ACIT, CC-3(2), Kolkata, Kolkata V. M/s PHPL Stock Broking Pvt. Ltd., Kolkata

ITSSA 12/KOL/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3881 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: A K TULSIYAN
• Keywords: Search and seizure
• Section: 153A; 132

Judgement Text

1 IT(SS)A NO.12/KOL/2017 PHPL STOCK BROKING PVT. LTD., AY 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T(SS).A NO. 12/KOL/2017 / ASSESSMENT YEAR: 2012-13 ASSISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCLE-3(2), KOLKATA. VS. M/S. PHPL STOCK BROKING PVT. LTD. (PAN: AAGCP5155Q) ( )* /APPELLANT ) ( +,)* / RESPONDENT ) DATE OF HEARING 14.06.2018 DATE OF PRONOUNCEMENT 21.08.2018 FOR THE APPELLANT/ )* SHRI G. HANGSHING, CIT, DR FOR THE RESPONDENT/ +,)* SHRI A. K. TULSIYAN, FCA / ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE REVENUE IS AGAINST THE ORDER OF TH E LD. CIT(A)-21, KOLKATA, DATED 24.03.2017 FOR AY. 2012-13. 2. IN THIS APPEAL GROUND NO. 1 OF REVENUES APPEAL REL ATES TO THE LEGAL ISSUE THAT THE LD. CIT(A) IS NOT JUSTIFIED TO HOLD THAT SECTION 153A O F THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DOES NOT EMPOWER THE AO TO REASSESS INCOME OF THE COMPLETED ASSESSMENT WITHOUT ANY SEIZED MATERIAL OR ASSET. IN ORDER TO APPRECIATE THE FACTS CLEARLY THE CHART MADE FOR THE AFORESAID ASSESSMENT YEAR IS REP RODUCED BELOW: ASSTT. YEAR DATE OF FILING ORIGINAL RETURN TIME LIMIT FOR ISSUANCE OF NOTICE U/S. 143(2) DATE OF SEARCH WHETHER ASSESSMENT IS PENDING ON DATE OF SEARCH (1) (2) (3) (4) (5) 2012-13 27.09.2012 30.09.2013 07.11.2013 NOT PENDIN G 2 IT(SS)A NO.12/KOL/2017 PHPL STOCK BROKING PVT. LTD., AY 2012-13 3. FROM A PERUSAL OF THE ABOVE CHART WE NOTE THAT R ETURN OF INCOME FOR THIS AY 2012-13 WAS FILED BY THE ASSESSEE ON 27.09.2012. WE NOTE T HAT THE TIME LIMIT FOR ISSUING OF NOTICE U/S. 143(2) OF THE ACT WAS ON 30.09.2013. WE ALSO NOTE THAT THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT ASSESSEES PREMISES ON 0 7.11.2013 WHICH MEANS THE ORIGINAL ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR WAS NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH. THEREFORE, SINCE THE ASSESSMENT WAS NOT PE NDING ON THE DATE OF SEARCH BEFORE THE AO, WHEN RE-ASSESSMENT U/S. 153A OF THE ACT IS CARR IED OUT THE AO HAS TO REITERATE THE ASSESSMENT AND CAN ONLY VENTURE TO MAKE ANY ADDITIO N ONLY IN RESPECT OF THE INCRIMINATING MATERIAL SEIZED DURING SEARCH AS HELD BY THE HONBL E DELHI HIGH COURT IN THE ITA NO. 707, 709 & 7013 OF 2014 CIT CENTRAL-III VS. KABUL CHAWLA , WHEREIN THEIR LORDSHIPS HAVE HELD AS UNDER: SUMMARY OF LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES 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 ISSUED TO THE PERSON SEARCHE D REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVAN T TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT 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 TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH B OTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS O F THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATI NG MATERIAL UNEARTHED DURING THE COURSE 3 IT(SS)A NO.12/KOL/2017 PHPL STOCK BROKING PVT. LTD., AY 2012-13 OF PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHIC H WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. 4. THE RATIO HAS BEEN APPROVED BY THE HONBLE JURIS DICTIONAL HIGH COURT ALBEIT IN PROCEEDINGS U/S. 153C IN CIT VS VEERPRABHU MARKETING LTD. REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL) HAS ALSO HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE DELHI HIGH COURT THAT INCRIMINATING MATERIAL IS PRE- REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED U/ S 153(C) R.W SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS MADE A DISALLOWANCE OF THE EXPENDITU RE, WHICH WAS HELD DISCLOSED, FOR ONE REASON OR THE OTHER, BUT SUCH DISALLOWANCES MADE BY THE AO WE RE UPHELD BY THE LD.CIT(A) BUT THE LD. TRIBUNAL DELETED THESE DISALLOWANCE. WE FIND NO INF IRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS, THEREFORE, DISMISSED. 5. IN THE LIGHT OF THE AFORESAID RATIO LAID BY THE HON'BLE HIGH COURTS, WHEREIN, THE HONBLE HIGH COURT HELD THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIALS, THE COMPLETED ASSESSMENT CAN BE RE-ITERATED AND IN THE CASE BEFOR E US FROM A PERUSAL OF THE AFORESAID CHART, IT IS CLEAR THAT ON THE DATE OF SEARCH I.E. ON 07.1 1.2013, ASSESSMENTS PERTAINING TO A.Y. 2012- 13 WAS NOT PENDING BEFORE THE AO BECAUSE THE LAST D ATE FOR ISSUANCE OF SECTION 143(2) NOTICE FOR SCRUTINY WAS ON 30.09.2013 FOR AY 2012-1 3, THEREFORE, IT CAN BE SAFELY PRESUMED THAT THE ASSESSMENT WAS NOT PENDING BEFORE THE AO A ND AS PER THE RATIO LAID BY THE HONBLE HIGH COURT THE ASSESSMENT WHICH STANDS CONCLUDED CA NNOT BE TINKERED WITH FRESH ADDITIONS WITHOUT INCRIMINATING MATERIALS SEIZED DURING SEARC H. FURTHER, WE NOTE THAT THE LD. DR COULD NOT BRING TO OUR NOTICE THAT THERE WAS ANY INCRIMIN ATING MATERIAL FOUND ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE IN THE RE-ASSESSMENT CARRI ED OUT UNDER SECTION 153A PROCEEDINGS. IN SUCH A SCENARIO, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND SO, WE CONFIRM THE SAME. THEREFORE, THE APPEAL OF THE REVENUE IS DISMISSED. SINCE THE APPEAL OF THE REVENUE IS DISMISSED ON THE LEGAL ISS UE OTHER GROUNDS ARE ACADEMIC IN NATURE AND NEED NOT BE ADJUDICATED UPON. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 ST AUGUST, 2018 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIALMEMBER JD.(SR.P.S.) DATED :21ST AUGUST, 2018 4 IT(SS)A NO.12/KOL/2017 PHPL STOCK BROKING PVT. LTD., AY 2012-13 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ACIT, CENTRAL CIRCLE-3(2), KOLKATA. 2 RESPONDENT M/S. PHPL STOCK BROKING PVT. LTD., 32, J. L. NEHRU ROAD, OM TOWER, 12 TH FLOOR, KOLKATA-700 071. 3 . THE CIT(A)-21, KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECY.,