TaxTMI 
TaxTMI 
2017 (12) TMI 565
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....rder of the CIT (A) is erroneous and not tenable in law and on facts, b) The appellant craves leaves to add, alter or amend any/a// of the grounds of appeal before or during the course of the hearing of the appeal." 3. Whereas in the Cross Objections the assessee has raised following grounds:- "The Ld. CIT (A) has erred in law and on facts in not quashing the addition of Rs. 3,29,71,035/- u/s 68 of the IT Act. on the ground that the above additions were not based on any incriminating material found in the course of search on the respondent assessee when the original assessment proceedings in the case had not abated as per proviso to section 153 A( 1) of the IT Act." 4. Since the cross objections raised by the assessee goes to the very legality/root of the addition made in the assessment order passed u/s 153A, therefore, at the outset we are proceeding to adjudicate the cross objections of the assessee. The brief facts qua the legal issues raised in the cross objection are that, the assessee company had filed its return of income for the A.Y. 2004-05 u/s 139(1) on 1.11.2004, declaring 'nil' income. Such return of income was duly accompanied by statement of taxable income as we....
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....atement recorded u/s 132(4) of Shri Mahesh Mehta. From the Panchnama he pointed out nothing relating to share application money was found during search. He also drew our attention to various questions and answers in the statement recorded during search and submitted that neither there is any reference of share application money nor anything is mentioned about the assessee company linking with any document seized for the A.Y. 2004-05. In the statement, the disclosure of sum of Rs. 60.80 crore was made in the case of various assessees but nothing has been found or surrendered relating to any assessee nor there do any mention about share application money. Thus, he submitted that the assessee's contention that nothing incriminating has been found in the search relating to the impugned addition for the present assessment year is substantiated from record, therefore no addition can be made within the scope of assessment u/s 153A. In support of this proposition, he strongly relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawala (2016) 380 ITR 570; and latest Hon'ble Delhi High Court decision of in the case of Pr. CIT vs. Meeta Gutgutia, Prop. M/....
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.... ostensibly borne out from the records and does not require any investigation of facts or recording of evidence. Even if it is a new plea taken by the respondent, then if such a plea is purely jurisdictional or a legal ground then same can be raised by the assessee by way of Cross Objections. The respondent can always support the judgment of first appellate authority on any ground even if such ground has not been raised before such authority, however with a caveat that it is purely legal issue and does not require any investigation of facts. Exactly similar issue has been considered by the Hon'ble Delhi High Court in the case of Fast Booking (India) Pvt. Ltd. in ITA No. 334 to 338, 339, 342/2015 vide judgment and order dated 2.9.2015, wherein their lordships had observed and held as under:- "13. In the impugned order, the ITAT relied on the decision of this Court in Regency Creations Ltd. (supra) and allowed the Revenues appeals. The ITAT restored the order of the AO disallowing the claim made by the Assessee under Section IOB of the Act. While taking up the cross- objections, although the delay in filing was condoned, the ITAT declined to permit the Assessee to maintain the ....
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.... the appeal on any ground provided only that the affected party has an opportunity of being heard on that ground. But it has been laid down in a number of cases that this rule does not enable the Tribunal to raise a ground, or permit the party who has not appealed to raise a ground, which will work adversely to the appellant and result in an enhancement." 15. The Supreme Court in NTPC v. CIT (l998) 229 ITR 383 SC has also explained that the power of the Tribunal in dealing with the appeals under Section 254 of the Act is "expressed in the widest possible terms". It was further observed as under: "5. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record, in respect of that item. We do not see any reason to restrict the power....
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.... material and documents which has been referred, mostly pertains to assessment years 2008-09, 2009- 10 and 2010-11 and nothing pertains to 2004-05. Apart from that, there is no reference at all about share application money received by the assessee in this year. From the perusal of the assessment order also, we find that nowhere the Assessing Officer has mentioned any incriminating document or material found during the course of search so as to remotely suggest that the share application money received by the assessee during the course of A.Y. 2004-05 is either bogus or it was received through any hawala transaction or is by way of accommodation entries. In fact as pointed out by the ld. counsel the Ld. CIT (Appeals) too has given a very categorical finding that no evidence was found in the search to indicate that share application money was non-genuine. Thus, it can be safely inferred that the additions aggregating to Rs. 3,29,71,040/- is not based on any incriminating material or documents found during the course of search indicating that the share application money is received by the assessee are bogus or have been received by way of hawala transaction or through accommodation e....
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....al." v. In absence of any incriminating material, the completed 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 jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 10. This the judgment of the Hon'ble High Court has been followed in several judgments not only by the Hon'ble Delhi High Court....