Sh. Krishan Kumar Goyal, Chandigarh V. DCIT, CC-1, Chandigarh

ITA 226/CHANDI/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3117 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-10-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GULSHAN RAJ
• Keywords: Revision of order; Audit objection; Period of limitation; Time period of passing order; Revised return; Reason to believe; Set aside
• Section: 143(3); 153A; 139(5); 143(1); 250; 143(2); 139(1); 147; 68; 148; 132; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO. 226/CHD/2019 / ASSESSMENT YEAR : 2007-08 SHRI KRISHAN KUMAR GOYAL, PROP SAGAR ENTERPRISE, SCF 153, SECTOR 26, GRAIN MARKET, CHANDIGARH THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO. AGIPK9063H / APPELLANT /RESPONDENT & ./ ITA NO. 456/CHD/2019 / ASSESSMENT YEAR : 2007-08 SHRI KRISHAN KUMAR GOYAL, PROP SAGAR ENTERPRISE, SCF 153, SECTOR 26, GRAIN MARKET, CHANDIGARH THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO. AGIPK9063H / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI NIKHIL GOYAL, ADVOCATE ' ! / REVENUE BY : SH. GULSHAN RAJ, CIT DR # $ % /DATE OF HEARING : 21.10.2019 &'() % / DATE OF PRONOUNCEMENT : 30.10.2019 ')/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS RELATES TO THE ASSESSEE FOR A SSESSMENT YEAR 2007-08. ITA NO. 226/CHD/2019 IS PREFERRED AGAINST THE ORDER DATED ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 2 24.08.2016 OF THE COMMISSIONER OF INCOME TAX-3, GU RGAON [HEREINAFTER REFERRED TO AS CIT(A) ], WHEREAS, ITA NO.456/CHD /2019 IS AGAINST THE ACTION OF THE CIT(A), VIDE ORDER DATED 28.2.2019, I N CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 2. BOTH THE APPEALS ARE INTER-CONNECTED AND RELATE TO THE SAME ASSESSEE, SO THESE WERE HEARD TOGETHER AND ARE BEIN G DECIDED BY THIS COMMON ORDER. 3. FIRST, WE SHALL TAKE UP THE APPEAL OF THE ASSESS EE IN ITA NO.226/CDH/2019, WHEREIN, FOLLOWING GROUNDS HAVE BE EN RAISED BY THE ASSESSEE:- ITA NO. 226/CHD/2019 :- 1. THAT THE WORTHY CIT(C)(A) HAS ERRED IN UPHOLDING THE ADDITION OF RS. 10,00,000/- ON ACCOUNT OF UNSECURED LOANS RECEIVED FROM SMT. SHAKUNTALA (SISTER) AND SH. DEEPAK SINGLA (SISTERS SON) (RS. 5 LAKH FROM EACH). 2. THAT THE WORTHY CIT(C)(A) HAS ERRED IN RATIFYING TH E TREATMENT OF UNSECURED LOAN AS INCOME FROM UNEXPLAINED SOURCES U/S 68 OF THE INCOME TAX ACT, 1961. 3. THAT THE WORTHY CIT(C)(A) HAS ERRED IN NOT CONSIDERING THAT THE AMOUNT WAS RECEIVED THROUGH REGULAR BANKING CHANNEL AND SUFFICIENT PROOFS HAVE BEEN GIVEN TO PROVE THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE CONCERNED PERSONS. ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 3 4. THAT THE ADDITION AS ABOVE HAS BEEN UPHELD AGAINST THE FACTS AND CIRCUMSTANCES AND DETAILED SUBMISSIONS FILED DURING THE COURSE OF HEARING HAS NOT BEEN CONSIDERED PROPERLY. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEAR D OR DISPOSED. 4. THE BRIEF FACTS RELATING TO THE ISSUE UNDER CONS IDERATION ARE THAT THE ORIGINAL RETURN U/S 139(1) WAS FILED BY THE ASS ESSEE ON 31.10.2007. THEREAFTER, A SEARCH ACTION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 8.9.2011. THEREAFTER, A NOTICE U/S 153 A WAS ISSUED TO THE ASSESSEE ON 21.03.2013, IN RESPONSE TO WHICH , ASSESSEE FILED HIS RETURN OF INCOME ON 26.7.2013. SUBSEQUENTLY, THE ASSESSING OFFICER MADE IMPUGNED ADDITIONS INTO THE INCOME OF THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 143(3) READ WITH SECTIO N 153A OF THE I.T. ACT, 1961 (IN SHORT 'THE ACT'). 5. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE IMPUGNED ADDITIONS HAVE NOT BEEN MADE BY THE ASSESS ING OFFICER ON THE BASIS OF ANY ALLEGED INCRIMINATING MATERIAL FOUND D URING THE COURSE OF SEARCH ACTION AT THE PREMISES OF THE ASSESSEE. THA T THE ORIGINAL ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR UNDE R CONSIDERATION HAD ALREADY ATTAINED FINALITY AS ON THE DATE OF SEARCH/ ISSUE OF NOTICE TO THE ASSESSEE, THE LIMITATION PERIOD FOR ISSUANCE OF NO TICE U/S 143(2) OF THE ACT FOR INITIATION OF SCRUTINY ASSESSMENT PROCEEDIN GS HAD ALREADY ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 4 EXPIRED. HE, THEREFORE, HAS CONTENDED THAT NO ADDIT IONS WERE WARRANTED ON ANY ISSUE OTHER THAN BASED ON ANY INCRIMINATING MATERIAL FOUND AND SEIZED DURING SEARCH ACTION ON THE BASIS OF WHICH T HE ASSESSMENT WAS CARRIED OUT IN THE CASE OF THE ASSESSEE U/S 153A OF THE ACT. HE, IN THIS RESPECT, HAS RELIED UPON THE DECISION OF THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. 12 0 DTR 89 AND OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAW LA 234 TAXMAN 300 ( DELHI) AND IN PRINCIPAL CIT VS. MEETA GUTGU TIA PROP M/S FERNS N PETALS, ITA 306/2017 AND OTHERS DECIDED VIDE ORDER DATED 25.5.2017. 6. THE LD. DR, ON THE OTHER HAND, HAS SUBMITTED THA T ORIGINAL ASSESSMENT PROCEEDINGS WERE NOT COMPLETED U/S 143(3 ) OF THE ACT RATHER THE RETURNS FILED BY THE ASSESSEE WAS PROCESSED U/S 143(1) OF THE ACT AND UNDER THE CIRCUMSTANCES, THE ASSESSING OFFICER WAS EMPOWERED TO EXAMINE AND LOOK INTO THE ISSUES AS THE SAME WERE NOT LOOKED INTO WHILE PROCESSING THE RETURN U/S 143(1) OF THE ACT. HOWEVE R, THE LD. DR HAS BEEN FAIR ENOUGH TO ADMIT THAT THE ADDITIONS IN THI S CASE HAVE NOT BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL FOU ND DURING THE SEARCH ACTION AT THE PREMISES OF THE ASSESSEE. HE HAS ALS O NOT DISPUTED THAT THE ORIGINAL ASSESSMENTS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION STOOD COMPLETED AND NOT ABATED AS ON THE DATE OF SEARCH I .E. 8.9.2011 AND ALSO ON THE DATE OF SUBSEQUENT ISSUE OF NOTICE U/S 153A OF THE ACT ON 26.7.2013. ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 5 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE RELATING TO THE VALIDITY OF ASSES SMENT MADE UNDER SECTION 153A WITHOUT HAVING ANY INCRIMINATING MATER IAL FOUND DURING THE SEARCH ACTION U/S 132 OF THE ACT IN CASE OF COM PLETED ASSESSMENTS, EVEN WHERE THE ORIGINAL RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT, HAS COME INTO CONSIDERATION BEFORE THE CO-ORDI NATE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF THE ACIT CENT. CIR. 33, MUMBAI VS. SHRI JAYENDRA P. JHAVERI ITA NOS.2141, 2142, 2143 & 214 4/M/2012 & CO NOS.248, 249, 250 & 251/M/2013 DECIDED ON 20.02.201 4 (ONE OF US BEING PARTY TO THAT ORDER). THE TRIBUNAL HAS DISCUS SED THE ISSUE IN DETAIL AND HAS MADE THE FOLLOWING OBSERVATIONS: 8. THE LEARNED DR HAS ALSO FILED WRITTEN SUBMISSIO NS. TO STRESS HIS POINT THAT THE RETURN PROCESSED U/S. 143 (1) CANNOT BE SAID TO BE AN ASSESSMENT BUT A MERE INTIMATION, HE HAS RELIED UPON THE JUDGMENT OF HONBLE SUPREME COURT I N THE CASE OF RAJESH JHAVERI STOCK BROKERS P. LTD. (200 7) 291 ITR 500 (SC). HIS CONTENTION HAS BEEN THAT IN THE C ASE IN HAND THE ASSESSMENT WAS NOT DONE ORIGINALLY U/S. 14 3(3) HENCE THE ESTIMATION IN QUESTION HAS BEEN RIGHTLY M ADE U/S. 153A OF THE ACT BY THE AO. HE HAS FURTHER CONTENDED THAT THE PRINCIPAL LAID DOWN BY THE SPECIAL BENCH OF THE TRI BUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. 137 I TD 287 CAN BE APPLIED TO THE CASE WHERE THE ORIGINAL ASSES SMENT WAS COMPLETED U/S. 143(3) OF THE ACT AND NOT TO THE CAS E WHERE THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR. SO FAR SO THE RELIANCE PLACED BY HIM IN THE CASE OF R AJESH JHAVERI STOCK BROKERS P. LTD. (SUPRA) IS CONCERNED , WE MAY OBSERVE THAT THE ISSUE BEFORE THE HONBLE SUPREME C OURT IN THAT CASE WAS REGARDING THE REOPENING OF THE ASSESS MENT U/S. 147 OF THE ACT. THE HONBLE SUPREME COURT HELD THAT THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ADANI EXPORTS V. DEPUTY CIT, (1999) 240 ITR 224 (GUJ) WAS NOT APPLICABLE IN THAT CASE. IN THE ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 6 CASE OF ADANI EXPORTS (SUPRA), WHERE THE ASSESSME NT WAS MADE U/S. 143(3) OF THE ACT, AND THE AO DID NOT HOL D ANY BELIEF THAT INCOME HAD ESCAPED ASSESSMENT ON ACCOUN T OF ERRONEOUS COMPUTATION, THE RE-OPENING U/S. 147 MADE MERELY ON THE BASIS OF AUDIT OBJECTIONS WAS HELD TO BE BAD IN LAW BY THE HONBLE HIGH COURT. IN THE CASE OF RAJESH JHAV ERI STOCK BROKERS P. LTD. (SUPRA), THE HONBLE SUPREME COURT WHILE INTERPRETING THE PROVISIONS OF SECTION 143(1) AND S ECTION 143(3) (AS WERE IN FORCE DURING THE RELEVANT TIME P ERIOD) HAS HELD THAT IN CASE OF ASSESSMENT MADE U/S. 143(3), T HE ASSESSMENT IS MADE BY THE AO BY APPLYING HIS MIND W HEREAS IN CASE OF PROCESSING OF RETURN U/S. 143(1) OF THE ACT, THERE IS NO APPLICATION OF MIND BY THE AO AND AS SUCH, IF A NEW MATERIAL COMES INTO THE KNOWLEDGE OF THE AO AND THE REQUIREMENTS OF SECTION 147 OF THE ACT ARE FULFILLE D, THE AO IS FREE TO INITIATE PROCEEDINGS U/S. 147 AND THE FAILU RE TO TAKE STEPS U/S. 143(3) WILL NOT RENDER THE AO POWERLESS TO INITIATE RE-ASSESSMENT PROCEEDINGS EVEN WHEN INTIMATION U/S. 143(1) HAD BEEN ISSUED. SO THE PROPOSITION OF LAW LAID DOW N IN THE CASE OF RAJESH JHAVERI STOCK BROKERS P. LTD. (SUP RA) RELATES TO THE POWERS OF THE AO FOR RE-OPENING OF A SSESSMENT U/S. 147IN RELATION TO THE ASSESSMENT PROCEEDINGS C ONDUCTED UNDER SECTION 143(1) VIZ-A-VIZ U/S 143(3) OF THE AC T. (AS WERE IN FORCE DURING THE RELEVANT PERIOD, SINCE SECTION 143 HAS BEEN FURTHER AMENDED VIDE FINANCE ACT 2008 W.E.F 01.04.2008.) IT IS TO BE NOTED THAT POWERS OF THE A O TO RE- OPEN AN ASSESSMENT U/S. 147 IS SUBJECT TO LIMITATIO N OF TIME PERIOD AS PRESCRIBED U/S. 149 OF THE ACT. SO THE RE ASONABLE CONCLUSION WILL BE THAT WHETHER THE RETURN WAS PROC ESSED U/S. 143(1) OR U/S. 143(3), IF THE AO HAS A REASON TO BE LIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT , HE CAN RE-OPEN THE ASSESSMENT U/S. 147 BY ISSUING NOTICE U /S. 148 BUT WITHIN THE TIME LIMIT AS PRESCRIBED U/S. 149 OF THE ACT. 10. SO FAR SO, THE QUESTION AS TO THE PROCESSING OF RETURN U/S. 143(1) VIZ-A-VIZ ASSESSMENT MADE U/S. 143(3) IS CON CERNED, IT MAY FURTHER BE OBSERVED THAT AFTER PROCESSING OF RE TURN U/S. 143(1) THE SAME CAN BE ASSESSED U/S. 143(3) BY ISSU E OF NOTICE U/S. 143(2) SUBJECT TO ITS ISSUANCE WITHIN T HE LIMITATION PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WH ICH RETURN IS FURNISHED AS PER THE PROVISO TO CLAUSE (I I) OF SECTION 143(2) [AS WAS EXISTING AT THE TIME OF RELEVANT ASS ESSMENT YEAR]. ONCE THE LIMITATION PERIOD AS PRESCRIBED VID E PROVISO TO CLAUSE (II) OF SUB SECTION (2) OF SECTION 143 IS EXPIRED, IT IS NOT OPEN TO THE AO TO ASSESS THE INCOME U/S. 143(3) OF THE ACT AND THE RETURN FILED BY THE ASSESSEE U/S. 139 IS DE EMED TO BE ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 7 ACCEPTED, WHICH HOWEVER, CAN BE RE-OPENED U/S. 147 OF THE ACT SUBJECT TO THE FULFILLMENT OF INGREDIENTS OF SE CTION 147 AND WITHIN THE TIME PERIOD AS PRESCRIBED U/S. 149 O F THE ACT, AS DISCUSSED IN THE PRECEDING PARA. SO UNDER SUCH CIRCUMSTANCES IF THE RETURN IS PROCESSED U/S. 143(1 ) AND NOT U/S. 143(3) AND AFTER THE PRESCRIBED PERIOD OF LIMI TATION, THE SAME CANNOT BE ASSESSED U/S. 143(3) THOUGH IT MAY B E INTERPRETED AS MERE INTIMATION ASSESSMENT OR OTHERW ISE, BUT THE SAME SHALL BE DEEMED TO BE ACCEPTED BY THE AO A ND IT WILL NOT HAVE ANY DIFFERENT COLOUR OTHER THAN THE RETURN WHICH IS PROCESSED U/S. 143(3) OF THE ACT. THE ONLY DISTINGU ISHING FEATURE AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF RAJESH JHAVERI STOCK BROKERS P. LTD. (SUPRA), WOU LD BE THAT IF TO A SET OF FACTS AND CIRCUMSTANCES, THE AO HAS APPLIED HIS MIND AND HE WAS OF THE BELIEF THAT THERE WAS NO ESCAPEMENT OF INCOME THEN FOR INVOKING THE PROVISIO NS OF SECTION 147 OF THE ACT, HE IS PRECLUDED, ON THE BAS IS OF SAME FACTS AND CIRCUMSTANCES, TO SAY THAT HE HAS REASON TO BELIEVE THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. WHEREAS IN CASE OF RETURNS PROCESSED U/S. 143(1), SINCE THE AO DOES NOT APPLY HIS MIND, SUCH A DEFENSE IS NOT AVAILABLE TO THE ASSESSEE. HOWEVER, THAT PROPOSITION OF LAW DOES NOT HELP THE REVENUE IN THE PRESENT CASE WHICH IS A CASE OF ASSE SSMENT/RE- ASSESSMENT U/S. 153A OF THE ACT. 11. ADMITTEDLY, IN THE CASE IN HAND, THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT BUT THE SAME HAS ATTAINED FI NALITY DUE TO THE EXPIRY OF LIMITATION PERIOD OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN WAS FILED. HE NCE, THE ASSESSMENT IS DEEMED TO BE COMPLETED AND NOT PENDIN G ON THE DATE OF SEARCH ON 14.08.2008. ADMITTEDLY, NO INCRIM INATING MATERIAL WAS FOUND FROM THE PREMISES OF THE ASSESSE E DURING THE SEARCH U/S. 132 OF THE ACT. THE SPECIAL BENCH O F THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD.(SUPRA), HAS HELD THAT ASSESSMENT U/S. 153A CA N BE MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH. THE HONBLE RAJASTHAN HIGH COURT IN THE CAS E OF JAI STEEL (INDIA) V. ACIT (2013) 259 CTR 281 HAS HELD THAT IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT O F SEARCH OR REQUISITION, THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMENT DOES NOT ARISE. UNDER SUCH CIRCUMSTANCES , IT IS NOT OPEN TO THE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN CLAIMED IN THE ORIGI NAL AND ALREADY CONCLUDED ASSESSMENT, IN THE CASE OF ASSESS MENT U/S. 153A IN PURSUANCE OF SEARCH ACTION. HONBLE HIGH CO URT REJECTED THE ARGUMENT OF THE LEARNED COUNSEL FOR AS SESSEE TO ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 8 THE EFFECT THAT ONCE THE NOTICE U/S. 153A IS ISSUED , THE ASSESSMENTS FOR SIX YEARS ARE AT LARGE BOTH FOR THE AO AND THE ASSESSEE. IT HAS BEEN FURTHER HELD BY THE HONBLE H IGH COURT THAT THE PROVISIONS OF SECTION 153A TO 153C CANNOT BE INTERPRETED TO BE FURTHER INNINGS TO THE AO AND/OR ASSESSEE BEYOND THE PROVISIONS OF SECTION 139(RETURN OF INCO ME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCA PING ASSESSMENT) AND 263(REVISION OF ORDERS) OF THE ACT. THE HONBLE HIGH COURT HAS FURTHER OBSERVED THAT THE WO RDS ASSESS OR RE-ASSESS HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONC LUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF A BATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLE TED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS TH EY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUP PORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY ON THE BASIS OF THE INCRIMINAT ING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS. THE HONBLE HIGH COURT WHILE REPRODUCING THE PROPOSITION OF LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF K P VARGHESE V. ITO (1981) 24 CTR 358 THAT IT IS RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISO MUST BE SO CONSTRUED, IF POSSIBLE, THAT ABS URDITY AND MISCHIEF MAY BE AVOIDED HAS OBSERVED THAT IF THE A RGUMENT OF THE COUNSEL FOR THE ASSESSEE WAS TO BE ACCEPTED, IT WOULD MEAN THAT EVEN IN CASE WHERE THE APPEAL ARISES OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A) OR TRIBUNAL AND THE HIGH COURT, ON A NOTICE ISSUES U/S . 153A OF THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS B EEN CONCLUDED BY THE HIGH COURT. ANY INTERPRETATION WHI CH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED AND/OR AVOIDE D AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF K P VAR GHESE (SUPRA). ALMOST SIMILAR PROPOSITION OF LAW HAS BEEN LAID DOW N BY THE CO-ORDINATE BENCH OF THE TRIBUNAL BENCH OF T HE TRIBUNAL IN THE CASE OF M/S DEEPA RESTAURANT & BAR P. LTD. IN ITA NO.1336/M/2012 DECIDED ON 05.02.2014 ( ONE OF US BEING THE PARTY OF THE SAID ORDER) WHEREIN, IT H AS BEEN OBSERVED THAT WHERE THE SCRUTINY ASSESSMENT ORDER U /S. 143(3) OF THE ACT WAS SET ASIDE BY THE HIGHER AUTHORITIES THAT, ITSELF, CANNOT BE A GROUND FOR RE-OPENING THE ASSESSMENT U/ S. 147 OF THE ACT ON THE PLEA THAT SINCE SCRUTINY ASSESSMENT HAS BEEN ANNULLED ON THE LEGALITY OF NOTICE U/S. 143(2) OF T HE ACT AND ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 9 THE CASE HAS NOT BEEN HEARD AT ANY OF THE STAGE HEN CE, THERE WAS A REASON TO BELIEVE THAT THE INCOME ASSESSED IN THIS CASE HAS ESCAPED ASSESSMENT. THE CO-ORDINATE BENCH IN TH E ABOVE SAID CASE HAS FURTHER HELD THAT SUCH AN ACTION CANN OT BE ALLOWED UNDER THE LAW AS IT MAY AMOUNT TO DEFEATING ONE OF THE STATUTORY PROVISIONS IN THE GRAB OF ACTING UNDE R OTHER PROVISIONS OF THE STATUTE. ONCE ASSESSMENT U/S. 143 (3) HAD BEEN ANNULLED BY HIGHER AUTHORITIES ON THE GROUND O F LEGALITY OF NOTICE U/S. 143(2) OF THE ACT, RE-OPENING U/S. 1 47 ON THAT VERY GROUND WOULD MEAN NOTHING ELSE BUT THE ABUSE O F PROCESS OF LAW. HENCE, THE CONTENTION OF THE LEARNE D DR THAT AS THE RETURN WAS PROCESSED U/S. 143(1) AND IT WAS A MERE INTIMATION HENCE, THE AO HAD REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT AND IT WAS OPEN TO THE AO TO REASSESS THE INCOME U/S. 153A, EVEN WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTI ON, IS NOT TENABLE. 12. THE LEARNED DR HAS FURTHER RELIED ON THE JUDGME NT OF THE HONBLE ANDHRA PRADESH HIGH COURT IN THE CASE OF G OPAL LAL BADRUKA VS. DCIT, 346 ITR 106 (AP) TO STRESS T HE POINT THAT THE AO CAN USE EVIDENCE OTHER THAN THAT FOUND DURING THE COURSE OF SEARCH WHILE FRAMING THE ASSESSMENT U/S. 153A OF THE ACT. THE SAID JUDGMENT OF HONBLE ANDHRA PRADES H HIGH COURT HAS BEEN DULY DISCUSSED BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA), HOLDING THAT THE SAME WAS DISTINGUISHABLE ON THE FACTS. IN THE CASE OF GOPAL LAL BADRUKA VS. DCIT (SUPRA), INCRIMINATING EVIDENCE WAS FOUND IN RELATION TO EIG HT PLOTS OF LAND BUT NO EVIDENCE WAS FOUND IN RESPECT OF 24 PLO TS. SINCE INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF EIGH T PLOTS, HONBLE COURT HELD THAT THE AO CAN ESTIMATE THE INC OME IN RESPECT OF ALL 32 PLOTS. THE FACT WAS THAT INCRIMIN ATING MATERIAL WAS FOUND IN THAT CASE. THE OTHER JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHETAN DASS LACHMAN DASS [201 2] 211 TAXMANN 61, STRONGLY RELIED UPON BY THE LEARNED DR, IS ALSO OF NO HELP TO THE REVENUE BUT TO THE ASSESSEE ONLY. IN THE SAID CASE THE HONBLE DELHI HIGH COURT, IN PARA 11 OF TH E ORDER, THOUGH HAS HELD THAT THERE IS NO CONDITION IN SECTI ON153A THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF E VIDENCE FOUND DURING THE COURSE OF SEARCH OR OTHER POST SEA RCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND AND THAT THE SEIZED M ATERIAL CAN BE RELIED UPON TO ALSO DRAW INFERENCE THAT THERE CA N BE SIMILAR TRANSACTIONS THROUGHOUT THE RELEVANT PERIOD , YET, AT ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 10 THE SAME TIME IT HAS BEEN FURTHER OBSERVED THAT THI S HOWEVER, DOES NOT MEAN THAT ASSESSMENT U/S 153 A CAN BE ARBI TRARILY MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. THE PROPOSITION OF LAW WHICH EMERGES OUT IN THE LIG HT OF THE LAW LAID DOWN BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) (SUPRA), HONBLE GUJARAT HIG H COURT IN THE CASE OF GOPAL LAL BADRUKA (SUPRA) AND ALSO BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CHETAN DAS S LACHMAN DASS IS THAT WHERE INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH ACTION, THE AO WHILE MAKING ASSES SMENT U/S. 153A CAN TAKE NOTE OF OTHER MATERIALS ON RECOR D, WHICH ARE RELEVANT AND CONNECTED TO THE MATERIAL FOUND DU RING THE SEARCH AND INFERENCE CAN BE DRAWN RELATING TO OTHER TRANSACTIONS OF SIMILAR NATURE. HOWEVER, WHEN NO INCRIMINATING EVIDENCE IS FOUND DURING SEARCH, IT I S NOT OPEN TO THE AO TO MAKE RE-ASSESSMENT OF CONCLUDED ASSESS MENT IN THE GARB OF INVOKING THE PROVISIONS OF SECTION 153A . AS OBSERVED ABOVE, SUCH AN ACTION WILL DEFEAT THE OTHE R RELEVANT PROVISIONS OF THE ACT AND ALSO THE RIGHTS OF THE AS SESSEE ACCRUED THEREIN. 8. THE ABOVE DECISION HAS ALSO BEEN FOLLOWED BY ANOTHER CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ATUL BAROT (H UF) VS. DCIT IN ITA NO.2889/M/2011 & ORS. DECIDED ON 26.02.2014. WE AGR EE WITH THE VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL IN T HE CASE OF SHRI JAYENDRA P JHAVERI (SUPRA). FURTHER, THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON'B LE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA (2016) 380 ITR 5 73 (DEL) FOLLOWED BY THE HON'BLE GUJRAT HIGH COURT IN THE CASE OF PCI T VS RSA DIGI PRINTS 2017 (9) TMI 530. RELIANCE IN THIS RESPECT C AN ALSO BE PLACED UPON DECISION OF HON'BLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION (2015) 374 ITR 645 (BOM.), ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 11 DECISION OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF PCIT VS SALASOR STOCK BROKING LTD. 2016 (8) TMI 1131 AND DECISION O F HON'BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA PROP M/S FERNS N PETALS, ITA 306/2017 AND OTHERS DECIDED VIDE ORDER DATED 25.5.2017 WHEREIN THE HON'BLE HIGH COURTS HAVE BEEN UNANIMOUS TO HOLD THAT IN RELATION TO THE ASSESSMENTS WHICH HAVE ALREADY B EEN CONCLUDED, THE AO IS PRECLUDED FROM MAKING ADDITIO NS ON ANY OTHER ISSUE EXCEPT RELATING OR CONCERNING TO THE INCRIMIN ATING MATERIAL FOUND DURING THE SEARCH ACTION. THE ASSESSING OFFICER CAN NOT DISTURB THE ASSESSMENT ORDER OR REASSESSMENT ORDER WHICH HAS AT TAINED FINALITY, UNLESS THE MATERIAL GATHERED IN THE COURSE OF PROCE EDINGS U/S 153A OF THE ACT ESTABLISHES THAT RELIEF GRANTED UNDER THE F INAL ASSESSMENT/REASSESSMENT WAS CONTRARY TO THE FACT UN EARTHED DURING THE COURSE OF 153A PROCEEDINGS. THE PROPOSITION LAID DOWN IN AFORESAID CASE LAWS C AN BE WELL APPLIED TO THE CASE OF THE ASSESSEE. IN VIEW OF THIS, WE DO NOT FIND ANY JUSTIFICATION ON THE PART OF THE LOWER AUT HORITIES FOR MAKING THE IMPUGNED ADDITION IN THE ALREADY CONCLUDED ASSE SSMENTS IN THE CASE OF THE ASSESSEE. THEREFORE, THE IMPUGNED ADDI TIONS ARE ORDERED TO BE DELETED. IN VIEW OF THIS, THE APPEAL OF THE ASSESSEE IN ITA NO. 226/CHD/2019 IS HEREBY ALLOWED. ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 12 ITA NO. 456/CHD/2019 9 VIDE THIS APPEAL THE ASSESSEE HAS AGITATED THE A CTION OF THE LD. CIT(A) IN CONFIRMING THE LEVY OF PENALTY BY THE ASS ESSING OFFICER U/S 271 (1)(C) OF THE ACT. 10. SINCE WE HAVE DELETED THE ADDITIONS SO MADE AND ALLOWED THE APPEAL OF THE ASSESSEE, IN VIEW OF THIS, THE VERY B ASIS ON WHICH THE ASSESSING OFFICER HAD MADE THE ADDITION HAS CEASED TO EXIST, AND AS ON THE DATE THERE IS NO ADDITION OR TAX LIABILITY EXIS TING AGAINST THE ASSESSEE, THEREFORE, THE CONSEQUENT IMPUGNED PENAL TY HAS NO LEGS TO STAND AND THE SAME IS ACCORDINGLY ORDERED TO BE DEL ETED. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE STA ND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.2019. SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 30.10.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE '+ # / BY ORDER, ITA NOS. 226 & 456-CHD-2019 M/S KRISHAN KUMAR GOYAL, CHANDIGARH 13 8 ' / ASSISTANT REGISTRAR