TMI Blog2015 (3) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... ears under consideration are not valid and the same are accordingly held as null and void. - Decided in favour of assessee. - ITA No. 1682/Del/2013,ITA No. 5087/Del/2012,ITA No. 1698/Del/2013 & ITA No. 1683/Del/2013 - - - Dated:- 17-2-2015 - Shri N.K. Saini And Shri I.C. Sudhir JJ. For the Appellant : Sh. Ved Jain Mrs. Rano Jain, CAs For the Respondent : Shri MB, CIT(DR) ORDER Per I.C. Sudhir: JUDICIAL MEMBER In all these appeals, the assessee has questioned validity of assessment framed under sec. 153A read with sec. 143(3) of the Income-tax Act, 1961 on the basis of various reasons in ground Nos. 1 to 8. One of the reasons questioning the validity of the said assessment raised in ground No. 6 is the absence of any incriminating material belonging to the assessee being found during the course of search. This issue has also been raised in ground No. 10 more elaborately containing two parts. Firstly , on the reason that reviewing of assessment proceedings for the year under consideration without there being any adverse material on record is bad in law and secondly no incriminating material belonging to the assessee was found during the course of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral bank accounts open in the name of several proprietary concerns and companies in which either he himself or his employees were directors or proprietors. The search and survey covered the premises of Shri A.K. Gupta, several associates/employees of Shri A.K. Gupta, several intermediatory companies and some beneficiaries including that of the assessee. Notice under sec. 153A of the Act was issued and in response thereto the assessee filed its return of income declaring the same income as shown in its original return of income filed under sec. 139 of the Act. The Assessing Officer thereafter being not satisfied with the explanting of the assessee made addition on account of income from some house properties owned by the assessee rejecting the contentions of the assessee that the provisions of sec. 23(1)(a) read with sec. 23(4) of the Act are applicable. Besides this addition, one more addition has been made in the assessment year 2009-10 by restricting the exemption claimed under sec. 54 of the Act at ₹ 16,16,700 as against ₹ 28,81,000 claimed by the assessee. These actions of the Assessing Officer were questioned by the assessee before the Learned CIT(Appeals) but th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l.); ii) Canara Housing Development Co. vs. DCIT - ITA No. 38/2014 dated 25.7.2014 (Karnataka). 9. Having gone through the orders of the authorities below, we find that the Learned CIT(Appeals) has rejected the contentions of the assessee on the issue of validity of assessment framed under sec. 153A read with sec. 143(3) of the Income-tax Act, 1961 in absence of incriminating material found during the course of search and in the absence of the pendency of the assessment as on the date of search on the basis that for framing assessment under sec. 153A, no such requirement is there and the only requirement is that search has been conducted under sec. 132 of the Act. 10. Having gone through the decisions cited by the learned AR including the decision of Special Bench of the ITAT in the case of AL Cargo Global Logestic Ltd. vs. CIT (supra), we find that the ratio laid down therein, supports the contentions of the assessee on the issue. 58. Thus, question No. 1 before us is answered as under :- (a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon 'ble Delhi High Court in the case of Anil Kumar Bhatia (supra) about not making of any addition in respect of an assessment year for which the assessment is already completed unless some incriminating material is found during the course of search. This can be seen from the . following observations of the Hon'ble High Court 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. 9. The above extracted observations of the Hon'ble High Court, which are though obiter dicta, make the point clear that where an assessment order has already been passed for a year(s) within the relevant six assessment years, then also the A.O is duty bound to reopen those proceedings and reassess the total income but by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied by the Ld. DR in the case of Madugulu Venu (supra) also talks about the need for making fresh assessment in respect of the assessment years for which the assessments are not pending on the date of search but does not set out the scope of such assessment, which is the issue before use. 13. We, thus, find that the decision of the Hon ble Jurisdictional Delhi High Court in the case of Anil Kr. Bhatia (supra) supports the case of the assessee that in absence of incriminating material found during the course of search an addition u/s 153A of the Act cannot be made in the assessment framed thereunder. The decisions relied upon by the ld. CIT, DR in the cases of Canara Housing Development Company vs. DCIT (supra) of Hon ble Karnataka High Court and Filatex India P. Ltd. vs. CIT (supra) of Hon ble Delhi High Court having distinguishable facts are not applicable in the present case. In the case of Filatex India Pvt. Ltd. (supra), the question raised on the applicability of provisions u/s 153A was that whether the Tribunal erred on facts and in law in not holding that re-computation of book profit, de-hors any material found during the course of search in the order passed u/s 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es one assessment; putting the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted or requisition was made. 14. In para no. 3 of the judgment the Hon ble Delhi High Court while discussing the cited decisions in the cases CIT vs. Chetan Das (2012), 254 CTR (Del) 292 and CIT vs. Anil Kr. Bhatia (2012), 2010-11 Taxman 453 (Del) cited by the ld. AR of the assessee appellant, has noted certain observations made and findings given by the Hon ble Court therein. Thereafter in para no. 4 of the judgment, the Hon ble High Court has held as under: The first question, we notice was not raised by the appellant before the AO, CIT(A) and before the Tribunal. The appellant claims that the contention being legal can be raised at any stage. We have examined sec. 153A of the Act and find that the submission/contention has no merit . 15. When we peruse the facts of the case in the case of Filatax India Ltd. and the question raised therein it comes out that in that case admittedly during the course of search incriminating material including statements were found and resulted in additions and the addition made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luded assessment 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. 17. In the case of SSP Aviation Ltd. vs. DCIT (supra) where the validity of assessment framed u/s 153C was challenged it was held that if the AO is satisfied that any money, bullion, Jewellery or other valuable article or thing or books of account or documents seized in the course of the search belongs to a person other than the person who was searched, then such assets or books of accounts or documents shall be handed over by him to the AO having jurisdiction over such other person. Once, that is done, the AO having jurisdiction over such other person shall proceed against him for making an assessment or reassessment of his income in accordance with the provisions of sec. 153A. The petitioner therein was not searched u/s 132 of the Act, however, some documents belonging to it were found during the search carried out in the premises of Puri Group of Companies. 18. We, thus, find that the ratio laid down by the Hon ble Delhi High Court and Hon ble Rajasthan High Court in the above cited and discussed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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