TMI Blog2015 (7) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of All Cargo Global Logistics, [2012 (7) TMI 222 - ITAT MUMBAI(SB)], we are of the view that there is no incriminating material found during the course of search in the present case for these assessment years, except the statement of one Shri Sambhu Kr More, as admitted by the AO in his remand report dated 23.09.2011 and despite number of opportunities revenue could not produce any incriminating material before the Bench and the assessments are already completed for these assessment years originally, the assessments framed u/s. 153A of the Act is invalid and hence, quashed. - Decided in favour of assessee. - I.T(SS).A Nos.12 to 16/Kol/2012,C.O. Nos. 13 to 17/Kol/2012,I.T(SS).A Nos.140 & 141/Kol/2011,I.T(SS).A Nos.17 to 19/Kol/2012,C.O. Nos. 18 to 20/Kol/2012 - - - Dated:- 22-6-2015 - Shri Mahavir Singh Shri B. P. Jain, JJ. For the Petitioner : Shri Vijay Kumar, CIT, DR For the Respondent : S/Shri S. L. Kochar Anil Kochar, Advocate ORDER Per Bench: I.T(SS)A Nos. 12 to 16/Kol/2012 by revenue and Cross Objection Nos. 13 to 17/K/2012 by assessee are arising out of common order of CIT(A), Central-III, Kolkata in Appeal Nos. 87,86,83,84,82/CC-X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord prior to search operation u/s. 132, in the absence of incriminating material found in search, no addition could be made in respect of completed assessment. 5. Briefly stated facts are that a search and seizure operation u/s. 132 of the Act was conducted at the residences, office premises and bank lockers on a number of individuals and group companies within the Surana Group of cases on 19.03.2009. The assessee is one of the persons searched u/s. 132 of the Act. The assessee in response to notice u/s. 153A of the Act disclosed the return of income at ₹ 3,05,880/- for the relevant AY 2003-04 (as returned originally u/s. 139 of the Act). During the course of hearing before us as well as before CIT(A), assessee contended that no incriminating material was found during the course of search on Surana Group of cases on 19.03.2009 except the regular books of account from where the Authorised Officer has found about share capital, unsecured loans, consequential disallowance of interest on loans and disallowance of expenses of exempted income by invoking the provisions of section 14A of the Act, as recorded in the books of account. Simultaneously, a separate search and seizu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts are finally issued to the relevant companies belonging to Sri Shanti Kumar Surana as per instructions received from Sri Shanti Kumar Surana, from time to time. 13. Please explain in details the transactions which take place after receipt of cash from Sri Shanti Kumar Surana, till the issue of cheques of relevant amounts to companies belonging to his group. Ans.- Whenever cash is received, first of all, I procure cheques of matching amount on various dates, from the market. Subsequently, cheques of relevant amounts are issued from my companies, after the following layers of in-house transactions :- a. The cheques procured from the market are introduced in the books of one or more companies, in the form of share capital or as proceeds from sale of share investments. b. Then the amounts are further circulated amongst many companies, through loan transactions / advances / share transactions, etc. c. Finally as per the requirement of Sri. Shanti Kumar Surana, cherques of appropriate amounts are finally issued to his companies in the form of share capital or unsecured loans. d. I may also mention that in some of the cases, the shares of Sri Shanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Sri Shanti Kumar Surana. And also state whether the said income has been offered to tax or not. Ans- I received the said income in cash. The receipts and expenses of the above transactions are outside regular books of accounts. 18. I am showing you the details of addition to share capital and share premium A/c for the F.Y 2004-05 in the case of Bikaji Mercantiles Pvt. Ltd (PAN-AABCB4120A) which is a company belonging to the Surana Group . From the details it is seen that all the 12,24,000 equity shares of this company have been subscribed by the following companies a. M/s Alfa Tie-Up Pvt. Ltd. b. M/s. Rang Vardhan Febtrade Pvt. Ltd. c. M/s Cygnus Publishers Ltd. d. M/s Payagpour Vyapaar Pvt. Ltd. e. M/s Anuvrat Transport System Ltd. f. M/s Manush Distributors Ltd. g. M/s Teji Mandi Securities Pvt. Ltd. Does these companies belong to you? If so, please confirm the modus opeandi which you have already explained in your response to Q. No. 13. Ans.- Yes, I confirm that all the seven companies belong to me and have their Registered offices at my business at 52, Weston Street, Kolkata-700012. I Further categorically co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Teji Mandi Securities Pvt. Ltd. 2002-03 45,00,000 45,00,000 1,51,170 Sub Total 82,00,000 82,00,000 2,53,515 Bikaji Mercantiles Pvt. Ltd. Manush Distributors Ltd. 2003-04 2,2,50,000 1,22,50,000 1,61,538 Bikaji Mercantiles Pvt. Ltd. Anuvrat Transport Systems Ltd. 2003-04 2,09,50,000 1,49,50,000 1,66,800 Shanti Kr. Surana Rang Vardhan Febtrade Pvt. Ltd 2003-04 15,00,000 15,00,000 12,986 Shanti Kr. Surana Manush Distributors Ltd. 2003-04 4,65,00,000 2,05,00,000 8,38,093 Shanti Kr. Surana Anuvrat Transport Systems Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shanti Kr. Surana Anuvrat Transport Systems Ltd. 2005-06 2,00,00,000 2,00,00,000 2,95,726 Amar Impex Pvt. Ltd. Anuvrat Transport Systems Ltd. 2005-06 1,20,00,000 1,20,00,000 91,726 S.A. Suppliers Pvt. Ltd. Manush Distributors Ltd. 2005-06 0 50,00,000 1,79,178 S.A. Suppliers Pvt. Ltd. Anuvart Transport Systems Ltd. 2005-06 0 50,00,000 1,80,822 Sub Total 10,33,00,000 14,33,00,000 33,82,323 Shanti Kr. Surana Payagpour Vyapaar Pvt. Ltd. 2006-07 1,35,00,000 1,35,00,000 1,70,137 Amar Impex Pvt. Ltd. Anuvrat Transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DSL Technologies Ltd. Alfa Tie-Up Pvt. Ltd. 2004-05 8,00,000 DSL Technologies Ltd. Payagpour Vyapaar Pvt. Ltd. 2004-05 13,00,000 Sub Total 2,99,80,000 Amar Impex Pvt. Ltd. Payagpour Vyapaar Pvt. Ltd. 2005-06 70,00,000 Amar Impex Pvt. Ltd. Teji Mandi Securities Pvt. Ltd. 2005-06 82,15,000 Amar Impex Pvt. Ltd. Alfa Tie-Up Pvt. Ltd. 2005-06 21,00,000 Amar Impex Pvt. Ltd. Cygnus Publishers Ltd. 2005-06 80,00,000 Amar Impex Pvt. Ltd. Rang Vardhan Febtrade Pvt. Ltd. 2005-06 62,50,000 Devanshi Consultants Pvt. Ltd Payagpour Vyapaar Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on such loans and share capital/premium for which he had provided accommodation entries to Sh. Shanti Kumar Surana and other group companies owned by him through the companies controlled by him. The details as furnished by him are reproduced in the above para. The AO, in view of the above statement of Shri Shambhu Kr More held that the assessee has availed the services of Shri Sambhu Kr More to obtain accommodation entries himself and the group companies. Subsequently, the AO noted that the assessee vide his statement u/s. 132(4) of Act on 20.03.2009 i.e. the date of search disclosed an additional sum of ₹ 81,83,210/- towards unaccounted jewellery and silver articles and in another statement on 08.04.2009 he voluntarily disclosed an additional income of ₹ 8 cr. on behalf of himself, members of his family and group concerns. The AO noted that while filing returns of income he only disclosed cash and jewellery at ₹ 1,25,50,000/-. The AO during the course of assessment proceedings recorded statement of assessee u/s. 131(1) on 15.09.2010, wherein he denied having made any disclosure of ₹ 8 cr. during post search proceedings and also denied having taken accommoda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of M/s. Anuvrat Transport Systems Ltd. (a company controlled by Sh. More) on 27/12/2004. It utilized this amount to advance ₹ 25,00,000/- by transfer to the account (No-891096) of M/s. Surana Mercantile Pvt. Ltd. i.e., the assessee and the ultimate beneficiary of this chain of transaction. c. Notice u/s 133(6) was issued to Sh. Vikas Kumar Agarwal, M/s. MJ Enterprise and M/s MA Trading Company to furnish the source of cash deposited by them. However, no reply was received from them. 3. The above description of the transactions clearly indicate that the cash deposits were ultimately transferred to the assessee company. The cash was deposited in accounts opened in the name of fake holders who were not traceable. 4. During the course of search at the office premises of the assessee company at Century Towers, 45, Shakespeare Sarani, several books documents were found and seized. One such bunch marked SSI/5 contain number of loose sheets with notings and abstracts of monetary transactions. Page No.-56 contain details of following transactions:- For Kocharji Sangeeta Co. --- 90,000 For Bhartiaji Payagpore --- 2,60,000 Teji M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are on record show that the appellant had obtained loans by account payee cheques which have been cleared and credited to the appellant s bank account. The loans have been refunded by the appellant by a/c payee cheques which have been cleared from the bank account of the appellant. Thus all these transactions of loans received and refunded are by a/c payee cheques through the banking channel. In support of the loan transaction the appellant had submitted a/c. Confirmation from the parties stating PAN of the loan creditors. The appellant also submitted the capital base of those creditors with reference to the copies of the annual accounts which was obtained from the ROC. There is no doubt about the availability of funds in these companies which proves their creditworthiness. The appellant has also paid interest on these loans after due deduction of tax at source. Thus it is crystal clear that the appellant has furnished all documentary evidences to prove the identity and the creditworthiness of the loan creditors as well as the genuineness of the transactions. It is a matter of great surprise that the assessment order is absolutely silent about the plethora of documentary evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h cash amounts were received. In fact, the details of addition to share capital, unsecured loans in the case of Bikaji Mercantile Pvt. Ltd. (which were late changed to Surana Mercantile Pvt. Ltd.) for the F.Y. 2004-05 were shown to Sri More asking him whether he has arranged accommodation entries for these amounts. Nothing was also asked about the alleged entries given to Bikaji Mercantile Pvt. Ltd. In other assessment years as well as ent5ries provided to other Group entities. Sri More on his own furnished a letter dated 15.05.2009 to the DDIT (Inv.) in which he provided a detailed list of unsecured loans, interest on such loans, repayment of loans and details of share capital / share premium in respect of which he had allegedly provided accommodation entries. These details run across six group entities for the period F.Y. 2002-03 to F.Y. 2007-08. It is interesting to note that another statement of Sri Smbhu Kumar More was recorded on 21.10.2010 U/s. 131(1) of the I.T. Act in which he has candidly admitted that he has absolutely no evidence regarding the accommodation entries provided to these group entities. I am at a loss to fathom how was it possible for him to supply in graphi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not understand English very well. Another statement was recorded U/s 132(4) of the I.T. Act on 8.4.2009. Surprisingly this statement was not read to him in Hindi. In any case in this statement it was stated I voluntarily wish to declare an income of ₹ 8,00,00,000/- (rupees eight crore only) which includes the amount of income declared by my elder brother and myself on 19/30th March, 2009 . It was also stated that the details of such income, manner in which the same was earned as well as the break up and applications thereof will be submitted in next few days. The third statement U/s 132(4) was recorded on 14.05.2005 which again was not read over to him in Hindi. Surprisingly no questions regard the details of the disclosure of ₹ 8 Crore was asked to him. He was asked to comment on the statement of Sri Sambhu Kumar More regarding his allegation about providing accommodation entries. In response he stated that without the copies of statement of Sri More he could not make any comment but on his part he could only say that he received the cheques of share capital and loans and the same were repaid by cheque only. He categorically stated that he never had any cash tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o claim, on the basis of cash deposit of ₹ 22,20,000/-, that approximately ₹ 51 crore of unaccounted cash have been introduced through accommodation entries. c) The AO also speaks about seized documents SSI/5 with notings and abstracts of monetary transactions. I am of the opinion that these rough notings have absolutely no connection to the alleged accommodation entries. Sri Surana had explained it as rough notings and account information. Apparently no effort have been made to cross verify these rough notings with regular books of accounts of the appellant. In this view of things these rough notings, in no way can be accepted as evidence corroborating the statement of Sri More regarding providing accommodation entries. (d) Finally the AO states that the appellant refused to cross examine Sri Sambhu Kumar More which is indicative of guilty mind of Sri Surana. The ape explained that Sri Surana informed the AO that there was no necessity or requirement on his part to cross examine Sri More as he had admittedly accepted that he had absolutely no evidence in support of what he had stated U/s 132(4). This information was given to the AO vide letter dated 16.12.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accommodation entries for the appellant is nothing but mere allegation base don which no addition could be made U/s. 68 of the I.T. Act. 6.14 For the reasons set out throughout this order I have no hesitation in holding that the AO was not justified in treating the amount received as loan as unexplained cash credit. Therefore, I delete the following additions made U/s 68 of the I.T. Act. A.Y. 2003-04 Unsecured Loan Rs. 82,00,000/- A.Y. 2004-05 Unsecured Loan ₹ 8,85,00,000/- A.Y. 2005-06 Unsecured Loan Rs.6,28,00,000/- A.Y. 2006-07 Unsecured Loan Rs.5,40,00,000/- A.Y. 2007-08 Unsecured Loan Rs.1,35,00,000/- Aggrieved, for these assessment years, revenue came in appeal on merits before Tribunal against deletion wherein assessee came in Cross Objection against validity of assessment framed u/s. 153A of the Act for the reason that there is no incriminating material for these assessment years and the assessments u/s. 143(3)/143(1) of the Act have already been completed and the proceedings cannot be revived unless the same is abated. In these assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and disallowance of expenses of exempted income by invoking the provisions of section 14A of the Act has already been explained and recorded in the regular books of account on the basis of which assessments were framed originally by the revenue. 10. On the other hand, when the Bench required the Ld. CIT,DR to produce the search material/incriminating material found during the course of search pertaining to these assessment years vide order sheet entry dated 23.04.2005 and the relevant order sheet entry reads as under: 23.04.2015: These group cases were heard partly today. During the course of hearing, the Ld. CIT, DR was asked to produce the seized material in these group cases because the assessee raised the jurisdictional issue that there is no search materials. Hence, no addition can be made while framing assessment under section 153A read with section 143(3) of the Act. The Ld. counsel for the assessee has drawn our attention to the remand report of the AO dated 23.09.2011, wherein he has clearly admitted that there is no search materials i.e. documents or evidences found during the course of search in these group cases. The Ld. CIT, DR is also requested to produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Background of main persons. Share capital issue Pages 4-7 Persons covered u/s. 153A Page 8 133A (or 153C) PP 9-16 Assets found/seized/documents detected. PP 17-29 Analysis of assets and documents found/seized. PP 30-32 Statements of disclosure u/s. 132(4) PP 32-69 Discussion on assets/documents and some statements PP 69-70 Statement. Raj Kumar More PP 72-101 Analysis. He also filed a copy of letter dated 28.04.2015 downloaded from Gmail Account of Ld. CIT, DR Shri Vijay Kumar, the relevant extract of the letter dated 28.04.2015 reads as under: Dear Shri Sishi Sinha and Shri Rajat Dutta, 18 appeals relating to Shanti Kumar Surana and Surana Mercantile (P) Ltd. relating to search periods are being heard in ITAT. The case was last heard on 23.4.2015 requiring production of some papers. Please find enclosed herewith a copy of the ITAT order sheet noting dated 23.4.2015. I only received copy of Appraisal report with three Annexures on 27.4.2015 evening. It does not apparently satisfy Para 2 of ITAT instructions dated 23.4.2015. Today, Shri Rajat Datta, DCIT case. Since all papers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide letter dated 23.09.2011 as under:- Kindly refer to your letter dated 13/9/2011 on the above referred matter. Ld. A/R of the assessee company, M/s Surana Mercantile Pvt. Ltd. Has furnished certain details and documents in connection with the appeal proceedings before you. Copies of these details and documents have also been filed before me. These include the following:- 1. Balance sheet of companies under the control of Shri Shambhu Kumar More and from which the loans and share application money was received by the assessee. 2. Confirmations in respect of unsecured loans received from the said companies. 3. Bank statements of the assessee reflecting the credit of loans and share application money as above by cheque or by bank transfer. 4. Balance sheets of the assessee company for the various years and details of loans, share application money received and shares issued. In this regard, I would like to submit before your kindself that the details and documents mentioned above were available at the time of assessment proceedings also and these were considered while framing the assessments of the assessee. These were not nay additional evidenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed ₹ 8 crores during the course of post search proceedings and that the appellant indirectly admitted of having entered into transactions through Sri More. Comment This matter has been explained by the appellant. He did not make any declaration of income of ₹ 8 crores. The appellant specifically challenges the AO s observations that the appellant admitted of having entered into transactions with the companies through Sri Shambhu Kumar More. There is no evidence of admission of any transactions between the appellant and the loan creditors as false or merely accommodation ent5ries. All these transactions of loans are duly supported by evidences. It is totally a perverse observation made by the AO. The AO states that during the post search proceedings DDIT (Inv.) conducted a selective enquires from ABN Amro Bank. The AO states that he also conducted similar enquiries from the said Bank. Thereafter, in subsequent three paras the AO has given certain names amounts. We find that the assessee was never confronted this report as argued by Ld. counsel for assessee before us now and even before CIT(A). 12. From the above facts we find that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings will not abate. Hon'ble Allahabad High Court in the case of CIT Vs. Smt. Shaila Agarwal (2012) 346 ITR 130 (All) has held as under: 12. A plain reading of Section 153A would show that where notice under this Section is issued as result of any search under Section 132, assessment or reassessment if any relating to any assessment year falling within the period of six assessment years referred to under Section 153, pending on the date of initiation of search under Section 132 or requisition under Section 132A shall abate. The words, pending on the date of initiation of search under Section 132, or making of requisition under Section 132A, as the case may be, has to be assigned simple and plain meaning. Where the assessment or reassessment is finalised, there are no pending proceedings to be abated, and restored to the file of the assessing officer. To abate means to diminish or to take away. The word 'abatement' has been defined in the Concise Law Dictionary (P. Ramanatha Aiyer) as follows:- Abatement. Abatement means, in respect of any chargeable accounting period, ending on or before the 31st day of March, 1947 a sum which bears to a sum equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave the pendency or continuance. The proceedings, which have already terminated are not liable for abatement unless statute expressly provides for such consequence thereof. 14. The word 'pending' occurring in the second proviso to Section 153A of the Act, is also significant. It is qualified by the words 'on the date of initiation of the search', and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate. 15. The pendency of an appeal in the Tribunal against the order of assessment against which an appeal has been decided by CIT (A) is not a continuation of the proceedings of assessment. An appeal under the Income Tax Act lies to the Appellate Tribunal on a question of law. Even if it is pending on the date of search, no such intention has indicated by the Tribunal arises out of the provisions of second proviso to Section 153A, to abate the proceedings, which have been completed, or concluded, and to restore assessment to the file of the Assessing Officer. 16. We do not find force in the submission of Shri Ashish Bansal that where a notice under Section 153A has been given after the search operations und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n against the vendor that consideration cannot weigh with the Court for interpreting the provisions of the taxing statutes. 19. The second proviso to Section 153A of the Act, refers to abatement of the pending asssessment or re-assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same alongwith assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271 (1) (c) of the Act. The material found in the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant portion of the judgment reads as under: 27. However, the Revenue's argument was that once proceedings under section 153A of the Act are initiated, then, the original assessment / reassessment order already passed in the assessment years covered under section 153A stand abated and the Assessing Officer is obliged to pass fresh assessment / reassessment orders and determine the total income afresh for those assessment years. Thus, earlier assessment orders abate as the proceedings in which they are passed have no legal consequence was the argument. Once the notice under section 153A was issued and an assessment order passed pursuant thereto, it is that order which was erroneous and prejudicial to the interest of the Revenue. 28. In dealing with those arguments, the Division Bench outlined the ambit and scope of the powers conferred by section 153A and observed thus : 8) We find it difficult to accept the above contention raised on behalf of the revenue. The object of inserting Sections 153A, 153B and 153C by Finance Act, 2003 by discarding the existing provisions relating to search cases contained in Chapter XIV B of the Income-tax Act, as stated in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on pending against finalised assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under Section 153A, the assessments/reassessments finalised for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153A (1) what stands revived is the pending assessment / reassessment proceedings which stood abated as per section 153A(1). 11) In the present case, as contended by Shri Mani, learned counsel for the assessee, the assessment for assessment year 1998-99 was finalised on the 29- 12- 2000 and search was conducted thereafter on 3-12- 2003. Therefore, in the facts of the present case, initiation of proceedings under Section 153A would not affect the assessment finalised on 29-12-2000. 12) Once it is held that the assessment finalised on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen, each of the above conclusions rendered by the Division Bench would bind us. 30. Even otherwise, we agree with the Division Bench when it observes as above with regard to the ambit and scope of the powers conferred under section 153A of the Act. Since we are not required to trace out the history and we can do nothing better than to reproduce the observations and conclusions as above that we are not repeating the same. Even if the exercise of power under section 153A is permissible still the provision cannot be read in the manner suggested by Mr. Pinto. Not only the finalised assessment cannot be touched by resorting to those provisions, but even while exercising the power can be exercised where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31st March, 2003. There is a mandate to issue notices under section 153(1)(a) and 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. Thus, the crucial words search and requisition appear in the substantive pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A (i)(b) and the first proviso clearly provide for assessment or reassessment of all six years. It may cause hardship to some assesses where one or more of such assessments has or have been completed before the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and against the very rule in this behalf that it should be supplied for the purpose of achieving legislative intent. The submissions of the Ld. Counsels are manifold, the foremost being that the provision u/s 153A should be read in conjunction with the provision contained in section 132(1), the reason being that the latter deals with search and seizure and the former deals with assessment in case of search etc, thus, the two are inextricably linked with each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be authorised on satisfaction of one of the three conditions enumerated earlier. Therefore, while interpreting the provision contained in section 153A, all these conditions will have to be taken into account. With this, we proceed to literally interpret to provision in 153A as it exists and read it alongside the provision contained in section 132(1). 52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is shall and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is shall and, therefore, the AO has no option but to assess or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f undisclosed income discovered in the course of search. He was specifically questioned about the jurisdiction of the AO to make original assessment along with assessment u/s 153A, merging into one. However he took an evasive view submitting that this question need not be decided in his case although the question of jurisdiction u/s 153A was vehemently pressed on account of which ground No.1 in the appeal for assessment year 2004-05 was admitted as additional ground. He also wanted the additional ground to be retained in case of any future contingency. 32. We would be failing in our duty if we do not note the reliance placed by Mr. Pinto on the judgments rendered by the High Court of Delhi at New Delhi and the High Court of Karnataka. Mr. Pinto would submit that the above observations and conclusions of the Special Bench and reproduced by us are specifically disapproved in Commissioner of Income Tax vs. Anil Kumar Bhatia by the Delhi High Court. We do not find this argument to be accurate. In Anil Kumar Bhatia as well the assessment involved the years 2000-01, 2002-03 and 2005-06. One of the questions and which was termed as substantial question of law was the correctness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts before the Tribunal and thereupon the Tribunal having deleted these additions and the notional interest, the matter was taken in appeal to the High Court of Delhi under section 260A of the IT Act by the Revenue. 33. The arguments, therefore, have been noted and from paragraphs 16, section 153A was analysed. 34. Mr. Pinto heavily relied on paragraphs 18, 19 and 20 of the judgment of the Hon'ble High Court of Delhi. He also relied on paragraph 21 to contend that the Special Bench decision has not been approved by the High Court of Delhi. 35. The Delhi High Court's judgment must be seen in the context of the essential controversy before it. Pertinently, that controversy arose because of a search being conducted at the residence and business premises of the assessee. Foundation of the action under section 153A being the search that the High Court of Delhi was required to consider the ambit and scope of the powers. Further, pertinently the Delhi High Court did not ignore any of the provisions. Those are correctly understood by the Delhi High Court. We do not see how and where the Delhi High Court disapproves the view taken by the Tribunal that its observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tia of the High Court of Delhi (supra) and then the following observations in paragraphs 10 and 11 are made: 10. Section 153A of the Acts start with a non obstante clause. The fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the total income of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing 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. 11. The Tribunal has proceeded on the assumption by virtue of the judgment of the special bench of the Mumbai, the scope of enquiry under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not, therefore, accede to the submissions of Mr. Pinto and revisit any of the conclusions rendered by the Division Bench of this Court. 15. In view of the facts in entirety and the legal principles enunciated by Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd., supra, of Hon'ble Allahabad High Court in the case of Shaila Agarwal, supra and Mumbai Special Bench decision in the case of All Cargo Global Logistics, supra, we are of the view that there is no incriminating material found during the course of search in the present case for these assessment years, except the statement of one Shri Sambhu Kr More, as admitted by the AO in his remand report dated 23.09.2011 and despite number of opportunities revenue could not produce any incriminating material before the Bench and the assessments are already completed for these assessment years originally, the assessments framed u/s. 153A of the Act is in valid and hence, quashed. 16. Accordingly, the Cross Objections of the assessee in CO Nos. 13 to 20/Kol/2012 are allowed. 17. In regard to the revenue s appeals in IT(SS)A Nos.12 to 19/K/2012, the revenue has challenged the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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