ITAT directs Re adjudication in respect of Condonation of Delay in filing of Return of Income u/s 153A of Income Tax Act [Read Order]

The Income Tax Appellate Tribunal (ITAT), Mumbai bench, directed readjudication in respect of condonation of delay in filing the return of income under Section 153A of the Income Tax Act, 1961.

In the case of the assessee company Ronak Gems Pvt Ltd, a search action was carried out under Section 132 of the Income Tax Act, 1961. Consequently, the assessment was completed under Section 153A r.w.s. 144 of the Act on 29.09.2021, wherein the total income was assessed at Rs. 3,22,40,000/- under the regular provisions of the Act.

Aggrieved, the assessee filed a further appeal challenging the validity of the assessment before the CIT(A), contesting it on the grounds that in the absence of any incriminating material found during the search, the assessment order was illegal and without jurisdiction. Therefore, the revenue filed another appeal against the CIT(A)'s order before the tribunal.

Sanyogita Nagpal, Counsel for the revenue, submitted that if the assessment abated or the assessment proceedings were pending as of the date of the search, the assessing officer has the authority to make additions under Section 153A proceedings not only based on incriminating material found but also on the basis of enquiries made during the assessment proceedings, relying on the financial statement of the assessee or any other material or information available to him.

Furthermore, the revenue submitted that the CIT(A) wrongly mentioned that the proceedings for the assessment year 2017-18 had not abated. Nishit Gandhi, Counsel for the Assessee, submitted that the assessee had filed the return of income on 30.09.2021 in response to the notice under Section 153A of the Act issued on 03.11.2020. Therefore, the action of the assessing officer in completing the assessment under Section 153A without issuing a notice under Section 143(2) of the Income Tax Act is bad in law, and the assessment completed under Section 153A read with Section 144 of the Act is liable to be quashed.

The tribunal observed that the AO submitted that no return of income was filed by the assessee. However, the assessee demonstrated that the return under Section 153A of the Income Tax Act was filed just before the completion of assessment.

After reviewing the facts and records, the two-member bench of Om Prakash Kant (Accountant Member) and Rahul Chaudhary (Judicial Member) held that for ascertaining whether the AO has access to the return of income filed electronically by the assessee, it should be verified by the Directorate of the computer system.

Hence, the bench restored the issue to the file of CIT(A) for adjudication.

To Read the full text of the Order CLICK HERE

Support our journalism by subscribing to Taxscanpremium. Follow us on Telegram for quick updates