of search and seizure operations, no addition can be made without appreciating that in the case of abated assessment, the existence of incriminating material is not sine qua non. ITA No.122/NAG/2017 3 6. When the appeal was called on, none appeared on behalf of the assessee despite due service of notice of hearing. Therefore, we proceed to dispose of this appeal after hearing the ld. CIT-DR. 7. In the first instance, we find that the return of income for the assessment year 2010-11 was filed on 29.09.2010. The search and seizure operations u/s 132 of the Act was conducted in the case of the assessee on 16.03.2011, which means that the assessment proceedings for assessment year 2010-11 were open. It is not the case of completed assessment. There is abatement of regular assessment proceedings. Any material which was unearthed as result of search and seizure proceedings or otherwise, which had come into the possession of the Assessing Officer can be used for the purpose of making of assessment. The ratio of the decision in the case of CIT vs. Kabul Chawla, 93 CCH 0210, CIT vs. Continental Warehousing Corporation (Mahava Sheva) Ltd., 58 taxmann.com 78 and All Cargo Logistic Ltd. vs. DCIT, 23 taxmann.com 103 has no application in case of completed assessment even in the absence of any incriminating material, additions can be made. 8. As stated by us supra in the present case, it is case of abated assessment, the regular assessment proceedings were open, therefore, the ratio of the decisions cited supra has no application to ITA No.122/NAG/2017 4 the facts of the present case. The ld. CIT(A) had fell in serious error in applying the ratio of the decisions cited supra. Therefore, we reverse the findings of the ld. CIT(A) and remit the matter back to the file of the ld. CIT(A) for de novo adjudication of the issue in appeal on merits after affording a reasonable opportunity of being heard to the assessee. Thus, the grounds of appeal filed by the Revenue stands partly allowed for statistical purposes. 9. In the result, the appeal filed by the Revenue stands partly allowed for statistical purposes. Order pronounced on this 18 th day of October, 2023. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 18 th October, 2023. Sujeet आदेश कᳱ ᮧितिलिप अᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A)-3, Nagpur. 4. The CIT (Central), Nagpur. 5. िवभागीय ᮧितिनिध, आयकर अपीलीय अिधकरण, नागपुर / DR, ITAT, Nagpur. 6. गाडᭅ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.