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2019 (4) TMI 1971
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.... quashed 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that in case a notice under section 153A is issued the Assessing Officer is bound to assess and reassess the total income of the Appellant. 2. The CIT(A) failed to appreciate and ought to have held that a completed assessment cannot be re-examined / reviewed under section 153A where no incriminating material / or undisclosed income is found in course of search assessment proceedings. 3. The CIT(A) has erred in not considering that having regard to the second proviso to section 153A, the completed assessment cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in the course of search or in the course of assessment proceedings under section 153A of the Income-tax Act. 4. The Appellant therefore prays that the order passed by the Assessing Officer is contrary to the provisions of law and liable to be quashed since no undisclosed income is found in the course of search or in the course of proceedings under section 153A. Ground N....
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...., the completed assessment cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in the course of search or in the course of assessment proceedings under section 153A of the Income-tax Act. 4. The Appellant therefore prays that the order passed by the Assessing Officer is contrary to the provisions of law and liable to be quashed since no undisclosed income is found in the course of search or in the course of proceedings under section 153A. Ground No.2: Disallowance under section 37 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that the Appellant has not set up his business and hence the expenditure of Rs. 31,60,275/- debited to Profit and Loss account cannot be allowed. 2. The CIT(A) has erred in treating the year of commencement of commercial operations i.e., financial year 2013-14 relevant to assessment year 2014-15 as the year of set-up of business. 3. The Appellant was incorporated on December 28, 2007, had set up its business, entered into contracts in the year 2008 for the....
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....le to be quashed 1. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in holding that in case a notice under section 153A is issued the Assessing Officer is bound to assess and reassess the total income of the Appellant. 2. The CIT(A) failed to appreciate and ought to have held that a completed assessment cannot be re-examined / reviewed under section 153A where no incriminating material / or undisclosed income is found in course of search assessment proceedings. 3. The CIT(A) has erred in not considering that having regard to the second proviso to section 153A, the completed assessment cannot be disturbed except only in the case where there is any undisclosed income found in the course of search or any incriminating documents pointing towards such undisclosed income is found in the course of search or in the course of assessment proceedings under section 153A of the Income-tax Act. 4. The Appellant therefore prays that the order passed by the Assessing Officer is contrary to the provisions of law and liable to be quashed since no undisclosed income is found in the course of search or in the course of proceedings under section 153A. ....
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....siness, the same should be treated as eligible for capitalisation and be added to the capital work-in-progress. 3. The Appellant therefore prays that the Assessing Officer be directed to treat the expenses of Rs. 8,66,882/- as eligible for capitalisation and be added to the capital work-in-progress Ground No.4: The Appellant craves leave to add, alter and/or amend all or any of the foregoing grounds of appeal." 6. The grounds raised by the revenue for Assessment Year 2008 - 09 in ITA No. 1325/Bang/2017 are as under. "1. Whether the CIT(A) was right in holding that preliminary expenditure which was spent 06 years before the commencement of the business can be considered as capital expenditure though the assessee never established that the preliminary expenditure is related to any particular business asset?" 7. The grounds raised by the revenue for Assessment Year 2009 - 10 in ITA No. 1326/Bang/2017 are as under. "1. Whether the CIT(A) was right in holding that preliminary expenditure which was spent 05 years before the commencement of the business can be considered as capital expenditure though the assessee never established that the preliminary expenditure is r....
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....ent of Hon'ble Delhi High Court rendered in the case of PCIT vs. Meeta Gutgutia (Supra), it was held that the invocation of section 153A by the revenue was without any legal basis in respect of those assessment years for which no incriminating material was found in search and the SLP of revenue against this judgment is dismissed by Hon'ble apex court and therefore, even if as per the judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Co. vs. DCIT (Supra), it was held that undisclosed income and incriminating material is not the precondition for issue of notice u/s 153A, now the judgment of Hon'ble apex court rendered in the case of Meeta Gutgutia (Supra) should be followed. In reply, it was submitted by the learned DR of the revenue that in the case of Meeta Gutgutia (Supra), before Hon'ble Delhi High Court, the judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Co. vs. DCIT (Supra) was not cited and therefore, not considered and hence, this judgment of Hon'ble Karnataka High Court still holds the field. In rejoinder, it was submitted by the learned AR of the assessee that Hon'ble Delhi High Court in ....
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....s passed u/s 143 (3) and only intimation was issued for this year on 08.05.2011 against return filed on 29.09.2009 at returned income of Rs. 100,74,257/- and therefore, for this year also, the assessment was not completed before search. She submitted that similarly for A. Y. 2011 - 12 also, no assessment order was passed u/s 143 (3) and only intimation was issued for this year on 13.02.2012 against return filed on 25.09.2011 at returned income of Rs. 27,24,129/- and therefore, for this year also, the assessment was not completed before search. This was her argument that for these four years, assessment was pending on the date of search because no order was passed u/s 143 (3) and intimation issued u/s 143 (1) is not an assessment order. We find that as per second proviso to section 153A, the assessment pending as on the date of search shall abate. Now the question is this as to whether for all those assessment years for which no assessment order is passed u/s 143 (3), it can be said that the assessment is pending. In our considered opinion, the assessment can be said to be pending if notice u/s 143 (2) of the I. T. Act was validly issued by the AO and order u/s 143 (3) could not be ....
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....o apply the ratio of this judgment, this factual aspect has to be examined as to whether any incriminating material for any of these four assessment years was found or not in search. Learned CIT (A) has not given any finding on this factual aspect because he proceeded on this basis that this is not material as per the judgment of Hon'ble Karnataka High Court rendered in the case of Canara Housing Development Co. vs. DCIT (Supra) but we have seen that this judgment is not relevant to decide this aspect as to whether section 153A can be invoked for a year prior to the year of search if no incriminating material is found in search for that year and the assessment is not pending on the date of search. Hence, we feel it proper to restore the matter back to CIT (A) for a fresh decision on this aspect about validity of invocation of section 153A in the light of this judgment of Hon'ble Delhi high Court rendered in the case of Meeta Gutgutia (Supra) against which, SLP is dismissed by Hon'ble apex court after finding out the facts as to whether any incriminating material was found in search or not. If the assessee succeeds on this aspect then nothing remains to be decided on merit but if th....