AI Drafter 
TaxTMI 
TaxTMI 
2021 (6) TMI 99
X X X X Extracts X X X X
X X X X Extracts X X X X
.... wife of the assessee, wants to implead as his legal heir in all he above appeals. The Death Certificate of the assessee along with Affidavit of the Legal Representative are placed on record. In view of the above, the assessee is substituted through Legal Representative Smt. Sneh Lata Sawhney. Before proceeding further, it would be relevant to dispose of the quantum appeals as under : ITA.Nos.427 to 432/Del./2017 - A.Ys. 2006-07 to 2011-12 : 4. Briefly the facts of the case are that in all the assessment years under appeals a search and seizure operation under section 132 of the I.T. Act, 1961 was carried-out on assessee and other Group of cases on 28.07.2011. Warrant of Authorization under section 132 of the I.T. Act, 1961 was also issued in the name of the assessee. Notice under section 153A of the I.T. Act were issued to the assessee requiring him to file return of income for the assessment year under appeal. The assessee in response to the notice filed return of income under section 153A of the I.T. Act, 1961. The A.O. issued statutory notices and asked for the details. The A.O. noted that during the assessment year under consideration, the assessee derived income from ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y be noted here that in the remaining A.Ys i.e., 2007-2008 to 2011-2012, the A.O. on the similar basis concluced that since assessee has unexplained bank deposits with HSBC, Geneva, Switzerland in A.Y. 2006-2007, therefore, in subsequent A.Ys i.e., A.Ys. 2007-2008 to 2011-2012 assessee has earned interest on the same deposits, therefore, addition was made on account of unexplained interest earned on the aforesaid deposits in HSBC Bank, Geneva, Switzerland. The A.O. passed the assessment orders under section 153A read with Section 143(3) of the I.T. Act, 1961, Dated 02.03.2015. 4.2. The assessee challenged the above addition on merits as well as on legal grounds before the Ld. CIT(A), however, the appeals of the assessee have been dismissed. 5. The assessee in the present appeals have challenged the legality of the assessment orders passed as being time barred as well as since no incriminating material have been recovered during the course of search, therefore, no addition could be made against the assessee. The assessee also challenged the additions made on account of unexplained deposit in the bank account maintained with HSBC, Geneva, Switzerland and interest earned thereon....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Law, could not have lead to extension of time limit for passing the assessment orders. Thus, the time limit in passing the impugned assessment orders in the case of the assessee expired on 31.03.2014 itself. He has further submitted that in fact the Revenue could not have made reference for the period prior to 01.04.2011 which is evident from the following :- 6.1.1. Administrative assistance by Swiss Competent Authority in their letter dated 26th June, 2015 addressed to Government of India, MOF, FT & TR and filed by Ld. CIT(DR) on 11.1.2021 through email reads as under: "In accordance with Article 26 DTA CH-IN, administrative assistance for questions concerning the application of domestic law can only be provided for information starting from the financial years 2011/2012 as the prior years are not covered by temporal scope of Article 26 of the amended Double Tax Agreement between India & Swtizerland. Therefore we can only provide you with information from 1 April 2011 (see decision A-4232/2013 of 12 December 2013 of the Swiss Federal Administrative Court). 6.1.1.2. The Learned Counsel for the Assessee submitted that the Agreement between The Republic of Ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2C) is in accordance with law or not. The order passed u/s 142(2A) or u/s 142(2C) cannot be appealed separately. But when an assessment order is challenged, then the different aspects which are integral to the process and ultimate completion of amount can be challenged in Appeal. For example a notice u/s 148 or reasons recorded by the A. O prior to re-opening of assessment cannot be challenged separately. But an assessment order can be challenged in an Appeal before the Ld. CIT(A) or the ITAT on the ground that the re-opening itself is bad in law, as the notice is illegal or not served or that there is no material based on which reasons were recorded etc. Every facet of an assessment can be challenged in appeal to deny once liability to be charged to tax or to challeng the quantum of tax demanded. In the case of hand, the legality of the orders passed u/s 142 (2A) or u/s 142(2C) can be challenged to demonstrate that the order of assessment has been passed beyond the period of limitation. Thus, we reject this contention of the Ld. CIT. DR. 8. In view of the above, discussion, we have no hesitation in holding to hold that the extension of time framed by the A.O for submissio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntion of the Id. DR. As mentioned elsewhere, since each A.Y is considered as a separate unit the Assessing Officer should have made out a case for A. Y 2008-09 only and since the order framed u/s 142(2) of the Act also refers to A.Y 2009-10, then the same cannot be used for A. Y 2008-09. 17. The quarrel before us is as to whether the assessment order framed u/s 143(3) is passed within the period of limitation period prescribed under the Act or not. In our considered opinion, for coming to such a conclusion, we can examine whether the order passed u/s 142(2A) of the Act is in accordance with law or not. It is true that the order passed u/s 142(2A) of the Act is not appealable but when an assessment order is challenged, then the different aspects, which are integral to the process and ultimate completion of the amount can be challenged in appeal and since the ground before us is challenged for assessment being barred by limitation, we are well within our rights to consider all material aspects which were considered while framing the assessment order u/s 143(3) of the Act. " 6.1.5. In the case of Sunder Exports vs. DCIT, reported in (2009) 126 TTJ 0853) (Del), the ITAT, De....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ny vs. Commissioner of Income Tax and another ITA.No. 167 2008, 152(2A), identical facts were dealt wherein Court held that section 153(1)(a) reads that no order of assessment shall be made u/s 143 or Section 144 at any time after expiry of two years from end of A.Y. in which income was first assessable-Order of assessment had been passed in violation of period prescribed in aforesaid provision, therefore, order passed by AO, CIT and ITAT was set aside-Therefore order passed by lower authorities including Tribunal could not be sustained as facts and circumstances were identical" 6.1.9. In the case of IPF India Property Cyprus (No. I) Ltd. vs. DCIT, ITA No. 6077/2018, (also reported in (2020) 183 ITD 0046) (Mum), the ITAT Mumbai Bench, Mumbai held as under : "7. Coming to the second point, we find that there is no dispute that if no draft assessment order was to be issued in this case, the assessment would have been time barred on 31st December 2017 but the present assessment order is passed on 17th August 2018. Once we hold that no draft assessment order could have been issued in this case, as the provisions of Section 144C(1) could not have been invoked in this case, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) and Pr. CIT vs., Meeta Gut Gutia reported in 395 ITR 526 (Del.) in which the Departmental SLP have been dismissed by the Hon'ble Supreme Court reported in 96 taxmann.com 468 (SC). He has also referred to panchanama executed in the case of assessee which did not find mention any incriminating material relevant to any assessment years under appeals which could be the basis for making any addition. He has, therefore, submitted that since no incriminating material was found in assessment year under appeals, therefore, no addition could be made against the assessee. Learned Counsel for the Assessee again by referring to the above evidences submitted that since no information could have been provided by the Swiss Authorities to the Revenue Authorities in India for assessment years under appeals, therefore, no incriminating evidence was found to show that additions are based on any incriminating material. Learned Counsel for the Assessee also submitted that assessee since the very beginning has denied to have maintained any bank accounts with HSBC, Geneva, Switzerland. Therefore, onus is upon the A.O. to prove by specific and reliable evidence that assessee maintained any such bank acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the panchanama drawn in the case of assessee at the time of search and thereafter, but, the same did not disclose if any, incriminating material much less than the material was found during the course of search to connect the assessee with maintenance of any bank account with HSBC, Geneva, Switzerland. The Ld. D.R. also placed on record letter of the A.O. Dated 22.08.2019 in which it is clearly mentioned by the A.O. that last panchanama was drawn on Dated 26.09.2011. Learned Counsel for the Assessee also placed on record letter Dated 26.06.2015 issued by Swiss Competent Authority addressed to the Government of India in which it is specifically mentioned that information as required could be provided from F.Y. 2011-2012 as the prior years are not covered by temporal scope of Article 26 of the Amended Double Taxation Avoidance Agreement between India and Switzerland. Therefore, such information could be provided from 01.04.2011. Learned Counsel for the Assessee also placed on record Notification Dated 27.12.2011 between India and Switzerland Confederation for avoidance of double taxation. These would clearly show that these are applicable after assessment years under appeals and as p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs. Conclusion 72. To conclude : (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153 A of the Act against the Assessee in relation....