TMI Blog2017 (7) TMI 1415X X X X Extracts X X X X X X X X Extracts X X X X ..... mit returns as provided under section 153A(1)(a). This being the scheme of the provisions of the Act, the Appellate Tribunal ought to have considered the issue with specific reference to the facts involved in the case and as provided under section 153A. We set aside the order of the ld. CIT(A) and direct him to adjudicate the grounds raised by the assessee on merits in accordance with law after allowing sufficient opportunities of being heard to the assessee. Accordingly all the appeals filed by the Revenue are allowed for statistical purposes. - I.T.A. Nos.2714, 2715 & 2716/Mds/2016 (Assessment Years : 2007-08, 2008-09 & 2010-11) - - - Dated:- 28-7-2017 - Shri Chandra Poojari, Accountant Member Shri Duvvuru RL Reddy, Judicial Member Appellant by : Shri V. Vivekanandan, CIT O R D E R PER DUVVURU RL REDDY, JUDICIAL MEMBER: These three appeals of the Department pertaining to the same assessee, are directed against the common order passed by the ld. Commissioner of Income Tax (Appeals) 18, Chennai dated 30.06.2016 relevant to the assessment years 2007-08, 2008-09 and 2010-11, whereby the Department has challenged in annulling the assessment made under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012-13, the ld. DR has submitted that service of notice under section 153A of the Act followed by the search conducted under section 132 of the Act, the Assessing Officer has validly assumed jurisdiction to complete the assessment under section 143(3) r.w.s. 153A of the Act and pleaded that the orders of the ld. CIT(A) should be set aside for the assessment years 2011-12 2012-13. 5. Despite service of notice, none appeared on behalf of the assessee. Hence, we proceeded to decide the appeal by considering materials available on record and the arguments of the ld. DR. 6. We have heard the ld. DR, perused the materials available on record and gone through the orders of authorities below. For all the assessment years, notice under section 153A of the Act was issued on 15.03.2013, since a search conducted under section 132 of the Act on the premises of the assessee on 15.05.2012. However, no incriminating material was found during the course of search. Therefore, it was the submission of the assessee that since no incriminating material was found during the course of search, the assessment completed under section 143(3) r.w.s. 153A of the Act is not valid. However, it was the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A cannot stand on its own leg, which are not framed on the basis of any incriminating material found during the course of search operation and they do not conform the mandate of section 153A of the Act. Accordingly, the assessments framed under section 153A r.w.s 143(3) for the assessment years 2007-08 to 2011-12 [five assessment years] are quashed. Therefore, we request your good self to allow this ground of appeal. As can be seen from the assessment order and pointed out by the appellant, the AO made the addition for each of the AY without referring to any incriminating documents found/seized during the search, thereby making one to come to the conclusion that the addition was not based on seized document. In the circumstances, inasmuch as the additions were made without any back up of materials or incriminating documents seized, the assessments are hereby annulled. Hence the ground relating to jurisdiction raised by the appellant is allowed. While deciding the issue in favour of the appellant, the following decisions were also relied upon. Various High Courts and ITAT have followed the decision of the Special Bench of the ITAT Mumbai in the case of All Cargo Global Log ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural income as non-agricultural income and also disallowance under section 40(a)(iii) of the Act. Now, the contention of the ld. Counsel for the assessee is that the assessment for the assessment years 2007-08 and 2008-09 already completed either under section 143(1) or 143(3) and there is no pendency of assessment so as to abate the assessment. Further, where, there is no seized material found during the course of search, the assessment under section 153A be framed only on the basis of original assessment, which is under section 143(1) or 143(3) of the Act. Admittedly, in these assessment years, the search took place on 15.05.2012. As on this day, the assessee has already filed return of income for the assessment years 2007-08 and 2008-09. It is also on record that the assessment for the assessment year 2008-09 and 2009-10 was completed under section 143(3) and the Assessing Officer accepted agricultural income in these assessment years. The time limit for issuing notice for other assessment years has already expired by this time and thereby, the assessments stated to be reached finality by operation of law for the assessment years 2007-08 to 2011-12 as on the date of search as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by the assessee. 8. At this stage, it is appropriate to mention the ratio laid down by the order of the Mumbai Special Bench decision of the Tribunal in All Cargo Global Logistic Ltd. v/s DCIT, [2012] 137 ITR 287 (SB) (Mum.), after analyzing the relevant provisions of the Act, came to the following conclusion and ratio: (a) In assessment that are abated, the Assessing Officer retains the original jurisdiction as well as jurisdiction conferred on him under section 153A for which assessments shall be made for each of the six assessment years separately. (b) In other cases, in addition to the income that has already been assessed, the assessment under section 153A will be made on the basis of incriminating material which in the context of relevant provisions means books of account, other documents, found in the course of search but not produced in the course of original assessment and undisclosed income or property discovered in the course of search. 9. In this case, the question answered in clause (b) would be applicable as the addition in the assessment order passed under section 153A, can be made only on the basis of incriminating material found in the cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bligation to issue notice to the person requiring him to furnish the return of income for six years immediately preceding the year of search. The Special Bench further held that in case assessment has abated, the AO retains the original jurisdiction as well as jurisdiction under section 153A for which assessment shall be made for each assessment year separately. Thus in case where assessment has abated the AO can make additions in the assessment, even if no incriminating material has been found. But in other cases the Special Bench held that the assessment under M/s. Govind Agarwal (HUF) 6 section 153A can be made on the basis of incriminating material which in the context of relevant provisions means books of account and other documents found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search. In the present case, 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. Therefore, there was no assessment pending in this case and in such a case there was no question of aba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years 2007-08 to 2011-12 [five assessment years] are quashed . 8. In the present case, admittedly, no assessment under section 143(3) of the Act was completed and moreover, even though no incriminating materials were found during the course of search, the decisions relied on by the ld. CIT(A) are not applicable. However, in similar facts and circumstances, in the case of CIT v. Dr. P. Sasikumar 387 ITR 8 (Kerala), the Hon ble Kerala High Court has observed and held as under: On a plain reading of section 153A, it is clear that once search is initiated under section 132 or a requisition is made under section 132A after the 31st day of May 2003, the Assessing Officer is empowered to issue notice to such person requiring him to furnish return of income in respect of each assessment year following within six assessment years referred to in clause (b). It further treats the returns so filed as if such return were a return required to be furnished under section 139. So that on a reading of section 153A(1) it is categorical and clear that once a notice is issued and the Assessing Officer has required the assessee to furnish return for a period of six assessment years as c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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