TaxTMI 
TaxTMI 
2026 (1) TMI 1314
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....and after taking into consideration the same, we find that the assessee is a senior citizen aged 69 years and has narrated of his bodily ailments leading to delay in filing both the appeals. Considering the same and the delay is not of a substantial period causing prejudice to cause of justice, the delay is condoned in both the appeals and the same are admitted for hearing. 3. Further, it comes up that in AY: 2019-20 the assessment was completed u/s 153C of the Act at an assessed income of Rs. 1,04,65,425/- as against income returned u/s 139(1) of the Act at Rs. 89,25,914/-. The assessee had filed original return of income u/s 139 of the Act on 24.10.2019 declaring income of Rs. 98,25,914/- and the return was processed u/s 143(1) of the Act by intimation dated 26.02.2020 at returned income of Rs. 1,04,65,425/- by observing an amount of Rs. 6,36,511/- on account of depreciation disallowable u/s 32(1)(ii) and 32(1)(iia) of the Act. 3.1 Subsequently, search and seizure operation was carried out on 22.10.2020 on Shri Imtiyaz Ahmad Shah for which the case of assessee was opened vide notice u/s 153C of the Act, in response to which assessee filed return of income on 01.09.2022 decl....
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....being part of audited accounts in which depreciation on the assets purchased after 30-09- 2018 was claimed @ 7.5% of the applicable rate i.e. 15% on 3 cars i.e. car Audi A6, Car GLC and Car Mercedes E220D and instead of Rs. 11,74,772/- depreciation was claimed of Rs. 2,95,631/- Rs. 4,23,888/- and Rs. 4,55,253/- and respectively @ 7.5% on the value of asset as of Rs. 39,41,750/- Rs. 56,51,844/- and Rs. 60,70,038/- respectively. Thus, total depreciation for 3 vehicles was taken at Rs. 11,74,772/- @ 7.5%. However, while computing intimation the assessing officer ignored page no. 44 at S. No. 11 where depreciation on half rate was clearly mentioned of Rs. 11,74,772/- and while computing at Page 45, depreciation already claimed at half rate was reduced further @ 50% by allowing at Rs. 5,35,264/- at S. No.11. The AO ignored that depreciation on fixed asset was already taken @ 7.5% in the computation of income at Page 4 and depreciation chart at page 11 alongwith the audited accounts but the AO ignored this fact and simply followed intimation u/s 143(1) of the Act. 5.1 Ground No.3 relates to TDS claimed by Assessee amounting to Rs. 32,72,686/- as against TDS allowed in the computation ....
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....icer as under: i Return Income as per Original Return u/s 139 of the IT Act, 1961 : Rs.81,46,110/- ii Income assessed u/s 143(1) of the Act vide order dated 26.02.20 : Rs.81,46,110/- iii Income as per return filed u/s 153C of the Act : Rs.62,60,210/- iv. Assessed income u/s 153C of the Act : Rs.81,46,110/- 4.1.6 In this case return was filed on 15.12.2020 showing income of Rs. 81,46,110/-. Thereafter return was processed u/s 143(1) of the Income Tax Act and income was determined at Rs. 81,46,110/-. In response to notice issued u/s 153C of the Income Tax Act, appellant filed his return showing income of Rs. 62,60,210/-. Assessment u/s 153C of the Income Tax Act was passed again at Rs. 81,46,110/- without doing any verification with regard to income increased by CPC while passing order u/s 143(1) of Income Tax Act. As per the provisions of the Act, the appellate order in this case is order u/s 143(1) passed by the CPC. The appeal under reference is against order u/s 153C wherein Assessing Officer has not made any addition in the body of the assessment order and simply copies the figure of total income as determined u/s 143(1) o....
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..... 15,658/- was not deposited, MVS Gymkhana Limited has not deposited Rs. 4,350/-, Royal Golf Link City Projects Private Limited has not deposited Rs. 8,51,251/- and Shipra Estate Limited and Jaikishan Estate Developers have not deposited Rs. 8,21,530/-. Thus, totaling Rs. 17,03,974/- was though deducted but not deposited. Due to which credit was not allowed while computing the tax." 8. The ld. DR has primarily relied the decision of Bangalore Bench in Areca Trust, ITA No. 433/Bang/2023 dated 26.07.2023 to contend that when no separate addition is made in assessment completed u/s 143(3) but merely adjustments of intimation of Section 143(1) of the Act are made appeal against the assessment order passed u/s 143(3) is not maintainable and for convenience we reproduce the relevant para of the decision relied by ld. DR: "7. We have heard the rival submissions and perused the material on record. On perusal of the impugned Assessment Order passed under section 143(3) (order dated 12.02.2021), it is clear that AO has assessed the total income at Rs. 23,29,62,420/- solely relying on the adjustment made by the AO/CPC in the intimation made under section 143(1) of the Act. In the ....
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.... 9. However, what is material is that present cases deals of assessments concluded u/s 153C of the Actand not u/s 143(3) of the Act forunabated years. The decision relied for appellant in DCIT versus JSR Infra Developers Pvt. Ltd. (supra) is quite relevant where co-ordinate bench has held that where assessment is u/s 153C of the Act, then original returned filed u/s 139 of the Act is substituted by the return filed in response to the notice u/s 153C of the Act and further claims of assesse are reopened. The relevant part in para 11 to 15 are reproduced herein below; "11. It is noted that, the second proviso to Section 153A of the Act mandates that the assessments or re-assessments pending on the date of initiation of search would stand abated. It further provides that, the return of income filed by the searched person, in terms of Section 153A(1)(a) of the Act, would be construed to be a return of income under Section 139 of the Act. Therefore, once the assessment gets abated, the original return which had been filed loses its originality and the subsequent return filed under Section 153Ar.w. 153C of the said Act (which is in consequence to the search action conducted un....
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....of the Tribunal is not justified and admission of the appeal is warranted. ............ 10. The reliance on the decision of the Apex Court in Sun Engineering Works (P.) Ltd. (supra) by the Revenue is misplaced. The above case dealt with re-opening of an assessment under Section 147 of the Act. It was in that context that the Apex Court observed that the Order passed under Section 147/148 and the Assessing Officer is primarily restricted to such income which has escaped assessment and does not permit reconsideration of issue which are concluded in the earlier assessment years in favour of the Revenue. 11. In the present facts for the subject assessment years it is an undisputed position that the pending assessment before the Assessing Officer consequent to return filed under Section 139(1) of the Act for the subject Assessment years had abated. This was on account of the search and as provided in second proviso to Section 153A(1) of the Act. The consequence of notice under Section 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has been issued. It is this ret....
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....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 re- assessment. 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 contained in sections 139, 147, 148, 149, 151 and 153. 8.2 Having noticed the above, we may also refer to the second and the third proviso to section 153A(1). For the sake of convenience, the second and third proviso to section 153A(1) of the said Act which is relevant is reproduced below and reads thus: 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 t....
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....lysis of the provisions contained in section 153-A (1) of the Act more particularly the key expressions as referred to above, it is evident that assessments or re-assessments 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. ... 13. In the present case, search was conducted on the assessee on 30-11- 2010. At that point of time assessment in the case of assessee for the assessment year 2008-09 was pending scrutiny since notice under section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to section 153A of the said Act, once assessment got abated, it meant that it was open for both the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained to be claimed in his earlier/regular return of income. This is so because assessment was never made in the case of the assessee in su....
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....eferred to in sub-section (1) is pending on the date of initiation of the search u/s. 132 of the Act shall abate. In the present case before us, however, though the second proviso to sub-section (1) of section 153A would not apply in the first three years of this case, yet, as far as the second three year period is concerned (which are pending before us), the assessments were pending The proceedings in relation thereto abate. Now the entire assessment in relation to the second phase of three years can be made. The pending assessment in that case may be undertaken u/s. 153A of the Act. The abatement of pending assessment is for the purpose of avoiding two assessments for the same year i.e. one being regular assessment and the other being search assessment u/s. 153A of the Act. In other words, these two assessments merge into one assessment. It means that completed assessments stand on different footing from the pending assessments. Hence, in so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s. 153A of the Act merge into one and in that case only one assessment for the remaining set of years, where assessment is pending, is to ....
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....red are answered as under: (i) Whether an assessee can make Yes claim for deduction under Chapter VIA of Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/ s 153A of the Act, pursuant to a search conducted under section 132 of the Act ? Yes ii) If yes, under which circumstances I. In case of unabated/ completed assessment/s, no fresh claim can be made under chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act. II. in case of abated assessment/s, fresh claim can be made under chapter VI-A of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act. 14. We observe that the arguments of the Ld. CIT, DR and his reference to certain excerpts from this decision was misplaced as those were rendered in the context of unabated assessments, to which we agree that, fresh claim of any new deduction cannot be made by an assessee in un....