TaxTMI 
TaxTMI 
2020 (8) TMI 238
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....ye of law, as such the impugned addition is liable to be deleted in the interest of justice. 3. For that, the learned C.I.T.(A) has committed gross in confirming the addition ot the claim of sundry creditors to the tune of Rs. 4,00,000.00 made by the learned A.O., without considering the explanation of the Assessee, particularly when, the impugned addition is based on a wrong presumption of fact, as such, being not correct in the eye of is liable to be deleted in the interest of justice. 4. For that, the learned C.I.T.(A) has committed gross error of law in confirming the addition of sundry creditors of Rs. 4,00,000.00 by applying section 41(1) of the Act, particularly when, there is no such liability claimed by the Assessee, as such the impugned addition being not sustainable in the eye of law, is liable to be deleted in the interest of justice. 2. The assessee is an individual deals in wholesale trading of fish, filed original return of income on 10.03.2012 showing total income of Rs. 7,52,329/-. A search and seizure operation u/s.132 of the Act, 1961 was conducted in the case of Tayab Khan Group of cases on 08.10.2013. During the course of search operatio....
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....ogus sundry creditors and allowed the appeal of the assessee partly. 4. Further being aggrieved, the assessee has filed this appeal before the Income Tax Appellate Tribunal. 5. Ld. AR before us agitated the additions confirmed by the CIT(A) and also argued on the legal grounds. Ld. AR has also filed written submissions contents of which are as under :- 1. That, the Appellant has been engaged in wholesale trading of fish, He filed original return of income on 10.03.2012, declaring total income at Rs. 7,52,329.00.Time limit for issue of notice u/s. 143(2) of the Act expired on 30.09.2012. Therefore, it is a completed / unabated Assessment. A search and seizure operation U/s. 132 of the Act was conducted in the case of Tayab Khan, Hapizur Raheman Khan and group of cases on 08.10.2013. As per the observation of the learned A.O., during course of search operation, incriminating documents i.e. purchase deeds belonging to the Appellant were found and seized in the residence of Hapizur Raheman Khan, one of the searched person of the group. 2. That, consequent to search operation, notice U/S.153C of the Act was issued. In response to such notice, Appellant filed retu....
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....ome, it cannot be treated as incriminating materials within the meaning of section 153C of the Act to disturb a completed Assessment. As per the provisions of section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Year in question and it is an undisputed fact that, the documents which were seized did not establish any co-relation, document-wise, with this Assessment Year. Since, this requirement U/s. 153C of the Act is essential for Assessment under that provision, it becomes a jurisdictional fact. Therefore, the impugned order of Assessment being without jurisdiction, unwarranted and unsustainable in the eye of law needs to be quashed in the interest of justice. 2. That, the Appellant wants to draw kind attention of this Hon'ble Tribunal to the table drawn by the learned C.I.T(A) in page No.3 of his order. In the said table, the learned C.I.T(A) has given details of documents found and seized during course of search of Hapizur Raheman Khan (Searched person). On perusal of said table, at point No.2, 3 and 4, this Hon'ble Tribunal will find that, no such incriminating documents were found and seized except cash. From the ta....
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....s incriminating material and in completing the Assessment U/S.153C of the Act. The Purchase Deeds are not coming within the ambit of incriminating material, so as to attract section 153C of the Act. In view of this, the validity of the impugned Assessment order so passed U/S.153C of the Act by the learned A.O. and subsequently, confirmed by the learned C.I.T.(A) being illegal, without the authority of law and not sustainable in the eye of law is liable to be quashed in the interest of justice. 5. That, it may be respectfully submitted here that, since no addition has been made on the basis of incriminating material and the documents so alleged to be incriminating in nature do not have any revenue implication, the authorities below have committed gross error of law in confirming the Assessment order, particularly when, law in this aspect is well settled by the Hon'ble Supreme Court in the case of Commissioner of Income Tax - Versus- Sinhaad Technical Educational Society Supra Reported in 397 ITR 344 that, no Assessment U/S.153C of the Act can be made in absence of any incriminating material. In view of this, the impugned Assessment order so passed for this Assessment ye....
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....me. It was a bonafied mistake which was rectified while filing the return U/S.153C of the Act. 7.2. That, similarly, the sundry creditors of Rs. 4,00,000.00 was wrongly * disclosed in the original return, which was corrected in the return filed U/S.153C of the Act. While preparing the Return U/S.153C, when the Appellant came to know about this mistake and wrong declaration of sundry creditors, he corrected it in the Balance Sheet and filed the corrected balance sheet along with the Return filed U/S.153C of the Act. The learned A.O. even though has no power, authority and jurisdiction to refer to the original return however, he exceeded his jurisdiction and made this addition. The impugned additions, thus are completely illegal, without the authority of law and contrary to the statutory provisions of law, hence being not sustainable in the eye of law are liable to be quashed/deleted in the interest of justice. 7.3. That, on perusal of section 153C of the Act, it provides, the procedure for completion of Assessment in respect of income of any other person other than the person referred to in section 153A of the Act, where a search is initiated U/s.132 of the Act and....
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....e evidence in hand. The impugned addition thus, is without the authority of law, hence is not sustainable in the eye of law. 7.4. That, law in this Aspect is well settled by series of judgments by different High Courts as well as by different Tribunals all over the country that, return filed U/s. 153A should be deemed to be the return filed U/s. 139(1) of the Act. In this regard, the Appellant relies upon the ruling of Hon'ble Pune IT AT in the case of Saniav Nandlal Vvas Vs ITO. (ITAT Pune) - IT A No 771 to 774/PN/201Q dated 23.12.2011 which directly covers the impugned issues in case of the Appellant. In the said case, the Hon'ble ITAT has held that, Return U/s. 153A of the Act on the basis of which Assessment was framed has replaced original return superseding earlier return and superseding the Assessment based upon that original return. A return filed U/s. 153A takes the place of the original return under Section 139 of the Act, for the purposes of all other provisions of the Act. Once the A.O. accepts the revised return filed U/s. 153A, the original return U/s. 139 abates and becomes non-est. In this regard, the appellant further relies x upon the decision of ....
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....turns filed under section 139(1) within time. As per section 80AC, no deduction under section 80IB shall be allowed unless return of income is furnished before due date under section 139(1) of the Act. Accordingly, it was held in this case clearly that, return U/S.153A is as good as a return filed under section 139(1) of the Act. Further Hon'hle Bombay High Court in the case of CIT vs B.G Shirke Construction Technology Pvt Ltd 120171 79 taxmann.com 306(BOM) held that: "A return filed U/s. 153A is a return furnished U/s. 139 of the Act and therefore, provisions of the Act which apply to return filed in regular course U/s. 139(1), would also continue to apply in case of return filed U/s. 153A." In view of the above as the Appellant's return was filed and Assessed U/S.153A and this return is treated as a valid return for the said Assessment U/S.153A, it is a return U/s. 139(1) filed by the Appellant. As seen from the above, the claim of the Appellant is squarely covered by direct case laws of High Courts and Tribunal in his favour. As such, the same deserves to be followed in Appellant's favour. In view of the above, it is prayed that, since the Authorities below ....
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....ubmissions, the ld. AR made oral arguments also. 6. On the other hand, ld. DR relied on the order of AO and CIT(A) with regard to additions made on account of income from commission and bogus sundry creditors. The ld. DR further submitted that the commission income was shown in original filed u/s.139(1) of the Act which has not been declared in pursuant of the return filed u/s.153C of the Act under the head undisclosed income which has been discovered by the AO during the course of assessment and he has also manipulated in the creditor shown in the original return by Rs. 4 lakhs. The income declared in the original return cannot be shown less than the income disclosed in the return filed in pursuant to the notice issued u/s.153C of the Act. The income declared in the original return can only be enhanced/reduced by way of revised return, which has not been done by the assessee in the present case. The case law relied on by the ld. AR is not application in the present facts of the case. 7. We have heard the arguments advanced by both the parties at length and perused the entire material available on record along with the orders of authorities below and case laws relied during t....
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....itating the additions confirmed by the CIT(A) as well as with the legal ground that the order passed by the AO is without jurisdiction. Ld. AR before us submitted that the assessee has raised legal ground before the CIT(A) in ground No.1, however, the same has not been decided. On perusal of the appellate order, we found that if the contention of the assessee is accepted that the assessee has raised the legal ground before the CIT(A) in ground No.1 and the CIT(A) has not adjudicated the same mentioning that ground No.1 is general in nature and does not need separate consideration, then a question arises as to whether any application has been filed by the assessee before the CIT(A) for any rectification of mistake in his order. However, there is no such explanation on the part of the assessee in this regard before us. 9. Be that as it may, if we take into consideration of the legal ground as stated by the ld. AR in the written submission as well as in oral submissions, we found that, in fact, it is clear that the assessee has filed his return of income for the relevant Assessment Year on 14.03.2012 declaring at income of Rs. 7.52.329/- and the same income was also declared in pur....
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.... In view of this it can be kept as under the unabated assessment year. In fact, it is also clear as per plain reading of the sections 153C/153A of the Act that the AO can issue notice for the six assessment years prior to the date of search. Ld. AR relying on the decision of Hon'ble Delhi High Court in the case of Kabul Chawla [2016] 380 ITR 573 (Delhi), submitted that as there is no incriminating material found during the course of search and seizure proceedings, the assessment order passed by the AO is not sustainable. For the sake of clarity we would like to reproduce the summary of the legal position drawn by the Hon'ble Delhi High Court at para 37, which read as under:- "37. On a conspectus of Section 153A(1) of the Act, read with the 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 searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii....
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.... during the course of search, therefore, as per the decision of the Hon'ble High Court in the above case, the interference by the AO u/s.153A of the Act with the assessment already completed u/s.143(3) of the Act is unjustifiable. However, on careful perusal of the para 36(vii) of the above observations of the Hon'ble High Court, we found that the Hon'ble High Court in the above para has observed that "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." 13. In our opinion, the case of the assessee clearly falls within the ambit of the observations of the Hon'ble High Court in para 37(vii) of the above decisions towards "undisclosed income". We, therefore, reject the contention of the assessee that there is no incriminating material found during the course of search by which the AO cannot interfere with the assessment completed originally while m....