DCIT, New Delhi V. M/s. Aakriti Hotels Pvt. Ltd., New Delhi

ITA 281/DEL/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6331 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Search and seizure; Documents seized
• Section: 56(2); 133A; 153A; 143(1); 143(2); 13; 153C; 132; 139; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER I.T.A. NO.281 & 282/DEL/2015 ASSESSMENT YEARS: 2009-10 & 2010-2011 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-31, NEW DELHI. VS. M/S. AAKRITI HOTELS PVT. LTD., 3 RD FLOOR, COMMUNITY CENTRE SAKET, NEW DELHI. TAN/PAN: AABCA0207D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SATPAL GULATI, CIT-DR. RESPONDENT BY: SHRI RAKESH JOSHI, CA DATE OF HEARING: 10 08 2021 DATE OF PRONOUNCEMENT: 17 08 2021 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEALS HAVE BEEN FILED BY THE REVENU E AGAINST COMMON ORDER DATED 29.09.2014, PASSED BY L D. CIT (APPEALS)-XIII, NEW DELHI FOR THE QUANTUM OF ASSESS MENT PASSED U/S.153A FOR THE ASSESSMENT YEARS 2009-10 AN D 2010-11. IN THE GROUNDS OF APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS:- A.Y. 2009-10 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 73,47,29,400/ - MADE U/S. 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED SHARE CA PITAL AND PREMIUM. ITA NO.281 & 282/DEL/2015 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT ON THE PREVAIL ING FACTS OF THE CASE THE ONUS ON THE PART OF THE ASSESSEE U/S 68 OF THE ACT STANDS DISCHARGED. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. A.Y. 2010-11 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 9,00,0 0,000/- MADE U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED SHAR E CAPITAL AND PREMIUM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN DELETING ADDITION OF RS. 7,64,22,000/- MADE U/S 68 OF THE IT ACT ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PROPERTY. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN HOLDING THAT ON THE PREVAIL ING FACTS OF THE CASE THE ONUS ON THE PART OF THE ASSESSEE U/S 68 OF THE ACT STANDS DISCHARGED. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. ITA NO.281 & 282/DEL/2015 3 2. THE LD. COUNSEL FOR THE RESPONDENT-ASSESSEE HAD RAISED FOLLOWING LEGAL GROUND AS ADDITIONAL GROUND UNDER R ULE 27 OF ITAT RULES, CHALLENGING THE VALIDITY OF THE ADDITIO N MADE BY THE ASSESSING OFFICER WITHIN THE SCOPE OF SECTION 1 53A WHICH READS AS UNDER: FILING OF GROUND UNDER RULE 27 OF THE INCOME TAX ( APPELLATE TRIBUNAL) RULES, 1963: 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LD CIT(A) ERRED IN REJECTING THE ASSESSEE'S SUB MISSION THAT THE PROVISION FOR ASSESSMENT PURSUANT TO PROCEEDING UNDER S. 153A CANNOT BE INVOKED UNLESS THERE WAS MATERIAL SE IZED DURING SEARCH OPERATIONS SUGGESTING CONCEALED INCOM E AND THE INCOME SOUGHT TO BE ASSESSED IS RELATABLE TO SUCH M ATERIALS' THE APPELLANT PRAYS TO YOUR HONOURS, KINDLY ALLOW T O RAISE THE ABOVE GROUND, WHICH IS PURELY LEGAL IN THE NATURE A ND MATTER OF INTERPRETATION OF THE LAW. 3. THUS, BEING PURELY A LEGAL GROUND GOING TO THE V ERY ROOT OF THE ADDITION AND AS ADMITTED BY BOTH THE PARTIES , THIS LEGAL PLEA IS ARISING OUT OF FACTS AND MATERIAL ON RECORD WHICH DOES NOT REQUIRE ANY INVESTIGATION ON FACTS, THEREFORE, THE SAME IS BEING ADMITTED FOR THE PURPOSE OF ADJUDICATION. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE WAS INC ORPORATED ON 19.06.1995 AND SINCE THEN WAS REGULARLY ASSESSED TO TAX. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-1 0 WAS FILED ON 30.09.2009; AND FOR THE ASSESSMENT YEAR 20 10-11 WAS FILED ON 2.09.2010. A SEARCH AND SEIZURE OPERAT ION WAS ITA NO.281 & 282/DEL/2015 4 CARRIED OUT ON 22.11.2011 AT THE OFFICE PREMISES OF THE ASSESSEE COMPANY AND ALSO AT DIFFERENT PLACES OF TH E GROUP CONCERN INCLUDING BLANK LOCKERS AND THE PERSON RELA TED TO THE ASSESSEE COMPANY IN THE BUSINESS ACTIVITIES. ACCORD INGLY, NOTICES U/S.153A WAS ISSUED FOR SIX YEARS ON 06.05. 2013 REQUIRING THE ASSESSEE TO FURNISH THE RETURN OF INC OME U/S.153A. IN RESPONSE THE ASSESSEE HAS FILED ITS RE TURN OF INCOME ON 17.07.2013. THE LD. ASSESSING OFFICER WIT HOUT EVEN REFERRING TO ANY SEIZED DOCUMENT OR ANY INCRIMINATI NG MATERIAL FOUND DURING THE COURSE OF SEARCH, HAS PRO CEEDED TO MAKE THE ASSESSMENT ON THE BASIS OF PERUSAL OF THE AUDITED BALANCE SHEET AS DISCUSSED BY HIM IN PARAGRAPH 3 OF THE ASSESSMENT ORDER. HE HAS NOTED THAT ON PERUSAL OF T HE AUDITED BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2 009, IT IS SEEN THAT THE ASSESSEE HAS SUBSCRIBED SHARE CAPITAL WHICH HAS INCREASED TO RS.3,58,10,060/- FROM RS.27177120/ -. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE H AS ISSUED 863294/- EQUITY SHARES OF THE VALUE OF RS.10/- AT A PREMIUM OF RS.1790/- PER SHARE. THUS, THE ASSESSEE COMPANY HAS SHOWN RECEIPT OF RS.154,52,96,260/- AS SECURITY PRE MIUM. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE COMPANY WAS REQUESTED TO FURNISH DETAILS OF PERSON TO WHOM NEW SHARES WERE ISSUED. AS PER THE DETAILS RECEIVED , ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN RECEIPT OF SHARE CAPITAL AND SHARE PREMIUM FROM KOLKATA, GUWAHATI AN D MUMBAI BASED COMPANIES. ITA NO.281 & 282/DEL/2015 5 5. THEREAFTER, IN THE ENTIRE ASSESSMENT ORDER THERE IS NEITHER REFERENCE NOR WHISPER ABOUT THAT THESE COMP ANIES ARE BASED ON ANY DOCUMENTS FOUND DURING THE COURSE OF S EARCH IN THE CASE OF THE ASSESSEE COMPANY. 6. LD. CIT(A) HAS DELETED THE ADDITION ON MERITS AN D AFTER DETAILED DISCUSSION, HAS DELETED THE ADDITION MADE U/S.68 ON THE PLEA THAT THE ASSESSEE HAS EXPLAINED IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE PARTIES AND ASSESSING O FFICER HAS FAILED TO MAKE FURTHER ENQUIRY IN THE CASE AND ADDI TION OF UNEXPLAINED INVESTMENT IN PROPERTY WAS DELETED ON T HE PLEA THAT THERE IS NO EVIDENCE FOUND WHICH SUGGEST THAT THE UNACCOUNTED PAYMENT WAS MADE BY THE ASSESSEE-COMPAN Y FOR PURCHASE OF PROPERTY AND IN THEREFORE, IN ABSENCE O F ANY ADVERSE MATERIAL OR EVIDENCE, NO UNACCOUNTED INVEST MENT IN THE PROPERTY CAN BE COMPUTED ON THE BASIS OF MARKET VALUATION OF REGISTRATION AUTHORITY. THE ASSESSEE A LSO TOOK GROUND BEFORE THE LD. CIT (A) THAT THE ADDITION IS NOT SUSTAINABLE AS THE SAME IS MADE WITHOUT ANY INCRIMI NATING DOCUMENT FOUND DURING THE COURSE OF SEARCH AND BOTH THE YEAR ARE UNABATED ASSESSMENT YEARS. HOWEVER, LD. CI T(A) RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF SHRI ANIL BHATIA (211 TAXMAN 453) (DELHI) HELD THAT AO HAVE AUTHORITY TO ASSESS INCOME OF LAST SIX YEARS U /S. 153A OF THE ACT AND REJECTED THIS LEGAL CONTENTION OF THE A SSESSEE. RELEVANT FINDING OF LD. CIT (A) IS GIVEN ON PAGE 7 OF HIS ORDER ON THIS ISSUE WHICH FOR SAKE OF READY REFERENCE IS REPRODUCED HERE UNDER:- ITA NO.281 & 282/DEL/2015 6 ========== 7. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT BOTH THE ASSESSMENT YEAR I.E. A.Y. 2009-10 & A.Y. 2 010-11 IS NON-ABATED ASSESSMENT YEAR AS PER 2 ND PROVISO TO SECTION 153A OF THE ACT, WHICH IS CLEAR FROM THE FOLLOWING CHART SUMMARIZING THE VARIOUS EVENTS : - PARTICULARS OF EVENT A Y 2009-10 A Y 2010-11 1 SEARCH ON AKRITI HOTELS PVT LTD 22/11/2011 22/11/2011 2 NOTICE ISSUED U/S 153A 06/05/2013 06/05/2013 3 RETURN FILED U/S 139 29/09/2009 23/09/2010 4 LAST DATE OF ISSUE NOTICE U/S 143(2) 30/09/2010 30/09/2011 8. FROM THE ABOVE CHART, HE SUBMITTED THAT IT IS CL EAR THAT NOTICE U/S 143(2) OF THE ACT COULD HAVE BEEN SERVED UPON THE ASSESSEE TILL 30/09/2010 & 30.09.2011 FOR A Y 2009- 10 & 2010-11 RESPECTIVELY AS PER THE LAW PREVAILING ON T HE SAID DATE, BUT NO SUCH NOTICE WAS GIVEN. SINCE NO ASSESS MENT WAS MADE THEREAFTER U/S 143(3)/144 OF THE ACT WITHIN TH E TIME ALLOWED FOR THE SAME, THE ASSESSMENT THUS COMPLETED U/S 143(1) AND HAD BECAME FINAL ASSESSMENT BEFORE THE D ATE OF SEARCH. ON TAKING UP PROCEEDINGS U/S 153A, THE ASSE SSMENTS FOR A.Y. 2009-10 & A.Y. 2010-11 DID NOT ABATE AS PE R 2 ND PROVISO TO SECTION 153A. LEGALLY SPEAKING, NO ADDIT ION COULD BE MADE, WHICH WAS NOT BASED ON INCRIMINATING MATER IAL SEIZED DURING SEARCH IN THE CASE OF A CONCLUDED ASS ESSMENT. ITA NO.281 & 282/DEL/2015 7 THUS, FROM THE ORDER ITSELF AND FROM RECORDS, IT IS VERY CLEAR THAT ON THE DATE OF SEARCH IS 22/11/2011 BOTH THE ASSESSMENT YEARS ARE UNABATED AS PER SECOND PROVISO TO SECTION 153A OF THE ACT. 9. DURING THE COURSE OF SEARCH, ADMITTEDLY NO INCRIMINATING DOCUMENTS RELATING TO ADDITION MADE W AS FOUND. THEREFORE, NO ADDITION COULD HAVE BEEN MADE IN THE ASSESSMENT ORDER PASSED U/S 153A OF THE ACT. LD AO HAS MADE ADDITION U/S 68 ON ACCOUNT OF ISSUE OF SHARE C APITAL OF RS. 73.47 CRORE AND RS. 9 CRORE IN AY 2009-10 & AY 2010-11 RESPECTIVELY. IN ADDITION TO THIS, IN A Y 2010-11 A O ALSO MADE ADDITION FOR UNEXPLAINED INVESTMENT OF RS. 7.64 CRO RE ON ACCOUNT OF DIFFERENCE BETWEEN STAMP DUTY VALUE AND TRANSACTION VALUE FOR PURCHASE OF PROPERTY DURING T HE YEAR. THERE WAS NO INCRIMINATING DOCUMENT FOUND DURING TH E COURSE OF SEARCH FOR BOTH THE ADDITION. IN CASE OF UNEXPLAINED INVESTMENT THE PURCHASE DEED OF PROPERTY WAS SEIZED BUT IT CANNOT BE TREATED AS INCRIMINATING DOCUMENT AS MERE LY DIFFERENCE IN STAMP DUTY VALUE AND TRANSACTION VALU E DOES NOT LEAD TO ANY UNEXPLAINED INVESTMENT. UNDER SUCH CIRCUMSTANCES THE SAID REGISTERED DEED CANNOT BE TR EATED AS INCRIMINATING DOCUMENT. FURTHER PROVISIONS OF SECTI ON 56(2) IS NOT APPLICABLE TO COMPANY ASSESSEE DURING THE RELEV ANT YEAR. THEREFORE, THERE IS NO SPECIFIC PROVISION UNDER THE ACT TO DEAL WITH SUCH TRANSACTION. HENCE ACTION OF THE ASSESSIN G OFFICER OTHERWISE IS ALSO NOT SUSTAINABLE. ITA NO.281 & 282/DEL/2015 8 10. FURTHER LD. CIT(A) HAS NOT ACCEPTED THE CONTEN TION OF THE ASSESSEE ON THE PLEA THAT HONBLE DELHI HIGH CO URT IN CASE OF SHRI ANIL BHATIA (211 TAXMAN 453) (DELHI) HELD THAT THE JURISDICTION OF ASSESSING OFFICER U/S. 153A IS TO ASSESS TOTAL INCOME FOR THE YEAR AND NOT RESTRICTED TO SEI ZED MATERIAL. 11. ON THE OTHER HAND, LD. CIT-DR THOUGH ADMITTED T HAT NONE OF THE ADDITION ARE BASED ON ANY INCRIMINATING MATERIAL, HOWEVER, STRONGLY RELIED UPON THE ORDER OF THE ASSE SSING OFFICER AND SUBMITTED WHAT IS REQUIRED TO BE SEEN I S, WHETHER THE ADDITION WHICH HAS BEEN MADE BY THE ASSESSING O FFICER ARE JUSTIFIED ON THE BASIS OF INQUIRY AND INFORMATI ON ON RECORD AND ASSESSEE WAS UNABLE TO DISCHARGE THE ONUS. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDERS A S WELL AS THE MATERIAL PLACED ON RECORD. IT IS AN ADMITTED FA CT THAT ON THE DATE OF SEARCH, THE ASSESSMENT FOR THE ASSESSME NT YEARS 2009-10 AND 2010-11 HAD ATTAINED FINALITY AND WERE NOT PENDING ON THE DATE OF SEARCH. HENCE, THE ASSESSMEN T FOR THE ASSESSMENT YEARS 2009-10 AND 2010-11 CANNOT BE TREA TED AS ABATED ASSESSMENTS. FURTHER, IT IS ALSO AN ADMITTED POSITION THAT THE ADDITIONS WHICH HAVE BEEN MADE BY THE ASSE SSING OFFICER U/S.68 IS NEITHER BASED ON ANY SEIZED DOCUM ENTS OR ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE HAS PROCEEDED WITH THE ASSESSMENT ON THE BASIS O F FACTS AND MATERIAL ALREADY ON RECORD AND DULY DISCLOSED I N THE RETURN OF INCOME WHICH HAD ATTAINED FINALITY. LD. C OUNSEL HAS ITA NO.281 & 282/DEL/2015 9 ALREADY EXPLAINED THAT NONE OF THE ADDITIONS ARE BA SED ON INCRIMINATING MATERIAL/DOCUMENT WHICH HAS NOT BEEN REBUTTED BY THE LD. CIT-DR ALSO, THEREFORE, THESE A DDITIONS NEEDS TO BE SEEN WHETHER THEY CAN BE ROPED IN, E WI THIN THE SCOPE OF SECTION153A IN THE LIGHT OF THE JUDICIAL PR INCIPLES LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AND H ONBLE APEX COURT. EVEN THE LD. CIT (A) HAS ADMITTED THAT THERE WAS NO INCRIMINATING MATERIAL ALBEIT HAS HEAVILY RELIED UPON THE HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF SHRI ANIL BHATIA (SUPRA) . 13. IN OUR OPINION, LD. CIT (A) HAS WRONGLY INTER PRETED THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SHRI ANIL BHATIA (SUPRA). IN THIS CASE IN PARA 23 THE HONBLE COURT ITSELF HAVE CLARIFIED THIS ASPECT IN THE FOLLOWING MANNER: 23. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFOR E, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. THUS FROM THE ABOVE FINDING IT IS CLEAR THAT THEIR LORDSHIPS IN THE ABOVE DECISION HAS NOT ADJUDICATED THE ISSUE WHEN NO INCRIMINATING DOCUMENT FOUND DURING THE COURSE OF S EARCH. 14. HOWEVER, LD. CIT (A) HAS MENTIONED THAT IN THE POST SEARCH PROCEEDING, THE AO HAS CONDUCTED ENQUIRY ABO UT THE SHAREHOLDERS ON THE BASIS OF SHAREHOLDERS DETAILS F OUND ITA NO.281 & 282/DEL/2015 10 DURING THE COURSE OF SEARCH. FOR A.Y. 2010-11 ADDIT IONS FOR UNEXPLAINED INVESTMENT, THE SALE DEED WAS SEIZED DU RING THE SEARCH. HENCE, IN HIS OPINION, THE ADDITION IS BASE D ON SEIZED MATERIAL. 15. SUCH A REASONING OF LD. CIT (A) CANNOT BE SUS TAINED, BECAUSE, MERE DETAILS OF SHAREHOLDERS FOUND DURING THE COURSE OF SEARCH AND REGISTERED SALE DEED CANNOT BE TERMED AS INCRIMINATING MATERIAL SO AS TO WARRANT ANY ADDITIO N WITHIN THE SCOPE OF SECTION 153A. DETAILS OF SHAREHOLDERS AND SHARE CAPITAL WERE ALREADY DISCLOSED IN THE AUDITED ACCOU NTS AND WERE PART OF RETURN OF INCOME WHICH STOOD ASSESSED AND ATTAINED FINALITY. ONCE THE ADDITION HAS BEEN MADE WITHOUT ANY INCRIMINATING DOCUMENTS OR INCRIMINATING MATERI AL ESPECIALLY FOR UNABATED ASSESSMENTS, THEN IN VIEW O F PRINCIPLE LAID DOWN BY THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA, REPORTED IN 380 ITR 573 (DELHI) SUCH ADDITIONS CANNOT BE ROPED IN THE ASSESSMENTS MADE U /S 153A. IT HAS BEEN HELD THAT COMPLETED ASSESSMENTS C AN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSME NT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATIN G MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVE RED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN THE CASE OF ASSESSEE, THE BALANCE SH EET WAS PART OF RETURN FILED BY THE ASSESSEE, HENCE IT CANN OT BE SAID THE SAME WAS NOT AVAILABLE WITH AO IN ORIGINAL ASSE SSMENT ITA NO.281 & 282/DEL/2015 11 AND THE SAME CAN BE NO WAY TERMED AS INCRIMINATING DOCUMENT UNEARTHED DURING THE COURSE OF SEARCH. HEN CE CONTENTION OF LD CIT (A) CANNOT BE ACCEPTED IN VIEW THE DECISION OF JURISDICTIONAL HIGH COURT. 16. FURTHER, HONBLE JURISDICTIONAL HIGH COURT IN T HE CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX, CENTRAL -2, N EW DELHI V. MEETA GUTGUTIA [2017] 395 ITR 526 (DELHI) HAS HELD AS UNDER: THE LEGAL POSITION, AS WILL BE DISCUSSED SHORTLY, I S THAT THERE CAN BE NO ADDITION MADE FOR A PARTICULAR ASSESSMENT YEAR W ITHOUT THERE BEING AN INCRIMINATING MATERIAL QUA THAT ASSES SMENT YEAR WHICH WOULD JUSTIFY SUCH AN ADDITIONTHE COURT IS UNA BLE TO ACCEPT THE SUBMISSIONS OF REVENUE THAT THERE WAS INCR IMINATING MATERIAL OTHER THAN WHAT HAS BEEN DISCUSSED IN THE O RDERS OF THE ASSESSING OFFICER, COMMISSIONER (APPEALS) AND THE TRIBU NAL FOR THE ASSESSMENT YEARS IN QUESTION[PARAS 38 & 39] IT WAS ALSO NOTED BY THE ASSESSING OFFICER - AND THI S HAS NOT BEEN DISPUTED BY THE ASSESSEE - THAT A SUM OF RS. 1.10 CR ORES WAS OFFERED BY THE ASSESSEE AS INCOME IN THE YEAR OF SE ARCH, ALTHOUGH IT WAS REPEATEDLY URGED BY THAT THE DOCUMENTS SEIZED AND FURNISHED BY PERTAINED TO THE ASSESSMENT YEARS OTHE R THAN THE YEAR OF SEARCH, CLEARLY, NO SUCH QUESTION WAS PUT T O IT SHOULD HAVE BEEN EASY FOR THE INVESTIGATING OFFICER TO ASK 'PA' OF THE PARTICULAR ASSESSMENT YEAR TO WHICH THE DOCUMENT RELATED TO, HO WEVER, THAT WAS NOT DONE, THEREFORE, ONLY THE STATEMENT MAKES A DISCLOSURE ABOUT THE EARLIER UNDISCLOSED INCOME AND STATING THAT THE OFFER OF ITA NO.281 & 282/DEL/2015 12 SUCH INCOME WAS BEING MADE 'TO BUY PEACE OF MIND', THEREFORE, THE STATEMENT RECORDED UNDER SECTION 133A CAN HARDLY BE SAID TO BE INCRIMINATING MATERIAL. [PARA 44] IN THE CIRCUMSTANCES, IT IS NOT POSSIBLE TO ACCEPT THE PLEA OF THE REVENUE NOW MADE THAT THE SO-CALLED ADDITIONAL INCRIMI NATING MATERIAL QUA EACH OF THE ASSESSMENT YEARS COULD NOT BE VERIFIED AND, THEREFORE, NOT DISCUSSED BY THE ASSESSING OFFICE R BECAUSE THE ASSESSEE DID NOT PRODUCE ITS BOOKS OF ACCOUNT. IT A PPEARS THAT THE REVENUE DID HAVE ACCESS TO THE ENTIRE BOOKS OF ACCO UNT OF THE ASSESSEE WHICH WERE ALSO SHOWN TO HAVE ALSO BEEN MAI NTAINED IN SOFT FORM ON THE COMPUTERS OF THE ASSESSEE WHICH WE RE ALREADY SEIZED BY THE REVENUE DURING SEARCH OPERATIONS. [PAR A 46] IN THE REMAND PROCEEDINGS, THE ASSESSING OFFICER COU LD NOT DISPUTE THE ABOVE INFORMATION. AS ALREADY NOTICED, THE ASSES SEE HAD BROUGHT WITH HERSELF ALL THE FRANCHISEE AGREEMENTS TO S UBSTANTIATE SUBMISSION MADE IN HER AFFIDAVIT. IT IS FOR THIS REAS ON THAT IN THE COMMISSIONER (APPEALS) FOR ASSESSMENT YEAR 2004-05, IT HELD: 'NO EVIDENCE TO DISPUTE THE AFFIRMATIONS IN THE AFFIDAVI T HAVE BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER IN THE RE MAND PROCEEDINGS'. THE ESTIMATED ADDITIONS WERE THEREFOR E HELD TO BE UNSUSTAINABLE IN LAW AS THEY WERE BASED ON A MISCONCE PTION AS TO THE FACTUAL POSITION WITH REGARD TO THE NUMBER OF OU TLETS IN EXISTENCE DURING THE RELEVANT PREVIOUS YEAR AS WELL AS ON THE SUSPICION THAT THE ASSESSEE MUST HAVE EARNED UNDISCLO SED INCOME DURING THE YEAR UNDER APPEAL. IT HAS BEEN CATEGORICAL LY FOUND BY THE COMMISSIONER (APPEALS) ON FACTS THAT NO INCRIMI NATING MATERIAL IN RELATION TO THE ASSESSMENT YEARS IN QUESTION I.E. , 2001-02 TO ITA NO.281 & 282/DEL/2015 13 2003-04 HAD BEEN BROUGHT ON RECORD WHICH COULD SUPPO RT SUCH PRESUMPTION. [PARA 48] AS RIGHTLY POINTED OUT BY ASSESSEE THAT NOTHING WA S BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT THERE W AS FAILURE ON PART OF THE ASSESSEE TO MAKE A DISCLOSURE AS REGARDS THE FRANCHISEE INCOME IN ANY OF THE EARLIER YEARS. THE IN CRIMINATING MATERIAL HAD TO BE IN RELATION TO ANY INCOME THAT WAS NOT DISCLOSED IN THE EARLIER RETURNS. THERE WAS NO SUCH INCRIMINAT ING MATERIAL TO SHOW THAT THERE WAS A FAILURE BY THE ASSESSEE TO DISC LOSE ANY FRANCHISEE INCOME FOR THOSE EARLIER YEARS. THE DISCLO SURE BY THE ASSESSEE ON ACCOUNT OF 'UNDISCLOSED FRANCHISEE COMMI SSION' WAS RELEVANT ONLY FOR THE YEAR OF SEARCH AND NOT FOR TH E EARLIER YEARS. [PARAS 49 & 50] SECTION 153A IS INDEED AN EXTREMELY POTENT POWER WHIC H ENABLES THE REVENUE TO RE-OPEN AT LEAST SIX YEARS OF ASSESSME NTS EARLIER TO THE YEAR OF SEARCH. IT IS NOT TO BE EXERCISED LIGHTL Y. IT IS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRI MINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENT S FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECTION 153A QUA EACH OF THE ASSESSMENT YEARS WOULD BE JUSTIFIED. [P ARAS 56 & 57] THE COURT IS OF THE VIEW THAT THE TRIBUNAL WAS JUSTI FIED IN HOLDING THAT THE INVOCATION OF SECTION 153A BY THE REVENUE FOR THE ASSESSMENT YEARS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EAC H OF THOSE ASSESSMENT YEARS. [PARA 71] ITA NO.281 & 282/DEL/2015 14 17. FURTHER, HONBLE SUPREME COURT IN CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (397 ITR 344) ( SC) WHEREIN EXACTLY SIMILAR LEGAL/TECHNICAL GROUND WAS TAKEN FOR THE FIRST TIME BEFORE THE ITAT. FURTHER, THE HONBL E APEX COURT UPHELD THE ORDER OF THE TRIBUNAL THAT ADDITION CANN OT BE MADE FOR THE ASSESSMENT YEARS FOR WHICH THERE ARE N O INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH IN THE ASSESSMENTS FRAMED U/S 153C. THE HONBLE COURT UPHELD THE ORDER OF THE TRIBUNAL IN THE FOLLOWING MANNER:- 16) IN THESE APPEALS, QUA THE AFORESAID FOUR ASSESS MENT YEARS, THE ASSESSMENT IS QUASHED BY THE ITAT (WHICH ORDER IS UPHELD BY THE HIGH COURT) ON THE SOLE GROUND THA T NOTICE UNDER SECTION 153C OF THE ACT WAS LEGALLY UNSUSTAIN ABLE. THE EVENTS RECORDED ABOVE FURTHER DISCLOSE THAT THE ISSUE PERTAINING TO VALIDITY OF NOTICE UNDER SECTION 153C OF THE ACT WAS RAISED FOR THE FIRST TIME BEFORE THE TRIBUNAL A ND THE TRIBUNAL PERMITTED THE ASSESSEE TO RAISE THIS ADDIT IONAL GROUND AND WHILE DEALING WITH THE SAME ON MERITS, ACCEPTED THE CONTENTION OF THE ASSESSEE. 17) FIRST OBJECTION OF THE LEARNED SOLICITOR GENERA L WAS THAT IT WAS IMPROPER ON THE PART OF THE ITAT TO ALLOW TH IS GROUND TO BE RAISED, WHEN THE ASSESSEE HAD NOT OBJECTED TO THE JURISDICTION UNDER SECTION 153C OF THE ACT BEFORE T HE AO. THEREFORE, IN THE FIRST INSTANCE, IT NEEDS TO BE DE TERMINED AS TO WHETHER ITAT WAS RIGHT IN PERMITTING THE ASSESSE E TO RAISE THIS GROUND FOR THE FIRST TIME BEFORE IT, AS AN ADDITIONAL GROUND. ITA NO.281 & 282/DEL/2015 15 18) THE ITAT PERMITTED THIS ADDITIONAL GROUND BY G IVING A REASON THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON THE RECORD AND, THEREFORE , COULD BE RAISED. IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PER THE PROVISIONS OF SECTION 153C OF THE ACT, INCRIMINATING MATERIAL WHICH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY CO-RELATION, DOCUMENT- WISE, WITH THESE FOUR ASSESSMENT YEARS. SINCE THIS REQUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENTIAL FOR ASSESSMENT UNDER THAT PROVISION, IT BECOMES A JURISDICTIONAL FACT. WE FIND THIS REASONING TO BE LOGICAL AND VALID, HAVING REGARD TO THE PROVISIONS OF SECTION 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT THE ITAT HAD SCANNED THROUGH THE SATISFACTION NOTE AND THE MATERIAL WHICH WAS DI SCLOSED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT YEAR 2004-05 THEREAFTER. AFTER TAKING NOTE OF THE MATERIAL IN PARA 9 OF THE ORDER, THE POSITION T HAT EMERGES THEREFROM IS DISCUSSED IN PARA 10. IT WAS SPECIFICA LLY RECORDED THAT THE COUNSEL FOR THE DEPARTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS IMPRIMATUR TO THE AFORESAID APPROACH OF THE TRIBUNAL. THAT APART, LEARNED SENIOR COUNSEL APPEAR ING FOR THE RESPONDENT, ARGUED THAT NOTICE IN RESPECT OF AS SESSMENT YEARS 2000-01 AND 2001-02 WAS EVEN TIME BARRED. ITA NO.281 & 282/DEL/2015 16 19) WE, THUS, FIND THAT THE ITAT RIGHTLY PERMITTED THIS ADDITIONAL GROUND TO BE RAISED AND CORRECTLY DEALT WITH THE SAME GROUND ON MERITS AS WELL. ORDER OF THE HIGH CO URT AFFIRMING THIS VIEW OF THE TRIBUNAL IS, THEREFORE, WITHOUT ANY BLEMISH. BEFORE US, IT WAS ARGUED BY THE RESPONDENT THAT NOTICE IN RESPECT OF THE ASSESSMENT YEARS 2000-01 A ND 2001-02 WAS TIME BARRED. HOWEVER, IN VIEW OF OUR AFOREMENTIONED FINDINGS, IT IS NOT NECESSARY TO ENT ER INTO THIS CONTROVERSY. 18. THE SEQUITUR OF THE JUDGMENT WHICH CAN BE CULLE D OUT IS THAT, SEIZED INCRIMINATING MATERIAL HAS TO PERTAIN TO THE ASSESSMENT YEAR IN QUESTION AND HAVE CO-RELATION, D OCUMENT- WISE, WITH THE ASSESSMENT YEAR. 19. RECENTLY, HONBLE DELHI HIGH COURT IN CASE OF PCIT VS. ALLIED PERFUMES P LTD. (2021 ) 431 ITR 237 (DELHI) HELD AS UNDER:- 13. UPON READING OF THE AFORESAID EXTRACTED PORTION OF THE IMPUGNED ORDER, IT IS CLEARLY DISCERNABLE THAT THE ITAT HAS GIVEN A FINDING OF FACT THAT THE ASSESSMENTS MAKE NO REFERENCE TO THE SEIZED MATERIAL OR ANY OTHER MATERIAL FOR THE YEARS UNDER CONSIDERATION, THAT WAS FOUND DURING THE COURSE OF SEARCH, IN THE CASE OF THE ASSESSEE. MR. MARATHA IS ALSO UNABLE TO POINT OUT ANY INCRIMINATING MATERIAL RELATED TO THE ASSESSEE WHICH COULD JUSTIFY THE ACTION OF THE REVENUE. ITA NO.281 & 282/DEL/2015 17 MERELY BECAUSE A SATISFACTION NOTE HAS BEEN RECORDED, CANNOT LEAD US TO REACH TO THIS CONCLUSION, ESPECIALLY WHEN THE REVENUE HAS NOT LAID ANY FOUNDATION TO SUPPORT THEIR CONTENTION. IN THE FACTUAL BACKGROUND AS EXPLAINED ABOVE, THE ASSUMPTION OF JURISDICTION UNDER SECTION 153C CANNOT BE SUSTAINED IN VIEW OF THE DECISION OF THIS COURT IN THE CASE OF KABUL CHAWLA (SUPRA) 20. THUS, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AS ABOVE AND IN VIEW OF AFORESAID BINDING JUDIC IAL PRONOUNCEMENTS, WE HOLD THAT THE ADDITIONS MADE IN THE ORDER PASSED U/S. 153A, FOR THE CAPTIONED ASSESSMEN T YEARS WHICH ARE UNABATED ASSESSMENTS, CANNOT BE MADE, BEC AUSE SAME ARE BEYOND THE SCOPE OF ASSESSMENTS U/S. 153A AS THE SAME ARE WITHOUT ANY INCRIMINATING DOCUMENTS FOUND DURING SEARCH. HENCE ON LEGAL GROUNDS THE IMPUGNED ADDITIO NS ARE DELETED. 21. IN THE RESULT REVENUES APPEALS ARE DISMISSED. ABOVE DECISION WAS ANNOUNCED ON CONCLUSION OF VIRTU AL HEARING IN THE PRESENCE OF BOTH THE PARTIES ON 17/0 8/2021. SD/- SD/- [PRASHANT MAHARISHI] [AMIT SHUKLA] [ACCOUNTANT MEMBER] JUDICIAL MEMBER DATED: 17/08/2021 PKK: