TMI Blog2009 (8) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... increase' in amount of interest pursuant to assessment under s. 153A of the Act. Sec. 240 of the Act does not entitle an assessee to claim refund of the tax paid in excess of the tax chargeable on the total income returned by the assessee in cases where assessments have already been completed but stand annulled. Sec. 139(5) of the Act stipulates time for revising return within one year from the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Furthermore the original returns filed under s. 139 of the Act are relevant for imposing penalty in such cases. This all goes to show that the assessment or reassessment made pursuant to notice under s. 153A of the Act are not de novo assessments. - Assessee is not entitled to claim new claim in pursuance of notice u/s 153A if otherwise is not eligible. - IT APPEAL NOS. 586 TO 588 (JD.) OF 2008 - - - Dated:- 19-8-2009 - Member(s) : B. R. JAIN., K. S. S. PRASADA RAO. ORDER-B.R. JAIN, A.M.: In all the eleven appeals by M/s Suncity Metals (P) Ltd., M/s Suncity Alloys (P) Ltd. and Jay Steels (India), identical grounds raised in all the years are as under: "1. The impugned order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such claim in the returns of income filed originally under s. 139 of the Act. He was of the view that returns of income filed in response to notice under s. 153A of the Act are as a consequence of action taken under s. 132 of the Act on these assessees. These proceedings are analogous to proceedings under s. 147 of the Act to the extent that these are proceedings for the benefit of Revenue and not that of the assessee. The assessee cannot be permitted, to convert these reassessment proceedings as his appeal or revision in disguise and seek relief in respect of items earlier not claimed in the original return of income. Reliance was placed to the judgment rendered by the Hon'ble Bombay High Court in K. Sudhakar S. Shanbhag vs. ITO (2000) 161 CTR (Bom) 391 : (2000) 241 ITR 865 (Bom) which was rendered by taking notice of the principle laid by the Hon'ble apex Court in CIT vs. Sun Engineering Works (P) Ltd. (1992) 107 CTR (SC) 209 : (1992) 198 ITR 297 (SC) to the effect that in reassessment proceedings, an assessee can neither claim nor be allowed a deduction that was not claimed in the original return. As such, it was held that the assessment proceedings initiated on the basis of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed return cannot be entertained. He also upheld the order to deny deduction in all the years under consideration. 8. The appellants carried the dispute before the Tribunal on the grounds aforesaid. Shri Kothari, learned counsel for the appellant makes a plea that after initiation of action under s. 153A of the Act, proceedings or returns filed under s. 139 or 147 of the Act stand abated. Further that the assessments for six years made or pending shall also abate. Thus the proceedings under s. 153A are de novo assessment proceedings wherein the assessee can make all fresh claims for grant of exemptions and deductions in any return of income furnished pursuant to notice under s. 153A of the Act. 9. Shri Narendra Gaur, learned CIT-Departmental Representative for Revenue objecting to the claim of the appellant, contends that the interpretation of law should not only be logical and rational in nature but should also be harmonious and understood in a manner which satisfies the prime objective and intention of legislation. Relevant principles on interpretation have been stated in the following case laws: (i) Gujarat Industrial Development Corporation vs. CIT (1997) 142 CTR (SC) 181 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under s. 132 or making of requisition under s. 132, as the case may be, shall abate. Explanation-For the removal of doubts, it is hereby declared that- (i) save as otherwise provided in this section, s. 153B and s. 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 this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 12. The Finance Act, 2003 has also inserted a new provision as s. 158BI, which provides that Chapter XIV-B containing special procedure for assessment of search cases shall not apply after certain date. The provision reads as under: "The provisions of this chapter shall not apply where a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A after the 31st day of May 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or reassessment made under s. 153A. It is also clarified that assessment or reassessment made under s. 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 65.6 The new s. 153B provides for the time-limit for completion of search assessments. It provides that the AO shall make an order of assessment or reassessment in respect of each assessment year, falling within six assessment years under s. 153A within a period of two years from the end of the financial year in which the last of the authorizations for search under s. 132 or for requisition under s. 132A was executed. 65.7 This section also provides that assessment in respect of the assessment year relevant to the preceding year in which the search is conducted under s. 132 or requisition is made under s. 132A shall be completed within a period of two years from the end of the financial year in which the last of the authorizations for search under s. 132 or for requisition under s. 132A as the case may be, was executed. 65. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148,149, 151 and 153. It provides the procedure for assessment where a search is initiated under s. 132 of the Act or books of account or other documents or any assets are requisitioned under s. 132A of the Act. This section does not override the provisions contained under s. 143 of the Act. It makes imperative on the part of the AO to issue notice to such person requiring him to furnish, within such period, as may be specified in the notice, return of income in respect of each assessment year falling within six assessment years preceding the assessment year in which the search was conducted under s. 132 or requisition was made under s. 132A of the Act. It also mandates to assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Even though no notice is required to be issued to such person requiring him to furnish return in respect of assessment year relevant to the previous year in which search is conducted under s. 132 or requisition is made under s. 132A of the Act, s. 153B prescribes time-limit for completion of assessment in such cases also. By i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessment proceedings shall be understood to have commenced from the date of filing of return by an assessee. The assessments that shall have to be thus considered "pending" on the date of initiation of action under s. 132 shall be- (i) where after filing of the return of income in accordance with provisions of s. 139 of the Act, the same is neither processed under s. 143(1)(a) nor a notice issued under s. 143(2) of the Act before the expiry of limitation period at the time when action under s. 132 of the Act has been initiated. (ii) where a notice under s. 143(2) of the Act has been issued but the assessment by the AO has not been completed within the time prescribed under s. 153(1) of the Act. 16. According to mandate of s. 139(5) of the Act, the assessee has a statutory right to revise its return of income in the manner provided therein. An assessee filing return in response to notice under s. 153A shall also be eligible to make new claim of deduction or allowance in the case of pending assessments where time to revise returns has not expired. After the expiry of time available under s. 139(5) no such new claim of deduction or allowance can be made in such returns. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment in the case of search initiated shall not apply. Instead, the provision that there shall be assessment on undisclosed income comprising of previous years relating to six assessment years preceding in which search, was conducted, shall apply. This supports the view we have entertained in the earlier para. Having regard to the provisions of s. 139(5) of the Act and since the assessments under s. 153A are in relation to undisclosed income, it is precisely for this reason that new claim of deduction or allowance cannot be made in the completed assessments. It is a settled principle of law that what cannot be done directly can also not be done indirectly. Reference may be had to the judgments rendered by Hon'ble Allahabad High Court in Anupam Sushil Garg vs. CIT (2003) 185 CTR (All) 505 : (2004) 265 ITR 474 (All). 19. There is another reason for not agreeing with the appellant's plea that the assessment or reassessments of six years preceding to the year in which search is initiated and the assessment year in which search is initiated contemplates fresh assessment, is that the second proviso below s. 153A of the Act suspends only the pending assessment. The word 'abate' has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cal purpose of calling for returns for all the six assessment years immediately preceding the year in which search is initiated is to dispense with the requirement of recording reasons for reopening the assessment and also to avoid any controversy as to the correct year of assessibility of such income falling within such six assessment years. Necessarily the undisclosed income that shall form part of total income would be so taken after defraying for all expenses that are incurred for earning such income by the assessee. Reference to the principle laid in judgment rendered by apex Court in CIT vs. Piara Singh (1980) 17 CTR (SC) 111 : (1980) 124 ITR 40 (SC) is relevant. 23. We, therefore, find ourselves in agreement with the proposition made by the learned Departmental Representative that rules of interpretation so applied would not allow making of fresh claims as such. Principle of interpretation laid by Hon'ble apex Court in Poppatlal Shah vs. State of Madras AIR 1953 SC 274 reads as under: "It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase, or sentence is to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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