TMI Blog2020 (1) TMI 914X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of any incriminating materials found during the course of the search? - In respect of abated assessments, fresh assessments are to be framed by the AO u/s 153A of the Act which would have a bearing on the determination of the total income by considering all the aspects, wherein the existence of incriminating materials do not have any relevance. However, in respect of unabated assessments, the legislature has conferred powers on the ld. AO to follow the assessments already concluded unless incriminating materials are found in the course of the search. That for the reasons stated above and on the basis of various judicial pronouncements, we hold that the disallowances made for the Assessment years which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search and accordingly directed to AO to delete the addition. - Decided against revenue. - IT(ss)A No.453/Ahd/2017 - - - Dated:- 20-1-2020 - Shri Rajpal Yadav, Judicial Member And Shri Waseem Ahmed, Accountant Member For the Appellant : Shri M.S.A Khan, CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. At the outset, we note that the appeal filed by the Revenue in the year 2017 has been listed several times for hearing, but the assessee remained absent. Therefore, we decided to proceed for hearing ex-parte qua the assessee. 2. First, we take up the ground no. 2 of the appeal raised by the Revenue, challenging the order of the Ld. CIT(A) wherein it was held that the additions in the assessment or re-assessment framed u/s 153A was to be restricted to the incriminating materials found during search. 3. The brief facts appearing, in this case, are that there was a search and seizure operation conducted u/s 132 of the Act in India Green Reality Group of cases on 15.03.2013 which also includes the premise of assessee. Accordingly the case of the assessee was also covered under search assessment u/s 153A of the Act. The assessment was framed u/s 153A/143(3) of the Act after making the following additions/disallowances of the regular item of the business as detailed under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e addressed is the preliminary issue of whether the addition could be framed under section 153A in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search. the scheme of the Act provides for abatement of pending proceedings as on the date of search. It was not in dispute that the assessment for the assessment year 2009-10 was not selected for scrutiny and the time limit for issuance of notice under section 143(2) had expired and hence it false under concluded proceeding, as on the date of search. It is held that the legislature does not differentiate whether the assessments originally were framed under section 143(1) or 143(3) or 147. Hence unless there was no any incriminating material found during the course of search relatable to concluded year 2009-10, the statute does not confer any power on the Assessing Officer to disturb the findings given thereon and income determined thereon, as finality had already been reached thereon, and such proceeding was not pending on the date of search to get itself abated. [Para 10.1 6.1. We also find support and guidance from the order of the Hon ble ITAT Ahmedabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e determined thereon as finality has already been reached and no proceedings were pending on the date of search. 8. We find that the Hon ble Delhi High Court in the case of CIT Central- III vs. Kabul Chawla reported in 380 ITR 573 (Del) has decided the impugned issue in favour of the assessee. The relevant extract of the order reads as under: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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