Delhi High Court
Pr Commissioner Of Income Tax ... vs M/S Sharp Mint Limited on 7 February, 2022
$~4
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 13/2021
PR COMMISSIONER OF INCOME TAX CENTRAL II
..... Appellant
Through Mr. Sanjay Kumar, Advocate and
Ms. Easha, Advocate
versus
M/S SHARP MINT LIMITED ..... Respondent
Through Mr. Somil Agarwal, Advocate.
% Date of Decision: 07th February, 2022
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE NAVIN CHAWLA
JUDGMENT
MANMOHAN, J: (Oral)
1. The hearing has been conducted by way of video conferencing.
2. Present appeal has been filed challenging the order dated 29th
November, 2018 passed by ITAT in ITA No. 3642/Del/2008 whereby the
appeal filed by appellant-Revenue was dismissed.
3. Learned counsel for the appellant states that ITAT erred in deleting
the deduction disallowed under Section 80HHC of the Income Tax Act,
1961 ['Act'] which had been confirmed on merit by CIT(A) in Assessee's
own case for Assessment Years 2003-04, 2004-05 and 2005-06. She states
that ITAT has erred in interpreting and applying the judgment of this Court
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Digitally Signed By:JASWANT
Signing Date:10.02.2022
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in CIT vs Kabul Chawla, (2016) 380 ITR 573. She further states that the
ITAT has erred in interpreting the power and jurisdiction of the Assessing
Officer under Section 153A of the Act.
4. A perusal of the paper book reveals that the Tribunal in the impugned
order has held that where assessment is complete and if no incriminating
material had been found during the search, then Section 153A shall have no
application.
5. A Division Bench of this Court in (2017) 82 taxmann.com 287 Del
PCIT vs. Neeta Gutgutia summarized the earlier judgment of this Court in
Commissioner of Income Tax v. Kabul Chawla, (2016) 380 ITR 573 with
regard to Section 153A as under:-
"37. On a conspectus of Section 153A(1) of the Act, read with the
provisos thereto, and in the light of the law explained in the
aforementioned decisions, the legal position that emerges is as under:
i. Once a search takes place under Section 132 of the Act, notice
under Section 153 A (1) will have to be mandatorily issued to the
person searched requiring him to file returns for six AYs immediately
preceding the previous year relevant to the AY in which the search
takes place.
ii. Assessments and reassessments pending on the date of the search
shall abate. The total income for such AYs will have to be computed
by the AOs as a fresh exercise.
iii. The AO will exercise normal assessment powers in respect of the
six years previous to the relevant AY in which the search takes place.
The AO has the power to assess and reassess the 'total income' of the
aforementioned six years in separate assessment orders for each of
the six years. In other words there will be only one assessment order
in respect of each of the six AYs "in which both the disclosed and the
undisclosed income would be brought to tax".
iv. Although Section 153 A does not say that additions should be
strictly made on the basis of evidence found in the course of the
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search, or other post-search material or information available with
the AO which can be related to the evidence found, it does not mean
that the assessment "can be arbitrary or made without any relevance
or nexus with the seized material. Obviously an assessment has to be
made under this Section only on the basis of seized material."
v. In absence of any incriminating material, the completed assessment
can be reiterated and the abated assessment or reassessment can be
made. The word 'assess' in Section 153 A is relatable to abated
proceedings (i.e. those pending on the date of search) and the word
'reassess' to completed assessment proceedings.
vi. Insofar as pending assessments are concerned, the jurisdiction to
make the original assessment and the assessment under Section 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."
6. Consequently, this Court is of the opinion that the questions of law
raised in present appeal has been settled by the predecessor Division Bench
in Kabul Chawla (supra) and assessment of the respondent had attained
finality prior to the date of search and no incriminating documents or
materials had been found and/or seized at the time of search. Accordingly,
no addition can be made under Section 153A of the Act as the case of
respondent is of non-abated assessment.
7. Though some of the judgments of this Court have been challenged
and are pending adjudication before the Supreme Court, yet there is no stay
of the said judgments till date.
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Digitally Signed By:JASWANT
Signing Date:10.02.2022
11:36:29
8. Consequently, in view of the judgments of the Supreme Court in
Kunhayammed and Others Vs. State of Kerala And Another, (2000) 6 SCC
359 and Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust
Association CSI Cinod Secretariat, Madras (1992) 3 SCC 1, the present
appeals are dismissed being covered by the judgment passed by the learned
predecessor Division Bench.
MANMOHAN, J
NAVIN CHAWLA, J
FEBRUARY 07, 2022
AS
Signature Not Verified
Digitally Signed By:JASWANT
Signing Date:10.02.2022
11:36:29
