DCIT CEN CIR 2(3), MUMBAI V. EMPIRE MALL P.LTD, MUMBAI

ITA 1544/MUM/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2633 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 13-03-2015
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Search and seizure
• Section: 143(3)

Judgement Text

, . . , IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER ./ ITA NO. 1544 / MUM/20 1 5 ( / ASSESSMENT YEAR : 20 10 - 20 11 DCIT, C - 2(3), MU MBAI - 20 VS. M/S EMPIRE MALL PVT. LTD., 105/106, PROVOUGE HOUSE, OFF. NEW LINK ROAD, ANDHERI (W), MUMBAI - 400053 ./ ./ PAN/GIR NO. : A A BCE 5637 R ( / APPELLANT ) .. ( / RESPONDENT ) AND CROSS OBJECTION NO. 100 / MUM/20 15 ( / ASSESSMENT YEAR :2010 - 2011 M/S EMPIRE MALL PVT. LTD., 105/106, PROVOUGE HOUSE, OFF. NEW LINK ROAD, ANDHERI (W), MUMBAI - 400053 VS. DCIT, C - 2(3), MUMBAI - 20 ./ ./ PAN/GIR NO. : A ABCE 5637 R ( / APPELLANT ) .. ( / RESPONDENT ) /REVENUE BY : SHRI NEIL PHILIP /ASSESSEE BY : SHRI RUSHABH MEHTA / DATE OF HEARING : 1 1 / 0 7 /201 6 / DATE OF PRONOUNCEMENT 14 / 07 /201 6 / O R D E R THIS IS AN APPEAL FILED B Y THE REVENUE AGAINST THE ORDER OF CIT(A) - MUMBAI, FOR THE ASSESSMENT YEAR 20 10 - 2011 , IN THE MATTER OF ORDER PASSED U/S.153C R.W.S.143(3) OF THE I.T.ACT . THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. ITA NO. 1544 / 1 5 & CO NO.100/15 2 2. IN THIS APPEAL THE REVEN UE IS AGGRIEVED FOR DELETING THE DISALLOWANCE MADE ON ACCOUNT OF ADMINISTRATIVE AND OTHER OVERHEADS. IN THE CROSS OBJECTION THE ASSESSEE HAD TAKEN A GROUND CHALLENGING THE ASSESSMENT FRAMED U/S.143(3) R.W.S.153C OF I.T.ACT. 3. I HAVE CONSIDERED RIVAL CONTE NTIONS AND FOUND FROM THE RECORD THAT ADDITION MADE ON ACCOUNT OF ADMINISTRATIVE EXPENSES WAS DELETED BY CIT(A) AFTER RECORDING A DETAILED FINDING AT PARA 5.6 TO 5.11. 4. IT WAS CONTENDED BY LD. AR THAT EVEN THOUGH THERE IS MERIT IN DELETION OF ADDITION BY CIT(A) , THE ADDITION MADE BY AO U/S.153C WAS NOT JUSTIFIED, INSOFAR AS PERIOD FOR ISSUE OF NOTICE U/S.143(2) HAD ALREADY BEEN EXPIRED, THE ASSESSMENT WAS NOT PENDING AND SINCE NO INCRIMINATING MATERIAL WAS NARRATED BY AO AS HAVING BEEN FOUND DURING THE CO URSE OF SEARCH. THE ISSUE IS ALSO SQUARELY COVERED BY THE DECISION OF MUMBAI BENCHES OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y.2007 - 08 . 5. FROM THE RECORD I FOUND THAT ISSUE HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES FAVOUR FOR THE ASSESSMENT YEAR 2007 - 08 & 2009 - 10 VIDE ORDER DATED 12 - 10 - 2015. I HAD CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL WHEREIN THE TRIBUNAL HAVE HELD THAT ASSESSMENT FRAMED U/S.153C HAVE NO LEGS TO STAND. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER : - 3. I HAVE C AREFULLY CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSMENTS IN BOTH THE CASES HAVE ATTAINED FINALITY BY OPERATION OF LAW IN AS MUCH AS THE ASSESSEE FILED RETURNS OF INCOME BEFORE THE SEARCH AND SEIZURE ACTION TOOK PLACE AND EVEN THE PROCEEDINGS UNDER SECTION 143(1) OF THE ACT HAVE ATTAINED FINALITY BEFORE THE DATE OF RECEIPT OF THE FILES BY THE AO CONCERNED. UNDER IDENTICAL CIRCUMSTANCES THE ITAT ITA NO. 1544 / 1 5 & CO NO.100/15 3 MUMBAI 'SMC ' BENCH IN THE CASE OF HAGWOOD COMMERCIAL DEVELOPERS PVT. LTD OBSERVED THAT THE NOTICE ISSUED UNDER SECTION 153C WITHOUT INCRIMINATING MATERIAL IS NOT SUSTAINABLE IN LAW. THE ITAT COCHIN (THIRD MEMBER) A LSO HAD AN OCCASION TO CONSIDER IDENTICAL ISSUE WHEREIN IT WAS OBSERVED THAT THE AMENDMENTS MADE TO SECTION 153C ARE CLARIFICATORY AND RETROSPECTIVE IN OPERATION AND UNLESS THERE IS INCRIMINATING MATERIA L FOR EACH ASSESSMENT YEAR THE AO CANNOT INITIATE PROCEEDINGS UNDER SECTION 153C PARTICULARLY WHEN THE ASSESSMENT UNDER SECTION 14 3 (1) IS DEEMED TO BE COMPLETED AND M/S. EMPIRE MALL PVT. LTD. ATTAINED FINALITY BEFORE SATISFACTION WAS RECORDED BY THE AO. I HAVE ALSO NOTICED THAT THE DECISIONS RELIED UPON BY THE LEARNED D.R. ARE DISTINGUISHABLE ON FACTS IN AS MUCH AS THE HON'BLE DELHI HIGH COURT AND HON'B LE KERALA HIGH COURT HAVE NOT DIRECTLY DEALT WITH THE ISSUE OF THE POWERS OF AO WHO HAS TO ISSUE NOTICE UNDER SECTION 153C OF THE ACT BUT THEY ARE CONCERNED WITH TRANSFER OF FILES FROM THE OFFICER WHO HA S CONDUCTED THE SEARCH TO THE AO WHO HAS TO ISSUE NOTICE TO THIRD PARTY. IN OTHER WORDS, THE POWER OF THE AO, WHO HAS TO DEAL WITH THE THIRD PARTY UNDER SECTION 153C , WAS NOT THE SUBJECT MATTER OF CONSID ERATION IN THE AFORECITED CASES, MORE PARTICULARLY AFTER THE AMENDMENT TO SECTION 153C OF THE ACT WHICH WAS CONSIDERED BY THE ITAT (THIRD MEMBER) KOLKATA AS WELL COCHIN. HAVING REGARD TO THE CIRCUMSTANCE S OF THE CASE I AM OF THE FIRM VIEW THAT THE ORDER PASSED UNDER SECTION 143(3) R.W.S. 153C IS WITHOUT JURISDICTION AND INVALID IN LAW IN AS MUCH AS THE LEARNED CIT(A) ADMITTED THAT NO INCRIMINATING MATER IAL WAS FOUND DURING THE COURSE OF SEARCH CONCERNING THE ASSESSMENT YEARS UNDER CONSIDERATION IN RESPECT OF THE ASSESSEE HEREIN. SINCE THE NOTICE ISSUED UNDER SECTION 153C IS HELD TO BE NOT VALID, THE AS SESSMENTS MADE THEREON HAVE NO LEGS TO STAND AND THEREFORE IT IS NOT NECESSARY TO DEAL WITH THE MERITS OF THE ADDITION/ DISALLOWANCE. 14. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE TREATED AS DISMISSED ON THE GROUND THAT IT IS OF ACADEMIC IMPORTA NCE WHEREAS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. 6. AS THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, WHEREIN ADDITION WAS MADE WITH REFERENCE TO THE SAME SEARCH, IN WHICH NO INCRIMINATING DOCUMENT PERTAININ G TO THE YEAR UNDER CONSIDERATION IS FOUND, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, I ALLOW THE CROSS OBJECTION FILED BY THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS TREATED AS DISMISSED, WHEREAS CROSS OBJECTIO N ASSESSEE IS ALLOWED. ITA NO. 1544 / 1 5 & CO NO.100/15 4 O RDER PRONOUNCED IN THE OPEN COURT ON THIS 14 /07 / 201 6 . SD/ - ( R.C.SHARMA ) / ACCOUNTANT MEMBER MUMBAI ; DATED 14 /07 /201 6 . . /PKM , . / PS / COPY OF THE ORDER FOR WARDED TO : / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//