The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has recently, in an appeal filed before it, dismissed the revenue’s appeal, on finding that there is lack of jurisdiction under Section 153C of the Income Tax Act owing to the absence of incriminating materials.
The aforesaid observation was made by the Delhi ITAT, when an appeal was preferred before it by the Revenue, as against the order of the Commissioner of Income Tax (Appeals), Gurgaon (Pr.CIT), arising from the assessment order, passed by the Assessing Officer (AO), under Section 143(3) of the Income Tax Act, 1961, concerning the AY 2015-16.
Briefly stated, the facts of the case were that a search and seizure operation under Section 132 of the Income Tax Act was carried out, at the residential/business premises of the persons associated with M3M Group. And, a satisfaction was drawn by the Assessing Officer on the search person under the provisions of sub section (1) of section 153C, that certain documents seized relates to the third party, i.e., assessee, and that the same will have bearing on the determination of total income for AYs 2011-12 to 2017-18 of the assessee herein.
In consonance of satisfaction, the provisions of Section 153C were invoked by Assessing Officer of the assessee and the assessment was framed under Section 153C r.w. Section 153A of the Income Tax Act.
The Assessing Officer while framing the assessment under Section 153C, inter alia made disallowance of Rs.5,15,65,800/- for the Assessment Year 2014-15 in question on the ground that expenditure towards EDC charges amounting to Rs.17,18,86,100/- paid to HUDA has not been subjected to TDS provisions.
Consequently, the Assessing Officer invoked the provision of Section 40(a)(ia) of the Income Tax Act and 30% of EDC charges paid to HUDA amounting to Rs.5,15,65,800/- was disallowed.
Aggrieved, the assessee preferred an appeal before the CIT (A), who in a combined order, for various assessees including the documents referred to in the satisfaction note, was of the opinion that, the same is not in the nature of incriminating material and that accordingly the provisions of Section 153C will not applicable at the first instance.
And it is being aggrieved by this order of the CIT(A), that the Revenue has preferred the instant appeal before the Delhi ITAT.
Hearing the opposing contentions of both sides as presented by Shri Gautam Jain, the Advocate on behalf of the asssessee, and by Shri T. James Singson, the CIT-DR, on behalf of the Revenue, the ITAT coram of Chandra Mohan Garg, the Judicial Member, and Pradip Kumar Khedia, the Accountant Member, thus held:
“Having regard to the view expressed in AY 2012-13 by the Coordinate Bench, there is hardly any merit in the disallowance carried out by the Assessing Officer as held by CIT(A). Besides, we find merit in the findings rendered by the CIT(A) for lack of jurisdiction under Section 153C owing to absence of any incriminating material. We thus no perceptible reason to interfere with the order of the CIT(A). In the result, the appeal of the Revenue is dismissed”.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
