SHYAM MAHABIR PRASAD JATIA,MUMBAI V. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 7(1), , MUMBAI

ITA 399/MUM/2024

AI Insights

The case involves appeals by Shyam Mahabirprasad Jatia against the orders passed by the Income Tax Officer, Central Circle-7(1), Mumbai, for the assessment years 2013-14, 2015-16, and 2016-17. The appeals were filed following a search and seizure operation under Section 132 of the Income Tax Act conducted on the assessee on 17/04/2018. The primary legal issue was the validity of the additions made by the AO under Section 153A read with Section 143(3), which were challenged as being made without any incriminating material. The Tribunal referenced the Supreme Court's decision in PCIT vs. Abhisar Buildwell (P) Ltd, which clarified that additions can only be made based on undisclosed income found through incriminating material during the search.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 40337 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-07-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 29-01-2024
• Other Referred Cases: PCIT vs. Abhisar Buildwell (P) Ltd in Civil Appeal No.6580 of 2021
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWANATH DAS
• Assessee Lawyers: SIDDHARTH
• Keywords: Salary income; Search and seizure; Block assessment
• Section: 143(3); 143(2); 132; 153A; 139(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘E‘ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA Nos.399-401/Mum/2024 (Assessment Year :2013-14, 2015-16 & 2016-17) Shyam Mahabirprasad Jatia G12, Raheja Centre 214, Free Press Journal Marg, Nariman Point Mumbai-400 021 Vs. Income Tax Officer Central Circle-7(1) Mumbai PAN/GIR No.AACPJ2619L (Appellant) .. (Respondent) Assessee by Shri Siddharth Srivasatava,CA Revenue by Shri Biswanath Das, CIT DR Date of Hearing 09/07/2024 Date of Pronouncement 03/10/2024 आदेश / O R D E R PER AMIT SHUKLA (J.M): The aforesaid appeals have been filed by the assessee against separate impugned order of even date on 30/06/2023 passed by CIT(A)-49, Mumbai for the quantum of assessment passed u/s.153A r.w.s. 143(3) for the A.Y.2013-14, 2015-16 and 2016-17. ITA No.399-401/Mum/2024 Shyam Mahabirprasad Jatia 2 2. In all the years, one of the legal issue which has been raised that ld. AO has passed assessment order u/s.153A r.w.s. 143(3) thereby, making various additions which comprised of adhoc disallowance of various heads of expenses without any incriminating material found in the course of search. 3. The brief facts are that a search and seizure action u/s.132 was carried out in the case of the assessee on 17/04/2018 and as on date of search, the status of assessment for A.Y.2013-14, 2015-16 and 2016-17 were as under:- Particulars AY 2013-14 AY 2015-16 AY 2016-17 Date of filing return under section 139(1) of the Act 23.07.2013 28.08.2015 21.07.2016 Income as per ITR Rs. 11,80,670/- Rs. 88,85,450/- Rs. 4,55,78,270/- Taxes Paid Rs. 188,612/- Rs. 25,67,124/- Rs. 1,54,43,529/- Date of intimation u/s 143(1)of the Act 29.11.2013 07.10.2015 23.11.2016 Date of assessment u/s 143(3) of the Act, if any No assessment order passed u/s 143(3) of the Act No assessment order passed u/s 143(3) of the Act No assessment order passed u/s 143(3) of the Act Date of assessment u/s 147 of the Act, if any No reassessment order passed u/s 147 of the Act No reassessment order passed u/s 147 of the Act No reassessment order passed u/s 147 of the Act ITA No.399-401/Mum/2024 Shyam Mahabirprasad Jatia 3 Last date to issue notice u/s 143(2) of the Act 30.09.2014 30.09.2016 30.09.2017 Date of conducting search & seizure u/s 132 of the Act 17.04.2018 17.04.2018 17.04.2018 Date of Notice issued u/s 153Aofthe Act 23.10.2019 23.10.2019 23.10.2019 Date of filing return in response to notice u/s 153Aofthe Act 05.11.2019 declaring total income as Rs. 11,80,670/-. 05.11.2019 declaring total income as Rs. 88,85,450/-. 05.11.2019 declaring total income as Rs. 4,55,78,270/-. Date of order u/s 153Ar.w.s. 143(3) of the Act 24.06.2021 24.06.2021 24.06.2021 Variance made to the returned income Addition of Rs. 2,57,604/- under the head Income from Salary Disallowance of Rs. 3,06,6 18/- of Expenses claimed u/s 57 of the Act Disallowance of Rs. 7,47,815/- of Expenses claimed u/s 57 of the Act 4. On perusal of the assessment order as well as the appellate order, it is seen that in all the years the ld. AO has made disallowance of expenses u/s. 57(iii) for the A.Y.2015-16 and ITA No.399-401/Mum/2024 Shyam Mahabirprasad Jatia 4 2016-17 for Rs.3,06,618/- & 7,47,815/- respectively; and addition of Rs.2,57,604/- under the head ‘income from salary’. Nowhere, the ld. AO and ld. CIT (A) has stated or has referred to any seized or incriminating material found in the course of search in all these years as noted above at the time of search. The assessments for A.Y.2013-14, 2015-16 and 2016-17 had attained finality and in terms of proviso to Section 153A, and therefore, all the assessments are to be reckoned as unabated assessment. It is now a well settled proposition of law as held by the Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell (P) Ltd in Civil Appeal No.6580 of 2021 wherein the Hon’ble Supreme Court held that the object of section 153A is to bring under tax undisclosed income which is found during course of search or pursuant to search or requisition, therefore, only in a case where undisclosed income is found on the basis of incriminating material, Assessing Officer would assume the jurisdiction to assess or reassess total income for entire six years block assessment period even in case of completed/unabated assessment. In case of search under section 132 or requisition under section 132A, Assessing Officer assumes jurisdiction for block assessment under section 153A and that all pending assessments/reassessments shall stand abated. In respect of completed assessments/unabated assessments no addition can be made by Assessing Officer in absence of any incriminating material found during course of search under section 132 or requisition under section 132A. ITA No.399-401/Mum/2024 Shyam Mahabirprasad Jatia 5 5. Thus, as admitted all the additions which have been made by the AO are adhoc disallowance of expenses which are neither based on any incriminating material found in the course of search nor any seized document. Thus, these additions are beyond the scope of Section 153A and accordingly, the same are deleted. 6. In the result, all the appeals of the assessee are allowed. Order pronounced on 3rd October, 2024. Sd/- (GAGAN GOYAL) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 03/10/2024 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// "