TMI Blog2017 (11) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent : Shri S.S. Rana, CIT (DR) ORDER PER AMIT SHUKLA, J.M.: The aforesaid appeal has been filed by the assessee against impugned order dated 9/10/2014 passed by the ld. CIT (Appeals)-XXXII, New Delhi for the quantum of assessment passed under section 153A r.w.s. 143(3) of the Income Tax Act, 1961 for assessment year 2007-08. 2. Before us, the ld. counsel for the assessee, Shri Rakesh Gupta, raised a preliminary objection regarding the scope of addition made under assessment passed under section 153A r.w.s. 143(3) on the ground that the additions made by the Assessing Officer are not based on incriminating materials found during the course of search, as the assessment for impugned assessment year was unabated at the time of search. Highlighting the chronology of events, he submitted that in this case return of income was filed on 31/10/2010 and in support of the same he filed a copy of acknowledgement of return of income which is duly stamped and acknowledged on the date of 31/10/2007. He pointed out that the last date for issuance and service of notice under section 143(21) was 31/10/2008, however, no such notice under section 143(2) was issued and accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions and perused the relevant finding given in the impugned order. Here in this case, the original return of income was filed on 31/10/2007 and last date for issuance and service of notice under section 143(2) was 31/10/2008. When search took place on 19/10/2010, then assessment for assessment year 2007-08 had attained finality and was not pending in terms of second proviso to section 153A. From the impugned assessment order, it is seen that the additions made by the Assessing Officer are not based on any material or document found or seized during the course of search relating to the assessee qua the assessment year impugned before us. This is clearly evident from the order of the Assessing Officer as well as this fact has not been disputed by the ld. CIT(A) also. In the absence of any rebuttal that any incriminating material or document was found for the impugned assessment year qua the addition made, then no addition can be made over and above income originally assessed. Now it is quite settled law in the jurisdiction of Hon'ble High Court that for making any addition for the unabated assessment covered under section 153A, it is sine-qua-non that some incriminating mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. [Emphasis supplied by us] 7. The Hon'ble High Court has also taken note of the judgment of their earlier judgment in the case of CIT vs. Anil Kumar Bhatia reported in [2013] 352 ITR 493 (Del) and observe that this was not the issue before the Court. Again in the case of Pr. CIT Vs. Meeta Gutgutia s (supra), their Lordships have again reiterated the same principle in a very detailed manner and have also distinguished one of their earlier judgment in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), the Court discussed the decision in Filalex India Ltd. {supra) as well as the above two decisions and observed as under: 31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das {supra), and Filatex India Ltd. v. CIT-IV {supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 {Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section I53A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 8. Thus, the Hon'ble High Court after detail analysis concluded that, whence there is no incriminating material qua each of the assessment year roped in under section 153A, then no addition can be made while framing the assessment under section 153A. 9. The aforesaid principle and ratio are clearly applicable on the facts of the present case also, as admittedly no incriminating material relating to this assessment year was found during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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