Income Tax Appellate Tribunal - Chennai
Deputy Commissioner Of Income Tax, ... vs Jsr Infra Developers Private Limited, ... on 28 February, 2025
आयकर अपीलीय अिधकरण, 'ए' यायपीठ, चे ई।
IN THE INCOME TAX APPELLATE TRIBUNAL
'A' BENCH: CHENNAI
ीएबीटी. वक , ाियकसद एवं
ीजगदीश, लेखासद केसम
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND
SHRI JAGADISH, ACCOUNTANT MEMBER
आयकरअपीलसं./ITA No.2232/Chny/2024
िनधा रणवष /Assessment Year: 2016-17
The DCIT, v. M/s.JSR Infra -
Central Circle-2(4), Developers Pvt. Ltd.,
Chennai. No.4, 10A, East Cross Road,
Gandhi Nagar,
Vellore-632 006.
[PAN: AADCJ 4440 P]
(अपीलाथ /Appellant) ( यथ /Respondent)
अपीलाथ क ओर से/ Appellant by : Ms.Swapna Nanu Ambatt, CIT
for Mr. Nilay Baran Som, CIT
यथ क ओर से /Respondent by : Mr. Venkat Raman CA
सुनवाईक तारीख/Date of Hearing : 15.01.2025
घोषणाक तारीख /Date of Pronouncement : 28.02.2025
आदेश / O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the Revenue against the order of the Learned Commissioner of Income Tax (Appeals), (hereinafter referred to as 'Ld.CIT(A)'), Chennai-19, dated 26.06.2024 for the Assessment Year (hereinafter referred to as 'AY') 2016-17.
2. Grounds of appeal raised by the Revenue are as under: ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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"1. The order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts of the case and in law.
2 The Ld.CIT(A) erred in allowing the claim of deduction u/s 80IA of the Act of Rs. 20,09,41,057/- when the same was not claimed in the original ITR filed by the assessee on 30.11.2016 but claimed for the first time, after proceedings u/s 153C were initiated post search conducted in their premises by filing the claim in the ITR filed in response to notice u/s 153C of the Act on 31/07/2018.
3. The Ld.CIT(A) erred in not taking note of the fact that the claim of deduction u/s 801A of the Act was not made by the assesse in the original ITR filed by the assessee u/s 139(1) on o 30.11.2016.
The Ld.CIT(A) erred in allowing the appeal of the assessee ignoring the decision of the Hon'ble Supreme Court of India in CIVIL APPEAL NO. 1449 OF 2022 (Arising out of SLP(Civil) No. 7620/2021) Principal Commissioner of Income Tax-III, III, Bangalore Bangalore Vs M/s Wipro Limited wherein the Apex Court has held that the "Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under Section 139(1) and cannot transform it. The assessee assessee can file a revised return in a case where there is an omission or a wrong statement. Filing a revised return and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income income is not permissible. By filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed under section 139(1) of the IT Act".
4. The Ld.CIT(A) erred in allowing the appeal of the assessee without appreciating the fact that the assessee would not have disclosed the unaccounted income if the search and seizure action would have not been conducted by the Income Tax Department as enunciated in the decision of the Hon'ble Rajasthan High Court in the case case of M/s Jal Steels (India) vs A.C.I.T, [2013] 36 taxmann.com 523, wherein the Hon'ble High Court has held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already already stands completed, only because an assessment under Section 153A of the Act in pursuance of search or requisition is required to be made.
5. The Ld.CIT(A) erred in allowing the appeal of the assessee without appreciating the fact that in the statute of Income tax Act, 1961, a section 146 was vogue earlier, similar to that of section 147 facilitating an assessee to reopen his assessment and consider his claim whereby his income could be reduced. However, the same had been removed w.e.f. 01.10.1984 as it i was detrimental to the revenue. Therefore, it is very obvious that the very introduction of search assessment was to bring out the unaccounted income and not to facilitate an assessee in taking recourses to reduction in income.
6. For these grounds and any any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored."
3. The brief facts of the case are that, the assessee is engaged in the business of development of infrastructure projects. For the relevant AY ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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2016-17, 17, the assessee had filed its return of income on 30.11.2016 declaring total income of Rs.46,69,82,790/-.
Rs.46,69,82,790/ In the original return of income, the assessee had not claimed any deduction u/s 80-IA 80 of the Act.
The case of the assessee was selected for scrutiny by issue of notice u/s 143(2) of the Act dated 18.07.2017. In the meantime, there was a search action u/s 132 of the Act conducted in the case of M/s SRS Mining on 08.12.2016. In the course of search, certain electronic evidence relating to unaccounted cash payments by the assessee was found from the premises of SRS Mining and in relation thereto, one of the directors dire of the assessee in his statement recorded on 11.12.2016 had admitted the same as the undisclosed income of the assessee. As a consequence, it was brought to our notice that the case of the assessee was centralized with the AO on 03.11.2017. The Ld. AR AR emphasized that on the said date, the assessment proceedings u/s 143(3) of the Act for the relevant AY 2016- 2016 17 was pending. Thereafter, satisfaction note was drawn by the AO in terms of Section 153C of the Act on 11.07.2018 and the notice u/s 153C of the Act for the relevant AY 2016-17 2016 17 was issued on 13.07.2018 (served on the assessee on 18.07.2018), requiring the assessee to file its return of income within 15 days from the date of service of the said notice. It is noted that, on the date of satisfaction note, which is deemed to be the date of search in terms of proviso to Section 153C of the Act, the income tax assessment for AY 2016-17 2016 17 was pending on the said date and as a ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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consequence of the issue of notice u/s 153C of the Act, the original assessment proceedings roceedings initiated by notice u/s 143(2) of the Act dated
18.07.2017 stood abated.
4. It was brought to our notice that, in response to the notice u/s 153C of the Act, the assessee filed its return of income on 31.07.2018, which was within the time allowed allowed in the said notice. In this return, the assessee had admitted the additional income which was offered by the director in his statement on 11.12.2016 and at the same time also claimed deduction of Rs.20,09,41,057/-
Rs.20,09,41,057/ u/s 80-IA(4) IA(4) of the Act for the first time.
ime. The assessee accordingly declared a total income of Rs.34,49,56,240/-,, after claiming deduction u/s 80-IA 80 IA of the Act, in the return of income filed u/s 153C of the Act. The assessee is also noted to have duly filed the audit report in Form 10CCB along with the return of income on 31.07.2018, as mandated by Section 80-IA(7) 80 IA(7) of the Act. The AO in the assessment completed u/s 143(3)/153C of the Act disallowed the fresh claim of deduction u/s 80-IA(4) 80 IA(4) of the Act, on the ground that this claim was not made in the original return of income filed u/s 139(1) of the Act and therefore could not have been made in the return filed u/s 153C of the Act. According to the AO, the provisions of Section 153A and 153C are meant for the benefit of the Revenue and not the assessee a and therefore acceptance of fresh claim in the return of income filed ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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consequent to search, would defeat the very purpose of unearthing the unaccounted income.
5. On appeal, the Ld. CIT(A) is noted to have allowed the claim of fresh deduction u/s 80-IA 80 IA of the Act holding that, in an abated assessment, the assessee can make all claims, provided the return is filed in adherence with the notice u/s 153C of the Act. For arriving at this finding, the Ld. CIT(A) relied upon the following decisions:
- Sanjay y Nandal Vyas v. ITO [ITA No.771 & 774 / PUN / 2010 dated 23.12.2011]
- PCIT v. Neeraj aj Jindal [2017] 393 ITR 1 (Del)
- Kirit Dahyabhai Patel v. ACIT [2017] 80 taxmann.com 162 (Guj)
- ACIT v. SpelndorLandbase Ltd [ITA No.2461/DEL/2016 dated 06.06.2018]
- Shrikanth Mohta v. CIT [2019] 414 ITR 270 (Cal)
- Naresh T Wadhwani v. DCIT [2015] 68 SOT 235 (Pune-Trib) (Pune
- Malpani Estates v. ACIT [2014] 64 SOT 105 (Pune-Trib) (Pune Trib)
- DCIT v. Sheth Developers (P) Ltd [2012] 25 taxmann.com 173 (Bom)
- ITO v. Gajraj Constructions [2015] 70 SOT 634 634 (Pune-Trib) (Pune
- ACIT v. Shri V.N.Devadoss [ITA No.1219 & 1221 / MDS / 2012 dated 04.02.2013]
6. Being aggrieved by the above order of the Ld. CIT(A) allowing the assessee's claim for fresh deduction u/s 80-IA 80 IA of the Act, the Revenue is now in appeal before us.
7. Assailing the action of the Ld. CIT(A), the Ld. CIT, DR has relied upon the decision of the Special Bench at Hyderabad in the case of DCIT vs Sew Infrastructure Limited (209 ITD 1)and
1)and argued that the Tribunal has held that the assessee is not entitled to make claim of fresh ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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deduction u/s 80-IA IA of the Act in a return of income filed u/s 153A of the Act. The Ld. CIT, DR, further relied upon the ratio laid down in the decisions of the Hon'ble Delhi High Hi Court in the case of Kabul Chawla (61 taxman 412),, Hon'ble Supreme Court in the cases of Abhisar Buildwell Ltd. (149 taxmann.com 199) and Goetze India Ltd. (284 ITR 323) to support the AO's case that the assessee cannot be permitted to raise fresh claim in the return filed u/s 153A/153C of the Act. The Ld. CIT, DR further took us through the legislative history of Section 80-AC 80 as applicable from AY 2016-17 2016 17 and argued that if the assessee assesse did not make a claim for deduction under Chapter VIA in the return of income filed u/s 139(1) of the Act, then the assessee is barred from making fresh claim u/s 80-IA IA subsequently. In support of his arguments, the Ld. CIT, DR has also filed a written note, which has been taken on record.
8. Per contra, the Ld. AR for the the assessee vehemently supported the order of the Ld. CIT(A). The Ld. AR argued that the Revenue had mis-
mis interpreted the decision of the Special Bench, Hyderabad, in the case of Sew Infrastructure Ltd. (supra), which according to him was in favour of the assessee.
ssessee. Taking us through the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell Ltd. (supra), the Ld. AR explained that it is by now well settled in law that in the context of the block of six years under Section 153A/153C of the Act, the same can be divided into ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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two categories viz., (a) unabated assessments and (b) abated assessments. He submitted that only in cases of unabated assessments, not only the Revenue is prevented from making any other addition apart from addition on the basis basis of incriminating material unearthed in the course of search but likewise the assessee is also prevented from raising any new claims in these already completed assessments, now reopened u/s 153A/153C of the Act. In so far as abated assessments are concerned, ned, the prevailing jurisprudence, according to the Ld. AR, is that the return of income filed u/s 153A/153C of the Act substitutes the return of income originally filed u/s 139(1) of the Act and therefore, in this abated assessment, both the Revenue is permitted permitted to make any enquiries and/or any additions, irrespective whether it is based on material unearthed in the course of search and likewise, the assessee is also permitted to raise any fresh claims or deductions for the first time in a return of income filed in response to notice u/s 153A/153C of the Act.
9. The Ld. AR further explained to us the interplay of Section 80A(5), 80AC and 80-IA(7) IA(7) of the Act and argued that the assessee in the present case was in compliance of these provisions and therefore the fresh claim for deduction u/s 80-IA IA made for the first time in the return u/s 153C of the Act was allowable. He brought to our notice that, Section 80AC requires that the claim for deduction under Chapter VIA has to be made in ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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the return of income or otherwise it cannot be entertained. The Ld. AR explained to us that the relevant AY 2016-17 2016 17 was an abated assessment and therefore the return of income filed u/s 153C of the Act was to be construed as return filed u/s 139 of the Act and in that view of the matter the conditions laid down in Section 80A(5) and 80AC was met. He further showed us that the assessee had also obtained certificate in Form 10CCB as mandated in Section 80-IA(7) 80 IA(7) of the Act and the same was filed along with the return of income and therefore, therefore, the requirement laid down in the said provision was also fulfilled. The Ld. AR further relied on several judicial precedents in support of the foregoing contention. He accordingly urged that there was no reason to interfere with the order of the Ld. L CIT(A). The Ld. AR has also furnished a written note of arguments rebutting the contentions of the Ld. CIT, DR, which has been taken on record.
10. We have heard both the parties, gone through the written submissions and perused the relevant provisions of law as well as the material placed on record. The undisputed facts of the present case are that, the assessee is engaged in the business of development developm of infrastructure projects. The assessee in the original return of income filed u/s 139 of the Act for relevant AY 2016-17, 2016 17, had not claimed any deduction u/s 80-IA IA of the Act. The case of the assessee was selected for ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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scrutiny and at the time when the notice u/s 153C of the Act was issued, the original assessment was pending, pending and therefore it got abated.
Pursuant to the notice u/s 153C of the Act, the assessee had filed the return of income within the time allowed under the said notice and in this return n of income filed on 30.07.2018, the assessee for the first time had claimed deduction u/s 80-IA 80 IA of the Act of Rs.20,09,41,057/-.
Rs.20,09,41,057/ The return of income filed u/s 153C of the Act was also accompanied with the report of chartered accountant in Form 10CCB, as required u/s 80-IA(7) 80 of the Act. On these facts, the narrow issue in dispute before us, is whether the assessee was legally permitted to raise a claim of deduction under Chapter VI-A A of the Act, for the first time in the return of income filed in response to notice u/s 153C of the Act, in relation to an abated assessment.
11. It is noted that, the second proviso to Section 153A of the Act mandates that the assessments or re-assessments re assessments pending on the date of initiation of search would stand abated. It further further provides that, the return of income filed by the searched person, in terms of Section 153A(1)(a) of the Act, would be construed to be a return of income under Section 139 of the Act. Therefore, once the assessment gets abated, the original return which h had been filed loses its originality and the subsequent return filed under Section 153Ar.w.
153A 153C of the said Act
ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17)
M/s. JSR Infra Developers Pvt. Ltd.
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(which is in consequence to the search action conducted under Section 132 of the Act) takes the place of the original return. In such a case, the return of income filed under Section 153A(1) of the said Act, would be construed to be one filed under Section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. As A a result, the return filed under Section 153Ar.w.
153A 153C takes the place of the original return under Section 139 of the Act, for the purposes of all other provisions of the Act. In I this regard, it is noted that, the provisions of Section 153A of the Act explicitly provides that, all the provisions of the th Income-tax tax Act will apply to the return filed by an assessee under Section 153A of the Act, as if such return filed by the assessee was a return filed under section 139(1) of the Act. In other words, in view of the second proviso to Section 153A(1) of the the said Act, once an assessment gets abated, the provisions of the Act which would be otherwise applicable in case of return filed under Section 139(1) of the Act, would also continue to apply in case of return filed under Section 153A of the Act. Having regard gard to the foregoing provisions, we are of the view that the assessee is entitled to lodge a new claim in a proceeding under Section 153A / 153C of the Act, which was not claimed in the regular return of income, because the assessment was never made/finalized made/finalized in the case of the assessee in such a situation. We find that this particular issue has been decided in favour of the assessee by the Hon'ble Bombay High Court held /Chny/2024 (AY 2016-17) ITA No.2232/Chny/20 M/s. JSR Infra Developers Pvt. Ltd.
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in the case of B.G. Shirke Construction Technology P Ltd (supra), (supra) wherein it was held as under :-
:
"8. The grievance of the Revenue before us is that the impugned order is unsustainable as it is a passed in the face of the Apex Court Order in Goetze (India) Ltd. (supra).
). It is submitted that the impugned order could not have held that the claim aim for deduction could be entertained by the Assessing Officer in the absence of the same finding a place either in return of income or in the revised return of income. It is further submitted that in view of the decision of the Apex Court in CIT v. Sun Engineering E Works (P.) Ltd. [1992] 198 ITR 297/64 Taxman 442 a re-assessment assessment consequent to re-opening re opening of the assessment cannot lead to reduction of income which had been originally assessed to tax. In the above view, it is submitted that the impugned order of the Tribunal is not justified and admission of the appeal is warranted.
..........
10. The reliance on the decision of the Apex Court in Sun Engineering Works (P.) Ltd. (supra)) by the Revenue is misplaced. The above case dealt with re-opening re of an assessment under Section 147 of the Act. It was in that context that the Apex Court observed that the Order passed under Section 147/148 and the Assessing Officer is primarily restricted to such income which has escaped escap assessment and does not permit reconsideration of issue which are concluded in the earlier assessment years in favour of the Revenue.
11. In the present facts for the subject assessment years it is an undisputed position that the pending assessment before before the Assessing Officer consequent to return filed under Section 139(1) of the Act for the subject Assessment years had abated. This was on account of the search and as provided in second proviso to Section 153A(1) of the Act. The consequence of notice underun Section 153A(1) of the Act is that assessee is required to furnish fresh return of income for each of the six assessment years in regard to which a notice has been issued. It is this return which is filed consequent to the notice which would be subject of assessement by the Revenue for the first time in the case of abated assessment proceedings. Consequent to notice under Section 153A of the Act the earlier return filed for the purpose of assessment which is pending, would be treated as non est in law. Further, Section 153A(1) of the Act itself provides on filing of the return consequent to notice, the provision of the Act will apply to the return of income so filed. Consequently, the return filed under Section 153A(1) of the Act is a return furnished under under Section 139 of the Act. Consequently, the respondent-assessee assessee is being assessed in respect of abated assessment for the first time under the Act. Therefore the provisions of the Act which would be otherwise applicable in case of return filed in the regular regular course under Section 139(1) of the Act would also continue to apply in case of return filed under Section 153A of the Act and the case laws on the provision of the Act would equally apply."
ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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12. The Hon'ble Bombay High Court in the case of Pr.CIT Vs JSW JS Steel Ltd (422 ITR 71) is also found to be squarely applicable to the present case. In this case also, the Hon'ble High Court has held that, it was permissible for an assessee to lodge new claim in proceedings u/s. 153A of the Act in case of abated assessments assessments as the return filed u/s 153A of the Act was required to be treated as return of income filed u/s 139(1) of the Act. The relevant findings of the Hon'ble High Court are noted to be as under:
"8.1 In other words, section 153-A(1) 153 provides that where a person is subjected to a search under section 132 or his books of accounts, etc. are requisitioned under section 132--A after 31-52003, 52003, the assessing officer is mandated to issue notice to such person to furnish return of income in respect of each assessment assessme year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. Such returns of income shall be treated to be returns of income furnished under section 139. Once returns are furnished, income is to be assessed or reassessed for the six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, once section 153-A(1) 153 (1) is invoked, assessment for 6 assessment years immediately preceding the assessment year in which search is conducted or requisition is made becomes open to assessment or re- re assessment. Two aspects are crucial here. One is use of the expression "notwithstanding"
standing" in sub-section sub section (1); and secondly that returns of income filed pursuant to notice under section 153-A 153 A (1)(a) would be construed to be returns under section 139. The use of non obstante clause in sub-section sub section (1) of section 153-AA i.e., use of the expression expression "notwithstanding" is indicative of the legislative intent that provisions of section 153-A(1) 153 A(1) would have overriding effect over the provisions contained in sections 139, 147, 148, 149, 151 and 153. 8.2 Having noticed the above, we may also refer to to the second and the third proviso to section 153A(1). For the sake of convenience, the second and third proviso to section 153A(1) of the said Act which is relevant is reproduced below and reads thus:
Provided further that assessment or reassessment, if any, any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate:ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.
8.3 Thehe second proviso says that any assessment or re-assessment re assessment proceedings falling within the said period of six assessment years pending on the date of initiation of search under section 132 or making of requisition under section 132-A A shall abate. The third proviso mentions that the Central Government may frame rules to specify such class or classes of cases in which the assessing officer shall not be required to issue notice for assessing or reassessing the total income for the said six assessment years.
8.4 4 Reverting back to the second proviso what is to be noticed is that as per this proviso, any assessment or re-assessment re assessment in respect of any assessment year falling within the said period of six assessment years is pending on the date of initiation of search h or making of requisition, those assessment or re-assessment re proceedings shall abate. In other words, pending assessment or reassessment proceedings on the date of initiation of search or making of requisition shall abate.
8.5 That brings us to the crucial crucial expression, which is 'abate'. The ordinary dictionary meaning of the word 'abate', as per Concise Oxford English Dictionary, Indian Edition, is to reduce or remove (a nuisance). Derivative of abate is abatement. In Black's Law Dictionary, Eighth Edition, 'abatement' has been defined to mean an act of eliminating or nullifying; the suspension or defeat of a pending action for a reason unrelated to the merits of the claim. In Supreme Court on Words and Phrases (1950-2008), (1950 2008), "abating" has been defined to mean "an extinguishment of the very right of action itself"; to "abate", as applied to an action, is to cease, terminate, or come to an end prematurely.
9. Therefore, from a critical analysis of the provisions contained in section 153- 153
A(1) of the Act more particularly particularly the key expressions as referred to above, it is evident that assessments or re-assessments re assessments pending on the date of initiation of search would stand abated. Return of income filed by the person concerned for the six assessment years in terms of section sect 153-A(1)(a) A(1)(a) would be construed to be a return of income under section 139 of the Act. ........
13. In the present case, search was conducted on the assessee on 30-11-2010. 30 At that point of time assessment in the case of assessee for the assessment year 2008-09 09 was pending scrutiny since notice under section 143(2) of the Act was issued and assessment was not completed. Therefore, in view of the second proviso to section 153A of the said Act, once assessment got abated, it meant that it was open for both the parties, i.e. the assessee as well as revenue to make claims for allowance or to make disallowance, as the case may be, etc. That apart, assessee could lodge a new claim for deduction etc. which remained ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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to be claimed in his earlier/regular return of income. This is so because assessment was never made in the case of the assessee in such a situation. It is fortified that once the assessment gets abated, the original return which had been filed looses its originality and the subsequent return filed under unde section 153A of the said Act (which is in consequence to the search action under section
132) takes the place of the original return. In such a case, the return of income filed under section 153A(1) of the said Act, would be construed to be one filed underer section 139(1) of the Act and the provisions of the said Act shall apply to the same accordingly. If that be the position, all legitimate claims would be open to the assessee to raise in the return of income filed under section 153A(1).
14. We would further ther like to emphasis on the judgment passed by this Court in the case of Continental Warehousing Corpn (Nhava Sheva) Ltd. (supra) which also explains the second proviso to Section 153A(1). The explanation is that pending assessment or reassessment on the date of initiation of search if abated, then the assessment pending on the date of initiation of search shall cease to exist and no further action with respect to that assessment shall be taken by the AO. In such a situation the assessment is required to be b undertaken by the AO under section 153A(1) of the said Act.
15. In view of the above, we are in agreement with the findings given by the Tribunal in respect of allowing of the assessee's appeal in paragraph -14 of the order under challenge dated 28-92016, 28 which reads thus :
"14. From the above discussion and precedence, the scheme of assessment u/s. 153A of the Act in case of search, the AO shall issue notice to searched person requiring him to furnish within such period as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b) of sub-section sub section (1) of section 153A and clause (b) postulates assessment or reassessment of the total income of six years immediately preceding preceding the assessment year relevant to the previous year in which such search is conducted. The first proviso mandates that the AO shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second second proviso postulates that the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in sub- sub-section (1) is pending on the date of initiation of the search u/s. 132 of the Act shall shal abate. In the present case before us, however, though the second proviso to sub-section sub (1) of section 153A would not apply in the first three years of this case, yet, as far as the second three year period is concerned (which are pending before us), the assessments were pending The proceedings in relation thereto abate. Now the entire assessment in relation to the second phase of three years can be made. The pending assessment in that case may be undertaken u/s. 153A of the Act. The abatement of pending assessment is for the purpose of avoiding two assessments for the same year i.e. one being regular assessment and the other being search assessment u/s. 153A of the Act. In other words, these two assessments merge into one assessment. It means that completed completed assessments stand on different footing from the pending assessments. Hence, in so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s. 153A of the Act merge into one and in that ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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case only one assessment assessment for the remaining set of years, where assessment is pending, is to be made separately on the basis of search materials and the regular material existing or brought on record before the AO/Revenue. It means that the assessee can make any new claim in the the return of income filed u/s. 153A of the Act or even during the course of assessment proceedings undertaken u/s. 153A of the Act. In our view, and in view of the second proviso to section 153A (1) of the Act, once assessment get abated it is opened both way ay i.e. for the Revenue to make any additions apart from seized material even regular items declared in the return can be subject matter if there is doubt about the genuineness of those items and similarly the assessee also can lodge new claim, deduction or or exemption or relief which remained to be claimed in regular return of income, because assessment was never made in the case of the assessee in such situation. Hence, we allow this issue of assessee's appeal."
16. From the above we conclude that in view of of the second proviso to section 153A(1) of the said Act, once assessment gets abated, it is open for the assessee to lodge a new claim in a proceeding under section 153A(1) which was not claimed in his regular return of income, because assessment was never made/finalised in the case of the assessee in such a situation."
13. Coming to the decision of the Special Bench at Hyderabad in the case of Sew Infrastructure Ltd (supra) cited by the Revenue, we are in agreement with the assessee that this decision supports supports their case. The relevant findings, taken note of by us, is as follows:-
follows:
"33.
33. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that the assessee cannot make a fresh claim of deduction under Chapter VI-A VI of the Income Tax Act, 1961, for the first time, in the return of income filed in response to notice issued under Section 153A of the Act, pursuant to search conducted under Section 132 of the Act, in unabated/completed assessment as on the date of search. In case of abated assessments, like the AO who can make assessment based on incriminating materials and any other information made available to him, including information furnished in return of income, the assessee may claim all deductions deductions towards any income or expenditure, as if it is a first return of income and fresh assessment. In view of the above, the questions referred are answered as under:ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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(i) ) Whether an assessee can make Yes a claim for deduction under Chapter VIA of Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/ s 153A of the Act, pursuant to a search conducted under section 132 of the Act ?
(ii)) If yes, under which circumstances I. In case of unabated/ completedd assessment/s, ? no fresh claim can be made under chapter VI-A VI of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act.
II. in case of abated assessment/s, fresh claim can be made under chapter VI-A VI of the Income Tax Act, 1961, for the first time, in the return of income filed in response to the notice issued u/s 153A of the Act, pursuant to a search conducted under section 132 of the Act.
14. We observe that the arguments of the Ld. CIT, DR and his reference to certain excerpts from this decision was misplaced as those were rendered in the context of unabated assessments, to which we agree that, fresh claim of any new deduction deduction cannot be made by an assessee in unabated assessments.
15. In view of the ratio laid down in the above decisions (supra), it is amply clear that the assessee is entitled to lodge new claims in the abated assessments u/s 153A/153C 153A of the Act. As noted earlier, the provisions of the Act, which would be otherwise applicable in case of return filed under Section 139(1) of the Act, would also continue to apply in case of return filed under Section 153Ar.w.
153A 153C of the Act. Having regard
d to the decisions of B.G. Shirke Construction Technology P Ltd ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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(supra),JSW JSW Steel Ltd (supra)& (supra) Sew Infrastructure Ltd (supra), (supra) the same analogy would be applicable with equal force in the proceeding'su/s 153C of the Act for abated assessments as well. We accordingly ccordingly hold that the assessee is entitled to raise additional claim/s in the abated assessment for AY 2016-17 in the proceedings u/s 153C of the Act.
16. Now we come to the Revenue's contention that the assessee had not complied with the provisions of Section 80AC of the Act and therefore the fresh claim of deduction made u/s 80-IA 80 IA of the Act, in the return of income filed u/s 153C of the Act cannot be admitted. For this, let us first have a look at the relevant provisions of Section 80AC of the Act, which w reads as under:-
"Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after--
after
(i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section s 80-IA or section 80-IAB IAB or section 80-IB 80 or section 80-IC IC or section 80-ID 80 or section 80-IE;
(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.--Deductions "C. Deductions in respect of certain incomes", inco no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-
sub section (1) of section 139."
17. In the above provision, which is applicable in relevant AY 2016-17, 20 the Legislature has provided that, unless the assessee claims the deduction under Chapter-VIA Chapter VIA in the return of income, it shall not be ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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admissible. As rightly pointed out by the Ld. AR, in in view of the second proviso to Section 153A(1) of the said Act, Act, once an assessment gets abated, the return of income filed in response to notice u/s 153C r.w.
153A of the Act would be construed as a return filed under Section 139(1) of the Act, and necessary consequences would follow. Accordingly, if the return u/s 153C 53C is filed within the prescribed time, it shall be treated as a return of income u/s 139(1) of the Act (in the present case, filed within the time allowed in notice u/s 153C) and consequently, if the deduction under Chapter VI-A (80-IA(4), (80 in the present case) is claimed in the return of income (deduction claimed in RoI, I, in present case), case) then it would fulfill the criteria laid down in Section 80-AC 80 AC of the Act. We find this proposition to be supported by the decision of this Tribunal at Guwahati in the case of ABCI Infrastructure (P) Ltd Vs ACIT (154 taxmann.com
397),, wherein it was held as under:-
under:
"112. On appeal, ld. CIT(A) vide his impugned appellate order u/s 250 of the Act has held that the Returns of Income filed in compliance with Notices issued u/s 153A of the Act substitutes the original Income-tax Income tax Returns [filed u/s 139(1) of the Act] and further since these Returns of Income (u/s 153A of the Act) are treated as Income-tax Income tax Returns filed u/s 139(1) of the Act, these Returns of Income are to be taken/treated taken/treated as having been furnished within the time limit as per section 139(1) of the Act and hence the corresponding Form 10CCBs filed by the assessee [for the aforesaid Assessment Years (i.e. AY 2017-18, 2017 18, AY 2018-19 2018 & AY 2019-20)]
20)] are also to be taken as furnished within the time limit as per section 139(1) of the Act. Further, since these Form-10CCBs, Form 10CCBs, as aforesaid, are to be taken/treated as having been furnished within the time limit as per section 139(1) of the Act, the assessee's claim for Deduction under under section 80IA(4)(i) of the Act cannot be rejected on the ground that the corresponding Forms (i.e. Form 10CCBs) were filed belatedly.
114. We have heard both the sides and perused the orders of the lower authorities. We have already discussed earlier in details in this order that a ITA No.2232/Chny/20 /Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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Return of Income filed in response to Notice u/s 153A substitutes the original Return of Income filed u/s 139 of the Act. Thus, where the Return u/s 153A of the Act is filed within the time permitted u/s 153A of the Act, the same s is to be taken as filed within the time limit as per section 139(1) of the Act. Thus, where the Audit Report in Form 10CCB is furnished on or before the time allowed for filing Return of Income in the Notice issued u/s 153A of the Act, the said Form 10CCB CCB is to be taken as filed on or before the time permitted u/s 139(1) of the Act and thus within the time allowed u/s 80IA(7) r.w.s 80AC of the Act. For holding so, we draw support from judgment rendered by the Hon'ble Calcutta High Court in Shrikant Mohta Mohta (supra) wherein the Hon'ble High Court held as under:
"The second question is answered thus:
When search operations are conducted under section 132 of the Act, the obligation of the assessee to file any return remains suspended till such time that a notice ce is issued for such purpose under section 153A(1)(a) of the Act. If the return is filed by the assessee within the reasonable time permitted by such notice under section 153A(1)(a) of the Act, such return would then be deemed to have been filed within the the time permitted under section 139 (1) of the Act for the benefit under section 139(3) of the Act to be availed of by the assessee."
18. The Revenue's reliance on the decision of Sew Infrastructure Ltd (supra) on this aspect is again found to be factually misplaced, as the Tribunal made it amply clear that their discussion only related to the referred question viz., whether a fresh claim of deduction under Chapter VI-A A of the Income Tax Act, 1961 1961 could be maintained for the first time in the return filed pursuant to a notice under Section 153A of the Act or not, not which they had answered in favour of the assessee, if the claim was raised in an abated assessment.
assessment The Tribunal made it clear that, the merits as to whether the assessee is eligible for such a claim or not, not u/s 80-IA(4) IA(4) of the Act, were not argued by both parties and therefore was not answered by them. The relevant concluding paragraph paragraph of this decision reads as under:-
ITA No.2232/Chny/20
/Chny/2024 (AY 2016-17) M/s. JSR Infra Developers Pvt. Ltd.
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"The present discussion hereinabove is with reference to the questions referred to on the issue, i.e. whether a fresh claim of deduction under Chapter VI-A VI of the Income Tax Act, 196 1 could be maintained for the first time in the return filed pursuant to a notice under Section 153A of the Act or not. The learned counsel for the assessee and the Senior Standing Counsel appearing for the Revenue did not argue on the merits as to whether the assessee is eligible for such a claim or not. Therefore, the present appeals filed by the Revenue are posted for hearing on the issue of deduction claimed under Section 80IA(4) of the Act on merits."
19. For the above reasons therefore, we do not see any reason to interfere with the order er of the Ld.CIT(A) on this issue. Hence, the grounds raised by the Revenue are accordingly dismissed.
20. In the result, the appeal of the Revenue is dismissed.
Order pronounced on the 28th day of February, 2025,, in Chennai.
Sd/- Sd/
Sd/-
(जगदीश) (एबीटी.. वक )
(JAGADISH) (ABY
ABY T. VARKEY)
VARKEY
लेखासद /ACCOUNTANT MEMBER याियकसद य/JUDICIAL MEMBER
चे ई/Chennai,
दनांक/Dated: 28th February,
February 2025.
TLN, Sr.PS
आदेशक ितिलिपअ ेिषत/Copy
Copy to:
to
1. अपीलाथ /Appellant
2. थ /Respondent
3. आयकरआयु /CIT,, Chennai / Madurai / Salem / Coimbatore.
4. िवभागीय ितिनिध/DR
5. गाडफाईल/GF