Pr. Commissioner Of Income Tax (Central), Gurgaon v. Sh. Ranjit Singh Gill

IN THER HIGH COURT OF PUNJAB AND HARYANAAIL CHANDIGAR ITA No.370 of 2017 (O&M)Date of Decision:- 16.11.2017 Pr. Commissioner of Income Tax (Central), Gurgaon ... Petition Versus Sh. Ranjit Singh Gill ... Respondent CORAM:Hon'ble Mr. Justice Rajesh BindalHon'ble Mr. Justice Gurvinder Singh Gill Present:-Mr. Rajesh Sethi, Senior Standing Counsel withMs. Varinder Kaur Warraich, Advocate,for the appellant. ::::: Rajesh Bindal, J The revenue has filed the present petition raising the followingsubstantial questions of law arising out of order dated December 30, 2016passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarhin ITA No.100/Chd/2015-Ranjit Singh Gill Vs. The D.C.I.T., Central Circle II], Chandigarfor the assessment year 2009-10:- Whether on the facts and circumstances of the casethe ITAT was right in concluding that there was adifference in scope ofproceedings under Section 153-A of the Income Tax Act, 1961 for an abatedassessment andfor a completed assessment?the ITAT was right in concluding that there was adifference in scope ofproceedings under Section 153-A of the Income Tax Act, 1961 for an abatedassessment andfor a completed assessment?11)Whether on the facts and circumstances of the casethe ITAT was right in holding that no addition can bemade u/s 153A in respect of completed assessment 1no incriminating material isfound during search?the ITAT was right in holding that no addition can bemade u/s 153A in respect of completed assessment 1no incriminating material isfound during search? ITA No.370 of 2017(O&M) 111)Whether there is any restriction on the powers of theAssessing Officer under section 153A of the IncomeTax Act, 1961 to confine only to the “incriminatingmaterial found during the search”, even though suchwords or conditions are not mentioned in the sectionAssessing Officer under section 153A of the IncomeTax Act, 1961 to confine only to the “incriminatingmaterial found during the search”, even though suchwords or conditions are not mentioned in the section per se? 1v)Whether on the facts and circumstances of the casethe ITAT was correct in interpreting section 153Awhich started with a non-obstinate clause statingtherein that the operation of section 139, 147, 146,149, 151 & 153 was deposed. Meaning thereby thatin search cases the Assessing Officer is duty bound totake up the assessment u/s 153A and that the abovementioned sections cannot be invoked. Therefore,even if incriminating material is not found duringsearch, but if any escaped income or under-assessedincome undisclosed income has to be assessed forsuch completed assessment, then it has to be done inthe proceeding u/s 153A in search cases?the ITAT was correct in interpreting section 153Awhich started with a non-obstinate clause statingtherein that the operation of section 139, 147, 146,149, 151 & 153 was deposed. Meaning thereby thatin search cases the Assessing Officer is duty bound totake up the assessment u/s 153A and that the abovementioned sections cannot be invoked. Therefore,even if incriminating material is not found duringsearch, but if any escaped income or under-assessedincome undisclosed income has to be assessed forsuch completed assessment, then it has to be done inthe proceeding u/s 153A in search cases? v)Whether on thefacts and circumstance of the case theITAT was right to bring in the special procedure ofblock assessment as laid in Chapter XIV B into thenew procedure of search assessment u/s 153Aintroduced by Finance Act, 2003, w.e.f. 1.06.2005,when Chapter XIV B was scrapped to reducelitigation and disputes regarding treatment of aparticular income as undisclosed and whether it isrelatable to material found during search (Financebill 2003 under head “Assessment in search cases-abolition of the special procedure in Chapter XIV-Band introduction ofnew provisions”)?ITAT was right to bring in the special procedure ofblock assessment as laid in Chapter XIV B into thenew procedure of search assessment u/s 153Aintroduced by Finance Act, 2003, w.e.f. 1.06.2005,when Chapter XIV B was scrapped to reducelitigation and disputes regarding treatment of aparticular income as undisclosed and whether it isrelatable to material found during search (Financebill 2003 under head “Assessment in search cases-abolition of the special procedure in Chapter XIV-Band introduction ofnew provisions”)? v1) Whether on the facts and circumstances of the casethe ITAT was right in ignoring the basic difference insearch assessment u/s 153A and chapter XIVB beingthat in section 153A the “totalincome’” has to bethe ITAT was right in ignoring the basic difference insearch assessment u/s 153A and chapter XIVB beingthat in section 153A the “totalincome’” has to be ITA No.370 of 2017(O&M) assessed or reassessed in six separate A.Ys., asopposed to assessing the “undisclosed income” inthe scraped Chapter XIV B for block period in asingle assessment? Vil)Whether on the facts and circumstances of the casethe ITAT was right in following Delhi High Courtdecision in the case of CIT vs. Kabul Chawla (61taxman.com 412) when the Hon’ble HC itself admitsin para 37(1v) the “Although section 153A does notsay that additions should strictly made on the basis ofevidence found in course of search.....” therebinterpreting the statute in the manner which werenever worded or intended by the legislature? vill)Whether or the facts and circumstances of the casethe ITAT has erred in ignoring the Principle of Strictinterpretation of statues when the words used in thestatute i.e. sec 153A(1)(b) of the IT Act, 1961 areAssess or Reassess the “Total Income 1x) Whether on the facts and circumstances of the casethe ITAT right in not following the Hon’ble SCjudgment on interpretation of statue in the case ofSmt. Tarulata Shyam & other vs. CIT (l08 ITR 345),Keshavjit Ravji And Co vd. CIT (153 ITR 1),Padamsundara Rao (Decd.) & others vs. State ofTamil Nadu 255 [TR 147, Prakash Nath Khanna &Other vs. CIT 266 ITR I, Institute of CharteredAccountants of India vs. Price Water House 93|Taxman 588? x) Whether on the facts and circumstances on the casethe ITAT is not following the Hon’ble HC judgmenton the issue of additions in search case u/s 153A inthe case of CIT vs. Anil Kumar Bhatia 352 ITR 493(Delhi HC), Madugula Venu vs. DIT 29 Taxman.com200 (Delhi HC), CIT vs. Raj Kumar Arora 367 ITR517 (Allahabad HC), Canara Housing Development X1) Company vs. DCIT 49 taxman.com9s (KarnatakaHC), Filatex India Ltd. vs. CIT 229 Taxman 555(Delhi HC), Sunny Jacob Jewellers and weddingcentre, 362 ITR 664 (Kerala HC) and CIT vs.ContinentalWarehousingCorporation"/taxman.com34(SC)?” Whether the Hon’ble ITAT was justified in followingthe decision of the Hon’ble Delhi High Court dated28.05.2015 in the case of CIT Vs Kabul Chawla,when the said decision was distinguished in theRevenue favoring judgment of the Hon’ble DelhiCourt dated 27.10.2016 in the case of Smt.Dayawanti through Smt. Sunita Gupta (L/H) Vs CIT.”the decision of the Hon’ble Delhi High Court dated28.05.2015 in the case of CIT Vs Kabul Chawla,when the said decision was distinguished in theRevenue favoring judgment of the Hon’ble DelhiCourt dated 27.10.2016 in the case of Smt.Dayawanti through Smt. Sunita Gupta (L/H) Vs CIT.” Learned counsel for the appellant submitted that the tax effect Whether the Hon’ble ITAT was justified in followingthe decision of the Hon’ble Delhi High Court dated28.05.2015 in the case of CIT Vs Kabul Chawla,when the said decision was distinguished in theRevenue favoring judgment of the Hon’ble DelhiCourt dated 27.10.2016 in the case of Smt.Dayawanti through Smt. Sunita Gupta (L/H) Vs CIT.”the decision of the Hon’ble Delhi High Court dated28.05.2015 in the case of CIT Vs Kabul Chawla,when the said decision was distinguished in theRevenue favoring judgment of the Hon’ble DelhiCourt dated 27.10.2016 in the case of Smt.Dayawanti through Smt. Sunita Gupta (L/H) Vs CIT.” Learned counsel for the appellant submitted that the tax effect in the present appeal being=a11,64,930/-, which is less than the monetarylimit prescribed by the Central Board of Direct Taxes for filing appeals inthe High Courts vide circular No.21/2015 dated 10.12.2015, he may bepermitted to withdraw the present appeal. Ordered accordingly. ( Rajesh Bindal )Judge 16.11.2017 9 &D . ( Gurvinder Singh Gill )Judge Whether speaking /reasonedYes/No Whether Reportable Yes/No