2014 (10) TMI 255 - HC - Income Tax

Assessment u/s 153A – Scope of total income u/s 2(45) - Addition made for gifts made – Held that:- Under section 153A of the Act, the AO is bound to issue notice to the assessee to furnish return for each AY falling within six AYs immediately preceding the AY relevant to the previous year in which such search is conducted or requisition is made - under the block assessment proceeding under Chapter XIV-B only the undisclosed income found during the search and seizure operation were required to be assessed and the regular assessment proceedings were preserved - even though an assessment order has been passed u/s 143(1)(a) or u/s 143(3) of the Act, the AO would be required to reopen these proceedings and reassess the total income taking notice of undisclosed income even found during the search and seizure operation - The fetter imposed upon the Assessing Officer u/s 147 and 148 of the Act have been removed by the non obstante clause u/s 153A.

In cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed, which were subsisting when the search was made, the AO would be competent to reopen the assessment proceeding already made and determine the total income of the assessee - the reasons given by the Tribunal that no material was found during the search cannot be sustained, since it has been held that the AO has the power to reassess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of the original assessment - relying upon CIT v. Anil Kumar Bhatia [2012 (8) TMI 368 - DELHI HIGH COURT] - the Tribunal has committed an error in dismissing the appeal of the Revenue – thus, the order of the Tribunal is set aside and the matter is remitted back for re-consideration – Decided in favour of revenue.