SHRIMATI .SANJANA MITTAL, FEROZPUR V. DY COMMISSIONER OF INCOME TAX, JALANDHAR

ITA 636/ASR/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2665 (ITAT-AMRITSAR)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 19-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Question of law
• Section: 132; 153A; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 635/Asr/2018 Assessment Year: 2015-16 Sh. Rahul Mittal, H. No. 15-17, Street No. 4, Ferozepur Cantt. [PAN: ASPPM 8787M] Vs. Dy. Commissioner of Income Tax, Central Circle-1, Jalandhar (Appellant) (Respondent) I.T.A. No. 636/Asr/2018 Assessment Year: 2011-12 Smt. Sanjana Mittal, H. No. 15-17, Street No. 4, Ferozepur Cantt. [PAN: AJWPM 1931B] Vs. Dy. Commissioner of Income Tax, Central Circle-1, Jalandhar (Appellant) (Respondent) Appellant by : Sh. Ashray Sarna, C.A. Respondent by: Sh. Sanjeev Kaushal, CIT DR Date of Hearing: 23.03.2022 Date of Pronouncement: 10.05.2022 ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 2 ORDER Per Dr. M. L. Meena, AM: Both the captioned appeals, by the assessees are directed against the order of the Commissioner of income tax, appeals, (hereinafter referred to as “the CIT appeal” wherein the assessee has challenged confirmation of additions in view of the legality of the impugned assessment orders passed under section153A r.w.s.143(3)of the act, as no incriminating material was found consequent to search conducted under section 132 of the act. 2. At the outset, Shri Ashray Sharna, learned counsel for the assessee submitted that in these cases assessments have been completed under section 153A r.w.s.143(3) of the act, consequent to search operation under section 132(1) at the business premises of the assessee on 11.02.2016 as noted by the authorities below. He contended that in the present case there was no assessment proceedings pending for assessment 2015 – 16 on the date of search and hence the said assessment was not abated. The learned AR contended that there was no incriminating material qua impugned addition was found in the search, as evident from the assessment order in which it is mentioned that addition has been made on the basis of documents obtained during the course of assessment. Thus, ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 3 there was no one committing material, much less, in respect of the impugned addition and hence such addition made in absence of any incriminating material unearthed in consequence of the search, is not permissible under the law. In support, he placed reliance on the decision of ITAT Amritsar bench in the case of Shri Krishna, Mittal, in ITA No. 637/ASR/2018 dated 23.12.2021. 3. Per contra, the Ld. CIT(DR) stands by the impugned order and argued that though the incriminating material was not recovered consequence of search operation, however in law there is no necessity of any incriminating material while initiating proceedings u/s 153A of the Act as various High Courts held that the addition can be made without any incriminating material qua the years covered by Sec.153A. The Ld. DR finally argued that the conclusion drawn by Delhi High Court in the case of CIT vs. Kabul Chawala (supra) is contrary to the principle laid by the same High Court in the case of Anil Kumar Bhatia (24 taxmann.com 98) and Chetan Das Lachman Das (25 taxmann.com 227) and thus, the decision of Kabul Chawla (supra) is not a good law because the issue relating to material not found during the search was considered to be open in Anil Kumar Bhatia (supra). ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 4 4. We have heard both the parties, perused the material available on record and the case laws cited at bar. Admittedly, in the present case there was no assessment proceedings pending for assessment 2015 – 16 on the date of search and hence the said assessment was not abated. The ld. Counsel, contended that no documents or suspecicious material of incriminating nature has been found or seized either from the premises of the assessee or the companies, in which he was one of the share holder. 5. Identical issue regarding no addition/disallowance can be made qua unabated assessment has been dealt with by the coordinate Amritsar bench in the case of Shri Krishna, Mittal (supra). The relevant part of the order is reproduced hereunder: 7. We have heard both the parties, perused the material available on record and the case laws cited at bar. It is not disputed that the asseeee has filed its Income Tax Return 30.09.2015 for the relevant assessment year 2012-13 which has been processed u/s 143(1) of the act on dated 23.03.3013. Subsequently, a search operation u/s 132 was carried out at the residential premises of the assessee on 11.02.2016. Further, another peculiar fact is that alleged incriminating material i.e., back up data stored in various computers lying in the business premises of M/s Bhagwati Lacto Foods Pvt. Ltd., and the Laptop of Sh. Manjeet Singh, Accountant of the Company, in the form of typed balace sheet, bank statement which was used against the assessee was already disclosed in its audited books of account the return of income filed with the Department. The ld. Counsel, contended that no documents or suspecicious ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 5 material of incriminating nature has been found or seized either from the premises of the assessee or the companies, wherein he become share holder. 8. It is seen that the assessee has claimed before the authorities below that where no assessment proceeding for the year under consideration is pending, in that eventuality, in the absence of any incriminating evidence found during the course of search and seizure proceedings, no addition/disallowance can be made qua unabated assessment for the said year, however the authorities below held that the Hon’ble Kerala High Court in the case of “E.N. Gopal Kumar vs. CIT(Central) (Supra)”, there is no condition that the Department has to unearth some incriminating material to conclude some method against the assessee in events where the assessment is triggered by a notice under Section 153(1)(a) of the Act. 7. The question of law involved in the instant case pertains to the issue that where no assessment proceeding for the year under consideration is pending, in that eventuality, in the absence of any incriminating material found during the course of search and seizure proceedings, whether the addition can be made qua unabated assessment for the said year? An identical question on identical fact has been examined and adjudicated by Coordinate Bench, Amritsar in case of “Smt. Sanjana Mittal Vs. DCIT”, ITA No. 487/Asr/20l8 dated 11.03.2019, one of the assessee of the same search group wherein it was held that in a case, where no incriminating material is found during course of search proceedings; and the assessment proceedings remain un-abated as on the said date no addition can be made validly in the hands of assessee. While arriving at such decision the coordinate Bench has relied on the judgment of Hon’ble Delhi High Court rendered in the case of “CIT(Central-3) vs. Kabul Chawla (supra)”, wherein it is clearly held that if on the date of search, the assessment proceedings already stood completed and no incriminating material unearthed during the search, then no addition can be made to the income already assessed. The said dictum of the Hon’ble High Court was confirmed by the Hon’ble Apex Court vide order dated 2 nd July, 2018 in the case of Pr. Joint CIT ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 6 vs. Meeta Gutgutia by dismissing the Department’s SLP filed against the judgment of Delhi High Court, wherein the same dictum has been laid down by the Hon'ble Court as laid down in the CIT vs. Kabul Chawla (supra), hence it cannot be said that law laid down by Delhi High Court in Kabul Chawla case {supra} is not a good law as claimed by the Ld. CIT DR. 6. In another case of “Smt. Manju Mittal Vs DCIT”, ITA No.l93/ASR/2019 dated 01.01.2020the Amritsar Bench held that where computation of undisclosed income vis-a-vis absence of incriminating material, Return filed by the assessee for the relevant assessment year has already been processed by the Revenue under s. 143(1), then it is not the case of the Revenue that the assessment proceedings were still alive as on the date of search operation. From the orders passed by the authorities below there is nothing to suggest as to what incriminating material has been found during the search either from the assessee's possession or its premises, and therefore, the additions so made not sustainable. The judgment in cases of CIT vs. Kabul Chawla (2015) 281 CTR (Del) 45 : (2015) 126 DIR (Del) 130 : (2016) 380 ITR 573 (Del), Principal CIT vs. Meeta Gutguiia (2017) 295 CTR (Del) 466 : (2017) 152 DTR (Del) 153(2017) 395 ITR 526 (Del) and Smt. Sanjana Mittal vs. Dy. ClT (2019) 199 TTJ (Asr) UO) 15 followed while distinguishing Dy. CIT & Anr Vs. Zuari Estate Development & Investment Co. Ltd. (2015) 124 DTR (SC) 222 : (2015) 373 ITR 661 (SC). ITA Nos.635&636/ASR/2018 Rahul Mittal & Ors v. Dy.CIT 7 7. Respectfully following Coordinate Amritsar Bench decision on the identical facts in the case of “Smt. Sanjana Mittal Vs. DCIT (Supra)”, and “Krishna Kumar Mittal Vs. DCIT(Supra), we hold that in the absence of incriminating material, no addition can be made qua unabated assessment for the year under consideration in the case of both the appellant assesses. 8. In the above view, we accept the grievance of assessee as genuine and as such delete the additions made by the AO in the case of both the appellate assessees. 9. In the result, both the appeals are allowed. Order pronounced in the open court on 10.05.2022. Sd/- Sd/- (Anikesh Banerjee) (Dr. M. L. Meena) Judicial Member Accountant Member Date: 10.05.2022 Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(Appeals) (4) The CIT concerned (5) The Sr. DR, I.T.A.T True Copy By Order