9911796707
TMI Blog2015 (10) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... nnulling the assessment order passed under section 147 of I.T. Act without appreciating the fact that no lawful proceedings under section 153A/C of the I.T. Act could have been undertaken in this case because no entity in the name of Shivam Gramodyog P. Ltd., in whose name warrant of authorization was issued and consequent search was made, ever existed and that the proceedings under section 153A/C could not have been undertaken on the basis of material/document found in consequence to search on a non existent entity. 3. That the CIT (A) erred in law and on facts in annulling the assessment order passed under section 147 of the I.T. Act without appreciating the fact that the information gathered from incriminating material and document found can be validly utilized for the purpose of ascertaining the assessee's escaped income and consequent reassessment proceedings under section 147 of the I.T. Act, following the (unreported) decision of Hon'ble High Court, Allahabad in the case of Sharad B. Sahai (copy enclosed for ready reference). 4. That the order of the Ld. CIT(A) being erroneous in law and on facts which needs to be vacated and the order of the A.O. be restored. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee vide letter dated 13.4.2010. Thereafter notices under section 143(2) and 142(1) of the Act were issued and after making detailed enquiry, the Assessing Officer has made additions under different heads, which were challenged before the ld. CIT(A), beside assailing the validity of reopening of assessment. 5. The ld. CIT(A) re-examined the entire aspect and has concluded that the assessment framed under section 147 of the Act was bad in law inasmuch as the assessment ought to have been framed under section 153C of the Act read with section 153A of the Act. Accordingly he annulled the assessment order and no finding was given on merit while disposing of the appeals. 6. Aggrieved the Revenue has preferred appeals before the Tribunal with the submission that undisputedly search was conducted upon the residential and business premises of Shri. Brij Mohan Pandey group which was engaged in the business of manufacturing/production of Kaththa and Khaini and trading of Kaththa, Khaini and raw material used in manufacturing of Pan Masala. A warrant of authorization was issued in the name of M/s Shivam Granodyog Pvt. Ltd. and the premises No.E-1, E-13, Site-I, UPSIDC Industrial Area, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended that the Assessing Officer has applied his mind while initiating the proceedings under section 153C of the Act on the basis of the seized material which were to be used by the Assessing Officer for reopening of the assessment. Therefore, it is nothing but a change of opinion of the Assessing Officer for initiating proceedings under section 147 of the Act and it is settled position of law that on account of change of opinion, the reopening of the assessment is not valid. In support of his contention, the ld. counsel for the assessee has placed reliance upon the following judgments:- 1. CIT & Anr. vs. Rinku Chakraborthy [ 2011] 242 CTR (Kar) 425. 2. ACIT vs. M/s Mudit Finance (P) Ltd. In I.T.A. Nos. 546 & 547/LKW/2011. 3. CIT vs. C. Sivanandan, 52 DTR 428 (Keral). 4. CIT vs. E.I.D. Parry Limited, 216 ITR 489 (Madras). 5. Motilal P. Khinvasara, HUF vs. Dy. CIT, 38 taxmann.com 355 (Pune - Trib.). 6. Asstt. CIT, Jhansi vs. Vidit Kumar Agarwal, 26 taxmann.com 185 (Agra) - Trib.). 9. The ld. counsel for the assessee has also placed reliance upon the judgment of the Hon'ble jurisdictional High Court in the case of Prakash Agrawal vs. Asstt. CIT, 287 ITR 172 (All.) in suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under section 147 of the Act read with section 143(3) of the Act was framed. 11. Now the solitary question arises before us is whether the assessment can be reopened on the basis of the incriminating material found during the course of search after dropping the proceedings initiated under section 153C of the Act on the basis of the same incriminating material? According to the ld. counsel for the assessee, the Assessing Officer has already applied his mind to the seized material while initiating proceedings under section 153C of the Act and therefore after dropping the proceedings under section 153C of the Act, the same material cannot be re-examined for the purpose of reopening of the assessment under section 147 of the Act whereas it was contended on behalf of the Revenue that there is no application of mind by the Assessing Officer on the seized material, as the proceedings initiated under section 153C of the Act were forced to be dropped on account of legal infirmity in the search conducted, during the course of which the impugned incriminating materials were found. 12. Having carefully examined the proposition of law as propounded by both the parties in the light of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of search can be utilized for the purpose of assessment. Therefore, the coordinated post search investigation and meaningful assessment has to take place it may be that on account of search being declared illegal, the block assessment under section 158BC of the Act cannot be made but the regular assessment or the re-assessment contemplated under the Act can be made. Therefore, initiation of proceedings under section 148 of the Act read with section 147 of the Act by the Addl. CIT cannot be said to be without jurisdiction. 16. In the light of the aforesaid judgments, we are of the considered view that the impugned incriminating material found during the course of search can be used by the Assessing Officer against the assessee, as it relate to it. 17. Now the question arises whether the Assessing Officer has applied his mind to the aforesaid incriminating evidence found during the course of search while initiating proceedings under section 153C of the Act? The answer is certainly no, as the proceedings under section 153C of the Act was not completed and it was dropped at the threshold with the approval of the Addl. CIT. Therefore, there is no bar for the Department to tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in favour of the assessee. 23. In the case of Asstt. CIT, Jhansi vs. Vidit Kumar Agarwal (supra), the issue in dispute was with regard to the validity of reopening of assessment on the basis of the evidence which was sought by the Assessing Officer by making requisition under section 132A of the Act from the Excise Authorities. The Hon'ble High Court has held that in such a circumstance, the proceedings initiated under section 148 of the Act cannot be said to be without jurisdiction, but the material evidence, which is relatable to the documents for which requisition has been sent under section 132A of the Act, cannot be taken into consideration. In the present case, the issue in dispute is entirely different. Therefore, the judgments referred to by the ld. counsel for the assessee are not at all relevant to the controversy involved in the instant case. 24. In the light of the aforesaid judgments, we are of the considered view that since the reopening was done on the basis of material seized during the course of search and the said material was never used by the Income-tax authority for completing the assessment, there is no change of opinion of the Assessing Officer and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
