Conditions for Section 153A Reassessment notice Issuance after 6 Years

ACIT Vs Goldstone Cements Ltd. (ITAT Kolkata)

The notice for reassessment u/s 153A which was beyond the period of six assessment years could have been issued only when the AO had in his possession any incriminating evidence which revealed that income valued Rs. 50 lakhs or more represented in the form of asset had escaped assessment

FULL TEXT OF THE ORDER OF ITAT KOLKATA

All these appeals preferred by the Revenue and cross objections filed by the assessee are against the common order of Ld. CIT(A)-2, Guwahati dated 18-03-2020 for AYs 2011­-12 to 2015-16 & 2017-18. Since the issues involved were common, all the appeals were heard together. Both the parties also argued them together raising similar contentions on these issues. Accordingly, for the sake of brevity, we dispose all the appeals by this consolidated order.

2. Before we advert to the grounds taken in the cross appeals, it would first be relevant to cull out the facts of the case in brief. The assessee is a company incorporated in the year 2007. The assessee was jointly promoted by M/s Gangwal Group, M/s More Group and M/s UFM Group for setting up cement factory at State of Meghalaya having a capacity of 2040 TPD. In connection therewith, these three (3) promoter groups had infused capital into the assessee company across all the years through the aegis of their group bodies corporate and individuals. The said cement plant was finally commissioned in July 2016 and the commercial production commenced in FY 2016-17. Search u/s 132 of the Income Tax Act 1961 (herein after referred to as the Act) was conducted against the M/s Goldstone Group, on 12-12-2017 (AY 2018-19). Ordinarily, having regard to the date of search, the AO was within his jurisdiction to issue notices u/s 153Aof the Act in respect of six assessment years preceding the assessment year of search i.e. in the present case search took place in AY 2018-19, so, ordinarily the AO was empowered u/s. 153A of the Act to reopen six preceding assessment years preceding the searched assessment year and those AY’s were AYs 2012­13 to 2017-18.However, in this case, the AO further in exercise of powers conferred under fourth proviso to Section 153A of the Act, which was inserted by Finance Act 2017 w.e.f. 01.04.2017, also reopened the seventh year, i.e. AY 2011-12, which was beyond six assessment years but within ten assessment years. All the notices were issued u/s 153A of the Act on 11-09-2019. It was pointed out that, prior to the date of search, the income-tax assessment u/s 143(3) of the Act for AY 2011-12 had been completed on 28-03-2013. Accordingly, the assessment for AY 2011-12 being not-pending on the date of search, did not abate consequent to the search as per second proviso to section 153A of the Act. And also, since the returns of income for these assessment years (hereinafter in short ‘AYs’) AYs 2012-13, 2013-14, 2014-15 & 2015-16 were filed on 30-03-2013, 24-10-2013, 22-11-2014 & 29-03-2016 respectively, and undisputedly the time limit for issuance of notices u/s 143(2) of the Act for all these years had expired as on the date of search on 12.12.2017. Accordingly, these AY’s i.e. AY 2012-13 to AY 2015-16 were also unabated, since they were not pending before the Income Tax Authority on the date of search. With regard to AY 2017-18, it was pointed out that, the return of income was filed on 31-10-2017 and therefore, the time limit for issuance of notice u/s 143(2) of the Act had not expired on the date of search i.e. 12-12-2017.Hence, AY 2017-18 was pending before the AO on the date of search and consequently, AY 2017-18 was an abated assessment year. Therefore, except AY 2017-18, all the other AYs 2011-12, 2012-13, 2013-14, 2014-15 & 2015-16 were unabated assessments.

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