TaxTMI 
TaxTMI 
2025 (2) TMI 1346
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....53C were initiated post search conducted in their premises by filing the claim in the ITR filed in response to notice u/s 153C of the Act on 31/07/2018. 3. The Ld. CIT(A) erred in not taking note of the fact that the claim of deduction u/s 801A of the Act was not made by the assessee in the original ITR filed by the assessee u/s 139(1) on 30.11.2016. The Ld. CIT(A) erred in allowing the appeal of the assessee ignoring the decision of the Hon'ble Supreme Court of India in CIVIL APPEAL NO. 1449 OF 2022 (Arising out of SLP(Civil) No. 7620/2021) Principal Commissioner of Income Tax-III, Bangalore Vs M/s Wipro Limited wherein the Apex Court has held that the "Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under Section 139(1) and cannot transform it. The assessee can file a revised return in a case where there is an omission or a wrong statement. Filing a revised return and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. By filing the revised return of income, the ....
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....sessee was found from the premises of SRS Mining and in relation thereto, one of the directors of the assessee in his statement recorded on 11.12.2016 had admitted the same as the undisclosed income of the assessee. As a consequence, it was brought to our notice that the case of the assessee was centralized with the AO on 03.11.2017. The Ld. AR emphasized that on the said date, the assessment proceedings u/s 143(3) of the Act for the relevant AY 2016-17 was pending. Thereafter, satisfaction note was drawn by the AO in terms of Section 153C of the Act on 11.07.2018 and the notice u/s 153C of the Act for the relevant AY 2016-17 was issued on 13.07.2018 (served on the assessee on 18.07.2018), requiring the assessee to file its return of income within 15 days from the date of service of the said notice. It is noted that, on the date of satisfaction note, which is deemed to be the date of search in terms of proviso to Section 153C of the Act, the income tax assessment for AY 2016-17 was pending on the said date and as a consequence of the issue of notice u/s 153C of the Act, the original assessment proceedings initiated by notice u/s 143(2) of the Act dated 18.07.2017 stood abated. 4....
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.... 2012 dated 04.02.2013] 6. Being aggrieved by the above order of the Ld. CIT(A) allowing the assessee's claim for fresh deduction u/s 80-IA of the Act, the Revenue is now in appeal before us. 7. Assailing the action of the Ld. CIT(A), the Ld. CIT, DR has relied upon the decision of the Special Bench at Hyderabad in the case of DCIT vs Sew Infrastructure Limited (209 ITD 1)and argued that the Tribunal has held that the assessee is not entitled to make claim of fresh deduction u/s 80-IA of the Act in a return of income filed u/s 153A of the Act. The Ld. CIT, DR, further relied upon the ratio laid down in the decisions of the Hon'ble Delhi High Court in the case of Kabul Chawla (61 taxman 412), Hon'ble Supreme Court in the cases of Abhisar Buildwell Ltd. (149 taxmann.com 199) and Goetze India Ltd. (284 ITR 323) to support the AO's case that the assessee cannot be permitted to raise fresh claim in the return filed u/s 153A/153C of the Act. The Ld. CIT, DR further took us through the legislative history of Section 80-AC as applicable from AY 2016-17 and argued that if the assessee did not make a claim for deduction under Chapter VIA in the return of income filed u/....
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....assessment and therefore the return of income filed u/s 153C of the Act was to be construed as return filed u/s 139 of the Act and in that view of the matter the conditions laid down in Section 80A(5) and 80AC was met. He further showed us that the assessee had also obtained certificate in Form 10CCB as mandated in Section 80-IA(7) of the Act and the same was filed along with the return of income and therefore, the requirement laid down in the said provision was also fulfilled. The Ld. AR further relied on several judicial precedents in support of the foregoing contention. He accordingly urged that there was no reason to interfere with the order of the Ld. CIT(A). The Ld. AR has also furnished a written note of arguments rebutting the contentions of the Ld. CIT, DR, which has been taken on record. 10. We have heard both the parties, gone through the written submissions and perused the relevant provisions of law as well as the material placed on record. The undisputed facts of the present case are that, the assessee is engaged in the business of development of infrastructure projects. The assessee in the original return of income filed u/s 139 of the Act for relevant AY 2016-17, ....
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....nd proviso to Section 153A(1) of the said Act, once an assessment gets abated, the provisions of the Act which would be otherwise applicable in case of return filed under Section 139(1) of the Act, would also continue to apply in case of return filed under Section 153A of the Act. Having regard to the foregoing provisions, we are of the view that the assessee is entitled to lodge a new claim in a proceeding under Section 153A / 153C of the Act, which was not claimed in the regular return of income, because the assessment was never made/finalized in the case of the assessee in such a situation. We find that this particular issue has been decided in favour of the assessee by the Hon'ble Bombay High Court held in the case of B.G. Shirke Construction Technology P Ltd (supra), wherein it was held as under :- "8. The grievance of the Revenue before us is that the impugned order is unsustainable as it is a passed in the face of the Apex Court Order in Goetze (India) Ltd. (supra). It is submitted that the impugned order could not have held that the claim for deduction could be entertained by the Assessing Officer in the absence of the same finding a place either in return of i....
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....f return filed in the regular course under Section 139(1) of the Act would also continue to apply in case of return filed under Section 153A of the Act and the case laws on the provision of the Act would equally apply." 12. The Hon'ble Bombay High Court in the case of Pr. CIT Vs JSW Steel Ltd (422 ITR 71) is also found to be squarely applicable to the present case. In this case also, the Hon'ble High Court has held that, it was permissible for an assessee to lodge new claim in proceedings u/s. 153A of the Act in case of abated assessments as the return filed u/s 153A of the Act was required to be treated as return of income filed u/s 139(1) of the Act. The relevant findings of the Hon'ble High Court are noted to be as under: "8.1 In other words, section 153-A(1) provides that where a person is subjected to a search under section 132 or his books of accounts, etc. are requisitioned under section 132-A after 31-52003, the assessing officer is mandated to issue notice to such person to furnish return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which s....
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....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 reassessing the total income for the said six assessment years. 8.4 Reverting back to the second proviso what is to be noticed is that as per this proviso, any assessment or re-assessment in respect of any assessment year falling within the said period of six assessment years is pending on the date of initiation of search or making of requisition, those assessment or re-assessment proceedings shall abate. In other words, pending assessment or reassessment proceedings on the date of initiation of search or making of requisition shall abate. 8.5 That brings us to the crucial expression, which is 'abate'. The ordinary dictionary meaning of the word 'abate', as per Concise Oxford English Dictionary, Indian Edition, is to reduce or remove (a nuisance). Derivative of abate is abatement. In Black's Law Dictionary, Eighth Edition, 'abatement' has been defined to mean an act of eliminating....
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.... Ltd. (supra) which also explains the second proviso to Section 153A(1). The explanation is that pending assessment or reassessment on the date of initiation of search if abated, then the assessment pending on the date of initiation of search shall cease to exist and no further action with respect to that assessment shall be taken by the AO. In such a situation the assessment is required to be undertaken by the AO under section 153A(1) of the said Act. 15. In view of the above, we are in agreement with the findings given by the Tribunal in respect of allowing of the assessee's appeal in paragraph -14 of the order under challenge dated 28-92016, which reads thus : "14. From the above discussion and precedence, the scheme of assessment u/s. 153A of the Act in case of search, the AO shall issue notice to searched person requiring him to furnish within such period as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section (1) of section 153A and clause (b) postulates assessment or reassessment of the total income of six years immediately preceding the asses....
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....de in the case of the assessee in such situation. Hence, we allow this issue of assessee's appeal." 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." 13. Coming to the decision of the Special Bench at Hyderabad in the case of Sew Infrastructure Ltd (supra) cited by the Revenue, we are in agreement with the assessee that this decision supports their case. The relevant findings, taken note of by us, is as follows :- "33. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the assessee cannot make a fresh claim of deduction under Chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to notice issued under Section 153A of the Act, pursuant to search conducted under Section 132 of the Act, in unabated/completed assessment as on the date....
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....AY 2016-17 in the proceedings u/s 153C of the Act. 16. Now we come to the Revenue's contention that the assessee had not complied with the provisions of Section 80AC of the Act and therefore the fresh claim of deduction made u/s 80-IA of the Act, in the return of income filed u/s 153C of the Act cannot be admitted. For this, let us first have a look at the relevant provisions of Section 80AC of the Act, which reads as under :- "Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after- (i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE; (ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C .- Deductions in respect of certain incomes", no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub- section (1) of section 139." 17. In the above provision, which is ap....
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....filed in response to Notice u/s 153A substitutes the original Return of Income filed u/s 139 of the Act. Thus, where the Return u/s 153A of the Act is filed within the time permitted u/s 153A of the Act, the same is to be taken as filed within the time limit as per section 139(1) of the Act. Thus, where the Audit Report in Form 10CCB is furnished on or before the time allowed for filing Return of Income in the Notice issued u/s 153A of the Act, the said Form 10CCB is to be taken as filed on or before the time permitted u/s 139(1) of the Act and thus within the time allowed u/s 80IA(7) r.w.s 80AC of the Act. For holding so, we draw support from judgment rendered by the Hon'ble Calcutta High Court in Shrikant Mohta (supra) wherein the Hon'ble High Court held as under: "The second question is answered thus: When search operations are conducted under section 132 of the Act, the obligation of the assessee to file any return remains suspended till such time that a notice is issued for such purpose under section 153A(1)(a) of the Act. If the return is filed by the assessee within the reasonable time permitted by such notice under section 153A(1)(a) of the Act, su....