2025 (1) TMI 836

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....learned CIT(A)'s order, essentially, on two grounds. First, that the learned CIT(A) had erred in holding that the provisions of Section 153A of the Act are inapplicable as no incriminating material was found during the course of the search and seizure. And second, that the learned CIT(A) had erred in law in deleting an addition of Rs. 4,30,00,000/- made by the Assessing Officer (AO) as unexplained credit under Section 68 of the Act. QUESTION OF LAW 4. The present appeal was admitted by an order dated 13.09.2024 on the following question of law: "1. Whether the Tribunal has grossly erred in allowing the appeal of the Revenue, wherein it gave the finding and adjudicated the matter only on legal ground and had given finding on ground no. 1 and have not adjudicated ground no.2, which was specifically raised by the revenue with regards to the addition of INR 4.30 crores so made by learned AO?" 5. However, after some arguments, the learned counsel for the parties agree that the question of law that arises for consideration of this court is not the question as framed but the following question: "Whether the Tribunal had erred in determining that the AO had right....

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.... were engaged in the business of providing accommodation entries. Accordingly, the AO added of a sum of Rs. 4,30,00,000/- under Section 68 of the Act on account of unexplained cash credits to the income declared by the Assessee and, accordingly, framed the assessment order. 6.6 The Assessee preferred an appeal against the assessment order dated 28.03.2013 before the learned CIT(A) (Appeal No. 321/2013-14). Although the Assessee had challenged the assessment order on several grounds but the learned CIT(A) decided the Assessee's appeal on a singular ground (Ground no. 3.2), which was to the effect that the provisions of Section 153A of the Act were inapplicable as no incriminating material had been found during the search proceedings. 6.7 Aggrieved by the said order dated 24.02.2014, the Revenue preferred an appeal before the learned ITAT - ITA No.3067/Del/2014 - which was allowed by the order dated 07.02.2024, which is impugned in the present appeal. ANALYSIS 7. As noted above, the learned CIT(A) did not decide the Assessee's appeal on merits of the addition made by the AO. The Asseesee's appeal was decided on the singular ground that Section 153A was inapplicable as no ....

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....ar 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 immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate." 10.1.4 The second proviso to section 153A provides that assessment or re-assessment if any, relating to any assessment year falling within the period of six ....

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....e course of search as the transactions on the seized material duly found to be recorded in the books of account and disclosed in the original return filed on 28.10.2009. 10.1.8 Reliance is placed in the case of Anil Kumar Bhatia & Others, the Hon'ble Delhi Tribunal held that in respect of an assessment u/s 153A, where processing of returns u/s 143(1)(a) stood completed in respect of returns filed in due course before search and no material is found in search thereafter, no addition can be made. In appeal preferred by the department against this order of the Tribunal, the Hon'ble Delhi High Court was pleased to hold that where assessment order had already been passed in respect of all or any of those six assessment years either u/s 143(1)(a) or section 143(3) prior to initiation of search or requisition, still Assessing Officer is empowered to reopen those proceedings u/s 153A without any fetters and re-assess total income taking note of undisclosed income if any unearthed during search. In the present case even though seized material was there, no undisclosed income was unearthed from the same by the Assessing Officer. 10.1.9 In the case of All Cargo Global Logist....

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.... learned CIT(A) on two grounds. The same, as noted in the impugned order, are reproduced below: "1. Whether Commissioner of Income Tax (Appeals) erred in law and on facts in upholding the ground of the assessee that provision of section 153A of the Act could not be applied in a case where no material has been found as a result of search and since no evidence or material had been found on search the instant addition made was outside the scope of section 153A of the Act. 2. That the Commissioner of Income Tax (Appeals) erred in law and on facts of the case in deleting the addition of Rs.4,30,00,000/- made by the AO on account of unexplained cash credit u/s 68 of the I.T. Act." 11. The learned ITAT found that the AO was not precluded from framing an assessment under Section 143(3) of the Act read with Section 153A of the Act as the assessment for AY 2009-10 had abated. 12. Insofar as the merits of the additions made by the AO is concerned (Ground No. 2 urged by the Revenue before the learned ITAT), the learned ITAT found in favour of the Revenue and affirmed the additions aggregating Rs. 4,30,00,000/- as unexplained cash credit under Section 68 of the Act. 1....