TMI Blog2016 (6) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... & 170/Ahd/2012, IT(SS)A Nos.174, 175 & 176/Ahd/2012, IT(SS)A Nos.180, 181, 182 & 183/Ahd/2012, IT(SS)A Nos.187, 188, 189 & 190/Ahd/2012, IT(SS)A Nos.194 & 195/Ahd/2012 - - - Dated:- 29-4-2016 - SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI S.S. GODARA, JUDICIAL MEMBER For The Appellant : Shri S.N. Soparkar with Shri P.M. Mehta For The Respondent : Shri Jagdish, CIT (D.R.) ORDER PER BENCH All these appeals filed by the different assesses are against the consolidated order of learned CIT(A)-III, Ahmedabad dated 25.01.2012 for the assessment years 2003-04 to 2006-07. 2. Before us, at the outset, learned Authorised Representative submitted that though the appeals pertain to different assessees, different assessment years, but all these appeals pertain to the family members of the assessee and the issues are also common and, therefore, he has common submissions to make and therefore the submissions made by him in the case of one appeal would be applicable to all the appeals. Learned Departmental Representative did not object to the aforesaid submission of the learned Authorised Representative. We, therefore, for the sake of convenience, proceed to dispo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r has erred on facts and in law charging interest u/s 234A, 234B and 234C when no such interest is leviable. The appellant denies its liability to pay interest. IT(SS)A No.154/Ahd/2012 for A.Y. 2004-05 1. In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has grossly erred in rejecting Grounds No.1 and 2 of the appellant s appeal before him challenging the validity of the assessment order passed u/s. 153A read with Section 143(3) of the Income Tax Act, 1961. 2. In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has erred in confirming addition in respect of gifts received by assessee for ₹ 14,00,000/- by considering the same as unexplained gifts u/s. 68 of the Act. The same may kindly be deleted. 3. The Assessing Officer has erred on facts and in law charging interest u/s 234A, 234B and 234C when no such interest is leviable. The appellant denies its liability to pay interest. IT(SS)A No.155/Ahd/2012 for A.Y. 2005-06 1. In law and in the facts and circumstances of the appellant s case, the learned CIT(A) has grossly erred in rejecting Groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative reiterated the submissions made before Ld. CIT(A) and further submitted that the impugned assessment framed under section 153A of the Act is not valid in view of the fact that no incriminating material indicating the unaccounted income was found at the time of search and therefore, the Assessing Officer was not justified in issuing notice under section 153A of the Act and passing the order. His second argument was that as per the mandate of s.153A, the completed assessments can be interfered only on the basis of some incriminating material unearthed during the course of search on undisclosed income or property disclosed in the course of search which are not produced or already not disclosed or made known in the course of original assessment and that the assessment under section 153A can be made only on the basis of evidence found in the course of search and in the absence of any incriminating material, the completed assessments could not be interfered. Learned Authorised Representative submitted that in the present case, the assessee had already accounted the gifts in the respective assessment years by crediting the capital account and the fact of the amount being ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 160/Ahd/2012 2003-04 27/09/2003 143(1) 30/09/2004 6 161/Ahd/2012 2004-05 01/11/2004 143(1) 30/11/2005 7 162/Ahd/2012 2005-06 28/03/2006 143(1) 31/03/2007 8 163/Ahd/2012 2006-07 27/03/2007 143(1) 31/03/2008 Vikashkumar D Agrawal 9 167/Ahd/2012 2003-04 27/09/2003 143(1) 30/09/2004 10 168/Ahd/2012 2004-05 01/11/2004 143(1) 30/11/2005 11 169/Ahd/2012 2005-06 27/03/2006 143(1) 31/03/2007 12 170/Ahd/2012 2006-07 31/03/2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of search and since there was no incriminating material found at the time of search, the assessment framed under section 153A was not valid and therefore the assessments framed under section 153A needs to be quashed. 7. On the issue that since the time limit of issuing the notice under 143(2) had elapsed, the intimation issued under section 143(1) should be treated as completed assessment he relied on the decision of the co-ordinate bench of the tribunal in the case of ACIT vs. PACL India Limited - ITA No.2637/Del/2010 order dated 20.06.2013 and pointed to the relevant finding at page no.19 of the paper book. He also placed reliance on another decision of Ideal Appliances Co. Pvt. Limited vs. DCIT - ITA No.173/Mum/2015 and others - order dated 31.12.2015. He placed on record copy of the aforesaid submission. He, therefore, submitted that in respect of the years for which the time limit for issuance of notice under section 143(2) had expired before the date of search in those assessment years it has to be construed to be non abated assessment and the assessments under section 153A of the Act can only be made in the light of incriminating material seized during the search. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of s. 153A assessment and not that of assumption of jurisdiction and that this fact has also been noted by the Co-ordinate Bench of the Tribunal in the case of Intas Pharmaceuticals Limited IT(SS)A Nos.807 to 809/Ahd/2010 20/Ahd/2011 order dated 14.08.2015. He pointed out the relevant paragraphs in page no.14 of the aforesaid order. On the submission of learned Departmental Representative about post search enquiry revealing undisclosed income, learned Authorised Representative submitted that assumption of jurisdiction under section 153A of the Act has to be decided on the date of issue of notice under section 153A of the Act and it does not depend upon the post search enquiries. He further submitted gift deeds and returns of income of the donors found itself cannot be considered to be an incriminating material. He also placed reliance on the decision of Hon ble Delhi High Court in the case of CIT vs. Ashok Dua reported in (2009) 177 taxman 494 (Delhi) and placed on record a copy of the aforesaid decision. He, therefore, reiterated that in the absence of any incriminating material found during the course of search, no addition under section 153A of the Act could be made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om AY 2003-04 to AY 2009-10. Before us, therefore it is Ld. AR s contention that the receipt of the gifts by the assessee has already been accounted for by the assessee in the respective assessment years and has also been reflected in the returns of income of the respective years. The material, namely the gift deeds and the copies of the return of income of the donors, found at the time of search are only supporting document of the gifts which have been declared by the Assessee. It is also Ld AR s contention that the return of income of the assessees have been processed u/s 143(1) and till the date of search, no notice u/s 143(2) has been issued with respect to the respective assessment years meaning thereby that the time period for selecting the return of income for scrutiny has elapsed and thereby the assessment for those assessment years had attained finality and therefore the assessment for those years could not be considered to be as pending and therefore there was no question of abatement of the assessments as per the provisions of s. 153A of the Act. The Ld. AR has placed a chart giving the assessment yearwise details indicating the date of filing the return of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der 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 [ Principal Commissioner or ] 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. 13. Reading of section 153A it is seen that what section 153A contemplates is that, notwithstanding the regular provisions for assessment/reassessment contained in the I.T. Act, where search is conducted under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separatel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regards the gifts, the Tribunal Iclt that it was not necessary to go into the question as in whether the alleged gifts were genuine or represented the assessee's own money sought to be laundered by way of NRI gifts. The Tribunal noted that the fact of the matter was that no incriminating material was found during the course of search to indicate that the assessee's claim of gifts was not genuine. During the course of search, only affidavits and gift deeds were found. The Tribunal observed that the very documents on which the assessee relied to base his claim on the said gifts were found during the course of search and that it was not the case of the Department that but for the search, the claim of the gifts would not have been raised by the assessee. The Tribunal concluded that it could not be said that the gifts have been unearthed as a result of a search under section 132 of the Income-tax Act, 1961, only. The documents found during the course of search were the records available with the assessee which could be relied upon by the assessee before the Department in the event his claim of having received the NRI gifts was called in question. The Tribunal returned a finding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing facts emerges as undisputed. The regular return of income was filed on 2.12.2003 and the same was processed u/s 143(1)(a) of the Act. The time period for issuing notice u/s 143(2) of the IT Act for selecting case for security expired on 31.12.2004. The first search was conducted on the premises of assessee on 22.9.2005 and the 2nd search was conducted on 25.8.2006 and in both the searches, no incriminating material, document, unaccounted assets and bogus of accounts were found and seized relating to land development expenses debited in profit and loss account for the year. The both searches on assessee did not yield any incriminating material on the basis of which it can be said that assessee was indulgent in debiting bogus land development expenses in its books of account. There is no reference of any material found in the search for making assessment u/s 153A of the Act. Thus the basic controversy before us remains about the scope of assessment u/s 153(A) when the return has been accepted u/s 143(1)(a) and time period for issuing notice u/s 143(2) has elapsed. 8. In our considered view, there is no dispute with regard to the proposition that A.O has the jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 132 or requisition of books, no proceeding is pending, but in the search, material is found indicating incriminating material, the Assessing Officer embarks on a jurisdiction, wherein he has to club the two sets of incomes, the returned income and the unearthed income and arrive at the total income. All CARGO GLOBAL LOGISTICS Ltd. Vs. Dy. CIT [2012] 18 ITR (Trib) 106 (Mumbai) [SB] and CIT Vs. ANIL KUMAR BHATIA [2013] 352 ITR 493 (Delhi) followed. Where in the search operation, no incriminating material is found and there are no proceedings pending before the Assessing Officer, the Assessing Officer has to issue notices under section 153A, asking the searched person to file its returns. But since there are no proceedings pending before him, the second proviso stops the Assessing Officer to proceed further, because proceedings cannot abate and since there is no material, no further jurisdiction is embarked on him. Where no proceedings are pending and no incriminating material has been found on clubbing, what remains is the income originally determined or assessed. 10. The ITAT SMC bench, Mumbai in ITA no. 786 and 787 Mumbai 2013 in its order dated 8.5.2013 has hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch in the context of relevant provision, means (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (ii) undisclosed income or property discovered in the course of search. 13. In the present case, neither any incriminating material was found nor any other material or document along with books of accounts were found, which were not produced before the AO while completing the assessment originally. For assessment year 2001-02, no incriminating material was found or any other documents were found, which suggests that the assessee has concealed particular of income. Therefore, in view of the observation made by the Special Bench, no addition can be made while completing the assessment under Section 153A, if there no fresh material or documents was found during the course of search. The issues arises from those processed return can be raised only when some materials found against the assessee. The Hon ble Delhi High Court in the case of Anil Kr. Bhatia sited it supra held that assessment u/s 153(A) would be similar to the orders passed in any reassessment, where the total income determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessed by Assessing Officer. Therefore, the assessing officer has no jurisdiction to make or to resort to roving and fishing inquiries to find out whether any income has escaped assessment during these reassessment proceedings. Particularly, when there is no incriminating material found and seized during the course of search u/s 132(1) of the Act and nothing is available in record to reassess the income of assessee. In view of the above, this is not a fit case for making the addition in the year under consideration, the same are deleted. 19. We also find that the co-ordinate Bench of Mumbai Tribunal in the case of Gurinder Singh Bava Vs DCIT (2012) 28 Taxmann.com 328 (Mum) has after relying on the decision of Special Bench of Tribunal in the case of Alcargo Global Logistics Ltd. has held that when the assessment had been completed under summary scheme under section 143(1) and time limit for issue of notice under section 143(2) had expired on the date of search and therefore there was no assessment pending in and in such a case there was no question of abatement. 20. In the present case, the assessment had been completed under summary scheme under section 143(1) and time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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