Deputy Commissioner of Income-tax, Central Circle -2 (4), Pune V. M/s. Anshul Siddhi Promoters & Builders, Pune

ITSSA 89/PUN/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3600 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-07-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 29-05-2019
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: NAVEEN GUPTA
• Keywords: Set aside
• Section: 132; 143(3); 153A; 139(1)

Judgement Text

आयकर अपीलीय अिधकरण “ए” Ɋायपीठ पुणे मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपीलसं. / IT(SS)A No.89/PUN/2019 िनधाᭅरण वषᭅ /Assessment Year: 2015-16 The Deputy Commissioner of Income Tax, Central Circle-2(4), Pune. Vs Anshul Siddhi Promotors & Builders, Unit-501, 5 th Floor, Karan Tej Bonita, CTS No.1187/16, Ghole Road, Shivajinagar, Pune – 411005. PAN: AAZFS 8803 L Appellant /Revenue Respondent/ Assessee Cross Objection No.27/PUN/2022 (arising out of IT(SS)A No.89/PUN/2019) िनधाᭅरणवषᭅ /Assessment Year: 2015-16 Anshul Siddhi Promotors & Builders, Unit-501, 5 th Floor, Karan Tej Bonita, CTS No.1187/16, Ghole Road, Shivajinagar, Pune – 411005. PAN: AAZFS 8803 L Vs The Deputy Commissioner of Income Tax, Central Circle-2(4), Pune. Appellant/ Assessee Respondent/ Revenue Assessee by Shri S N Puranik – AR Revenue by Shri Naveen Gupta – DR Date of hearing 16/06/2022 Date of pronouncement 11/07/2022 आदेश/ ORDER PER DR.DIPAK P.RIPOTE, AM: This appeal filed by the Revenue, Cross Objection appeal filed by the assessee are directed against the order of ld.Commissioner of IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 2 Income-tax(Appeals)-12, Pune’s, order dated 29.03.2019 for the Assessment Years 2015-16 & 2016-2017, involving proceedings under section 143(3) rws 153A of the Income Tax Act, 1961. The Revenuehas raised the following grounds of appeal: “1. On the facts and circumstances of the case and law, the Ld.CIT(A) erred in directing the A.O. to allow fresh claims made in the return of income after examining the genuineness of the expenses before allowing the same, by ignoring that the powers of the CIT(A) to set aside a matter to the AO has been omitted by Finance Act 2001 w/e/f 01/06/2001. 2. The appellant craves leave to add, modify or delete any or all of the aforesaid grounds of appeal.” 2. In Cross Objection appeal, the Assessee following grounds of appeal: “1. Cross-objector prays for dismissal of Appeal of Revenue, as not maintainable for revenue effect less than Rs.50 lakhs. 2. Cross-objector objects Revenue’s contention in Ground as to Order is set aside by CIT(A) to A.O. Cross objector prays to hold that CIT(A) has not set aside the Order and the same is valid. 3. Cross Objector prays to uphold the order of CIT(A) for allowing the fresh claim in the return filed in response to Notice U/s.153A. 4. Cross-objector prays for just and equitable relief. 5. Cross-objector prays to add, alter, amend and/or withdraw the Ground/s during appellate proceedings as occasion may demand.” 3. Brief facts of the case are that there was a search u/s 132 of the Act on 28/03/2016 in Anshul group. The assessee had filed original return of Income u/s 139(1) of the Act on 30/09/2015 showing Total IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 3 Income of Rs.1,05,38,540/-. After the search in response to notice u/s153A of the Act the assessee filed return of Income u/s 153A declaring total income at Rs.21,75,050/-. The AO ignored the Total Income shown in the return of income filed in response to notice u/s 153A of the Act, of Rs.21,75,050/- and considered the total income of Rs.1,05,38,540/- shown in the original return filed u/s 139(1) of the Act, giving only one reason that it is beneficial for the revenue. The AO has not given any other reason for rejecting the assessee’s claim. 3.1 Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the ld.Commissioner of Income Tax(Appeal). The ld.CIT(A) accepted the claims of expenditure made in the return of Income filed under section 153A of the Act, but the ld.CIT(A) set it aside to the Assessing officer to verify the expenditure. 3.2 Aggrieved by the order of the ld.CIT(A), both department and assessee has filed appeal before this Tribunal. 4. Heard both the parties. Perused the assessment order and records. 4.2 In this case the Ld.CIT(A) has given a finding that the assessment was abated for the year. As per section 153A of the Act, the second proviso, any assessment or re-assessment proceedings IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 4 falling within the said period of six assessment years pending on the date of initiation of search under section 132 or making of requisition under section 132-A shall abate. Hon’ble Bombay High Court in the case of PCIT Central vs JSW Steel Ltd (ITA No.1934 of 2017 order dated 05/02/2020) has held as under: Quote “14. We would further like to emphasis on the judgment passed by this Court in the case of Continental Warehousing Corpn (Nhava Sheva) Ltd. (supra) which also explains the second proviso to Section 153A(1). The explanation is that pending assessment or reassessment on the date of initiation of search if abated, then the assessment pending on the date of initiation of search shall cease to exist and no further action with respect to that assessment shall be taken by the AO. In such a situation the assessment is required to be undertaken by the AO under section 153A(1) of the said Act. 15. In view of the above, we are in agreement with the findings given by the Tribunal in respect of allowing of the assessee's appeal in paragraph -14 of the order under challenge dated 28-9-2016, which reads thus : "14. From the above discussion and precedence, the scheme of assessment u/s. 153A of the Act in case of search, the AO shall issue notice to searched person requiring him to furnish within such period as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A and clause (b) postulates assessment or reassessment of the total income of six years immediately preceding the assessment year relevant to the previous year in which such search is conducted. The first proviso mandates that the AO shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso postulates that the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in sub- section (1) is pending on the date of initiation of the search u/s. 132 of the Act shall abate. In the present case before us, however, though the second proviso to sub-section (1) of section 153A would not apply in the first three years of this case, yet, as far as the second three year period is concerned (which are pending before us), the assessments were pending The proceedings in relation thereto abate. Now the entire assessment in relation to the second phase of three years can be made. The pending assessment in that case may be undertaken u/s. 153A of the Act. The abatement of IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 5 pending assessment is for the purpose of avoiding two assessments for the same year i.e. one being regular assessment and the other being search assessment u/s. 153A of the Act. In other words, these two assessments merge into one assessment. It means that completed assessments stand on different footing from the pending assessments. Hence, in so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s. 153A of the Act merge into one and in that case only one assessment for the remaining set of years, where assessment is pending, is to be made separately on the basis of search materials and the regular material existing or brought on record before the AO/Revenue. It means that the assessee can make any new claim in the return of income filed u/s. 153A of the Act or even during the course of assessment proceedings undertaken u/s. 153A of the Act. In our view, and in view of the second proviso to section 153A (1) of the Act, once assessment get abated it is opened both way i.e. for the Revenue to make any additions apart from seized material even regular items declared in the return can be subject matter if there is doubt about the genuineness of those items and similarly the assessee also can lodge new claim, deduction or exemption or relief which remained to be claimed in regular return of income, because assessment was never made in the case of the assessee in such situation. Hence, we allow this issue of assessee's appeal." 16. From the above we conclude that in view of the second proviso to section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation.” Unquote . 5. Respectfully following the Hon’ble Jurisdictional High Court, we hold that the assessee can lodge a new claim u/s153A in abated assessments which was not made in the return of Income originally filed u/s139(1) of the Act. Therefore, in this case the assessee was right in making a new claim which was not made in the original return filed u/s 139(1) of the Act. It is observed that the Assessing Officer in the impugned assessment u/s 153A r.w.s 143(3) of the Act, has rejected the claim on technical ground without verifying it on IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 6 merit. We have already held that assessee can make a fresh claim. The Assessing officer had not verified the expenditure claimed in the return filed u/s 153A which were not claimed in the return of income filed u/s 139(1), therefore, in the interest of justice, we set aside the case to the file of the Assessing Officer for limited purpose of verifying the expenditure claimed which were not claimed in the original return filed under section 139(1),after giving opportunity to the assessee.AO is directed to allow the expenditure claimed if found as per law.Thus, the grounds raised in the CO are allowed for statistical purpose. 5.1. Regarding the department’s ground number 1, we are of the opinion that the ld.CIT(A) had given a finding that the assessee can make a new claim in the return of income filed in response to notice u/s 153A . But the ld.CIT(A) had asked the AO to verify the new claim. We agree with the department that the ld.CIT(A) do not have any power to set aside u/s 251(1)(a); applicable w.e.f. 1/6/2001, remand the case to the AO for verification of the claim made by the assessee. Therefore, the Ground No.1 of the Revenue is allowed. However, in the earlier para we have directed the Assessing Officer to admit the claim made by the Assessee in the return of income filed under section 153A and verify the expenditure claimed. The AO is directed to allow the expenditure claimed if found as per law after giving opportunity. IT(SS)A No.89/PUN/2019 [R] & C.O.No.27/PUN/2022 [A] for A.Y.2015-16 Anshul Siddhi Promotors & Builders 7 6. Thus, the Revenue’s appeal is allowed and assessee’s Cross Objection appeal is allowed for statistical purpose in above terms. Order pronounced in the open Court on 11 th July, 2022. Sd/- Sd/- (S.S.GODARA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 11 th July, 2022/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR, ITAT, “A” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकरअपीलीयअिधकरण, पुणे/ITAT, Pune.