Commissioner of Income Tax (Central)-I v. Jakson Engineers Ltd.

3. For the reasons stated therein, the delay in re-filing tlie appeal ij condoned. ITANos.m,9ll,912&91J/2015 Page2of[5]

4. The applications are disposed of. ITA Nos.910/2015.911/2015.912/2015&

5. Notice.Through Mr.Pranjal Srivasatav,Advocate accepts notice forthe Respondent.

6. These four appeals by the Revenue under Section 260A ofthe Income Tax Act, 1961 ('Act')are directed against the impugned order dated 11^ April 2014 passed by the.Income Tax Appellate Tribunal('ITAT')in the Q ITA Nos. 660/Del/2014, 661/Del/2014, 350/Del/2013 and 352/Del/2013 forthe AssessmentYears('AYs')2006-07,2007-08,2007-08 and 2006-07 respectively.

7. The facts in briefare that search and seizui*e operations were conducted on lO*''February 2010 in the premises ofthe Jakson group ofcompanies headed by Mr. S.K. Gupta, The Jakson group was manufacturing and tradingin p^els,canopies and part ofdiesel generator sets. According to the Department,duringthe course ofseai'ch,the undisclosed income ofRs. 19.94crores wasfound which wasbeen surrendered by Mr.S.K.Gupta. In response to tlie notice issued under Section 153A ofAct,the Respondent Assessee filed areturn declaring an income ofRs.9,89,76,180.Thereafter, notices under Sections 143 (2) and 142 (1) along with detailed questionnaire were issued. An addition ofRs.35,63,593 was made by the Assessing Officer('AO')under provisions ofSection 14A read with Rule 8D.

8. On appeal, the Commissioner ofIncome Tax (Appeals)['CIT (A)'] negativedthe contention soughtto be urged bythe Assesseethatthe notice underSection 153A ofthe Actwasinvalid.However, tlie CIT(A)granted ITA Nos.910,911,912&913/2015' Page3of[5] ^ A? 1. ^ r a partial reliefas regards the disallowance under Section 14A ofthe Act andrestrictedthe disallowanceto 1.06%ofthe grossincome.

9. The Assessee then appealed to the ITAT which has,in the impugned order dated 11*April 2014,followed the decision ofthis Courtin CTT v. AnilBhatia352ITR493(Del)and held thus:

10.]Vlr. Kariial Sawhney,learned Senior standing counsel for the Revenue submits that the above CQnclusion oftheITAT is contraiy to the decision ofthis Court m Comnfissipner ofIncome Tax v. Kabul Chawla(2015) 234 Taxman300,

11. Indeed,this Court m Kabul Chawla {supra)after taking note ofthe decision of this Court in Madugula Venu v. Director ofIncome Tax [2013]29 Taxmann.Com 200(Del), summarized the position oflaw in relation to notices under -Section 153A and one of the points in. that summary read as under: "(i)Once a search takes place under Section 132ofthe 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 ITA Nos.910,911,912&913/2015 ^ ^ ^ A y which the search talces place"

12. However, as far as the present appeals are concerned, although the ITAT may have erred in holding that the issuance ofnotice under Section 153A (1)(a) of the Act was irivalid, it is not in dispute that qua the Respondent Assessee no incriminating material was found during the search so as to justify the addition made in the assessment order passed pursuant to the issuance of such notice. As held in several decisions _ _ ■ ■ ■■ ■ including KabulChawla{supra),no assessmentcan be framed in terms of the Section 153A of the Act ip the absence of the any incriminating material foimd-rduring the.seai'ch. Consequently,the net result is that the assessmentorder willin anyeventhaveto remain quashed.

13. In that yiew ofthe matter, except to the extent clarified in para 11 above concerning the validity ofthe notice issued under Section 153 A of \ the Act,no substantial question oflaw arises asfar as the quashing ofthe assessment itself.■

14. The appeals are dismissed with the above observations.

S.MURALIDHAR,J VIBHUBAKHRU,J DECEMBER 7,2015/RA: