TMI Blog2014 (8) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction. If the commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of proceedings - the reasoning given by the Tribunal is not justified - The Commissioner did not have jurisdiction to initiate any proceedings u/s 263 of the Act – Decision in the case of COMMISSIONER OF INCOME TAX vs. ANIL KUMAR BHATIA [2012 (8) TMI 368 - DELHI HIGH COURT] relied upon - Decided in favour of Assessee. - ITA No.38/2014 - - - Dated:- 25-7-2014 - N Kumar and B Manohar, JJ. For the Appellant : Sri J Balachander, Adv. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority has to confine the assessment to the incriminating material found during search. He cannot take into consideration other materials while making an assessment order. Therefore, it is open to the Commissioner to invoke his powers under Section 263 of the Act, if the said assessment order is erroneous and prejudicial to the interest of the revenue, otherwise the revenue will be without any remedy. In coming to the said conclusion the Tribunal relied on the judgment of the Special Bench of ITAT, Mumbai in the case of ALL CARGO GLOBAL LOGISTICS LIMITED - (2012) 16 ITR (TRIBUNAL) 380 (MUM) (SB) and therefore, it held, in such cases, it would be open to the revenue to explore remedies open to it in law under Section 263 of the Act, subject to satisfaction of the condition precedent for exercise of jurisdiction under that provision even after the initiation of search under Section 132 of the Act. Thereafter, he proceeded to consider the case on merits in respect of two items. It was held the revisional power has been wrongly exercised in respect of other two instances and the matter was remanded to the assessing authority. It is against the said order the assessee is before this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment 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 (sub-section) pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A as the came may be, shall abate. 9. The Delhi High Court interpreting this provision in the case of COMMISSIONER OF INCOME TAX vs. ANIL KUMAR BHATIA (2012) 82 CCH 113 Del HC held as under: 18. A perusal of Section 153A shows that it starts with a non obstante clause relating to normal assessment procedure which is covered by Sections 139, 147, 148, 149, 151 and 153 in respect of searches made after 31.5.2003. These Sections, the applicability of which has been excluded, relate to returns, assessment and reassessment provisions. Prior to the introduction of thes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid years. The condition precedent for application of Section 153A is there should be a search under Section 132. Initiation of proceedings under Section 153A is not dependent on any undisclosed income being unearthed during such search. The proviso to the aforesaid section makes it clear the assessing officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. If any assessment proceedings are pending within the period of six assessment years referred to in the aforesaid sub-section on the date of initiation of the search under Section 132, the said proceeding shall abate. If such proceedings are already concluded by the assessing officer by initiation of proceedings under Section 153A, the legal effect is the assessment gets reopened. 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. The Assessing Officer is empowered to reo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. On the contrary, it is expressly provided under Section 153A of the Act the Assessing Officer shall assess or reassess the total income of six assessment years which means the said total income includes income which was returned in the earlier return, the income which was unearthed during search and income which is not the subject matter of aforesaid two income. If the commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the said material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of said proceedings. In that view of the matter the reasoning given by the Tribunal is not justified. The Commissioner did not have jurisdiction to initiate any proceedings under Section 263 of the Act. 12. For the aforesaid reasons the substantial question of law framed is answered in favour of the assessee and against the revenue. Hence, we pass the following: ORDER (a) The appeal is allowed. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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