DY CIT, CC-7(1), MUMBAI V. DR. D.Y. PATIL SPORTS ACADEMY , MUMBAI

ITA 155/MUM/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7620 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-11-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 17-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Charitable institution; Question of law; Reassessment proceedings
• Section: 68; 132; 28; 11; 139; 143(3); 80HHC; 153A; 12A; 143(1); 264; 13; 119; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “D”, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA Nos.155, 156, 157 & 158/M/2021 Assessment Years: 2011-12, 2012-13, 2013-14 & 2014-15 DCIT, CC-7(1), Room No.676B, 6 th Floor, Aayakar Bhavan, M.K. Road, Mumbai - 400020 Vs. M/s. Dr. D.Y. Patil Sports Academy, Patil Building, Opp. MIG Colony, Adarsh Nagar, Worli, Mumbai – 400 025 PAN: AAATD3202G (Appellant) (Respondent) Present for: Assessee by : Shri Satyaprakash Singh, A.R. Revenue by : Shri Ajay Kumar Sharma, D.R. Date of Hearing : 24.11.2021 Date of Pronouncement : 25.11.2021 O R D E R Per Rajesh Kumar, Accountant Member: The above titled appeals have been preferred by the Revenue against the even order dated 29.12.2020 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment years 2011-12, 2012-13, 2013-14 & 2014-15 respectively. ITA No.155/M/2021 (A.Y. 2011-12) 2. The only issue raised in both the grounds of appeal is against the order of Ld. CIT(A) allowing the carry forward of the deficit being excess of expenditure over income to the subsequent years by holding that the same is eligible for set off against the income of subsequent years. ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 2 3. The facts in brief are that the assessee filed return of income on 06.03.2012 declaring total income at Nil which was processed under section 143(1) of the Act. The case of the assessee was selected under scrutiny and statutory notices were duly issued and served upon the assessee and assessment under section 143(3) was framed vide order dated 02.05.2013. Thereafter, a search operation under section 132(1) of the Act was conducted on M/s. D.Y. Patil Group (Shri Vijay D. Patil, Smt. Shivani Patil, Pd. Dr. D.Y. Patil University) on 27.07.2016. Thereafter, a satisfaction note under section 153C of the Act was received with relevant evidences and panchnama from AO of the searched persons on 12.09.2018 and accordingly after recording satisfaction by the AO of the assessee a notice under section 153C of the Act was issued and served upon the assessee trust for A.Y. 2011-12 to 2014-15 on 14.09.2018. The assessee is a trust registered under section 12A with DIT(E) dated 28.09.01. The assessee trust is incorporated with main object of promoting, motivating, developing sports, imparting sports knowledge and fitness awareness by establishing coaching/training classes, participating and conducting tournaments in India and abroad. The assessee complied with the notice issued under section 153C by filing return of income on 03.10.2018. Thereafter, statutory notices were issued and duly served upon the assessee. The assessee carried forward the loss from earlier years and claimed the same against the current year surplus, however, according to the AO carry forward of losses and setting off against the subsequent years can not be allowed and accordingly the assessment was framed ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 3 vide order dated 28.12.2018 passed under section 153C read with section 143(3) of the Act. 4. The aggrieved assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) allowed the appeal of the assessee by observing and holding as under: “7.3.1. I have considered the facts of the case, the findings of the A.O. as incorporated in the assessment order, and the submissions of the assessee in this regard. In assessment order, the A.O. has not allowed set off in respect of losses brought forward from previous years and also not allowed the losses of the current year to be carried forward. It Is observed that while disallowing such claim, Id. AO has not placed reliance on any incriminating documents found during the course of search which could be said to be adversely affecting the case of the assessee as to this issue. 7.3.2. It was submitted in the online submissions filed that the deficit of impugned year being the excess of expenditure over receipts is eligible for carry forward to subsequent years. It was also submitted that the deficit incurred during previous year is to be regarded as application of funds in subsequent years and thus the appellart is eligible to set-off the deficit of previous year with the income of subsequent years. in this context, the assessee relied on several judicial decisions of Hon'ble Apex Court, Jurisdictional High Court and other High Courts to support the case of the appellant. 7.3.3. I find that the Hon'ble Jurisdictional High Court has considered this issue in the case of CIT vs. institute of Banking Personnel Selection reported in 264 ITR 110, wherein following substantial question of law was admitted by Hon'ble High Court : “ 3. Whether, on the facts and in the circumstances of the case, the tribunal was justified in law forward the deficit of earlier year and set it off against the surplus of subsequent years when the same was not allowable in the case of assessee trust in whose case income exempted under section 11 of the income Tax Act, 1961." In this case, the Hon'ble Bombay High Court decided the aforesaid substantial question of law in favour of the assessee by holding as under: “ 5. Now coming to question No. 3, the point which arises for consideration is : whether excess of expenditure in the earlier years can be adjusted against the income of the subsequent year and whether such adjustment should be treated as application of income in subsequent year for charitable purposes? It was argued on behalf of the Department that expenditure incurred in the earlier years cannot be met out of the income of the subsequent year and that utilization of such income for meeting the expenditure of earlier years would not amount to application of income for charitable or religious purposes. In the present case, the Assessing Officer did not allow carry forward of the excess of expenditure to be set off against ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 4 the surplus of the subsequent years on the ground that in the case of a Charitable Trust, their income was assessable under selfcontained code mentioned in section 11 to section 13 of the Income-tax Act and that the income of the Charitable Trust was not assessable under the head “profits and gains of business” under section 28 in which the provision for carry forward of losses was relevant. That, in the case of a Charitable Trust, there was no provision for carry forward of the excess of expenditure of earlier years to be adjusted against income of subsequent years. We do not find any merit in this argument of the Department Income derived from the trust property has also got to be computed on commercial principles and if commercial principles are applied then adjustment of expenses incurred by the Trust for charitable and religious purposes in the earlier years against the income earned by the Trust in the subsequent year will have to be regarded as application of income of the Trust for charitable and religious purposes in the subsequent year in which adjustment has been made having regard to the benevolent provisions contained in section 11 of the Act and that such adjustment will have to be excluded from the income of the Trust under section 11 (1)(a) of the Act. Our view is also supported by the Judgment of the Gujarat High Court in the case of CIT v. Shr Plot Swetamber Murti Pu'ak Jain Mandal [1995] 211 ITR 293 . Accordingly, we answer question No. 3 in the affirmative i.e., in favour of the assessee and against the Department." ( emphasis supplied) Further, in the case of DIT vs. Mumbai Education Trust reported in 244 Taxman 163, Hon'ble Jurisdictional High Court of Bombay had decided that : “Impugned order of the Tribunal has dismissed the Revenue's appeal on both the issues namely — allowability of depreciation on capital assets acquired for the purposes of carrying out charitable activities and set off of deficit of earlier years against income of the current year. The impugned order in fact followed decision of this Court in CIT v/s. Institute of Banking Personnel Services reported in 264 ITR 110 while holding in favour of the Respondent assessee.” In the case of CIT vs. Subros Educational Society reported in 166 DTR 257, Hon'ble Supreme Court has observed that: “(a). Whether any excess expenditure incurred by the trust/charitable institution in earlier assessment year could be allowed to be set off against income of subsequent years by Invoking Section 11 of the Income Tax Act, 1961?" .... To this extent, Mr. K. Radhakrishnan, learned senior counsel appearing on behalf of the applicant/appellant is correct. Therefore, we have heard him on the aforesaid question of law ae well But did not find any merit therein." In the case of CIT vs. Shri Plot Swetamber Murti Pujak Jain Mandal reported in 211 ITR 293, Hon'ble High Court of Gujarat had decided that : ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 5 “There is nothing In the language of s. 11(1}(a) to indicate that the expenditure incurred in the earlier year cannot be met out of the income of the subsequent year and utilization of such income for meeting the expenditure of the earlier year, would not amount to such income being applied for charitable or religious purposes. That apart income derived from trust property has to be determined on commercial principles and if commercial principles for determining the income are applied, it is but natural that the adjustment of the expenses incurred by the trust for charitable and religious purposes in the earlier year against income earned by the trust in the subsequent year will have to be regarded as application of income of the trust for charitable and religious purposes in the subsequent year in which such adjustment has been made having regard to the benevolent provisions contained in s. 11 and will have to be excluded from the income of the trust under s. 11(1)(a). The deficit arising out of excess of expenditure over Income during the previous year relevant to the assessment year should, therefore, be set off against the surplus of income over expenditure relating to subsequent year in computing the taxable income of the later assessment year." (emphasis supplied) In the case of CIT vs. Shri Gujrati Samaj (Regd) reported in 257 ITR 397, Hon'ble High Court of Madhya Pradesh had decided that : “In view of 8. 11(1)(a) it cannot be said that the expenditure incurred in the earlier year cannot be met out of the income of the subsequent year and utilization of such income for meeting the expenditure of the earlier year would not amount to such income being applied for charitable or religious purposes. Having regard to s. 11(1 )(a) when the income of the trust is used or put to use to meet the charitable or religious purposes it is applied for charitable purpose and the said application of the income for charitable or religious purposes takes place in the year in which the income is adjusted to meet the expenses incurred for charitable or religious purposes. Thus even if the expenses for charitable and religious purposes have been incurred in the earlier year and the said expenses are adjusted against the income of a subsequent year, the income of that year can be said to have been applied for charitable and religious purposes in the year in which expenses incurred for charitable and religious purposes had been adjusted. There are no words of limitation in s. 11(1)(a) explaining that the income should have been applied for charitable or religious purposes only in the year in which the income had arisen." In the case of CIT vs. Matriseva Trust reported in 242 ITR 20, Hon'ble High Court of Madras had decided that :- "4.With regard to the second question, the Tribunal has held that the trust is entitled to set off the amount of excess application of the last year against the deficiency of Rs. 82,516 of the present assessment year. ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 6 5. When similar questions came up before Rajasthan High Court and Gujarat High Court in the case of CIT vs. Maharana of Mewar Charitable Foundation (1987) 60 CTR (Raj) 40 : (1987) 164 ITR 439 (Raj) : TC 23R.1198 and CIT vs. Shri Plot Swetamber Murti Pujak Jain Mandal (1994) 119 CTR (Guj) 144 : (1995) 211 ITR (Guj) 293 : TC 23R.1228 respectively, both Rajasthan High Court and Gujarat High Court have answered the questions in favour of the assessee and against the Revenue. 6. Following the aforesaid decisions of Rajasthan and Gujarat High Courts, we answer the second question referred to us in favour of the assessee and against the Revenue." In the case of Gonvindu Naicker Estate vs. ACIT reported in 248 ITR 368, Hon'ble High Court of Madras had decided that :- "The expenditure, if incurred in an earlier year is adjusted against the income of a later year, it has to be held that the trust had incurred expenditure on religious and charitable purposes from the income of the subsequent year, even though the actual expenditure was in the earlier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other." In the case of OTC Exchange of India vs. ADIT reported in ITA No.7189, 7190 & 7191/ Mum/ 2016, Hon'ble ITAT, Mumbai had decided that; "Ground No. 7 of the grounds of appeal is regarding confirming the action of the Assessing Officer in not allowing the setoff of earlier years loss against current year's income. ............ Respectfully following the said decision, we hold that excess of expenditure in earlier years can be adjusted against income of subsequent years and such adjustment would be application of income for subsequent years and therefore we direct the Assessing Officer to allow the claim of the assessee for set off of excess expenditure of earlier years against current year's income following the above decision of the Hon'ble Jurisdictional High Court (supra)." 7.3.4. It is found that the other Judicial decisions relied upon by the assessee also supports the case of the appellant. In fact, it is evident that the Hon'ble Courts, including the Hon'ble Jurisdictional High court, and the Tribunal has consistently pronounced that in case of Charitable Trust excess expenditure over income is to be allowed to be carried forward for setting off against income of subsequent years. 7.3.5. Furthermore, it is found that the decision in the case of CIT vs. Institute of Banking Personnel Selection (supra) has subsequently been followed by the Hon'ble Bombay High Court in the case of Director of Income-tax-Exemption v. Society for Applied Microwave Electronic Engineering & Research [2019] 106 taxmann.com 203 (Bom.) and the SLP filed by the department in respect of order ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 7 in this case has been dismissed by the Hon'ble Apex Court in 106 taxmann.com 204 (SC). 7.3.6. Hence, respectfully following the judicial decisions cited supra, I hold that the assessee is eligible to set off losses brought forward from previous years and carry forward the deficit, being excess of expenditure over receipts, to subsequent years and the same is eligible to be set-off with the income of subsequent years. The AO is accordingly directed to allow the set off of brought forward of deficit in AY 2011- 12 and allow to carry forward the balance deficit in the succeeding years for setting off against income of such succeeding years.” 5. The Ld. A.R. vehemently submitted before us that the issue is squarely covered by the various decisions namely; Hon'ble Bombay High Court order in the case of CIT vs. Institute of Banking Personnel Selection (IBPS) [2003] 131 Taxman 386 (Bombay), Hon'ble Supreme Court order in the case of DIT vs. Society for Applied Microwave Electronic Engineering & Research [2019] 106 taxmann.com 204 (SC), Hon'ble Supreme Court order in the case of CIT(Exemption) vs. Subros Educational Society [2018] 96 taxmann.com 652 (SC), Hon'ble Mumbai ITAT order in the case of Income Tax Officer (Exemptions) vs. Anjuman I-Islams Tibba College & Hospital Public ITA No. 4002/Mum/2017 and Hon'ble Mumbai ITAT order in the case of Income Tax Officer (Exemptions) vs. Garware Charitable Trust ITA. No. 5345/Mum/2016 and the Ld. CIT(A) has passed this order after following some of these decisions and allowed the appeal of the assessee. The Ld. A.R. submitted that in view of the issue being covered by the above decisions, the appeal of the assessee may be allowed. 6. The Ld. D.R., on the other hand, relied on the grounds of appeal. 7. After hearing both the parties and perusing the material on record, we find that the issue of carry forward losses and setting ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 8 off against the subsequent years surplus is squarely covered by the decision as cited by the Ld. A.R. We have perused the order of Ld. CIT(A) carefully and found that the Ld. CIT(A) has passed a very reasoned order after following the decision of CIT vs. Institute of Banking Personnel Selection (IBPS) (supra) wherein it has been held by the Hon’ble High Court that the carry forward of deficit of earlier years and setting it off against the surplus of the subsequent years is allowable. We also note that the SLP filed by the department against this decision has been dismissed as reported in 106 taxmann.com 204. Similarly, in the case of CIT vs. Subros Educational Society (supra) the Hon’ble Supreme Court has held that the excess expenditure incurred by the charitable institution in the earlier years could be allowed to be set off against the subsequent years by invoking section 11. Considering the ratio laid down in the above decision, we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the Revenue. ITA No.156/M/2021 A.Y. 2012-13 8. The issue involved in this appeal is identical to the one as stated above in ITA No.155/M/2021 for A.Y. 2011-12. Therefore, our findings in ITA No.155/M/2021 for A.Y. 2011-12, mutatis mutandis, would apply to this appeal as well. Accordingly, this appeal of the Revenue is dismissed. ITA No.157/M/2021 A.Y. 2013-14 9. Ground Nos.1 & 2 involved in this appeal are identical to the one as stated above in ITA No.155/M/2021 for A.Y. 2011-12. Therefore, our findings in ITA No.155/M/2021 for A.Y. 2011-12, mutatis mutandis, would apply to ground Nos.1 & 2 of this ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 9 appeal as well. Accordingly, ground Nos.1 & 2 of the Revenue’s appeal are dismissed. 10. The issue raised in ground No.3 is against the deletion of addition by Ld. CIT(A) of Rs.20,00,000/- as made by the AO as undisclosed income on the ground that assessee has diverted funds to another sister entity which is not in accordance with the objectives and general accounting principle. 11. The facts in brief are that Shri Ajay G. Rai used the stadium of the assessee for film shooting purposes and was asked to make the payment to M/s. D.Y. Patil Hospital and Research Centre, Navi Mumbai. Accordingly, the AO issued show cause notice as to why this income has been diverted to another entity which was replied by the assessee that Shri Ajay G. Rai, proprietor of Jar Entertainment has given corpus donation of Rs.20,00,000/- to M/s. D.Y. Patil Hospital and Research Centre, Navi Mumbai. The assessee submitted that he has given a specific direction for utilization of donation of Rs.20,00,000/- towards corpus of M/s. D.Y. Patil Hospital and Research Centre, Navi Mumbai. Therefore, in view of the said separate direction in writing from the donor for utilization of donation, the same can not be treated as general donation. However, the AO rejected the contention of the assessee and added Rs.20,00,000/- to the income of the assessee. 12. The Ld. CIT(A) allowed the appeal of the assessee by holding that the assessment for A.Y. 2013-14 was already completed vide order dated 07.12.2015 passed under section 143(3) of the Act and thus on the date of search on D.Y. Patil ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 10 Group on 27.07.2016 the assessment was unabated. The Ld. CIT(A) observed that any addition in an unabated assessment can not be made in absence of incriminating material found during the search. The Ld. CIT(A) observed and held as under: “9.3.1. I have considered the submissions of the Appellant, the contentions of the AO in the assessment order and the other materials available on record on these Grounds of Appeal. 9.3.2. In the assessment order, the AO has relied on the statement of Shri Ajay Rai and concluded that Rs. 20.00 lakhs given by Shri Rai to another Trust of the group Pd. Dr. D Y Patil University, as donation was in fact usage charges for filming in the studio belonging to the assessee trust and the same was required to be taxed as income of the assessee trust. The AO, while making this addition has not referred to any incriminating material found during the course of search to form an opinion or belief that the said amount was taxable in the hands of the assessee. 9.3.3. The Appellant has contended that In the assessment order, the Assessing Officer has referred to statement of Mr. Ajay Rai while making addition of Rs. 20,00,0007- on account of donation received. It is submitted that these evidences do not reflect any notings of incriminating nature calling for the addition in the present case. In the assessment order, at page 8, the Assessing Officer has stated that in statement of Shri Ajay Rai, he has confirmed having made payment of Rs. 20 lakhs to another institution, namely, D. Y. Patil Hospital and research Centre, Navi Mumbai for using the sports stadium of the appellant for certain shootings carried out by him. Based on the said statement, the Assessing Officer concluded that the income so diverted to D. Y. Patil Hospital and research Centre, Navi Mumbai actually belong to the appellant and therefore should be taxed in the hands of the appellant. 9.3.4. The assesses further submitted in this regard that the statement of Mr. Ajay Rai was recorded on 17.08.2018, i.e. during the course of assessment proceedings carried out by the Assessing Officer in the present case. As explained in the foregoing Paras, it is settled position in law that in respect of the assessment proceedings which were concluded on 14.09.2018, no addition can be made unless supported by any evidence found as a result of search. In the present case, no evidence has been found as a result of search, which can prove that some income to the tune of Rs. 20 lakh was earned by the appellant but not offered to tax. This is evident from the assessment order and the finding of the Assessing Officer while making the addition of Rs. 20 lakhs. This therefore proves that the impugned addition of Rs. 20 lakh is not based on any incrementing material found as a result of search. 9.3.5. A perusal of the assessment order clearly reveals that the contention of the Appellant is true that the impugned addition was made solely on the basis of statement of Shri Rai recorded during the course of assessment proceedings. Hence, the evidence is not even a statement recorded during the course of search. In fact, there is no discussion in the assessment order about any specific ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 11 incriminating material, which have been found during the course of search operation so as to support a view that the said amount was paid as usage charges of the stadium of the assessee Trust. 9.3.6. In the present case at hand, I have noted that the assessment for the AY under reference was already completed u/s 143(3) on 07.12.2015. The date of search in the D.Y. Patil group is 27.07.2016, thereby making it an unabated assessment, as on the date of search. Accordingly, as on the date of search, the assessment year under consideration was unabated and not pending before the AO. Since, the proceedings for A.Y. 2013-14 had not abated and the assessment for the said assessment year already stood completed, the contention of the assessee is that the AO was empowered only to make additions based on the incriminating seized material found during the course of search operation. It is a material fact on record that the AO had failed to bring on record any incriminating material in the assessment order. 9.3.7. It is pertinent to note here that the Section 153A(1) of the Act starts with a non-obstante clause and disregards the normal provisions of the assessment prescribed under the Act in the case of a search operation carried out u/s 132 of the Act. By virtue of clause (a) of section 153A(1), the AO is required to issue notice calling for Returns of Income for the six assessment years prior to the date of search. The further consequences of a search carried out u/s 132 are mentioned in clause (b), whereby the A.O. is required to assess or reassess the total income of those six Assessment Years. As such, the AO has no option but to make an assessment in respect of all the six Assessment Years concerned as he has to bring the proceedings to a logical conclusion by making an assessment of the returns filed for all these Assessment Years. 9.3.7. Having said so, the next question, which arises is what are the issues which could be taken up for assessment u/s 153A of the Act, for the assessment years which abate. In such a scenario, the second proviso to Section 153A(1) specifies that any assessment or reassessment falling with the period of six Assessment Years pending on the date of initiation of search under section 132 or requisition of books under section 132A, as the case may be, shall abate. In this regard, the relevant proviso is reproduced below:- ........... ........... ........... 9.3.10. While considering this issue, the Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo Global Logistics Ltd vs DCIT (2012) 18 ITR 0106 (SB) has observed as under: "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 12 has to assess or reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to assess or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In other words pending proceedings will not be proceeded with thereafter. On this issue the Special Bench of Hon'ble Mumbai ITAT in the case of All Cargo Global Logistics Ltd vs DCIT (supra), has also observed as under:- "58. Thus, question No.1 before us is answered as under: a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means - (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search." It has been categorically observed in the above-mentioned judgment that only the pending proceedings, as on the date of search shall abate meaning thereby that the completed proceedings attain finality. 9.3.11. The next question which needs to be answered is what is the scope of assessment/ reassessment under the provisions of section 153A of the Act for the assessments/reassessments which have not abated and those which have attained finality. 9.3.12. The use of the phrase 'so far as maybe' in section 153A(1)(a) implies that all e provisions of the Act as contained under Chapter XIV prescribing the procedure 'for assessment or under any other Chapter of the Act with respect to the return of income filed u/s 139 of the Act shall be applicable to the returns filed pursuant to notice issued u/s 153A/153C of the Act. The applicability of those provisions which are inconsistent with the provisions of section 153A are restricted by the use of the phrase 'so far as may be'. As such, for the assessments proceedings which are abated, the AO gets all the powers prescribed under the law, as if the assessment is being made for the first time. Thus, if the assessment is made for the first time, all the provisions of assessment, relevant for making of an assessment u/s 143(3) shall be applicable. 9.3.13. As far as the assessments/reassessments, which do not abate or which have attained finality, the principle of time barring rule comes into play. The assessee acquires a right as to the finality of proceedings. Quietus of the completed assessments can be disturbed, only in a case, where incriminating seized material is ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 13 found, during the course of the search operation u/s 132 of the Act. Further, as observed above, the objective behind the second proviso to section 153A(1) is to eliminate multiplicity of proceedings. In such cases, it is only the seized material and undisclosed income emanating out of the search proceedings, which is relevant for the purpose of assessment. 9.3.14. The Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation, 374 ITR 645, has held that when the assessment has attained finality, then the AO while passing the independent assessment order u/s 153A of the Act can't disturb the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s 132 of the Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of search operation. In the case referred, supra, the Hon'ble Bombay High Court has upheld the following observations of Hon'ble ITAT:- "i. On a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of the proceedings under Section 153A, it is only the assessment / reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalized for those assessment years covered under Section 153A of the Act. ii. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/ reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending against finalised assessment/reassessments would not abate. iii. Therefore, the argument of the revenue, that on initiation of proceedings under Section 153A, the assessments/reassessments finalised for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153A(1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section. 9.3.15. Further, upon perusal of SLP No. 18560 of 2015 dated 12/10/2015 admitted by Hon'ble Supreme Court against the decision of Hon'ble Bombay High Court rendered in CIT Vs. Continental Warehousing Corporation [supra], it is found that Hon'ble Apex Court has only admitted SLP against the ruling of the Hon'ble Bombay High Court's finding. However, it is seen that the Hon'ble Apex Court has not stayed or suspended the operation of the decision of the Hon'ble Bombay High Court in any manner and therefore, at the moment, the decision of jurisdictional High Court is binding. ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 14 9.3.16. A similar view has been taken by the Hon'ble Bombay High Court (Nagpur Bench) in case of Murli Agro Products Ltd Vs. CIT 49 Taxman.com 172in ITA No 36 of 2009, wherein it has been held that on initiation of proceedings U/s. 153A, it is 5nly the assessment proceedings that are pending on the date of conducting search U/s. 132 or making requisition U/s. 132A of the Act that stand abated and not the assessments already finalized. The relevant excerpts of the judgment are reproduced hereunder- "9. What Section 153A contemplates is that, notwithstanding the regular provisions for assessment/ reassessment contained in the IT Act, where search is conducted under Section 132 or requisition is made under Section 132A on or after 31/5/2003 in the case of any person, the Assessing Officer shall issue notice to such person requiring him to furnish return of income within the time stipulated therein, in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made and thereafter assess or reassess the total income for those assessment years. The second proviso to Section 153A provides for abatement of assessment/reassessment proceedings which are pending on the date of search/requisition. Section 153A(2) provides that when the assessment made under Section 153A(1) is annulled, the assessment or reassessment that stood abated shall stand revived. 10. Thus on a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of proceedings under Section 153A, it is only the assessment/reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessment/reassessments already finalized for those assessment years covered under Section 153A of the Act. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalized assessment/reassessment shall not abate. It is only because, the finalized assessments/reassessments do not abate, the appeal, revision or rectification pending against finalized assessments/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings lender Section 153A, the assessments/reassessments finalized for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153A(1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). 11. In the present case, as contended by Shri Mani, learned counsel for the assessee, the assessment for the assessment year 1 998-99 was finalized on 29-12-2000 and search was conducted thereafter on 3-122003. Therefore, in the facts of the present case, initiation of ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 15 proceedings under Section 153A would not affect the assessment finalized on 29-12-2000. 12. Once it is held that the assessment finalized on 29.12.2000 has attained finality, then the deduction allowed under section 80HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143(3) of the IT. Act could not have disturbed the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. 13. In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80 HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act." In the above-mentioned judgment, the Hon'ble Bombay High Court has held that no addition can be made in respect of assessments which have become final, if no incriminating material is found during the course of search. It has been held that once the original assessment has attained finality, then the Assessing Officer while passing the assessment order U/s. 153A r.w.s. 143(3) cannot disturb the assessment/ reassessment order which had attained finality, unless the material gathered during the course of the search proceedings establishes something contrary to it. If there is nothing on record to suggest that any incriminating material was unearthed during the search, the AO, while passing order U/s. 153A r.w.s. 143(3) cannot disturb the original assessment order passed U/s. 143(3) of the Act. 9.3.17. ........................... .................................... ............................. ................................... .................................. It is noted that the Department had filed a Special Leave Petition in S.L.P (C) No- 34554 of 2015 before the Hon'ble Apex Court against the above judgment of the Delhi High Court, which has since been dismissed. The relevant extracts reported in 380ITR (st) 64-Ed is as follows: ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 16 "Their Lordships Madan B.Lokur and S.A. Bobde JJ dismissed the Department's special leave petition against the judgment dated July 06,2015 of the Delhi High Court in I. T.A No 369 of 2015, whereby the High Court held that no substantial question of law arose since there was a factual finding, that no incriminating evidence related to share capital issued was found during the course of search and that the assessing officer was not justified in invoking section 68 of the Act for the purpose of making additions on account of share capital" 9.3.22. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Meeta Gutgutia [2017- TIOL-1000-HC-DEL-IT], has affirmed the view that no addition can be made for a particular assessment year without there being an incriminating material that relates to the said assessment year which would justify such an addition. The Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central IT, New Delhi Vs. Meeta Gutgutia [2018] 96 taxmann.com 468 (SC) has dismissed the SLP in the case and thus upheld the decision of Hon'ble Delhi High Court that invocation of section 153A to re-open concluded assessments of assessment years earlier to year of search was not justified in absence of incriminating material found during search qua each such earlier assessment year. 9.3.23. ................................... ................................... .................. ................ 9.3.24. In view of the aforesaid detailed discussion and respectfully following the judicial precedents, I am of the view that assessments which are completed u/s 143(3) of the Act, do not abate. Further, proceedings u/s 153A/153C of the Act does not empower the AO to re-adjudicate the same issues again, unless fresh incriminating material is found during the course of search and in such cases the AO does not have jurisdiction to make additions/disallowances which are not based on any incriminating material found during the course of search. To conclude, in the case of completed/un-abetted assessments, where no incriminating material is found during the course of search, the assessment u/s 153A of the Act is to be made on originally assessed / returned income and no addition or disallowance can be made de hors the incriminating evidences recovered during the course of search. 9.3.25. In this case, since the addition of Rs.20.00 lakh was made on the basis of a statement recorded during the course of assessment proceedings which is not based on any incriminating material found during the course of Search conducted u/s 132 of the Act, the addition is directed to be deleted. The Ground is accordingly allowed.” ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 17 13. We have heard the rival contentions of both the parties and perused the materials as placed before us including the decisions as cited above. The undisputed facts are that on the date of search the assessment for the current assessment year was not pending and therefore it has attained finality and thus it was unabated on the date of search. Therefore the AO has no jurisdiction to make addition in an unabated assessment year without there being incriminating materials and accordingly the jurisdiction of the AO can not be justified. We note that the ld CIT(A) passed a very reasoned and speaking order after following the decision of Hon'ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation ( 374 ITR 645), Murli Agro Products Ltd Vs. CIT 49 Taxman.com 172in ITA No 36 of 2009 and Pr. CIT vs. Meeta Gutgutia [2017-TIOL-1000-HC- DEL-IT]. Therefore we do not find any infirmity in the order and are inclined to uphold the same by dismissing ground no.3. ITA No.158/M/2021 A.Y. 2014-15 14. The issue involved in this appeal is identical to the one as stated above in ITA No.155/M/2021 for A.Y. 2011-12. Therefore, our findings in ITA No.155/M/2021 for A.Y. 2011-12, mutatis mutandis, would apply to this appeal as well. Accordingly, this appeal of the Revenue is dismissed. 15. In the result, all the appeals of the Revenue are dismissed. Order pronounced in the open court on 25.11.2021. Sd/- Sd/- (Ravish Sood) (Rajesh Kumar) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated: 25.11.2021. * Kishore, Sr. P.S. ITA Nos.155, 156, 157 & 158/M/2021 M/s. Dr. D.Y. Patil Sports Academy 18 Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [ By Order Dy/Asstt. Registrar, ITAT, Mumbai.