TaxTMI 
TaxTMI 
2021 (1) TMI 121
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....589/Coch/2013. The relevant assessment years are 2002-03 to 2006-07. 2. Brief facts of the case are that a search u/s, 132 of the Income Tax Act was conducted on 26.03.2008 in the premises of the firms and in the residence of the partners of E T Devassy Group. 2.1 Consequent to the search the Assessing Officer issued notices under Section 153A of the Income Tax Act for the Asst. Years 2002-03 to 2007-08 and issued notice under section 142(1) for the Assessment year 2008-09. 2.2 The Assessees filed returns of income and the assessing officer completed the assessments under section 153A vide order dated 29.12.2009 in respect of the Asst. Years 2002-03 to 2007-08 and u/s. 143(3) relating to Asst. Year 2008-09 in respect of the following 84 cases in respect of 13 Assessees. 1. M/s New Kerala Investments ( Asst Years 2002-03 to 2008-09) 2. M/s E T Devassy & Sons, Edassery (Asst Years 2002-03 to 2008-09) 3. St. Francis Tile Industries ( Asst Years 2007-08 to 2008-09) 4. St. Francis Clay Decor Tiles (Asst Years 2004-05 to2008-09) 5. St. Francis Clay Works (Asst Years 2002-03 to 2008-09) 6. Edassery Ceramics (Asst Years 2002-03....
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....see or any other principles of law laid down by competent courts of law and take a decision on merits in accordance with law. The question framed is answered in favour of revenue to the extent indicated above. However we make it clear that the common question with regard to the power of the Appellate Authority with respect to receipt of evidence in appeal and its application concluded by the tribunal in 84 cases and upheld by this court, will remain undisturbed" 3. While adjudicating the above issue, the Tribunal dismissed the appeals of the Revenue by observing as follows: "4. We have heard the rival submissions and perused the record. In our opinion, there is merit in the argument of the Ld. AR. We deem it appropriate to first refer to section 268A of the Income Tax Act, 1961 which was inserted by the Finance Act, 2008 with retrospective effect from 01/04/1999 which reads as under: "268A (1) The Board may, from time to time issue orders, instructions or directions to other income tax authorities fixing such monetary limits as it may deem fit for the purpose of regulating filing of appeal or application for reference by any income tax authorities under the pro....
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....rts and SLPs/ appeals before Supreme Court keeping in view the monetary limits and conditions specified below. 3. Henceforth, appeals/ SLPs shall not be filed in cases where the tax effect does not exceed the monetary limits given hereunder: S. No. Appeals/SLPs in Income-tax matters Monetary Limit (Rs) 1. Before Appellate Tribunal 20,00,000/- 2. Before High Court 50,00,000/- 3. Before Supreme Court 1,00,00,000/- It is clarified that an appeal should not he filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. 4. For this purpose, 'tax effect' means the difference between the tax on the total income assessed and the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issues against which appeal is intended to be filed (hereinafter referred to as 'disputed issues'). Further, 'tax effect' shall be tax including applicable surcharge and cess. However, the tax will not include any interest thereon, except where chargeability of interest i....
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....n 115JC; D = the total income that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC was reduced by the amount of disputed issues under the said provisions: However, where the amount of disputed issues is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not he reduced from total income assessed while determining the amount under item D. 7. In a case where appeal before a Tribunal or a Court is not filed only on account of the tax effect being less than the monetary limit specified above, the Pr. Commissioner of Income-tax/ Commissioner of Income Tax shall specifically record that "even though the decision is not acceptable, appeal is not being filed only on the consideration that the tax effect is less than the monetary limit specified in this Circular". Further, in such cases, there will be no presumption that the Income-tax Department has acquiesced in the decision on the disputed issues. The income-tax Department shall not be precluded from filing an appeal against the disputed issues in the case of th....
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....ank accounts. 11. The monetary limits specified in para 3 above shall not apply to writ matters and Direct tax matters other than income tax. Filing of appeals in other Direct tax matters shall continue to be governed by relevant provisions of statute and rules. Further, in cases where the tax effect is not quantifiable or not involved, such as the case of registration of trusts or institutions under section 12A/12AA of the IT Act, 1901 etc., filing of appeal shall not be governed by the limits specified in para 3 above and decision to file appeals in such cases may be taken on merits of a particular case. 12. It is clarified that the monetary limit of Rs. 20 lakhs for filing appeals before the ITAT would apply equally to cross objections under section 253(4) of the Act. Cross objections below this, monetary limit, already filed, should be pursued for dismissal as withdrawn/not pressed. Filing of cross objections below the monetary limit may not lie considered henceforth. Similarly, references to High Courts and SLPs/ appeals before Supreme Court below the monetary limit of Rs. 50 lakhs and Rs. 1 Crore respectively should be pursued for dismissal as withdrawn/not ....
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....missed." 4. Now, the contention of the Department is that it had filed the appeals before the Jurisdictional High Court challenging the constitutional validity of the provisions of the I.T. Act insofar as the original order of the Tribunal was concerned, since in that order, the Tribunal had held that addition in pursuance to notice issued under section 153A r w s 153C of the Income-tax Act, 1961 can be made only if incriminating material is found and seized in case where there is also abatement of regular assessment proceedings. It was the submission of the Department that this is an artificial restriction placed on Section 153A r w s 153C, that is nowhere envisaged in the Income-tax Act, wherein the Assessing officer has been granted the powers to assess or reassess the income for six previous assessment years, notwithstanding the provisions of Section 139,147,148,149,151 and 153 of the Act. 4.1 It was the submission of the Revenue that on this issue the High Court of Kerala has remanded the case back to the Tribunal for fresh consideration by taking into account the principles laid down by competent courts of law and take a decision on merits in accordance with law. Furthe....
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....ion at any stage of appeal. It was submitted that even though the assessee questioned the action of the Assessing officer regarding the initiation of proceedings U/s 153A, for the Asst. Years 2002-03 to 2006-07 before the CIT(A), the CIT(A) rejected the claim with the following observation: "Therefore, there is no infirmity in the action of the Assessing Officer in initiating proceedings u/s 153A of the Act far the Asst. Years 2002-03 to 2005-06".(para no. 22.3 in page 67 Of Order of the CIT (A) in the case of E T Devassy & Sons Edassery Jewellers) 6.1 The Ld. AR submitted that the CIT (A), deleted the additions made by the Assessing officer to the returned income for the asst years 2002-03 to 2006-07 on estimate basis as it was not supported with any incriminating materials, i.e. oral or documentary evidence such as books of accounts etc. The Ld. AR submitted that the Assessing Officer in his remand report dated 22.04.2013 confirmed that there is no incriminating materials available for the Asst. Years 2002-03 to 2006-07 (Page 69-70 of C1T(A) Order). The Ld. AR relied on the judgment of the Supreme Court in the following cases wherein it was held that the assessment u/....
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....s in deciding the scope of assessment u/s 153 A/ 153C of the Act in the absence of specific incriminating materials for that Assessment Year. According to the Ld. AR, this judgment was challenged by the revenue in the Apex Court and the SLP filed by the department was dismissed by the Apex Court [Diary No.3267 of 2016, 5952 of 2016 and 6377 of 2016] vide order dated 17/09/2016 based on the CBDT Circular No. 3/2018 as the tax effect involved is below the prescribed monetary limits, which clearly proves that there is no issue of constitutional validity in the decisions explaining the scope of assessment u/s 153 A/ 153C of the Act. Further, the Ld. AR relied on the judgment of the Supreme Court in the case of DCIT Vs MSEB Holding Company Ltd, SLP (Civil) Diary 26373/2019, dated 16.08.2019 wherein it was held as under:- "Since the tax effect involved in this matter is less than Rs. 2 Crores, we see no reason to interfere in this matter the special leave petition is dismissed". From the above, it is clear that the issue involved in the present cases, do not involve any challenge to the constitutional validity of any of the provisions of the Act. In view of the above, it w....
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....n consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income Tax Act, 1922 (11 of 1922), or under subsection (1) of Section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 142 of this Act was issued to produce, cause to be produced, any books of account or other documents has omitted to or failed to produce, or cause to be produced, such books of account or other documents as required by such summons or notice, or etc. etc. Sub-Section(4): The authorized officer, during the course of the search or seizure examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act." 18. On going through Section 132 of the Income Tax Act what we find is that if the authority specifi....
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....isions of Section 153A in a proper manner, it is appropriate to extract the said provision, which reads thus: 153A(1) Notwithstanding anything contained in section 139, section 147, section 149, section 151 and section 153, in the case of the person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) Issue notice to such person requiring him to furnish within such period, as may be specified in the notice, in return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) Assess or reassess the total income of six assessment years relevant to the previous year in which such search is conducted or requisition is made. Provided that the Assessing Officer shall assess or reassess th....
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....return required to be furnished under Section 139. So that on a reading of Section 153A(1) it is categoric and clear that once a notice is issued and the AO has required the assessee to furnish return for a period of six assessment years as contemplated under clause (b) then the assessee has to furnish all details with respect to each assessment year since the same is treated as a return filed under section 139. It is true that as per the first proviso, the AO is bound to assess or reassess the total income with respect to each ay following the six assessment years specified in sub-clauses (a) and (b) of Section 153A. However, even if no documents are unearthed or any statement made by the assessee during the course of search under section 132 and no materials are received for the aforespecified period of six years, the assessee is bound to file a return, is the scheme of the provision. Even though the second proviso to Section 153A speaks of abatement of assessment or reassessment pending on the date of the initiation of search within the period of six assessment years specified under the provision that will also not absolve the assessee from his liability to submit retur....