TMI Blog2010 (2) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Act In the present case, notice under section 143(2) has been issued on 6-3-2006 alter issue of notice under section 153A was issued , and in response to which the assessee vide its letter dated 12-11-2005 has stated that return of income for assessment year 2004-05, filed under section 139 of the Income-tax Act, 1961 filed on 1-11-2004 could be treated as return filed in response to notice under section 153A - t condition of time limit for service of notice under section 143(2) shall also apply to assessment/reassessment proceedings contemplated under section 153A and it would start from the end of the month in which return is filed in response to notice issued under section 153A/142(1) and, in case, no such notice has been issued, then, it shall be construed from the end of month in which return was filed - In the result, the appeal filed by the Revenue stand’s allowed - I.T. (SS) APPEAL NO. 54 (INDORE) OF 2007 - - - Dated:- 20-1-2010 - JOGINDER SINGH, JUDICIAL MEMBER J. AND V.K. GUPTA, ACCOUNTANT MEMBER J. K.K. Singh for the Appellant. Ravi Sarda for the Respondent. Order Per V.K. Gupta, Accountant Member. This appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant to previous year in which search was conducted were covered and, therefore, for assessment year 2004-05, assessment could be made only in accordance with the provisions of section 143(3) or 144 and not by invoking section 153A. The assessee also pleaded that return of income had been filed on 1-11-2004, hence, the notice under section 143(2) could be served only up to 30-11-2005, and since the same had been served on 6-3-2006, hence, the assessment made by the Assessing Officer was invalid for this reason also. The Ld. CIT(A) held that the Assessing Officer made a patent and obvious mistake by applying provisions of section 153A as for this year no return was required to be filed under section 153A, nor any notice was required to be issued under that section for such year and, therefore, no assessment was possible for such year under section 153A. Accordingly, he annulled the assessment passed by the Assessing Officer. He further held that since notice under section 143(2) had not been served within 12 months and, therefore, the assessment was invalid even under section 143(3) of the Act. Aggrieved by this, the Revenue is in appeal before us. 5. The ld. Departmental Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice of the notice under section 153A and in view of the fact that section 153A contemplated issue of notice for six years preceding the search, no return was to be filed for the year of search under section 153A and, therefore, no assessment could be possible under that Section. The Learned counsel, thereafter, drew our attention to relevant portion of the material relied on by him. On a query from the Bench regarding the nature and scope of provisions of Explanation 1 to section 153A and provisions of section 153B(1)(b), the learned counsel contended that these provisions were related to procedure of completion of assessment under section 153A read with other provisions of the Act and, therefore, these could not extend the scope of the provisions of section 153A indirectly. The Ld. counsel also contended that direction by the ld. CIT(A) to the Assessing Officer to take action under section 147, if any had escaped assessment were not correct in law and for this he mainly relied on the decisions of the Hon ble Supreme Court in the case of CIT v. Green World Corpn. [2009] 18 Taxman 111 and in the case of Rajendra Nath v. CIT [1979] 120 ITR 14 (SC) apart from two other decisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-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. [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153. the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation .-For the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s falling under the period of six assessment years; secondly, there could be pending assessment or reassessment of any assessment year falling in such period and in that case, such pending assessment shall abate and the assessee would be required to file a fresh return under section 153A and assessment or reassessment of such year shall be done under section 153A; thirdly, assessment for the year in which search is conducted (which has been disputed in the present appeal). As far as first two aspects are concerned, the provisions are absolutely clear. However, the scope of operation of the provisions of section 153A, may be different in first two situations, because in the case of completed assessment/reassessment, the reassessment would be limited in scope having regard to the fact that jurisdiction under section 153A in such situation is a result of an action as per the provisions of sections 132 and 132A, i.e., the income already assessed plus undisclosed income/undisclosed assets pertaining to a specific year would become the total income for such year. In the second situation i.e., in the case of proceedings in relation to an abated assessment, the scope of provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made, cannot be made in accordance with provisions of section 153A read with section 153B or 153C as contended by the assessee. It is further noteworthy that concept of broken period in the year of search applicable for block assessment is not present under the new scheme, hence, the Assessing Officer has to wait to exercise the assessment powers after the relevant financial year during which search took place and such procedure, in fact, provides an opportunity to assessee to disclose unexplained assets/income in such return and avoid penalty. It is also pertinent to mention here that notice under section 153A requiring the assessee to file return for such is, generally, not to be issued for the previous year of search or requisition precisely for the reason that the assessee is required to file return for the such previous year of search in normal course and, in case of failure of the assessee to do so, the Assessing Officer can issue notice under section 142(1) of the Act to file the return under section 139(4). 15. Thus, absence of requirement of issue of notice under section 153A for the year of search, in our opinion, does not result into an inference that assessment of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guity then, literal construction should be given effect as such although which may result into hardship. However, in the context of present dispute, in our humble opinion, the provisions of law do not appear so clear or unambiguous as is evident from the discussion made hereinbefore. In this regard, we may further point out that if the assessee s view that the assessment for the financial year wherein such search under section 132 took place or requisition was made under section 132A, has to be completed as per the normal provisions of the Act, then provisions of section 153B(1)(b) would become redundant. Further, there would also arise a possibility of such assessment being treated as time-barred under section 153B(1)(b) because as per the provisions of section 153, the time limit for completion of assessment under section 143(3) is more than the normal time limit available to the Assessing Officer for completing the assessment under section 153A read with section 153B of the Act. Further, if the assessment of search year is to be completed under section 143 as such, then, there appears no reason as to why such assessment should be completed within the time limit prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961, the Assessing Officer gets jurisdiction by issuing a notice and as per the provisions of this clause, the person receiving such notice is required to furnish return of income in respect of such six assessment years within such period as may be specified in the said notice. It is also provided that the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 of the Act. Thus, no minimum or maximum time limit has been prescribed under clause (a) of sub-section (1) of section 153A for issue of notice and filing of return. In this legal position is further analyzed then, in our humble opinion, the time limit specified in such notice would be equivalent to time limit prescribed under section 139(1) of the Act, meaning thereby that if the assessee does not file a return in response to notice issued under section 153A of the Act, the Assessing Officer may issue notice under section 142(1) and in the event of the assessee does not file any return even then, the Assessing Officer may complete the assessment under section 153A by applying provisions of section 144 read with section 143(2) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned CIT DR has also tried to argue that there would arise some inconsistency/absurdity, if such requirement was envisaged in case of search assessments. In this regard he has cited the provisions of section 139(4) and its consequential impact as regards the time limitation. We are, however, not convinced with this argument of the learned CIT DR as veil for the reason that as per the provisions of section 139(4) the return can be filed by an assessee before expiry of one year from the end of the relevant assessment year or before the completion of assessment, whichever is earlier. Hence, when the time limit for completion of assessment as per the provisions of section 153B is less, then naturally the assessee can file return under such section before completion of such assessment only. To put it differently, the extended time limit under the normal circumstances would not be available to an assessee in whose case assessment is to be completed under section 153A/153C read with section 153B of the Act. Thus, in sum and substance all other provisions of the Act, save as otherwise provided in sections 153A, 153B and 153C, have to be necessarily applied and, therefore, time-limit of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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