Shri D.S. Sharma, Faridabad V. ACIT, Faridabad

ITA 4991/DEL/2015

• Counselvise Citation: 499120114 RSA 2015
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 21-10-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 04-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M K JAIN
• Assessee Lawyers: SAUBHAGYA AGGARWAL
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-II : NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NOS.4988 TO 4991/DEL/2015 ASSESSMENT YEARS : 2002-03 TO 2004-05 & 2007-08 D.S. SHARMA, HOUSE NO.1373, SECTOR-37, FARIDABAD. PAN: AOCPS8078H VS. ACIT, CENTRAL CIRCLE-1, FARIDABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SAUBHAGYA AGGARWAL, ADVOCATE DEPARTMENT BY : SHRI M.K. JAIN, SR. DR DATE OF HEARING : 21.10.2015 DATE OF PRONOUNCEMENT : 30.10.2015 ORDER ALL THESE APPEALS ARE FILED BY THE ASSESSEE AGAINS T THE COMMON ORDER OF THE CIT(A)-3, GURGAON DATED 4.6.2015 FOR ASSESSM ENT YEARS 2002-03 TO 2004-05 AND ORDER DATED 4.6.2015 FOR ASSESSMENT YEA R 2007-08. ITA NOS.4988 TO 4991/DEL/2015 2 2. AS THE ISSUE ARISING FROM ALL THESE APPEALS ARE COM MON, FOR THE SAKE OF CONVENIENCE, THESE ARE BEING DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 3. THE COMMON GROUND THAT ARISES FROM ALL THESE APPEAL S IS GROUND NO.1 WHICH IS EXTRACTED FOR READY REFERENCE:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMI NG THE ACTION OF THE LD.AO IN FRAMING THE IMPUGNED ASSESSMENT ORDER U/S 153A/143(3) AND MAKING THE IMPUGNED ADDITION THEREIN, MORE SO WHEN NO INCRIMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH AND IN ANY CASE IMPUGNED ADDITION IS OUTSIDE THE PURVIEW OF SECTION 153A OF THE ACT. 4. THE FACT THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND OR SEIZED DURING THE COURSE OF SEARCH, BASED ON WHICH THE ABOVE ADDITIONS OR DISALLOWANCES WERE MADE AND THE FACT THAT NONE OF T HE ASSESSMENTS FOR THESE ASSESSMENT YEARS HAVE ABATED, IS NOT IN DISPU TE. THIS IS EVIDENT FROM PARA 7.1 OF THE LD.CIT(A)S ORDER. 5. ON THESE FACTUAL BACKGROUND, THE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT, CENTRAL-III VS. KABUL CHAWLA IN ITA NO .707/2014 VIDE JUDGMENT DATED 20 TH APRIL, 2015 AT PARA 37 AND 38 HAS HELD AS FOLLOWS: - ITA NOS.4988 TO 4991/DEL/2015 3 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN W HICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TO TAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE AS SESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATIO N AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT D OES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT AN Y RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESS MENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATAB LE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEA RCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. ITA NOS.4988 TO 4991/DEL/2015 4 VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006- 07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS A LREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEA RTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE IN COME ALREADY ASSESSED. 6. RESPECTFULLY FOLLOWING THE PROPOSITION LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN ALL THESE CASES, THE A DDITION MADE IN ALL THESE ASSESSMENTS ARE DELETED FOR THE SOLE REASON THAT TH EY ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.201 5. SD/- [J.SUDHAKAR REDDY] ACCOUNTANT MEMBER DATED, 30 TH OCTOBER, 2015. DK ITA NOS.4988 TO 4991/DEL/2015 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.