TaxTMI 
TaxTMI 
2025 (8) TMI 637
X X X X Extracts X X X X
X X X X Extracts X X X X
....the delay, Revenue has filed an Application pleading therein that the additions deleted by ld. CIT(A) was of Rs. 37,96,083/- being sale consideration of the shares and Rs. 1,89,804/- as unexplained commission expenses on which tax effect is less than Rs. 50 lacs and, therefore, it was thought that no appeal is required to be filed before the Tribunal. However, when appeal of Shri Avinash Singla in A.Ys. 2013-14 and 2014-15 were examined for filing then, it revealed that though tax effect in those appeals is also less than Rs. 50 lacs but the issues fall within the exemption clause of tax effect Circular. This was by way of a Misc. letter dated 16.09.2019 issued by CBDT. This letter was not within the knowledge of the Assessing Officer in the beginning but while examining the case of other assessee it came to his notice. Due to this reason, the appeal could not be filed well in time. 3. With the assistance of the ld. Representatives we have gone through the record carefully. 4. Sub-section 5 of Section 253 contemplates that the Tribunal may admit an appeal or permit filing of memorandum of cross objections after expiry of relevant period, if it is satisfied that there was a su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ey are meant to see that parties do not resort to dilatory tactics, but seek their remedy promptly. The object of providing a legal remedy is to repair the damage caused by reason of legal injury. Law of limitation fixes a life-span for such legal remedy for the redress of the legal injury so suffered. Time is precious and the wasted time would never revisit. During efflux of time newer causes would sprout up necessitating newer persons to seek legal remedy by approaching the courts. So a life span must be fixed for each remedy. Unending period for launching the remedy may lead to unending uncertainty and consequential anarchy. Law of limitation is thus founded on public policy. It is enshrined in the maxim Interest reipublicae up sit finis litium (it is for the general welfare that a period be putt to litigation). Rules of limitation are not meant to destroy the right of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. A court knows that refusal to condone delay would result foreclosing a suitor from putting forth his cau....
X X X X Extracts X X X X
X X X X Extracts X X X X
....facility of reference, we are taking up facts from ITA No. 814/Chd/2023, i.e., in the case of Shri Avinash Singla. 9. A perusal of the grounds of appeal would reveal that Revenue has taken six grounds in each appeal, however, perusal of these grounds would reveal that they are not in consonance with Rule 8 of ITAT Rules. They are descriptive and argumentative in nature. In brief, common issue involved in these appeals is : Whether capital gains earned by the assessees / respondents on sale of shares of Turbotech Engineering Ltd. deserves to be treated as bogus in assessment orders passed u/s 153A of the Income Tax Act. 10. The brief facts of the case are that a search and seizure operation was conducted in the cases of AFI group of companies and residential premises of both the assesses was covered under the search. The search was conducted on 25.04.2018. Thereafter, Assessing Officer issued has notices u/s 153A of the Income Tax Act to both the assessees on 27.01.2020. Smt. Meena Singla had filed her original return u/s 139(1) on 31.07.2014. In response to the notice u/s 153A, she has again filed her return of income on 15.02.2020. The income was declared at the sam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y and deleted all the additions by recording following findings. For the facility of reference, we take note the findings of the CIT(A) from ITA No. 814/Chd/2023, as under: "6.2.2 I have carefully considered the submissions of the appellant, assessment order, facts of the case and legal position. Before proceeding further, it is very important to analyze and understand the meaning of the term 'incriminating material' and position of law on assessment u/s 153A/153C cases. Now this issue of scope of assessment u/s 153A of the Act has been decided by the Hon'ble Supreme Court in the case of PCIT Central-3 vs. Abhisar Build well Pvt. Ltd. Reported at 150 Taxmann.com 257 (SC) (2023) wherein, it has been held by the Hon'ble Court as under: "14. In view of the above and for the reasons stated above, it is concluded as under: i) That in case of search under Section 132 or requisition under Section 132A, the A.O. assumes the jurisdiction for block assessment under section 153 A; ii) All pending assessments/reassessments shall stand abated; iii) In case any incriminating material is found/unearthed, even, in case of unabated/comple....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rther, in the case of UK Paints (Overseas) Ltd. Reported at TS-229-SC-2023, this view has been reaffirmed. 6.2.4 Therefore, now in view of the binding judgment of above judgment of Hon'ble Supreme Court, it is now settled that assessment in search cases u/s 153A or 153C can be made only if there is incriminating material found during search. Therefore, moot question is whether there is any incriminating material found during search in present case. It has been observed that there is single document which is the basis of entire proceedings and the addition. This paper is reproduced as under:- "Securities and Exchange Board of India ASSISTANT MANAGER Investigations Department January 20, 2018 AVINASH KUMAR No. 521, Sector 38B Chandigarh, Sector 36, Po Chd Chandigarh, Near Gugamadi Mandir, Chandigarh India 160038 Sir/Madam, Sub: Investigation in the trading activities of certain entities in the scrip of Turbotech engineering Limited (03 cases) 1. It was observed that you had received share of Turbotech Engineering Limited ("company") in off market from entities conn....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as unexplained expenditure on commission for arranging this transaction (Rs. 24,05,283/- and Rs. 1,20,264/-) cannot be sustained and hence deleted. 6.3 Grounds of Appeal Nos. 5 to 12: Since the addition has been deleted on legal grounds i.e. ground of appeal no. 4, other grounds become infructuous and academic in nature. Hence, require no further adjudication. 7. In the result, appeal is allowed. 14. With the assistance of the ld. Representatives we have gone through the record carefully. Admittedly, nothing was found during the course of search except a warning letter from the SEBI reproduced in the findings of the CIT(A). This letter in itself does not exhibit that anything which is relevant for the assessment of the income of the Assessee. It is just a caution to the Assessee for avoiding any transaction with such type of shares. It is an apprehension that this company might be involved in manipulating the price of its shares but concretely it does not provide the transactions of the Assessee are are to be treated as bogus. Apart from the above, it is penitent to note that while construing the scope of section 153A, Hon'ble Delhi High Court has propounde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 39. The question framed by the Court is answered in favour of the Assessee and against the Revenue. 40. The appeals are accordingly dismissed but in the circumstances no orders as to costs". 16. This judgment and other judgments on this school of thought have fallen for consideration o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ome declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible unde....