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TMI Blog2022 (7) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... ese appeals are admitted on the following substantial questions of law :- (i) Whether assessment or re-assessment under Section 153-A of the Income Tax Act 1961, can be framed only on the basis of incriminating material found during course of search under section 132 of the Act. (ii) Whether assessment or re-assessment under Section 153-A of the Income Tax Act 1961 can be framed where no incriminating material has been found in the search under Section 132 of the Act. 2. Since substantial questions of law involved in all these appeals are similar, therefore, all these appeals have been heard together. Facts:- 3. The facts with regard to disclosed and assessed income of the assessees involved in the 'First Set' of appeals are briefly described as under:- Sl.No. First Set of Income Tax Appeal Nos. Assessment Year Income as per return (in Rs.) Accommodation entries in the form of unsecured loan shown from/ entry provider/bogus LTCG Bogus LTCG/ STCG/Commission added under Sections 68/69 1 51 of 2021 2012-13 Rs.1,06,500/- Subodh Agarwal, Success Vyapar Ltd and Neil Industries Ltd. Rs.3,67,59,615/- (bogus unsecured loan and interest) + Rs.42,05,902/- (bogus unsecu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income tax appeals. Notices under Section 153A of the Act, 1961 were issued to the assessees requiring them to furnish return of the Income for the Assessment Years and the assessees filed return of income. Thereafter, notices under Section 143(2)/142(1) of the Act, 1961 were also issued and served upon the assessees. Show cause notices were also issued to the assessees requiring them to explain as to why the L.T.C.G. or unsecured loans shown from Success Vyapar Ltd. and Neil Industries Ltd. or payment of interest or commission be not added in the income. The explanation submitted by the assessees were not accepted by the Assessing Officer and certain amounts shown as unsecured loan from the aforesaid two companies or L.T.C.G. and interest/ commission shown were added to the income of the assessees under Section 68 of the Act, 1961. Similarly, interest payment shown and commission shown were disallowed and added under Section 69 of the Act, 1961 on account of accommodation entries. 5. Against the Assessment Orders, the assessees filed appeals before the CIT (Appeals), Kanpur which were dismissed. The aforesaid appellate orders were challenged by the assessees before the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.05.2016 passed by the Principal CIT-I, Kanpur. Notices under Section 153A of the Act, 1961 were issued requiring the asssessees to file return of income. The notices were duly served upon the assessees. Thereafter, notices under Section 142(1) along with questionnaire were issued which were also duly served upon the assessees. Notices under Section 143(2) along with specific questionnaire were also issued which were also well served. The assessees filed their return of income in response to the aforesaid notice. After following due procedure of law, the assessment orders under Section 153A of the Act, 1961 were passed making certain additions. Aggrieved with the assessment orders, the assessees filed appeals before the CIT (Appeals), Kanpur, which were dismissed by common order. Aggrieved with the appellate orders, the assessees filed Income Tax Appeals before the Income Tax Appellate Tribunal, Lucknow which were allowed by the impugned common order dated 14.09.2021. 8. Aggrieved with the orders of the Income Tax Appellate Tribunal, Income Tax Department has filed the present appeals which have been admitted on the substantial questions of law aforenoted. 9. Thus, these appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (1998) 99 Taxman 155 (Delhi) = (1998) 232 ITR 771(Delhi) and State of U.P. Vs. Aman Mittal and another 2019 (19) SCC 740 (para 24 and in ITA No.31 of 2016 E.N. Gopakumar Vs. Commissioner of Income Tax, decided on 3.10.2016 by Kerala High court (para 8). Submissions on behalf of the respondents/Assessee s :- 11. Sri Tarun Gulati, learned Senior Advocate, assisted by Sri Ashish Bansal learned counsel for the respondent Assessee, has referred to the provisions of Section 153A and 153 C of the Acrt 1961 and certain judgments of Delhi High Court and submitted as under :- (i) No incriminating material was found in the search on the assessee conducted by the Officers under Section 132 of the Act, 1961. (ii) Since no incriminating material was found, therefore, provisions of Section 153-A of the Act, 1961 could not be invoked inasmuch as assessment of all the assessees for all the assessment years in question were already completed and finalised. (iii) The original assessment proceeding of the assessee were completed by the Assessing Officer under Section 143 (3) of the Act. Therefore, on the pretext of proceedings under Section 153-A of the Act 1961 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.-For the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an 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. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. (3) Nothing contained in this section shall apply in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A on or after the 1st day of April, 2021." 14. In the 'First Set' of appeals (leading Income Tax Appeal No.51 of 2021) relating to Chaurasia Group of cases, we find that in assessement order passed under Section 153A of the Act, 1961 the Assessing Officer and in the Appellate order, the CIT(A) have very exhaustively dealt with evidences including incriminating materials found at the tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after considering cases of: (i) CIT v Kabul Chawla [2016) 380 ITR 573/(20151 234 Taxman 300/61 taxmann.com 412 (Delhi). (ii) CIT v Continental Warehousing Corpn. (Nhava Sheva) Ltd. [2015] 374 ITR 645/232 Taxman 270/58 taxmann.com 78 (Bom.), (iii) Principal CIT v. Kurele Paper Mills (P.) Ltd. [2016] 380 ITR 571 (Delhi). (iv) CIT v Lancy Constructions [2016] 383 ITR 168/237 Taxman 728/66 taxmann.com 264 (Kar.), (v) CIT v ST. Francies Clay Decor Tiles [2016] 240 Taxman 168/70 taxmann.com 234 (Ker.) and (vi) CIT v Promy Kuriakose [20l6] 386 ITR 597 (Ker.). Further, in the case of CIT Vs Rai Kumar Arora [2014] 52 taxmann.com 172 (Allahabad)/(2014) 367 ITR 517 (Allahabad)-_ Hon'ble Allahabad High Court held that Assessing Officer has power to reassess returns of assessee not only for undisclosed income found during search operation but also with regard to material available at time of original assessment. Similarly, in the case of ClT Vs Kesarwani Zarda Bhandar Sahson Alld. HTA No. 270 of 20141 (Allahabad)- Hon'ble Allahabad High Court held that Assessing Officer has power to reassess returns of assessee not only for undisclosed income found during search operation bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries are self-evident. This clearly establishes that you have very close nexus with Sh. Subodh Agrawal who also has been one of the directors of your company M/s Sulabh Engineering & Services Limited along with Sh. Manoj Agrawal. The above entries at page number 45 also clearly explain the nature of transactions in Neil industries limited is that of providing 'accommodation entries' as in the case of Success Vyapar Limited. Sh. Subodh Agrawal has already accepted that he has provided bogus LTCG in Oasis Cine Communication Limited, apart from Sulabh Engineering & Services Limited and Nikki Global Finance Limited The above entries at page number 43 further clearly establishes that Sh. Subodh Agrawal has provided the bogus LTCG in Oasis Cine Communication Limited through merger/ amalgamation of Gravity Barter Limited and Makeover Vintrade Limited. All the three companies are registered at the same premise In Kolkata at Bijan Theatre, 5A, Raja RaJ Kissan Street, Kolkata- 700006.SO, it further cements the basic allegation that the LTCG/STCG/unsecured loans accrued to you through is nothing but your own cash routed as such." ii) "It is also observed that search u/s 132 was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odh Agarwal related to the search of Godiee group by investigation wing of Kanpur, has accepted on oath that, Mr. Rishi Kant Awasthi was an employee in the office of Mr. Subodh Agarwal. Since, all the dummy directors and the details found at the office premises of the Mr. Subodh Agarwal, it is concluded that, creditor company M/s. Success Vyapar Ltd. is controlled by Mr. Subodh Agarwal. As discussed earlier, it is established that, Mr. Subodh Agrarwal is an entry provider through various paper companies including the M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd., which advanced unexplained unsecured loans to various group companies of this appellant group in the different financial years in the form of accommodation entry. The facts of another creditor M/s. Neil Industries Limited is no different. In fact hard evidence of payment of cash for providing the accommodation entries were found in the search of Shri Subodh Agarwal, Rich capital and Goldiee group. 7.6 It is a settled preposition of law u/s 68 of the Act that, the initial burden of proof lies on the appellant to prove three vital ingredients u/s 68 of the act i.e. the identity, credit capacity of the creditor and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, lenders have disclosed meager income in their returns and each credit of unsecured loans to the appellant company is preceded by the equivalent or more amount of deposits of credit on the same date or on the prior dates. Also, AO has recorded the finding of fact that, most of the lenders do not exist on the given address and are paper companies providing the accommodation entries of unsecured loans. Also, AO has dealt at length on the seized documents and the statements of directors of M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd., evidencing the non-genuine nature of transactions. Finding of Hon'ble Allahabad High Court in WT No. 458/459 of 2015, wherein, it is held that, the creditor companies are dubious entities laundering the money in the garb of LTCG/share capital/share premium/unsecured loans. Thus, it is concluded that genuineness of the transaction and credit capacity of the creditors are unsubstantiated and transaction of unsecured loans are non-genuine. Appellant, on the other hand has not placed any material before the undersigned to dislodged the finding recorded by the AO. Therefore, considering the totality of facts and Circumstances of the case, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by Such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10." The present facts of the case are squarely covered by the provisions or law mentioned here-in-above, wherein it was imperative for the appellant to prove the identity and creditworthiness of the creditors along with the genuineness of transaction. In the instant case, appellant has miserably failed to prove genuineness of the transaction and creditworthiness of the creditors. Hence, addition made by Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s behind them who run and manage the said companies. It is the person behind the company who take the decisions, controls and manage them." The cases relied upon by the Ld. AR are on their own footings and distinguishable on facts and are not applicable to the present case. Further, Hon'ble Calcutta High Court has observed and held in the case of Pragati Financial Management Pvt. Ltd. Vs. CIT in C.A.887 & 998 of 2016 and others dated 07.03.2017, that, AO is entitled to make enquiry u/s. 68 of the Act regarding genuineness of the transaction. Further, it is held that, in the following Judicial pronouncements of the Honble High Courts that unsecured loans received from the entities involved in providing accommodation entries are liable to be taxed u/s 68 of the Act. i) CIT vs. Nova Promoters & Finlese (P) Ltd. 342 ITR 169 [Delhi] 2013. ii) CIT vs. D.K. Garg [2017] 84 taxmann.com 257 [Delhi] 7.12 In view of the above detailed discussion of the factual matrix of the case and considering the enumerated judicial pronouncements, it is concluded that appellant company has miserably failed to prove the vital ingredients of creditworthiness of the creditors' and genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agrawal has provided the bogus LTCG in Oasis Cine Communication Limited through merger/amalgamation of Gravity Barter Limited and Makeover Vintrade Limited. All the three companies are registered at the same premise In Kolkata at Bijan Theatre, 5A, Raja Raj Kissan Street, Kolkata-700006. SO, it further cements the basic allegation that the LTCG/STCG/unsecured loans accrued to you through is nothing but your own cash routed as such." ii) "It is also observed that search u/s 132 was conducted by Investigation Directorate, Kanpur in Rich Udyog Group of Kanpur on 28.04.2015. Nikki Global Finance Limited is one of the companies of this group which was subjected to search u/s 132. This company has Sh. Subodh Agrawal as one of its directors, apart from Sh. Sashwat Agrawal and his family and friends. Nikki Global Finance Limited is also covered in total 84 scrips investigated by Investigation Directorate, Kolkata. After search, two of the group companies subjected to search u/s 132 challenged the same before the Hon'ble Allahabad High Court in WP No. 458/459 of 2015. Hon'ble Allahabad High Court after perusing the satisfaction note and all the seized material dismissed the writ petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on entry. The facts of another creditor M/s. Neil Industries Limited is no different. In fact hard evidence of payment of cash for providing the accommodation entries were found in the search of Shri Subodh Agarwal, Rich capital and Goldiee group. 6.4 It is a settled preposition of law u/s 68 of the Act that, the initial burden of proof lies on the appellant to prove three vital ingredients u/s 68 of the act i.e. the identity, credit capacity of the creditor and genuineness of the transactions. In the present factual matrix of these cases, let us first, examine whether appellant has discharged the initial onus casted u/s 68 of the Act. Admittedly, appellant has filed the confirmation letters, ITRs and Bank statements of the creditors. However, mere filing of confirmation of ITRs or Bank statements is not sufficient to prove the credit capacity of creditors and genuineness of the transaction. On the other hand, AO has brought out the incriminating seized documents and statements of Directors of the alleged creditors i.e. M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd. who accepted on oath that, their companies are involved in providing the accommodation entries of LTCG/shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant to establish the identity, credit capacity of the creditor and to establish the genuineness of transaction. For the sake of clarity provision of section 68 of the Act as amended read as under: "68. Where any sum is found credited in the books of an assessee maintained for any previous year and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year: "Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by such assesseee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. v. C.I.T. (26 ITR 775, 783), and applied by that court in Kishinchand Chellaram v, C.I.T. (125 I.T.R. 713), where An assessment based on the result of private inquiries conducted behind the back of the assessee was set aside because the evidence so gathered was not placed before the assessee. In Gunda Subbayya v. C.I.T. (7 I.TR. 21, 28), Leach CJ said: "Information which the Income-Tax Officer has received may not always be accurate and it is only fair when he proposes to act on material which he has obtained from an outside source that he should give the assessee an opportunity of showing, if he can, that the Income- Tax Officer has been misinformed, but the Income-Tax obviously not bound to disclose the source of his information." In the case of P. S. Barkathali v. Directorate of Enforcement, New Delhi AIR KER 81, the Hon'ble High Court observed as under: "Even though the statement was subsequently retracted, the significance of admission in the first place cannot be under-mined. It is well established that mere bald retraction cannot take away the importance and evidentiary value of the original confession, specially in view of the fact that in this case, the depon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. It is also investigated that, the purchasers or the exit provider of such Penny Stock's do not have the credit capacity to purchase the shares. Thus, it was concluded by the A.O. that, the appellant has miserably failed to prove the genuineness of the transaction LTCG/STCG. Therefore, the credit entries in the form of LTCG are nothing but the unexplained credits u/s 68 of the Act. 7.2 On the other hand, ld. A.R. of the appellant has submitted detailed written submissions, which revolves around two points. Firstly, the sales of shares are supported by the contract notes issued by the brokers, hence, appellant has correctly claimed the exemption u/s 10(38) of the Act or paid lesser tax as STCG and secondly, opportunity of cross examination of the persons, whose statements were relied by AO, were not provided. Various case laws were also cited by the appellant in his favour. Therefore, it was submitted that, the addition made by the A.O. is unjustified and liable to be deleted. 7.3 The undersigned has carefully gone through the assessment order, written submission as well as verbal argument of the ld. A.R. of the appellant. Appellant is one of the entities belonging to Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y clients. When party/beneficiary, come to us for having accommodation entry, we used to get/give cash from/to them which is collected from the promoters/brokers. For doing so, we get a commission income in cash from party. iii) Appellant has not substantiated purchase of shares with cogent evidences including bank statement. iv) Further, during the assessment proceeding, the AO very specifically analyzed the price movement of shares of these companies and found that contrary to the market trends (BSE, Sensex), rates of above said companies moved at unexpectedly high end. The AO in his assessment order has mentioned it elaborately. AO also analyzed the basis and frequency of rising share price in market trend but she found that there was no change in the basic fundamentals of the company's balance sheet nor any new business opportunities were with these companies and even no any new step towards any business expansion or any other idea was there, which may attract the public to purchase of shares of these companies. Further, the volume of shares traded for these companies was found very low. Apart from the above, AO also found that trading of this company was questioned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is claimed by the appellant then it is for the appellant to prove that, such claim is genuine. AO has dealt with at length to successfully establish that, the cheque received for the sale of penny stocks shares are part and parcel of scam of bogus Penny Stock. Also, AO. has discussed at length the methodology adopted by the appellant to artificially rigged the share price of Penny Stock through circular trading. The astronomical increase in share prices of the Penny Stock is against the proportional increase in share market and against the intrinsic value of the share at that relevant time. Various share broker/operator/director of paper entities/exit operator have accepted their wrong doing in the sworn statement recorded before statutory authorities, which is very relevant evidence against the appellant. Independent investigation conducted by investigation directorate, Kolkata and SEBI have corroborated the findings of A.O, regarding the scam of bogus claim of LTCG/STCG. A.O. has recorded the finding of fact that exit provider or the purchasers of Penny Stock at such astronomical prices are person without established credit capacity or creditworthiness. A.O. has also established ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139. Clause (b) of sub-Section (1), empowers the Assessing Officer to assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years, provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years and for the relevant assessment year or years. The second proviso to clause (b) provides that assessment or reassessment or proceedings for any assessment year falling within the period of six assessment years or for the relevant assessment year or years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. 20. Undisputedly, the respondents-assessees filed return of income in response to the notice issued by the Assessing Officer under Section 153A(1) of the Act, 1961. Section 153A provides for assessment or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nating materials found in the search. If Section 153A is interpreted in the matter that the assessment or reassessment can be made only on the basis of incriminating materials found in the search, it would mean that it is not assessment or reassessment of total income but it would be assessment or reassessment of merely undisclosed income on the basis of incriminating materials found in the search. Section 153A does not exclude assessment or reassessment on consideration of other incriminating materials including incriminating materials available on record. Therefore, when the language of Section 153A is plain and unambiguous, it cannot be given a restricted meaning. To do so, it would amount to legislation by court or authority under the Act, which is not permissible. 24. It is admitted case of the respondents - assessees that search under Section 132 of the Act, 1961 was conducted in their premises in November, 2015. Another search was conducted on 28.04.2015 on Nikki Global Finance Ltd. Searches were conducted on premises of certain other persons on 24.04.2014 and statement of one Sri Subodh Agarwal was also recorded who appeared to be the real operator of the Success Vyapar Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 153C have been inserted in the Income-tax Act to provide for assessment in case of search or making requisition. 65.4 The new section 153A provides the procedure for completion of assessment where a search is initiated under section 132 or books of account, or other documents or any assets are requisitioned under section 132A after May 31, 2003. In such cases, the Assessing Officer shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, return of income in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted under section 132 or requisition was made under section 132A. 65.5 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded. If, after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. 65.9 The new section 153C provides that where an Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 65.10 An appeal against the order of assessment or reassessment under section 153A shall lie with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 143(1) (a) or under Section 143(3) of the Act, the Assessing Officer would be required to reopen these proceedings and reassess the total income taking notice of undisclosed income even found during the search and seizure operation. The fetter imposed upon the Assessing Officer under Sections 147 and 148 of the Act have been removed by the non obstante clause under Section 153A of the Act. Consequently, we are of the opinion that in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed, which were subsisting when the search was made, the Assessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the assessee. The Assessing Officer, while exercising the power under Section 153A of the Act, would make assessment and compute the total income of the assessee including the undisclosed income, notwithstanding the assessee had filed the return before the date of search which stood processed under Section 143(1)(a) of the Act. 11. In the light of the aforesaid, the reasons given by the Tribunal that no material was found during the search cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commenced with the words notwithstanding anything contained in Section 139, 147, 148, 149, 151 and 153, meaning thereby whatever has been provided in the aforesaid provisions that will not bar Assessing Officer in proceeding with the assessment or reassessment of total income for six assessment years, immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. The word 'assess' or 'reassess' not only suggest but show that power under Section 153A includes reassessment and that would be done only when assessment has already been finalized. There is inherent hint in Section 153A and there is no reason to restrict its scope. Tribunal has relied on the decision of Special Bench of Mumbai Tribunal in All Cargo Global Logistics Ltd. Vs. DCIT, 147 TTJ 513 wherein it was held that no addition can be made for any assessment year under Section 153A, the assessment which, is not pending on the date of search, unless any incriminating material is found in the course of search. Tribunal has decided the issue in favour of Assessee and deleted all the additions made in assessment orders up for consideration in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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