AI Drafter 
TaxTMI 
TaxTMI 
2025 (7) TMI 1287
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.... of ITA. Nos. 299 & 300/JP/2025) DCIT, Central Circle-01, Jaipur Versus Smt. Snehlata Agarwal Snehill And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Priya Dewan Aakash Ganga, Sikar And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Sh. Subhash Chandra Banka Aakarshan And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Smt. Usha Banka Aakarshan And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Vipul Banka Industrial Area, Neem Ka Thana, Sikar And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Trilok Dewan Neem Ka Thana, Sikar And (Vice-Versa) And DCIT, Central Circle-01, Jaipur Versus Smt. Sarita Dewan And (Vice-Versa) Dr. S. Seethalakshmi, Jm And Shri Rathod Kamlesh Jayantbhai For The Assessee : Sh. Rajeev Sogani, CA & Sh. Rohan Sogani, CA For The Revenue : Smt. Runi Pal, CIT (Th. VC) ORDER PER BENCH: The present bunch of appeals were filed by the revenue and cross objections to those appeals so filed by the revenue were preferred by the assessee. Since the issue raised by the revenue and that of the assessee are similar in all the assessee, we have heard these bunch together with the consent of parties. 2. As....
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....t on 13-06-2019 at the various premises of Dewan Group. The assessee derives income from Business or Profession and Other Source during the year under consideration. Consequent to search action, notice u/s. 153A of the Act was issued to the assessee on 04-03-2021 which was duly served. In response to a notice issued u/s 153A, the assessee furnished Return of Income on 24-03-2021 declaring total income of Rs. 31,63,250/-. Earlier the assessee had filed his regular return u/s 139 of the Act on 14-10-2016 declaring total income of Rs. 31,63,250/-, Hence, there is no additional income disclosed by the assessee in the Return of Income filed u/s 153A of the Act. Thereafter notice u/s 143(2) of Act was issued on 25-06-2021 which was duly served. Further notice u/s 142(1) of the Act was issued on 11-08-2021 and certain details/explanations were called for. In response to these notices, the assessee submitted requisite details/explanation, which have been examined. 6. While search and seizure action u/s. 132 of the Act 1961 in the case of various persons of Dewan Group, various bunch of documents and loose papers related to shares were found and seized. These documents/loose papers we....
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....e when the assessee entered in purchases & sales transactions. The assessee submitted that on 1.10.2012, the assessee applied for 10000 shares of 'ANAX COM TRADE LIMITED' for the value of Rs. 1,00,000/- and was allowed. That the purchase was made through cheque no. 16042 issued on 1.10.2012 and the same amount has been deducted from the bank account on 17.10.2012 when the shares were allotted to the assessee. The fact that share of ANAX COM was split into ten shares each, therefore, the assessee had 100000 shares. Eventually 'ANAX COM' amalgamated into Yamini Investments and the assessee was allotted 80000 shares of Yamini Yamini Investments'. That merger process was approved by Hon'ble Bombay High Court vide order dated 9.05.2014. This fact confirms that the company is not bogus and the investment of the assessee in the company was genuine. The assessee sold the above referred shares through SEBI registered broker, B. Lodha Securities Ltd., vide their bill no. V78/BB095 dt. 13.08.2015, bill no. V78/BB096 dt. 14.08.2015, bill no. V78/BB097 dt. 17.08.2015, bill no. V78/BB100 dt. 20.08.2015, bill no. V78/BB109 dt. 02.09.2015, and bill no. V78/BB110 dt. 03.09.2....
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....ated here in below: 5.4 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the order and the report. The contentions/submissions of the appellant are being discussed and decided as under:- The brief facts of the case on the issue as per the assessment order that a Search and Seizure operation under section 132(1) of the Income Tax Act, 1961 was carried out on 13.06.2019 at the various premises of Dewan Group. Assessment in the case of assessee was completed u/s 153A of the I.T. Act, 1961 on 21.09.2021 and from the perusal of the assessment order it is seen that the following additions have been made:- (i) Addition on account of bogus Long Term Capital Gain claimed by the assessee of Rs. 40,15,061.29/- (ii) Addition on account of commission expenses of Rs. 2,05,753/- for obtaining accommodation entry @ 5% of Sale consideration In the appeal in this ground the appellant has challenged the addition on the technical ground that regarding the addition made in the assessment order no incriminating material was unearthed during the course of search and seiz....
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....order)& Recommendation of the SIT on black Money (Para No.5.4.2 of assessment order); and other information including from the inquiry during assessment. (v) From the perusal of the assessment order there is no finding in the assessment order that these documents were found from the search and seizure action on the appellant. In response to the contention of the appellant that no incriminating material was unearthed during the course of search and seizure action, a letter was issued to the learned AO requesting, on the addition made in the assessment order, for the copy of the incriminating material unearthed during the course of search and seizure action of the appellant. The learned AO has provided the copies of documents. In the remand report whereby the incriminating material seized from the search on appellant have been provided these above referred documents are not forming part of annexed documents. The Id. AO has provided the documents of Exhibit No.-16 (Party A-3) (i) Copy of transaction statement maintained with Stock Holding Corporation of India Page No.1 to 15 (ii) Copy of bills issued by B. Lodha Securities Ltd Page No. 16 to 18 (iii) Copy of Contract....
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....rived at on the basis of other material as discussed in the paragraphs above. From the above it is noted that the documents considered as incriminating by the learned AO are not incriminating in nature and also such documents cannot be considered as having been unearthed in the nature of new information during the course of search and seizure action of the appellant as the documents are in the nature of already on record of the relevant authorities and supporting's of disclosed transactions. These documents pertain to the "form" of the transaction. The addition has been made by arriving at the "substance" of the transaction arrived at on the basis of material other than the material unearthed from the search action on the appellant. In the assessment order, with respect to the second addition, the addition has been made with respect to the commission for obtaining accommodation entry and such addition is consequential in nature and is based on the same material on which the primary addition has been made and which has been discussed in the earlier paragraphs. Thus this addition is also found to be have been made without the basis of with the incriminating material....
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....sessments in case of each assessee were under section 153-C of the Income-tax Act, 1961 (for short, 'the Act'). As found by the High Court in none of the cases any incriminating material was found during the search either from the Assessee or from third party. In that view of the matter, as such, the assessments under section 153-C of the Act are rightly set aside by the High Court. However, Shri N Venkataraman, leamed ASG appearing on behalf of the Revenue, taking the clue from some of the observations made by this Court in the recent decision in the case of Pr. CIT v. AbhisarBuildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC), more particularly, paragraphs 11 and 13, has prayed to observe that the Revenue may be permitted to initiate re-assessment proceedings under section 147/148 of the Act as in the aforesaid decision, the powers of the re-assessment of the Revenue even in case of the block assessment under section 153-A of the Act have been saved. .................... 3. However, so far as the prayer made on behalf of the Revenue to permit them to initiate the reassessment proceedings is concerned, it is observed that it will be open for the Revenue to....
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.... proceedings by issuance of notice under section 147/148. The Id. AO is directed to take necessary action in this regard for issuance of notice u/s 148. Further, the CBDT (ITJ Section) has issued Instruction No. 1 of 2023 dated 23-08-2023 vide F.No. 279/Misc./M-54/2023-ITJ on the subject "Implementation of the judgment of the Hon'ble Supreme Court in the case of Pr.CIT (Central-3) v/s AbhisarBuildwell Pvt. Ltd. (Civil Appeal No. 6580 of 2021)-Instruction regarding". The learned assessing officer is directed to implement the law and ratio of the judgement of Abhisar Buildwell (supra) and the said Instruction No. 1 of 2023 dated 23-08-2023 and section 150 of the Act, in the case of the appellant appropriately as per the facts of the case and as per above findings. Accordingly this ground of appeal is adjudicated in above terms. For statistical purposes this ground is hereby treated as allowed. 6.2 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the AO in the assessment order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as und....
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....enue. As regards the cross objection he submitted that ld. CIT(A) should refrain from giving direction. In support of the arguments advanced before us he mainly repeated what is submitted by way of written submission which reads as under : I. In the present case, Shri Vaibhav Banka, (hereinafter referred to as "the assessee"), originally filed his return of income under Section 139 of the Income-tax Act, 1961 ("the Act") on 14.10.2016, declaring a total income of Rs. 31,63,250. II. A search operation under Section 132 of the Act was conducted on 13.06.2019 in the case of Dewan Group. As the assessee is associated with the Dewan Group, a simultaneous search was also carried out at his premises. However, no incriminating material of any nature was found or seized during the course of the search. III. Subsequently, the ld. Assessing Officer (AO) issued a notice under Section 153A of the Act on 04.03.2021, in response to which the assessee once again filed his return of income declaring Rs. 31,63,250. The assessment was completed under Section 153A vide order dated 21.09.2021, determining the total income at Rs. 73,84,060. This resulted in an addition of Rs. ....
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....n made in assessment order u/s 153A cannot be sustained and is hereby deleted as the same is without basis of incriminating material unearthed during the search action on the appellant and impugned addition could have been done by the learned assessing officer in re-assessment proceedings by issuance of notice under section 147/148. The ld. AO is directed to take necessary action in this regard. Further, the CBDT (ITJ Section) has issued Instruction No. 1 of 2023 dated 23-08-2023 vide F.No. 279/Misc./M-54/2023-ITJ on the subject "Implementation of the judgment of the Hon'ble Supreme Court in the case of Pr.CIT (Central-3) v/s AbhisarBuildwell Pvt. Ltd. (Civil Appeal No. 6580 of 2021)-Instruction regarding". The learned assessing officer is directed to implement the law and ratio of the judgement of AbhisarBuildwell (supra) and the said Instruction No. 1 of 2023 dated 23-08-2023 and section 150 of the Act, in the case of the appellant appropriately as per the facts of the case and as per above findings. Accordingly this ground of appeal is adjudicated in above terms. For statistical purposes this ground is hereby treated as allowed" [Emphasis Supplied] 1.2. The ....
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....th the AO including the income declared in the returns; and iv.) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." * Hon'ble Supreme Court in the case of DCIT v. U.K. Paints (Overseas) Ltd. (supra) (CLC 30-31) vide judgment dated 25.04.2023 dismissed the SLP in light of judgment in the case of Abhisar Buildwell and held as under: "However, so far as the prayer made on behalf of the Revenue to permit them to initiate the reassessment proceedings is concerned, it is observed that it will be open for the revenue to ini....
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.... would apply to all the proceedings pending in all the forums including before this Hon'ble Court. (ii) That even though the appeals of the Revenue are dismissed in respect of assessments passed under 153A and 153C, in the absence of incriminating material found during the search, in respect of such income which was found to have escaped assessment other than through incriminating material, the assessing officers would be entitled to reassess such income in terms of Section 147/148 read with section 150. (iii) That the Assessing Officer, may if found necessary initiate fresh proceedings within 60 days from date of disposal of this application following the procedure stipulated in section 147-151 of the Act as is in force now." 2.3.ii. The Hon'ble Supreme Court vide its order dated 12.05.2023 titled as PCIT v. Abhisar Buildwell Pvt. Ltd. [2023] 294 Taxman 70 (SC) (CLC 32-34) dismissed the Revenue's Misc. Application by observing as under: "2. Having gone through the averments made in the application and the prayers, we are of the opinion that the prayers sought can be said to be in the form of review which requires detail consideration at length l....
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....o absence of incriminating material. 2.4.ii. However, such administrative instructions are not binding on quasi-judicial authorities like the CIT(A). It is a settled principle of law, as held by the Hon'ble Supreme Court in UCO Bank v. CIT [(1999) 237 ITR 889 (SC)] (CLC 41-49), that CBDT circulars or instructions cannot override, supplement, or expand the scope of statutory provisions. 2.4.iii. In the present case, the ld. CIT(A) has erroneously construed Instruction No. 1/2023 as enabling or empowering appellate authorities to direct initiation of reassessment proceedings. This is a fundamental misapplication of the Instruction, which neither authorizes appellate intervention in reassessment matters nor vests any such power in the ld. CIT(A). 2.4.iv. The Instruction cannot substitute the independent statutory preconditions under Sections 147/148 read with Section 149, which provides the timelines for issuance of notice of reopening. Provision of such section must be satisfied by the ld. AO at any given point of time, when the jurisdiction is assumed for reopening a particular assessment year. 2.5. OBSERVATIONS OF THE HON'BLE SUPREME COURT DO NOT....
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....ompliance. If the AO retains discretion in whether to act, it cannot be considered a "direction." 2.5.vii. Hon'ble Delhi High Court, in PCIT v. Sumitomo Corporation India (P) Ltd. [2024] 166 taxmann.com 55 (Delhi) (CLC 137-179) has explained the scope of Section 150 as under: "56. More fundamentally, a direction, in terms as commended for our consideration by learned counsels appearing for the Revenue, would also not be a finding or direction as contemplated therein. Mr. Vohra, in this context, invited our attention to the judgment of the Constitution Bench in Income Tax Officer, A Ward, Sitapur v. Murlidhar Bhagwan Das where the expression "finding" and "direction" was explained in the following words:- "9. Now, let us scrutinize the expressions on which strong reliance is placed for the contrary conclusion. The words relied upon are "section limiting the time", "any person", "in consequence of or to give effect to any finding or direction". Pointing out that before the amendment the word "sub section" was in the proviso but it was replaced by the expression "section", it is contended that this particular amendment will be otiose if it is confined to the....
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....shman Prakash v. CIT construed the word "finding" in a rather comprehensive way. Desai, C.J., speaking for the Court, observed: "A finding is nothing but what one finds or decides and a decision on a question even though not absolutely necessary or not called for is a finding." If that be the correct meaning, any finding on an irrelevant or extraneous matter would be a finding. That certainly cannot be the intention of the Legislature. The Madras High Court also in A.S. Khader Ismail v. Income-tax Officer, Salem gave a very wide interpretation to that word, though it did not go so far as the Full Bench of the Allahabad High Court. Ramachandra Iyer J., as he then was, speaking for the Court, observed that the word "finding" in the proviso must be given a wide significance so as to include not only findings necessary for the disposal of the appeal but also findings which were incidental to it. With respect, this interpretation also is inconsistent with the well-known meaning of that expression in the legal terminology. Indeed, learned counsel for the respondent himself will not go so far, for he concedes that the expression "finding" cannot be any incidental finding....
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....ear. A direction was defined as one which the appellate authority was empowered to issue under the Act. 58. However, a direction in terms as suggested by the respondents would clearly not fall within either of those two expressions since what we are essentially invited to do is to extend the period of limitation that otherwise stands prescribed under the Act. The finding that we have arrived at is that it was imperative for the AO to frame an order in draft as opposed to a final order of assessment. Any consequential direction that could be framed would have to be in consonance with the aforesaid finding. That direction would additionally and necessarily have to be in accordance with the scheme of the Act and the statutory prescriptions comprised therein. The same would clearly not warrant or justify the Court enlarging the period of limitation as statutorily prescribed. As is well settled, while courts may, where legally permissible, consider condonation of delay, they are not entitled to expand or enlarge a period of limitation as statutorily prescribed." [Emphasis Supplied] 2.5.viii. Accordingly, observation made by the Hon'ble Supreme Court in the case of P....
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....ning to reassessment as contained in the Act. The observations of the Supreme Court cannot possibly be read or construed as a carte blanche enabling the respondents to overcome and override the restriction that otherwise appear in Section 149 of the Act. The observations of the Supreme Court in Abhisar Buildwell (supra) were thus intended to merely convey that the annulment of the search assessments would not deprive or denude the Revenue of its power to reassess and which independently existed. However, the Supreme Court being mindful of the statutory prescriptions, which otherwise imbue the commencement of reassessment, qualified that observation by providing that such an action would have to be in accordance with law. This note of caution appears at more than one place in that judgment and is apparent from the Supreme Court observing that the power to reassess would be subject to the fulfilment of the conditions mentioned in Sections 147 and 148 of the Act. 52. The respondents despite the clear enunciation of the legal position with respect to search assessments in terms of our judgements in Kabul Chawla (supra), RRJ Securities (supra) and a host of others that followed....
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....ssment lacks legal validity and deserves to be set aside. 2.6. CIT(A) EXCEEDED HIS APPELLATE JURISDICTION (SECTION 250/251) 2.6.i. Under the specific scheme of Income Tax Act, 1961 the CIT(A)'s role is appellate which is confined to adjudicating the subject matter of the appeal before him (i.e. the contested additions/disallowances for that assessment year) - and his powers are circumscribed by Section 251 of the Act. Relevant extract of provisions is hereunder: Section 251: Powers of the [Joint Commissioner (Appeals) or the] Commissioner (Appeals). "(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment: ..." 2.6.ii. Accordingly, in an appeal against an assessment order, the ld. CIT(A) may i.) confirm, or ii.) reduce, or iii.) enhance, or iv.) annul the assessment; but he has no power to issue directions to initiate a new assessment or reassessment for a different year or under a different provision. 2.6.iii. The appellate jurisdiction ....
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....isms (like Section 34 of 1922 Act, now Section 147) to deal with escaped income. Accordingly, the Apex Court held that "It was not contended, nor was it possible to contend, that by reason of the reference to the said provisions the powers and jurisdiction conferred on the respective authorities, tribunals or courts referred to therein were enlarged or modified by a reference in the proviso or that the proviso could be read or construed as amending those sections conferring on those bodies wider or different powers or jurisdiction. Learned counsel for the department expressly disclaimed any such submission. Therefore, the scope of the proviso cannot ordinarily exceed the scope of the jurisdiction conferred on an authority under the said provisions." 2.6.viii. In other words, a CIT(A) cannot broaden the scope of the appeal decision to "advise" or "compel" the AO to take actions in a different proceeding. 2.6.ix. Thus, applying these principles in the present case, the ld. CIT(A) was tasked with deciding whether the addition under Section 153A was sustainable given the specific facts and circumstance of the case. Ld. CIT(A) rightfully found it was not (for ....
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....not only exceeds statutory authority but also fundamentally undermines the core principles of certainty, finality, and predictability that form the bedrock of the taxation framework. Such a construction is impermissible and must be struck down by the Hon'ble Tribunal. 2.7. IMPERMISSIBLE REVIEW/SUBSTITUTION OF THE AO'S AUTHORITY 2.7.i. It is further submitted that, the impugned direction by ld. CIT(A) also amounts to an unwarranted usurpation of the ld. AO's statutory authority to assess or reassess income. The Income Tax Act clearly demarcates the roles of the AO and appellate authorities. Initiation of reassessment (Section 147/148) is an executive act that lies in the AO's domain, subject to strict timelines provided under Section 149. 2.7.ii. The ld. CIT(A) has no role in the initiation of such proceedings - indeed, if an assessment is found to be erroneous and prejudicial to the interest of Revenue, for missing an issue, the law empowers the Commissioner (administratively, under Section 263), not the CIT(A) in an appellate order. 2.7.iii. By instructing the AO to issue notice under Section 147, the ld. CIT(A) essentially reviewed the assessme....
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.... support and guidance from the judgment of Hon'ble Supreme Court in the case of ITO vs. Murlidhar Bhaghubabu reported in 52 ITR 335 (SC). The relevant extract of the judgment is reproduced below:- "Section 33(4) of 1922 Act only refers to a finding or direction made by an appellate authority and does not itself confer any power on an appellate authority to make a finding or direction. Indeed, section 34 of 1922 Act deals with entirely a different aspect, that of empowering an ITO to bring to assessment escaped income, and has no concern with the powers of an appellate authority. The provision which deals with the powers of an appellate authority is section 31 of 1922 Act." Respectfully following the judgment of Hon'ble Supreme Court in the case of Murlidhar Bhaghubabu (supra) we conclude that Ld. CIT(A) has no power under the provision of law for giving any direction to AO for reopening of assessment. The appeal before Ld. CIT(A) is confined to the particular assessment year which is before him. Thus, in view of the above proposition, we dismiss the ground of Revenue's appeal. Consequently, Revenue's ground is dismissed." 3. In light of the detail....
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....se of PCIT vs Sumitomo Corporation India (P.) Ltd. [2024] 166 taxmann.com 55 (Delhi) 137-179 12. We have heard the rival contentions and perused the material placed on record. As is evident from the grounds of appeal filed by the revenue that ground no. 1 relates to the decision of ld. CIT(A) directing to delete the addition of Rs. 40,15,061 made by the ld. AO being the amount of Long Term Capital gain claimed by him in his return of income and ground no. 2 relates to the estimation of commission at 5 % on the said income offered by the assessee as charges for the accommodation entry. The facts related to these two additions were already discussed herein above the same are not repeated. Record reveals that a Search and Seizure operation under section 132(1) of the Income Tax Act, 1961 was carried out on 13.06.2019 at the various premises of Dewan Group. Pursuant to that action notice u/s. 153A of the Act was issued to the assessee because the assessee was one of the persons in the group where search operation was conducted. The assessee filed the return of income pursuant that notice issued u/s. 153A of the Act and thereby the assessment was also completed on on 21.09.2021....
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.... the assessee as those shares were sold by the assessee after more than 12 months. Transaction was made through SEBI registered broker. The broker issued bills of sale to the assessee. The shares were sold on the prices of Bombay Stock Exchange Limited of the particular date & particular time. The assessee paid security transaction tax, service tax, etc, and thereby the assessee justify his claim u/s 10 (38) of the Act. He also claimed that payments of purchases & sales were made / received through banking channel and in support of the claim he filed the following documents ; 1. Allotment Certificate 2. Copy of Bank Account showing purchase receipts 3. Sale bill cum contract note (Annexure A/5) 4. Copy of Demat Account 5. Copy of Bank Account showing the sale receipts 6. Copy of Return of Income for AY 2016-17 where assessee has declared income of Rs. 45,14,780/- under the head LTCG exempt under section 10(38) of the Act. (Annexure A/1) He also based on the MCA master data submitted that the company has filed its balance sheet with ROC up to 31/03/2020 & last AGM of company was held on 24/12/2020. The share is also traded on ....
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....2 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other Hi....
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....O would have jurisdiction to re-open the assessments made under section 143(1)(a) or 143(3) of the Act, 1961 and to reassess the total income taking notice of undisclosed income even found during the search and seizure operation. 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the aforesaid appeals preferred by the assessee - M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs. Based on these set of facts and respectfully following the finding of the apex court holding that ....
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....ss-Objection to challenge the directions and to raise other legal and factual grounds in support of the deletion of the addition. Record reveals that ld. CIT(A) vide page 36 while dealing with the appeal of the assessee has issued direction to the ld. AO which reads as under : "Accordingly, the judgement of Hon'ble Supreme Court in the case of Abhisar Buildwell (supra) and U. K. Paints (supra) are squarely applicable to the facts of the case. Accordingly, following the judgment of honorable Supreme Court it is held that the ld. AO rightly issued notices u/s 153A of the Act and at the same time the impugned addition made in assessment order u/s 153A cannot be sustained and is hereby deleted as the same is without basis of incriminating material unearthed during the search action on the appellant and impugned addition could have been done by the learned assessing officer in re-assessment proceedings by issuance of notice under section 147/148. The ld. AO is directed to take necessary action in this regard. Further, the CBDT (ITJ Section) has issued Instruction No. 1 of 2023 dated 23-08-2023 vide F.No. 279/Misc./M-54/2023-ITJ on the subject "Implementation of the judgment of ....
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....sment or recomputation may be taken. Section 251 reads as follows : Powers of the^70[Joint Commissioner (Appeals) or the] Commissioner (Appeals). 251. (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment: ^71[Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment;] (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, he may, after taking into consideration all the material and other information produced by the assessee before, or the results of the inquiry held or evidence recorded by, the Settlement Commission, in the course of the proceeding before it and such other material as may be brought on his record, confirm, reduce, enhance or annul the assessment; (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as....
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....o all the proceedings pending in all the forums including before this Hon'ble Court. (ii) That even though the appeals of the Revenue are dismissed in respect of assessments passed under 153A and 153C, in the absence of incriminating material found during the search, in respect of such income which was found to have escaped assessment other than through incriminating material, the assessing officers would be entitled to reassess such income in terms of Section 147/148 read with section 150. (iii) That the Assessing Officer, may if found necessary initiate fresh proceedings within 60 days from date of disposal of this application following the procedure stipulated in section 147-151 of the Act as is in force now." 4.1.ii. The Hon'ble Supreme Court vide its order dated 12.05.2023 titled as PCIT v. Abhisar Buildwell Pvt. Ltd. [2023] 294 Taxman 70 (SC) (CLC 32-34) dismissed the Revenue's Misc. Application by observing as under: "2. Having gone through the averments made in the application and the prayers, we are of the opinion that the prayers sought can be said to be in the form of review which requires detail consideration at length looking into th....
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.... Supreme Court in UCO Bank v. CIT [(1999) 237 ITR 889 (SC)] (CLC 41-49), that CBDT circulars or instructions cannot override, supplement, or expand the scope of statutory provisions. Thus, taking shelter of Instruction No. 1/2023 as enabling or empowering appellate authorities to direct initiation of reassessment proceedings is a fundamental misapplication of the Instruction, which neither authorizes appellate intervention in reassessment matters nor vests any such power in the ld. CIT(A). Even other wise the Instruction cannot substitute the independent statutory preconditions under Sections 147/148 read with Section 149, which provides the timelines for issuance of notice of reopening. Provision of such section must be satisfied by the ld. AO at any given point of time, when the jurisdiction is assumed for reopening a particular assessment year. Even the power vested with ld. CIT(A) are limited wherein he may i.) confirm, or ii.) reduce, or iii.) enhance, or iv.) annul the assessment; Thus, he has no power to give any direction that what is prescribed in law. The issue related to the power of the commissioner of income has already been dealt....
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....2-12-1967 by the Chief Commissioner of Delhi granting compensation in favour of the appellant. The Additional District Judge by the judgment dated 20-5-1980 held the appellant entitled to 1/32 share of the compensation awarded under various awards and the appellant was granted total compensation in the sum of Rs. 1,18,810 approximately in the year 1981. 2. On a reference under section 18 of the Land Acquisition Act, the learned Additional District Judge, Delhi vide his judgment dated 31-7-1991 awarded a sum of Rs. 1,10,20,624. The amount was paid to the appellant between 15-10-1992 and 26-5-1993. The amounts paid represented principal sum of compensation of Rs. 41,96,496 and interest in the sum of Rs. 76,84,829 up to 18-5-1992. Before making the above payments, tax was deducted at source amounting to Rs. 8,60,701. 3. Since the lands acquired were agricultural lands and were acquired prior to 1-4-1970, capital gains tax was not leviable but tax was leviable on interest earned on the amount awarded on year to year basis. 4. The appellant through counsel sent a letter dated 17-9-1993 informing the ITO that he had received interest amount of Rs. 76,84,829 and....
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....tion the provisions of section 150(1) and (2). The provisions read as under : "Provision for cases where assessment is in pursuance of an order on appeal, etc.-(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision [or by a Court in any proceeding under any other law]. [The portion bracketed and italicised above is inserted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989]. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which ....
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.... other law, that the provision has been amended to lift bar of limitation for reassessment. 13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to sub-section (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to sub-section (1) of section 150 which intends to lift embargo of period of limitation under section 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the Act but also on order of a Court in any proceedings under any law, has to be applied prospectively on or ....
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.... Such an interpretation would make the whole provision under section 150 discriminatory in its application to assessments sought to be reopened on the basis of orders under the Act and other assessments proposed to be reopened on the basis of orders under any other law. Interpretation, which creates such unjust and discriminatory situation, has to be avoided. We do not find that sub-section (2) of section 150 has that result. Sub-section (2) intends to insulate all proceedings of assessments, which have attained finality due to the then existing bar of limitation. To achieve the desired result it was not necessary to make any amendment in sub-section (2) corresponding to sub-section (1), as is the reasoning adopted by the High Court. 18. Sub-section (2) aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation. Sub-section (2) in putting such embargo refers to whole of sub-section (1) meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or recomputation either on the basis of orders in proceedings under the Act or orders of courts passed under a....
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.... provision must be read subject to the rule that in the absence of an express provision or clear implication, the Legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred." (p. 240) 20. On a proper construction of the provisions of section 150(1) and the effect of its operation from 1-4-1989, we are clearly of the opinion that the provisions cannot be given retrospective effect prior to 1-4-1989 for assessments which have already become final due to bar of limitation prior to 1-4-1989. Taxing provision imposing a liability is governed by normal presumption that it is not retrospective and settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot in the absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable the authorities to affect f....
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....s. (3) of s. 143 or s. 147 has been made for relevant assessment year, no notice shall be issued under s. 148 by an AO, who is below the rank of Asstt. CIT or Dy. CIT unless the Jt. CIT is satisfied on the reasons recorded by such AO that it is a fit case for the issue of such notice. Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Chief CIT or CIT is satisfied, on the reasons recorded by the AO aforesaid, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-s. (1), no notice shall be issued under s. 148 by an AO, who is below the rank of Jt. CIT, after the expiry of four years from the end of the relevant assessment year, unless the Jt. CIT is satisfied, on the reasons recorded by such AO, that it is a fit case for the issue of such notice. Explanation : For the removal of doubts, it is hereby declared that the Jt. CIT, the CIT or the Chief CIT, as the case may be, being satisfied on the reasons recorded by the AO about fitness of a case for the issue of notice under s. 148, need not issue such notice himself." S....
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....ng the large amount of income to be taxed, an approval under s. 147 may kindly be granted. Sd/- Asstt. CIT, Circle-1(3), Nagpur." 10. Direction of the higher authority including that of the CIT(A) will not confer power to assume jurisdiction to the AO to initiate reassessment proceeding. With this considered view, on a total in-depth study of the case laws and considering the rival submissions, we allow the assessee's appeal and cancel the order of the CIT(A). Before parting with the order it is to be pointed out that the notice issued under s. 143(2) was also barred by time in this case and since the root of the matter had been dealt at length as above, we did not feel it proper to again deal with ground No. 5 in detail. Howsoever it is treated to have been considered and decided in favour of the assessee. 11. In the result, the assessee's appeal is allowed. Even the co-ordinate bench of Kolkata vide dealing with the appeal of the revenue in the case of ITO Vs. Sri Biswajit Chatterjee ITA no. 565/Kol/2023 has also held that " CIT(A) has not power under the provision of law for giving any direction to AO for re-opening of asse....
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.... It is also imperative for the Income-tax Officer to record his reasons before initiating proceedings as required by section 148(2). Another requirement is that before notice is issued after the expiry of four years from the end of the relevant assessment years, the Commissioner should be satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice. The duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment. Production before the Income-tax Officer of the account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure contemplated by law. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Officer draws ....
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.... Act of 1961. This contention has been controverted by the learned counsel for the respondent who has canvassed for the correctness of the view taken by the High Court in the judgment under appeal. It would appear from what has been discussed above that one of the essential requisites for proceeding under clause (a) of section 147 of the Act of 1961 is that the income chargeable to tax should escape assessment because of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The present is not a case where the assessee had omitted or failed to file the return. Question then arises as to what has been omission or failure on the part of the assessee to make a full and true disclosure. There is nothing before us to show that in the return filed by the assessee appellant the particulars given were not correct. Form C under rule 19 of the Indian Income-tax Rules, 1922, at the relevant time gives the form of return which had to be filed by the companies. Part V of that form deals with depreciation. The said part requires a number of columns to be filled in by the assessee. It has not been suggested that an....
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....the Income-tax Officer on questions of law. It may also be mentioned that so far as the assessment for the assessment year 1957-58 is concerned, the assessment order was once rectified and at another time revised. Despite such rectification and revision, the above mistake in the calculation of the depreciation remained undetected. It was only in October, 1965, that the Income-tax Officer realised that higher amount of depreciation had been allowed to the appellant than was actually due. A letter to that effect was consequently sent to the assessee on October 5, 1965. It was, however, nowhere mentioned in that letter that the higher amount of depreciation had been allowed and the income as such had escaped assessment because of the omission or failure on the part of the assessee to disclose truly and fully all material facts. Reference to such omission or failure came only in a subsequent communication. The submission made on behalf of the appellant is not without force that reference was made to the assessee's omission or failure to disclose truly and fully all material facts because it was realised that after the expiry of four years from the end of the relevant asses....