TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 457
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the AY 2017-18 onwards were claimed only after the search. 2. Ld. CIT(A) has erred by deleting the addition of Rs. 48,49,69,851/- i.e. the deduction claimed by the assessee for the AY 2020-21) u/s. 80-IA of the Act by not considering the fact that by virtue of second proviso to clause (i) of sub-section (4) of section 80IA, the claim of deductions u/s. 80-IA for the assessment years succeeding the assessment year 2017-18 can only be admissible if the deduction u/s. 80IA related to the same project(s) has been allowed in the assessment year 2017-18. 3. Ld. CIT(A) has erred by deleting the addition of Rs. 48,49,69,851/- i.e. The deduction claimed by the assessee for the AY 2020-21 u/s. 80IA of the Act by not considering the fact that for the purpose of section 80IA, the assessee was a "works Contractor" and NOT a "Developer of Infrastructure." 3. The present appeal filed by the revenue is delayed by 417 days for which an application for condonation of delay is placed on record vide letter dated 17.11.2023. The reason given in the said application for condonation of delay states that order of Ld CIT(A) was passed on 27.07.2022 according to which appeal should have been fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the assessee at Knowledge Hub, DN 23, 2nd floor, Sector V, Salt Lake, Kolkata - 700 091, at its Corporate Office at Club Road, Silchar - 788 001 as well as at various branch offices of the assessee at Guwahati, Delhi Aizawl etc. on 20.09.2019. The search and seizure operation was finally concluded on 18.11.2019. Statedly, during the course of the search, no unaccounted cash, jewellery or any unaccounted/undisclosed asset was found or seized by the Search Team from the assessee. Prior to the search, the assessee was regularly assessed to income-tax at Kolkata. Consequent to the search and seizure operation, the assessee's case was centralized with ACIT/DCIT, Central-Circle-1, Guwahati vide order dated 23.12.2000 of the Ld. PCIT u/s 127 of the Act and accordingly, the jurisdiction over the case of the assessee was transferred from Kolkata to Guwahati. 7. The year under consideration before the Tribunal is AY 2020-21 which is the year of search by taking into account the date of conduct of search on 20.09.2019. It being the year of search the assessment has been completed u/s. 143(3) of the Act for the return filed by the assessee u/s. 139(1) of the Act wherein it had claimed dedu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... make it amply clear that the claim of deduction made by the assessee under section 80-IA of the Income Tax Act, 1961 is not admissible. Thus, the claim of deduction u/s. 80-IA made by the assessee in the return of income e-filed for the assessment year 2017-18 in response to notice u/s. 153A of the Income Tax Act, 1961 but not made in the original return of income is thus being disallowed." 7.3. Ld. AO thus finally concluded in para 4.25 and 4.26 that relevant facts for AYs 2018-19 and 2019-20 are similar to AY 2017-18 and therefore, claim of deduction for these years are also not admissible. Basing his decision on the outcome of these three preceding assessment years, Ld. AO concluded that claim of deduction u/s. 80-IA for AY 2020- 21 is also not admissible. 7.4. For the purpose of understanding, the outcome of appeal for the three preceding assessment years, we perused the order of Co-ordinate Bench in the assessee's own case (supra), wherein this issue which formed the basis of disallowing the claim by the Ld. AO as narrated above. We take recourse to the said order wherein identical issue has been elaborately dealt with. From the said order, we note that while making fresh ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the same has not been claimed in original returns u/s 139 of the Act and (ii) whether, in terms of section 80IA(7) of the Act, the Audit Reports in Form 10CCB furnished within the time limit allowed in the Notices u/s 153A of the Act can be treated as filed within the time specified u/s 80IA(7) of the Act, given that the same were not filed with the original returns u/s 139 of the Act. 63. Barring the above, the Department has impliedly accepted the assessee's compliance with all the other conditions specified u/s 80IA(4) of the Act vis-à- vis the assessee's claim for deduction u/s 80IA(4) of the Act in respect of the impugned infrastructural facilities for the impugned AYs 2017-18, 2018-19 and 2019-20. The assessee has not filed any appeal before us to the extent the impugned additions/disallowancesof Rs. 12,78,15,656/- in respect of deduction claimed u/s 80IA of the Act vis-à-vis two infrastructural projects for AY 2019- 20 that have been sustained by the ld. CIT(A) in view of the applicability of second proviso appended to section 80IA(4)(i) of the Act to these projects. Hence, ld. CIT(A)'s findings on the above are left undisturbed.In the above backdrop,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the second proviso to Section 153A of the Act which provides that all pending assessments (wherein no such deductions had been claimed) and reassessments pending on the date of search shall abate. 68. The reasoning advanced by the ld. AO (insofar as relevant to the aforesaid grounds of appeal)in the assessment orders u/s 153A of the Act for the impugned years for disallowing the assessee's claim of deduction u/s 80IA of the Act in Returns of Income filed in response to notices issued u/s 153A of the Act for AYs 2017-18, 2018-19 & 2019-20 may be summarized as under: "(i) That, returns e-filed u/s 153A of the Act were in consequence of action taken u/s 132 of the Act and thus, couldn't be advantageous to the Assessee since the object of the legislation was to assess undisclosed income. If new claims of deduction or exemption were allowed to searched persons, then the same would be discriminatory to the other regular assessees who had lost a right as such to claim the deduction by efflux of time. (ii) That fresh claim of deduction u/s 80-IA in return u/s 153A, almost one and a half years after the search was conducted on the Assessee was an afterthoughtand mischief on the pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere challenged in appeal before ld. CIT(A). Apropos the impugned grounds challenging the disallowance of fresh claims of deduction u/s 80IA of the Act in returns filed u/s 153A of the Act, ld. CIT(A), after considering the submissions filed by both the sides, the various provisions of the Income-tax Act, 1961 and the relevant case-laws on the impugned subject vide his order u/s 250 of the Act dated 27.07.2022finally held that even though the impugned claim of deduction u/s 80IA of the Act had not been made in the Original Income Tax Return filed u/s 139(1) of the Act or by way of a Revised Return, the assessee was still entitled to claim the deduction u/s 80IA(4)(i) of the Act in the Returns filed by the assessee u/s 153A of the Act in respect of the impugned assessment years. 70. Before dealing with the findings of ld. CIT(A) in respect of the above grounds, it is expedient to quote the relevant provisions of section 153A(1) of the Act (as applicable for the relevant period): "Assessment in case of search or requisition. 153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.- For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.-For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) If any proceedings initiated or any order of assessment or reassessment made under sub-section (1) h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment for each of the prescribed A.Ys is to be compulsorily made afresh by the A.O. u/s 153A of the Act only on the basis of the Return filed u/s 153A and not on the basis of Return filed u/s 139(1) or any other section. (vi) That, the Return filed u/s 153A is not an addendum or an Annexure of the earlier Return filed u/s 139(1) and the proceedings u/s 153A are not an extension of the earlier proceedings which has either abated or remains unabated. (vii) That, for one assessment, for the purpose of making an assessment, there can only be one return. After the search or requisition, for the purpose of making assessment or reassessment u/s 153A, details filed in both Returns [i.e., u/s 153A and u/s 139(1)] cannot be used by the A.O at his whims and fancies i.e., he cannot choose Return filed u/s 153A for the purpose of collecting taxes on additional income disclosed during the search and cannot rely on earlier Return u/s 139(1) for denying the benefit of deduction. The A.O cannot approbate and reprobate simultaneously. (viii) That, while completing assessment u/s 153A, ALL provisions (including provisions of Chapter VI-A etc.) of the Act, "so far as may be", are applica....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings which were initiated on the basis of the Return filed u/s 139 (b) Second, about filing of fresh Return of income u/s 153A of the Act, and (c) Third, about assessment to be made on the basis of such fresh Return of Income u/s 153A. (xiii) That, no other section in the Act talks about abatement of the proceedings. Thus, once section 153A is invoked, then all other proceedings and the basis of those proceedings are extinguished. The entire process of the Return of Income and Assessment is initiated de-novo and completed afresh after section 153A is invoked for the purpose of assessment or re-assessment. (xiv) That, however, in case where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the total income, such orders will subsist at the time when a search is conducted or a requisition is made since there is no question of any abatement since no proceedings are pending. In this case, the A.O will assess or reassess the income strictly based on incriminating material found during the course of search or requisition. (xv) That, however, the total income for such AYs (i.e., where the Assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Search (i.e. on 20.09.2019), the assessment proceedings for A Y2018-19 & AY2019-20 were pending since either the time limit for issuance to a Notice under Section 143(2) of the Income Tax Act, 1961 had not expired OR the time limit to furnish a Return of Income was still available. Lastly, since on the date of Search (i.e. on 20.09.2019), the Appellant could not have furnished any Income Tax Act, 1961 in respect of the Assessment Year 2020-21 (relevant to the financial year 2019-20 during which the Search was conducted) since the relevant Financial Year had not expired and therefore the assessment proceedings for the aforesaid Assessment Year (i.e. AY 2020-21) were the Original/Regular Assessment Proceedings and could be said to pending. 74. Ld. CIT(A) (at pages 223 to 233 of his Order) has also taken note of the fact that the ld. AO, vide letter no. 88 dated 07.07.2022 had admitted that the original/regular assessment proceedings initiated u/s 143(3) of the Act for AYs 2017-18 & 2018-19 had abated and further for AY 2019-20, since the Income- tax Returns had not been furnished till the date of search (since the 'due date' as referred to in section 139(1) of the Act had not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T (SS) Appeal Nos. 76 To 84 & 887 To 889 (Ahd.) Of 2015, order dated 17/09/2019] - ITAT Ahmedabad (vii) Shree Yamuna Pulses vs. ACIT [2013 (2) TMI 344 - IT(SS)A No.233, 234, 235, 236, 237, 238 and 239/Ahd/2010, order dated 07/08/2012]- ITAT Ahmedabad (viii) ACIT vs. Splendor Landbase Limited [2018 (6) TMI 444 - I.T.A. No.2461/DEL/2016 And C.O. NO. 215/DEL/2016, order dated 06/06/2018] - ITAT DELHI (ix) A. Srinivas Rama Raju vs. DCIT [2016 (10) TMI 174 - TA.No.975/Hyd/2015, order dated 19/08/2016] - ITAT Hyderabad" 77. Next, ld. CIT(A) has placed reliance on the following judgments which are directly relevant to the issue at hand, wherein the Hon'ble Courts have opined and held that fresh claim of deduction u/s 80IA of the Act can be made in Returns of Income filed in response to notice u/s 153A of the Act although the same was not made in the original Return of Income filed u/s 139 of the Act: "(i) PCIT vs. Vijay Infrastructure Limited [2017 (7) TMI 956 - Income Tax Appeal No. 29 of 2016, judgment dated 12/07/2017] - Allahabad High Court - SLP filed by the Department against the aforesaid Judgment of the Hon'ble Allahabad High Court was dismissed by the Hon'ble Suprem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....est (i.e. a nullity). 4. That, in respect of the Assessment Years whose assessment were pending / had abated, since the Returns of Income filed in compliance with the Notices issued under Section 153A of the Act substitute the Original/Earlier Income Tax Returns (filed prior to Search or even afterwards) under Section 139(1) of the Income Tax Act, 1961, an assessee was entitled to make Fresh/ New/ Revised Claim in the aforesaid Returns (i.e. under Section 153A), notwithstanding that the aforesaid claims were not made by the assessee in earlier income tax returns filed prior to /after the Search." 80. Ld. CIT(A) has also opined (at page 367 of his order) that even if the assessee, at the time of filing the Returns of Income u/s 139(1) of the Act was under a mistaken belief that he was not entitled to the said deductions under Section 80IA of the Act and, subsequently, on a re-think or on legal advice came to believe that he was actually entitled to the said deductions, the deductions permissible to the assessee would depend on the provisions of Law and not on the view which the assessee might have taken of his rights to be entitled to such deductions. Similarly, looking from the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the said claim during the Appellate Proceedings. He has placed reliance on the following judgments in this regard: "(i) Himachal Gramin Bank vs. DCIT [(2009) 176 Taxman 433(HP)] - Himachal Pradesh High Court (ii) V. Lakshmi Reddy vs. ITO [(2011) 196 Taxman 78 (Mad)] - Madras High Court (iii) CIT vs. Jai Parbolic Springs Ltd. [(2008) 306 ITR 42 (Del.)] -Delhi High Court (iv) CIT vs. Ramco International [221 CTR 491 (P&H)] -Punjab and Haryana High Court (v) CIT vs. Bharat Aluminium Ltd. [303 ITR 256 (Del.)] -Delhi High Court (vi) CIT vs. Jindal Saw Pipes Ltd. [(2010) 328 ITR 338 (Delhi)]- Delhi High Court (vii) Pruthvi Brokers & Shareholders Pvt. Ltd. [[(2012) 349 ITR 336 (Bom.); ITA No.3908 of 2010 decided on 21/06/2012] - Bombay High Court (referred to at page 927 of the CIT(A)'s Order) (viii) GiridharlalParasmal v. State of Mysore [(1967) 20 STC 64 (Mys)] - Mysore High Court (at page 928 of the CIT(A)'s order)" 82. Referring to Article 265 of the Constitution of Indiawhich provides that "no tax shall be levied or collected except by the authority of law", ld. CIT(A) (at page 925 of his order) has averred that in terms of Article 265 of the Constitution, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act made by the assessee in its Returns filed in response to Notices issued u/s 153A of the Act. He also filed a written submission dated 25.01.2023 reiterating the reasons advanced by ld. AO while making the impugned disallowance in the impugned assessment orders u/s 153A of the Act qua the years under appeal. Vide his written submissions, apropos the impugned grounds of appeal, ld. D/R has further stated as follows: "(i) That the Ld. CIT(A) has failed to appreciate that the A.O has no power to entertain a claim made by the Assessee otherwise than by filing a revised return - the Ld. DR has placed reliance on the judgment of the Hon'ble Supreme Court in Goetze (India) Ltd.Vs. CIT (2006) 284 ITR 323 (ii) That, since the Assessee had not filed the return of income within the due date prescribed/s 139(1) of the Act, the right course of action for the Assessee would be to file condonation of delay u/s 119(2)(b) & (c) of the Act with the Appropriate Authority for filing of return of income, which was not done. (iii) That the Hon'ble Jodhpur ITAT in the case of Suncity Alloys (P) Ltd. Vs. ACIT [2009] 124 TTJ 124 had held that the assessments or reassessments made pursuance to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Act for the impugned assessment years were earlier filed by the assessee without claiming any deduction u/s 80IA of the Act. While making fresh claims for deduction u/s 80IA(4) of the Act in the Returns of Income filed in compliance to notices issued u/s 153A of the Act in respect of the impugned assessment years, the assessee filed the corresponding forms (being Report of Audit of the Eligible Undertaking from an Accountant) in Form 10CCB [as required u/s 80IA(7)] electronically on 12.02.2021 i.e., within the time permitted as per Notices issued u/s 153A of the Act (i.e., before 15.02.2021) [this aspect has been dealt with later on in this Order while deciding Ground No. 2]. The details of assessment year-wise Form 10CCB e-filed and the corresponding amount of deduction claimed by the assessee in respect of the corresponding eligible undertakings are tabulated at page 153 of ld. CIT(A)'s order. 87. Admittedly, as on the date of search i.e., 20.09.2019, the assessments for the impugned AYs 2017-18, 2018-19 & 2019-20 were pending on account of the following reasons: "(i) A.Y. 2017-18 - Assessment proceedings initiated vide Notice u/s 143(2) dated 24.09.2018 (i.e., issued pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Return of Income filed u/s 153A of the Act [and not on the basis of the original Returns filed earlier u/s 139(1) of the Act] by virtue of the provisions of section 153A(1)(b) of the Act and the first proviso thereto. 90. Even though the word "abate" has not been defined under the Income- tax Act, 1961, the said expression has been judicially explained vis-à-vis section 153A of the Act by the Hon'ble Courts in the several judgments, few of which are extracted hereunder: "(i) Pr. CIT vs. JSW Steel Limited [422 ITR 071; ITA No. 1934 of 2017, judgment dated 05/02/2020], it was held/averred, as follows, by the Hon'ble Bombay High Court: "8.3. The second proviso says that any assessment or re-assessment proceedings falling within the said period of six assessment years pending on the date of initiation of search under Section 132 or making of requisition under Section 132-A shall abate. The third proviso mentions that the Central Government may frame rules to specify such class or classes of cases in which the assessing officer shall not be required to issue notice for assessing or re-assessing the total income for the said six assessment years. 8.4. Reverting back to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessing officer. To abate means to diminish or to take away. The word 'abatement' has been defined in the Concise Law Dictionary (P. Ramanatha Aiyer) as follows: "Abatement. "Abatement" means, in respect of any chargeable accounting period, ending on or before the 31st day of March, 1947 a sum which bears to a sum equal to: (a) in the case of a company, not being a company deemed for the purposesof Section 9 to be a firm, six per cent of the capital of the company on the first day of the said period computed in accordance with Schedule II, or one lakh of rupees, whichever is greater, or (b) in the case of a firm having(i) nor more than two working partners, one lakh of rupees, or (ii) three working partners, one and a half of rupees, or (iii) four or more working partners, two lakh of rupees, or (c) in the case of a Hindu undivided family, two lakhs of rupees, or (d) in any other case, one lakh of rupees, The same proportion as the said period bears to the period of one year and, in respect of any chargeable accounting period beginning after the 31st day of March, 1947, such sum as may be fixed by the annual Finance Act. [Business Profits Tax Act (21 of 1947....
X X X X Extracts X X X X
X X X X Extracts X X X X
....153A for the impugned assessment years were the subject of assessment for the Revenue for the first time in the case of abated assessment proceedings of the said years. Consequent to the notice issued u/s 153A of the Act, the earlier Returns of Income filed u/s 139 of the Act for the impugned years for the purpose of assessment which were pending on the date of search, were to be treated as non-est (i.e., a nullity) in law [see para 11 of the judgment of the Hon'ble Bombay High Court in CIT vs. B.G. Shirke Construction Technology Ltd. (395 ITR 371)] 92. Upon a conspectus of section 153A(1)(a) of the Act, it is seen that it provides that "the provisions of this Act" [i.e., the provisions of Income-tax Act, 1961, which impliedly includes the deduction under Chapter VI-A], "shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 of the Act" thus, implying that all other provisions of the Act (to the extent not inconsistent with the provisions of section 153A of the Act) shall apply to a Return filed in compliance with the Notice issued u/s 153A of the Act. The Explanation to section 153A(2) of the Act further, lays down t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... beginning of Section 153A (1) of the Act suspends, for the purpose and to the extent as indicated in such provision, the operation of several other provisions of the Act, including Section 139 and even Section 147 in course of any reassessment. In other words, when a search is initiated under Section 132 of the Act, the assessee is not required to file the assessee's return till such time that the assessee receives a notice under Section 153A(1)(a) thereof. Once such notice is received the liability fastens on the assessee to file the return within the reasonable time specified in the relevant notice. To boot, the second proviso to Section 153A(1) of the Act, insofar as it is material for the present purpose, mandates that any "assessment or reassessment ... relating to ... the relevant assessment year or years ... pending on the date of initiation of the search under Section 132. ... shall abate". It goes without saying that since the search operations in this case were initiated on September 2, 2004, it was no longer necessary for this assessee to file his regular return by October 31, 2004 notwithstanding the mandate of Section 139(1) of the Act. The obligation to fil....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... allowability of fresh claim of deduction u/s 80IA of the Act in Returns of Income filed in response to notice u/s 153A of the Act despite the same not being made in the original Return of Income filed u/s 139 of the Act: "(i) PCIT vs. Vijay Infrastructure Limited [2017 (7) TMI 956- ITA No. 29 of 2016, judgment dated 12/07/2017] - The Hon'ble Allahabad High Court held as under: "3. It was admitted on the following substantial questions of law: "(i) Whether the Income Tax appellate Tribunal was justified in allowing the deduction u/s 80IA to the assessee on the basis of return filed after the issue of notice u/s 153A of the Act. "(ii) Whether the Income Tax Appellate Tribunal was justified under the facts and circumstances of the case in confirming the order of CIT (A) who has travelled beyond the statutory provision of Chapter VIA, u/s 80A(5) of the Income Tax Act, 1961 which clearly provides that if assessee fails to make a claim in his return of income of any deduction; no deduction shall be allowed to him thereunder". 4. Tribunal has justified deduction under Section 80IA on the basis of return filed under Section 153A by observing that for the assessment year 2009....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... explanation had not been taken into account therein, some of its projects had not been considered as eligible for this relief due to amendment introduced vide Finance Act No.2 of 2009 with retrospective effect from 01.04.2000 and that it had finally considered itself as eligible for the deduction in question as per various judicial pronouncements at that point of time. 19. The Assessing Officer's assessment order dated 22.03.13 declined assessee's section 80IA deduction claim on multiple grounds. He observed that this relief could not be allowed in absence of a revised return as per Goetze (India) Ltd. Vs. CIT [2006] 284 ITR 323 (SC). That the assessee had also filed a revised return on the same day which was not valid since submitted beyond a period of one year from end of the relevant assessment year. The Assessing Officer went on to quote date of section 153A notice i.e., on 20.07.2011 asking for return within 15 days of service. He observed that assessee's return; which was required to be filed on or before 11.08.11 inclusive of 15 working days; came on 30.09.2011 only. He held that the said return was also a belated one u/s 139(1) which could not be revised. And that secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee is a legally entitled for a deduction claim which is not taxable and the corresponding claim can also be allowed to be raised for the first time even in section 254 proceedings. It has also come on record that the assessee had very well explained the reasons of having not raised the impugned scheme due to the corresponding legislative amendments in section 80IA followed by CBDT's explanatory memorandums. This tribunal in (2012) 22 taxmann.com 2(Hyderabad) ITO vs. S. Venkataiah also holds that an assessee's legally allowable claim which could not be raised owing to circumstances beyond its control and pressed later on by way of belated return, could not be declined on account of mere technicality. 29. Coming to the statutory aspect viewed from various legislative developments right from "block" to "search assessments" applicable up to 31.05.03 and w.e.f. 01.06.03 onwards; respectively, we find that the same sufficiently answer the Revenue's arguments. The former scheme of block assessment in section 158BCA(i) and (ii) read with 2nd proviso thereto made it clear that a person; who had furnished a return under this clause, would not be entitled to file a revised return. The l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rding to the AO, assessee treated this as capital receipt even though the same was credited to the assessee's profit and loss account being difference between the deferred sales tax and its NPV. 5. However, the primary question that arose before the AO was whether the claim which was not made in the earlier original return of income filed under Section 139(1) of the said Act, could be filed and considered in the subsequent return filed by the assessee in pursuance to notice under Section 153A of the said Act (which was consequent to search action conducted under Section 132 of the said Act). AO held that the assessee could not raise a new claim in the return filed under Section 153A which was not raised in the original return of income filed under Section 139(1). Thereafter, the claim was disallowed and was treated as "revenue receipt" 5.1. By order dated 15.04.2013, the first appellate authority i.e. the Commissioner of Income Tax (Appeals) (hereinafter referred to as "CIT(A)") upheld the order passed by the A.O. In further appeal, the I.T.A.T., however, by the impugned order dated 28.09.2016, allowed the assessee's appeal and set aside both the orders passed by the A.O. and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Such returns of income shall be treated to be returns of income furnished under Section 139. Once returns are furnished, income is to be assessed or re-assessed for the six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, once Section 153-A(1) is invoked, assessment for 6 assessment years immediately preceding the assessment year in which search is conducted or requisition is made becomes open to assessment or reassessment. Two aspects are crucial here. One is use of the expression "notwithstanding" in sub-section (1); and secondly, that returns of income filed pursuant to notice under Section 153-A (1)(a) would be construed to be returns under Section 139. The use of non obstante clause in sub-section (1) of Section 153-A i.e., use of the expression "notwithstanding" is indicative of the legislative intent that provisions of Section 153-A(1) would have overriding effect over the provisions contai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aw Dictionary, Eighth Edition, 'abatement' has been defined to mean an act of eliminating or nullifying; the suspension or defeat of a pending action for a reason unrelated to the merits of the claim. In Supreme Court on Words and Phrases (19502008), "abating" has been defined to mean "an extinguishment of the very right of action itself"; to "abate", as applied to an action, is to cease, terminate, or come to an end prematurely. 9. Therefore, from a critical analysis of the provisions contained in Section 153A(1) of the Act more particularly the key expressions as referred to above, it is evident that assessments or reassessments pending on the date of initiation of search would stand abated. Return of income filed by the person concerned for the six assessment years in terms of Section 153-A(1)(a) would be construed to be a return of income under Section 139 of the Act. ..... 12. In this perspective we are called upon to decide the question projected by therevenue as substantial question of law arising from the order of the Tribunal. We have considered the grounds of appeal and the orders passed by the AO, CIT(A) and the Tribunal with the assistance of learned counsel fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gitimate claims would be open to the assessee to raise in the return of income filed under Section 153A(1). ....... 16. From the above we conclude that in view of the second proviso to Section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under Section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation." 96. Respectfully following the above judgments, we hold that pursuant to the search & seizure operation conducted in the case of the Assessee on 20.09.2019, since the pending assessment proceedings for the impugned AYs 2017-18, 2018-19 & 2019-20 had got abated by virtue of application of the second proviso to section 153A(1) of the Act,it was open for the Assessee to make a legitimate claim of deduction u/s 80IA(4) of the Act which had remained unclaimed in the earlier Returns filed for the impugned years (AY 2017-18 & AY 2018-19) u/s 139(1) of the Act and for AY 2019-20 for which no return was filed due to initiation of search before the due date of filing return for AY 2019-20. This was because th....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... AO other than by filing a revised return in the course of normal assessment proceedings (and not proceedings u/s 153A of the Act pursuant to a search action). On the said question, the Hon'ble Apex Court ordained that ld. AO had no power to entertain a claim for deduction not made in the return of income otherwise than by filing a revised return. The aforesaid judgment is clearly inapplicable to the disparate set of facts in the present case wherein pursuant to the search and seizure operations u/s 132(1), the original returns of income for the impugned assessment years [wherein no claim of deduction had been made u/s 80IA(4) of the Act] had become non-est (i.e., rendered to a nullity) and the fresh returns filed u/s 153A of the Act [wherein deductions had been claimed afresh u/s 80IA(4) of the Act] had substituted and taken place of the original returns filed u/s 139(1) of the Act. Thus, unlike the factual matrix in the case of Goetze India Ltd. (supra), the present case does not involve any request made by the assessee for allowing fresh claims of deductions not claimed in the original return filed u/s 139(1) of the Act via a letter before ld. AO, but claims of legally tenable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../s 80IA(4) of the Act have been claimed [and which substitute the original returns u/s 139(1) of the Act] are not delayed and hence the question of filing any condonation of delay does not arise. 100. Next, ld. D/R's reliance on the judgment of the Hon'ble Jodhpur Bench of the ITAT in the case of Suncity Alloys (P) Ltd. Vs. ACIT [2009] 124 TTJ 124 to the effect that assessments or reassessments made pursuant to notice u/s 153A of the Act are not de-novo assessments and therefore no new claim of deduction or allowance can be made by the assessee is also misplaced. The judgment in the said case was rendered in context of completed assessment proceedings i.e., unabated assessment yearswhich are not covered under the second proviso to Section 153A(1) of the Act. In case of completed/unabated assessment proceedings i.e., where assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee's total income prior to the date of search, such orders shall subsist since there is no question of any abatement since no proceedings are pending. In such a case, ld. AO will assess or reassess the income of the assessee strictly ba....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ns filed u/s 153A of the Act was under challenge. The said facts are missing in the present case, making the ratio inapplicable to the present case. Further, insofar as the observation of the Delhi Bench in the above case to the effect that - fresh claims cannot be made u/s 153A of the Act which have the result of lowering income returned earlier considering that search proceedings are for the benefit of the Revenue - is concerned, it is seen that other benches of this Tribunal have taken a divergent view in this regard. To cite a few such judgments: "(i) Srinivas Rama Raju vs. DCIT [2016 (10) TMI 174 - ITAT Hyderabad; TA.No.975/Hyd/2015, order dated 19/08/2016]: The Hon'ble ITAT Hyderabad held as under: "11. We have carefully considered the rival submissions and perused the record. As could be noticed from the grounds of appeal and the arguments advanced by the Learned Counsel for the assessee, the main contention is not with regard to abatement of proceedings under section 153A of the Act. The limited issue is with regard to claim of deduction in response to notice issued under section 153A of the Act even if such claim was not made in the original return. In fact, the Ld. C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....filed by the assessee within the due date prescribed under section 139(1) but they are filed after the search operation was conducted but before the issuance of notice under section 153A of the Act. In para28 of its order, the Bench has observed as under: "28. Next we have to examine the decision of the Commissioner of Income tax(Appeals) rendered on the alternate ground raised by the assessees before him. The alternate ground was whether the returns filed in response to notices issued under section 153A can be taken as returns filed within the time limit stipulated under section 139(1). The Commissioner of Income-tax (Appeals) has decided in favour of the assessees holding that the returns filed under section 153A are to be treated as returns filed under section 139(1) within the time allowed under the statute." 102. Further, the proposition that fresh claims of deductions can be made in returns filed u/s 153A of the Act even though such deductions were not claimed in the original returns has been decided in favour of the assessee in a plethora of judgments by the Hon'ble High Courts and various benches of this Tribunal across the country (cited earlier) and hence is no long....