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TMI Blog2013 (6) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 19.08.2009 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur ('ITAT') in relation to the assessment proceedings concerning the respondent assessee for the assessment years 2001- 02, 2002-03 and 2000-01. The substantial questions of law involved in this appeal have been indicated in the order of admission dated 18.03.2011, that may be noticed as under:- "(i) Whether Tribunal was justified in not examining the question as to whether sale-tax incentive availed by the assesses for running their business is a capital expenditure or revenue expenditure? (ii) Whether not examining of the issue mentioned in question No.1 by the Tribunal entails remand of the case to Tribunal for giving findings on the said issue? (iii) Whether Sale tax incentive availed of by the assesses is in the nature of capital receipts or revenue receipts and if so whether it is subjected to payment of tax? (iv) Whether Tribunal was justified in holding that case of the assessee relating to sale-tax incentive cannot be examined under Section 153A of the Act because it is a case of search?" The relevant background aspects of the matter could be noticed in the following: A sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f not claimed earlier." In appeal before the Commissioner of Income Tax (Appeals), Central, Jaipur ['CIT(A)'], the CIT(A) by his order dated 16.10.2008, while rejecting the appeal, inter alia, observed and held as under:- "It is fact that the Sales Tax incentive was not claimed by the assessee while filing return u/s 139(1) of the Income Tax Act, 1961 nor in the assessment proceeding u/s 143 by filing any revised return. The consideration of capital receipt against the Sales Tax incentive is a matter of claim and it is not regular allowable deduction as per provision of the Act. It requires the initiation of claim and conclusion on the basis of facts and other judicial pronouncements. Therefore, it cannot be claimed without filing of revised return. Return filed in response to notice u/s 153A of the Income Tax Act, 1961 is not substitute of revised return for the claim of such benefit. In addition to reliance of cases placed by the Ld. AO, I may mention the recent decision of Apex Court in Goetze (India) V. CIT 284 ITR 323/157 Taxman (2006) wherein it has been ruled that a fresh claim before the Assessing Officer can be made only by filing a revised return not otherwise. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparent that Section 234B of the Act also mandates only the 'increase' in amount of interest pursuant to assessment under section 153A of the Act. Section 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. Section 139(5) of the Act stipulates time for revising return within one year from the end of the relevant assessment year or before the complete of the assessment whichever is earlier. Furthermore the original returns filed under section 139 of the Act are relevant for imposing penalty in such cases. This all goes to show that the assessment or re-assessment made pursuant to notice under section 153-A of the Act are not denovo assessments. We, therefore, find no merit in the ground raised in appeal to make a new claim of deduction or allowance as such where admittedly the regular assessments are shown as completed assessment on the date of initiation of action u/s 132 of the Act. Such a ground in all these appeals stands rejected." In view of it coming to the conclusion as aforesaid on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is not open for the assessee to claim any deduction, which was not claimed in the original assessment proceedings. Attention was drawn to second proviso to Section 153A of the Act, which provides for abatement of only 'pending assessment or reassessment' on the date of initiation of the search and not the concluded assessment proceedings. It was submitted that the assessee having failed to claim the deduction while filing original return under Section 139 and having failed to furnish any revised return under Section 139(5) of the Act and those assessments having become final, it is not open for the assessee to use the proceedings under Section 153A of the Act to reopen the concluded assessments. It was also submitted that the assessee can only claim income or expenditure or deduction in pending assessment or reassessment proceedings, which abate in terms of second proviso to Section 153A of the Act and not otherwise. Reliance was placed on the judgment of Allahabad High Court in Commissioner of Income-tax (Central), Kanpur v. Smt. Shaila Agarwal : (2012) 346 ITR 130. Though while admitting the appeal, four substantial questions of law were framed by this Court, as n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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.] [(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 this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.]" A plain r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments have to be taken into consideration while assessing or reassessing the total income under the provisions of Section 153A of the Act. Even in a case where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration. The requirement of assessment or reassessment under the said section has to be read in the context of Sections 132 or 132A of the Act, inasmuch as, in case nothing incriminating is found on account of such search or requisition, then the question of reassessment of the concluded assessments does not arise, which would require more reiteration and it is only in the context of the abated assessment under second proviso which is required to be assessed. The underline purpose of making assessment of total income under Section 153A of the Act is, therefore, to assess income which was not disclosed or would not have been disclosed. The purpose of second proviso is also very clear, inasmuch as, once a assessment or reassessment is 'pending' on the date of initiation of search or requisition and in terms of Section 153A a return is filed and the AO is required to assess the same, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion and the assessments passed earlier may have to be reiterated. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:- "19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e' of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition "shall abate". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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