The Principal Commissioner Of Income Tax v. Rameshbhai Jivraj Desai

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 216 of 2020 ========================================================== THE PRINCIPAL COMMISSIONER OF INCOME TAX VersusRAMESHBHAI JIVRAJ DESAI ========================================================== Appearance:MRS MAUNA M BHATT, SENIOR STANDING COUNSEL(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATHandHONOURABLE MR. JUSTICE J.B.PARDIWALA Date : 18/09/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. This Tax Appeal under Section 260A of the Income Tax Act, 1961 (for short “the Act, 1961”) is at theinstance of the Revenue and is directed against theorder passed by the Income Tax Appellate Tribunal,instance of the Revenue and is directed against theorder passed by the Income Tax Appellate Tribunal, Ahmedabad “C” Bench, Ahmedabad dated17.01.2020 in IT (SS)A No. 107/Ahd/2017 for A.Y.2008-09. 2. The Revenue has proposed the following substantialquestion of law for the consideration of this Court:-question of law for the consideration of this Court:- “Whether the Appellate Tribunal is right in lawand on facts in holding that in absence of anyincriminating material related to the givenassessment year found during search,assessment u/s. 153A of the Act cannot bemade for that assessment year for whichassessment has been concluded on the date ofsearch and not abated? “ 3. We have heard Ms. Mauna Bhatt, the learned SeniorStanding Counsel appearing for the Revenue.Standing Counsel appearing for the Revenue. 4. The Tribunal, while passing the impugned orderobserved as under:-observed as under:- “At the outset we note that the technical issue raised by the assessee in ground 1 & 2challenging the validity of the assessmentframed under section 153A of the Act isidentical to the issue raised in the case of ShriRajnibhai Jivraj Desai in ITA No. 104/AHD/2017whic has been decided by us in favour of theassessee vide paragraph No. 14 & 15 of thisorder. For the detail discussion please refer therelevant paragraph as discused above.Therefore respectfully following the same and to maintain parity wit the findings, we allow thetechnical ground raised by the assessee in hisfavour without going into the merit of the case.” 5. We shall now look into the findings recorded by theTribunal in ITA No. 104/AHD/2017 in the case of ShriRajnibhai Jivraj Desai. The findings recorded are asunder:-Tribunal in ITA No. 104/AHD/2017 in the case of ShriRajnibhai Jivraj Desai. The findings recorded are asunder:- “9. We have perused the case record, analyzedthe facts and circumstances of the case and heardthe rival contentions. We find that it would benecessary to address the preliminary issue, whetherassessment could be framed u/s 153A of the Act inrespect of concluded proceedings without theexistence of any incriminating materials foundduring the course of the search. The scheme of theAct provides for abatement of pending proceedingsas on date of search. It is not in dispute that theassessment year under consideration falls under theambit of unabated assessment as on the date ofsearch. There is no differentiation as found in theintent of the legislature to diferentiate whether theassessments were originally framed u/s 143(1) OR143(3) OR 147 of the Act. As such we note that theaddition made by the AO based on the searchproceedings represents the items of the regular assessments being income from the sale of the landbearing survey Nos. 522/3, 520,523, 525 and 526along wit Shri Rajeshbhai Jivraj Desai andRameshbhai Jivraj Desai located at Sarkhej Village,Ahmedabad which was disclosed in the income taxreturn. Therefore, if any incriminating material isnot found during the course of search related to theconcluded assessment year, the Act does not conferany power to the AO to disturb the finding giventhereon and income determined thereon as finalityhas already been reached and no proceeding waspending on the date of search. xxxxxx xxx 13.Once the proceeding u/s 153A of the Act isinitiated which are special proceedings, thelegislature provides diferent treatments for abatedand unabated assessments. However, in respect ofunabated assessments the legislature has conferredpowers on the Ld. AO to just follow the assessmentsalready concluded unless incriminating materialsare found in the course of search. 14.That for the reasons stated above and onbasis of various judicial pronouncements, we holdthat the impugned addition for the Assessment yearunder consideration which was unabated/concludedassessment as on date of search cannot be made inthe search assessments in the absence of any incriminating material found in the course of searchand acordingly the impugned addition is directed tobe deleted. Since the legal issues are addressed, werefrain to give our findings on merits of additionsunder the provisions of the Act. Accordingly, theground raised by the assessee is allowed.” 6. Thus, having regard to the materials on record, theTribunal is right in holding that once it is held thatthe assessment has attained finality, then, theAssessing Officer, while passing independentassessment order under Section 153A read withSection 143(3) of the Act cannot disturb theassessment/reassessment, which has attained finalityunless the materials gathered in the course of theproceedings under Section 153A of the Act establishthatthereliefsgrnatedinthefinalassessment/reassessment were contraty to the factscoming during the course of Section 153Aproceedings. 7. The Tribunal noticed that there was no record toindicate that any material was unearthed during theindicate that any material was unearthed during the course of Section 153A proceedings and in suchcircumstances, the Assessing Officer, while passingthe order under Section 153A read with Section143(3) of the Act, 1961 could not have disturbed theassessment order. 8. We are in complete agreement with the line ofreasoning assigned by the Tribunal. In our opinion,the question as proposed by the Revenue cannot betermed as substantial question of law.reasoning assigned by the Tribunal. In our opinion,the question as proposed by the Revenue cannot betermed as substantial question of law. 9. In the result, this appeal fails and is herebydismissed.dismissed. (VIKRAM NATH, CJ) NAIR SMITA V./A.M.PIRZADA (J. B. PARDIWALA, J)