TMI Blog2018 (1) TMI 584X X X X Extracts X X X X X X X X Extracts X X X X ..... ing effect to the said order passed by the Settlement Commission, the Ld. DCIT has already passed an order u/s 153A r.w.Sec.245D (iv) of the I.T. Act 1961, therefore, we are of the considered opinion, keeping in view of the mandates of the Sec.245-C, 245E and 245-I and in order to end the litigation, impugned order under challenge passed by the Ld. CIT(A) is liable to be set aside . - I.T.A No.04(Asr)/2015 - - - Dated:- 30-11-2017 - SH. T.S. KAPOOR, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER For The Appellant : Sh. Salil Kapoor (Adv.) For The Respondent : Sh. Rahul Dhawan (D.R) ORDER PER N.K.CHOUDHRY (JM): The instant appeal has been preferred by the assessee, on feeling aggrieved against the order dated 31.10.2014 passed in Appeal No.643/2006-07, relevant to the Asst. Year: 2004-05 by CIT(A)- Amritsar. 1. That the Ld. Commissioner of Income Tax (Appeals) has, in view of the facts and circumstances of the case, grossly erred in law and on fact in:- i.) upholding the rejection of the trading results, ii) upholding the Addition made by the Ld. A.O. by applying G. P. Rate of 8% and iii) making further enhancement o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same manner as last year and that the CIT(A) has taken G.P. rate much higher then shown by the assessee by not satisfying with the reply of the assessee that the books are being maintained on the same basis as last year and day to day records are also maintained as per the system followed last year, all sales and purchases are duly vouched and stock tallies are maintained and no defects is found. Further the assessee has also drawn the attention of the AO to the appellate order passed by the CIT(A) CIT(A), for A.Y. 2003-04 in which the rejection of books of account was held as improper. After considering the submissions of the assessee, trading result was rejected and finally the Assessing Officer estimated the G.P rate @ 8% (on the basis of earlier G.P. rate) which worked out the gross profit at ₹ 87,22,800/- and was subjected to the taxation purposes. 3. Feeling aggrieved against the assessment order passed by the Assessing Officer, the assessee preferred the first appeal before the Ld. CIT(A) and during the course of appellate proceedings, the assessee filed the following submissions which are reproduced below. 1. That assessment order u/s 143(3) was made on 18.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Aassessee s group i.e., business premises of Assessee and its sister concerns and the residential premises of its directors/partners and family members, wherein some loose documents, unaccounted purchase bills, unaccounted stocks and jewellery etc. were found. Thereafter, the assessee group had gone into settlement before the Settlement Commission and the undeclared income was settled for all the cases of group including the assessee, its sister concerns and individual members of the group for the various assessment years vide order dated 26.09.2013 which was subsequently, amended vide order 07.03.2014 and the order of the Settlement Commission squarely covers the period of the assessee from Asst. Year 2001-02 to 2007-08 and thereafter, the reassessment u/s 153A w.e.f., 245D of the Income Tax Act, 1961 has been made by the DCIT, Central Circle, Amritsar vide his order dated 28th Jan. 2014 and the Asst. Order u/s 153A supersedes the original assessment order for which the appeal was pending before the ld. CIT(A) . During the search, some unaccounted purchase bills were seized and the Hon ble Settlement Commission had worked out the addition @ 9% on the value of such bills for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Jurisdictional High Court was pleased to held that valuation of closing stock declared by the assessee in the Profit and Loss account was not verifiable in the absence of stock register and so the G.P rate was not verifiable and accordingly restricted the G.P. rate to 9% and upheld the rejection of books of accounts. It was further argued by the ld. D.R. that while coming to the instant case, the Assessing Officer rightly held that correct income cannot be computed in the absence of proper books of account and day to day stock particulars as the assessee has not maintained quality/quantity wise records of manufacturing, purchases, sales and all the production. In view of the aforesaid judgment the Ld. AO was right in rejection of books of account. Further the Ld. DR argued that the settlement commission has no power to reopen the completed proceedings at the instance of the assessee and application before Settlement Commission cannot be filed in respect of those assessment years where no case was pending and assessment has already been completed in view of judgement passed in the case of IDCO DYES and CHEMICALS Pvt. Ltd. Anr. vs. Settlement Commission and Ors. (2003) 259 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 132 or requisition was made under section 132A. 65.3.C The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate.. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the 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. 65.3.D The new section 153B provides for the time limit for completion of search assessments. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the date of the application, by an order in writing, reject the application or allow the application to be proceeded with: Further, Sec.245E prescribes the powers of Settlement Commission to reopen the completed proceedings:- 245E. If the Settlement Commission is of the opinion (the reasons for such opinion to be recorded by it in writing) that, for the proper disposal of the case pending before it, it is necessary or expedient to reopen any proceeding connected with the case but which has been completed under this Act by any income-tax authority before the application under section 245C was made, it may, with the concurrence of the applicant, reopen such proceeding and pass such order thereon as it thinks fit, as if the case in relation to which the application for settlement had been made by the applicant under that section covered such proceeding also : Provided that no proceeding shall be reopened by the Settlement Commission under this section if the period between the end of the assessment year to which such a proceeding relates and the date of application for settlement under section 245C exceeds nine years: Provided further that no proceeding shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time limit for completion of search assessments. It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year, falling within six assessment years under section 153A within a period of two years from the end of the financial year in which the last of the authorizations for search under section 132 or for requisition under section 132A was executed. While coming to the instant case, the assessee vide its application dated 29.05.2007 filed before the Settlement Commission subjected the assessment orders for A.Y. 2001-02 to 2007-08 without mentioning the fact that the assessment of the A.Y. 2004-05 has already been completed. The Settlement Commissioner while computing the income u/s 245D(4) of the Act of the assessee for the Asst. Year 2004-05, determined at ₹ 12,57,540/- instead of ₹ 11,31,540/- which was shown by the Assessee in its return of income and the DCIT, Central Circle, Amritsar while giving effect to the order of the Hon ble Settlement Commission, New Delhi assessed the income at ₹ 12,57,540/- as finally settled by the Hon ble Settlement Commission and passed an consequential order u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and the proceeding relevant to assessment year 2004-05 was not reopened, however, the same was taken into consideration by the settlement commission and order dated 26.09.2013 was passed, which was supplemented by the order dated 07.03.2014 covering the assessment order under appeal qua A.Y. 2004-05 and while giving effect to the said order passed by the Settlement Commission, the Ld. DCIT has already passed an order u/s 153A r.w.Sec.245D (iv) of the I.T. Act 1961, therefore, we are of the considered opinion, keeping in view of the mandates of the Sec.245-C, 245E and 245-I and in order to end the litigation, impugned order under challenge passed by the Ld. CIT(A) is liable to be set aside . The judgment relied upon the by Ld. DR in the case of IDCO, DYES CHEMICALS (Pvt.) Ltd. Anor. Vs. Settlement Commission Ors, does not help the Revenue Department as it is a fundamental doctrine of all courts that there must be an end of litigation. In overall consideration the other issues and grounds raised by the assessee does not requires any specific adjudication. In view of the above, we set aside the impugned order passed by the ld. CIT(A). In cumulative effect, all the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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