TMI Blog2019 (3) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... is already proceedings pending or to re-assess in the case of completed assessments; if the search under Section 132 reveals material pointing to a practice of suppression of income from taxation. These materials need not necessarily be that relevant to the previous six years since a practice of suppression detected in the subject year permits a like presumption to be drawn in the earlier six years too; on best judgment with reference to the business or profession carried on by the assessee. There is no assumption possible that in any of the prior years in which assessments were not regularly completed and the time for the same has expired, there could be additions only on the basis of materials recovered relevant to those years. The returns filed in pursuance to a notice under Section 153A is also to be treated as a return filed under Section 139. Hence, we cannot agree with the Tribunal that the assessments carried out under Section 153A for the prior years in which the due date for notice under Section 143(2) has expired, can only be with reference to incriminating materials recovered on search. When a notice is issued pursuant to a search under Section 132, for assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal. We would first look at the issues which do not survive for finalisation of the assessment for completeness. 2. One of the issues raised was on gifts received from friends for the assessment years 2003-04 to 2004-05. The Tribunal had remanded the matter to be considered by the Assessing Officer. The learned counsel for the assessee submits that the said individual gifts were considered and those which were proved were allowed by the Assessing Officer and others were added back to the income. 3. The next question is with respect to the deficiency in cash flow statement. The assessee had indicated depreciation claimed on two vehicles as cash in-flow for the respective years from 2002-03 to 2008-09. The Assessing Officer refused to accept the same as a cash in-flow; rightly so. The Tribunal found that, though the cash flow statement cannot be accepted, since it is depreciation,the same can be allowed as a deduction by the Assessing Officer. The modified order indicates that the Assessing Officer has allowed the said amounts as deduction from income as permissible for depreciation. The one other issue arising is with respect to sale of trees carried out in the assessment y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded assessments' are to be treated as concluded unless there is discovery of fresh materials for those years in the search conducted. The Tribunal's finding was based on yet another decision of the Tribunal itself that, when returns have been filed in a prior year coming within the six years as provided under Section 153A, and there is no assessment made within the 21 month period, then necessarily those adjustments which could have been made by way of a proper assessment being conducted on the basis of the returns filed, cannot be taken up for fresh consideration, merely for reason of an assessment having been initiated under Section 153A. The Tribunal was of the opinion that such re-assessments with respect to concluded assessments has to be only on the basis of some incriminating material received on search, which can be related to the relevant previous years of such 'concluded assessment' years. 8. The question of law is, hence, reframed as follows: Whether the Tribunal was correct in having found that in those years prior to 2005-06, where the due date for issue of notice under Section 143(2) had expired, as on the date of search, there could be no re-a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided under section 153A. 10. Hence, when a notice under Section 153A is issued, it enables the department to carry out re-assessment or assessment with respect to the six immediate prior years and the year in which the search is carried out. This does not require any incriminating material recovered on search relating to those prior years; in which there is no time left, on the date of search, for an assessment under Section 143. The provision under Section 153A is a non obstante clause having overriding effect over Sections 139, 147, 158, 149, 151 and 153. The intention of the legislature is to enable assessment, if it has not been regularly done in any of the previous years, or to re-initiate assessment in case there is already proceedings pending or to re-assess in the case of completed assessments; if the search under Section 132 reveals material pointing to a practice of suppression of income from taxation. These materials need not necessarily be that relevant to the previous six years since a practice of suppression detected in the subject year permits a like presumption to be drawn in the earlier six years too; on best judgment with reference to the business or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd revived with effect from the date of receipt of the order of such annulment by the [Principal Commissioner or] Commissioner: 12. We do not think that the intention in providing for abatement of pending proceedings and the revival of the same, if the proceedings under 153A(1) are eventually set aside; was to provide for a separate procedure for the years in which the notice period under Section 143(2) has expired. In fact, the second proviso is intended at keeping in abeyance any pending proceeding for assessment in a particular year; in which there is a proceeding initiated under Section 153A, pursuant to a search under Section 132. Otherwise, there would be parallel proceedings continued for the same assessment year. Hence, when a notice is issued pursuant to a search under Section 132, for assessment under Section 153A, all pending proceedings with respect to a regularly initiated assessment or re-assessment would stand abated. For the said years, the proceedings under Section 153A would be continued and the assessments concluded on that basis. However, when and if the said assessment proceeded with and concluded under Section 153A, is said aside by the statutory authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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