TMI Blog2022 (7) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the order of the CIT(A) clearly reveal voluminous incriminating materials were not available in the hands of the Assessing Officer and on the basis of such incriminating materials, the Assessing Officer assessed the respondents-assessees under Section 153A of the Act, 1961. Incriminating materials relating to the respondents-assessees were available on record and were also found in the search/ investigation relating to certain other person. 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 Ltd. through his employee Sri Rishikant Awasthi, a nominal Director. Neil Industries Ltd. was also found being run from the same premises at Kanpur. On the basis of certain incriminating materials found regarding accommodation entries, the proceedings under Section 153A of the Act, 1961 was initiated by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Appeal Defective No. - 13 of 2022, Income Tax Appeal No. - 17 of 2022, 18 of 2022 Hon'ble Surya Prakash Kesarwani And Hon'ble Jayant Banerji JJ. For the Appellant : Praveen Kumar, Shubham Agrawal, Gaurav Mahajan, Gaurav Mahajan,Ashish Bansal, Gaurav Mahajan,Ashish Bansal, Gaurav Mahajan For the Respondent : Ashish Bansal, Ashish Bansal, Shalini Goel ORDER PER: SURYA PRAKASH KESARWANI, J. 1. All these 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 brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer under Section 153A of the Income Tax Act, 1961 (hereinafter referred to as Act, 1961 ). Common facts in all these appeals are that a search and seizure operation under Section 132(1) of the Act, 1961 was carried out in Chaurasiya Group on 27.11.2015. Simultaneously, search was also conducted at the premises No.B-2, Surya Nagar, Ghaziabad in the case of Ashish Kumar Chaurasia, Atul Kumar Chaurasia, Shree Mehandi Balaji Enterprises (P) Ltd., M/s Ghata Mehendipur Balaji Agri Extraction (P) Ltd., M/s Tejas Food (P) Ltd., Ashish Kumar Chaurasia HUF and Kanishk Iron (P) Ltd. Warrant of Authorisation was also issued and executed. Punchnama was also drawn. A survey under Section 133A of the Act, 1961 was also carried out in the case of M/s Mehndipur Balaji Enterprises (P) Ltd. at Kila No.202, Village Hasangarh, District Rohtak. Various incriminating documents were found and impounded. The cases were centralized to the office of the Deputy Commissioner of Income Tax, Central Circle-II, Kanpur vide order dated 14.09.2016 under Section 127 of the Act, 1961 passed by the Principal, CIT- 18, Delhi. Thus, search operations were conduced in respect of the assessees who are respondents in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 Rs.40,38,840/- Rs.9,66,00,000/- (bogus unsecured loans) Rs,72,97,989/- (interest disallowed) 3 11 of 2022 2012-13 Rs.3,91,20,210/- Rs.6,01,00,000/- (bogus unsecured loans) Rs,1,82,27,831/- (interest disallowed) 4 13 of 2022 (defective) 2012-13 Rs.21,32,660/- Rs.6,28,961/- (bogus LTCG) Rs.31,448/- (commission) Rs,2,00,000/- (bogus unsecured loans) 5 17 of 2022 2011-12 Rs.12,38,250/- Rs.21,252/- (bogus LTCG) Rs.1,060/- (commission) Rs,25,00,000/- (bogus unsecured loans) 6 18 of 2022 2011-12 Rs.8,95,140/- Rs.4,03,656/- (bogus LTCG) Rs.20,180/- (commission) Rs,17,00,000/- (bogus unsecured loans) 7. All these appeals of Second Set relate to M/s Goldie Masale and Shree Santosh Kumar Agarwal group of cases. Common fact in all these appeals are that a search and seizure operation under Section 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent assessees, a search under Section 132 of the Income Tax Act, 1961 was carried on his premises in November, 2015. Another search was conducted on 28.04.2015 on Nikki Global Finance Ltd. Searches were also conducted on premises of certain other companies on 24.04.2014 and statement of one Sri Subodh Agrawal was recorded on 28.10.2015 who appeared to be the real operator of Success Vyapar Ltd. through his employee Sri Rishi Kant Awashty as a nominal Director. Several companies including one M/s. Neil Industries Ltd. were also found being run from the same premises at Kanpur. On the basis of certain incriminating material found regarding accommodation entries, the proceedings under Section 153 A of the Income Tax Act, 1961 was initiated by the Assessing Officer and unsecured loans as unexplained income were assessed to tax in the hands of the respondent assessee under Section 68 and 69 of the Act, 1961. The Assessment Orders passed by the assessing authority were affirmed by the CIT (Appeal) but it was upset by the impugned order passed by the Income Tax Appellate Tribunal. (ii) The finding of the Tribunal that there was no incriminating material or that in the absence of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked unless some specific incriminating material was found in the search. Since no incriminating material was found in the search conducted on the assessee, therefore, reassessment proceedings under Section 153-A of the Act could not have been initiated by the Assessing Officer and such initiation of proceedings was wholly without jurisdiction. (v) Reliance is placed upon the judgments of Delhi High Court in Commissioner of Income Tax Vs. Sinhgad Technical Education Society reported in (2017) 397 ITR 344 (SC) (paras 4,13,18); Commissioner of Income Tax Vs. Kabul Chawla reported in (2015) 380 ITR 573 (Delhi) (paras 2,14,15,17) and Principal Commissioner of Income Tax Vs. Ram Avtar Verma reported in (2017) 395 ITR 252 (Delhi) ( para 4). (vi) No incriminating material against the assessee was found during the course of search conducted under Section 132 of the Act, for the Assessment Years in question. Therefore, no reassessment under Section 153 A of the Act 1961 could have been made. Consequently, the Income Tax Appellate Authority has lawfully and correctly set aside the order passed by the Assessing Authority. Discussion and Findings 12. We have carefully considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.-For the purposes of this sub-section, the expression relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to 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 : Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n decision on legal grounds of these cases: A.Y 2012-13 to A.Y. 2015-16: 5.1 Ground no. 1 to 3 for all the assessment years pertain to legal challenge to notice u/s 153A of the Act. It is also submitted by the ld. A.R. of the appellant that order u/s 153A of the Act is invalid in absence of incriminating material found as a result of search for these relevant assessment years in appeals. 5.2 Undersigned has carefully considered the submission and the case laws cited by the appellant. However, considering the express provisions of section 153A of the Act, undersigned would like to differ with the submission of the appellant, because section 153A of the Act clearly provides the power to AO to assess/reassess the cases of person searched u/s 132(1) of the Act for immediately six preceding years. Section 153A of the Act does not provide existence of incriminating material as essential requirement. In the opinion of the undersigned, the action u/s 132/132A of the Act would automatically trigger the provisions of section 153A of the Act for computation of total income of the appellant. This provision does not restrict the Assessing Officer to take action in those c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction of AO under 153A is to assess total income for the year and not restricted to seized material. Post search reassessment in respect of all 6 years can be made even if original returns are already processed u/s 143(1)(a) - Assessing Officer has power u/s 153A to make assessment for all six years and compute total income of assessee, including undisclosed income, notwithstanding that returns for these years have already been processed u/s 143(1)(a). Even if assessment order had already been passed in respect of all or any of those six assessment years, either under section 143(1)(a) or section 143(3) prior to initiation of search/requisition, still Assessing Officer is empowered to reopen those proceedings under section 153A without any fetters and reassess total income taking note of undisclosed income, if any, unearthed during search. In the case of Filatex India Ltd Vs CIT (49 taxmann.com 465)- Hon'ble Delhi High Court held that during assessment under section 153A, additions need not be restricted or limited to incriminating material, found during course of search. 7.5 The undersigned has carefully gone through the assessment order, grounds of appeal, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation 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 WT No.458/459 of 2015. Hon'ble Allahabad High Court after perusing the satisfaction note and all the seized material dismissed the writ petitions and observed that this group is involved in clandestine activity of taking cash and making dubious transactions in cheque, thereby laundering the money . This group is also centralized with the Central Circle and you are hereby shown the page number 8, 9 and 11 of BK-8 of the seized material which mentions bogus transactions with Success Yapar Limited. The similar findings have been made by the AOs in Kolkata of Success Vyapar Limited and Neil Industries Limited where they have disallowed losses claimed by these two companies in sale of Nikki Golabl Finance Limited as being held bogus and Part of racket of LTCG/ STCG/unsecured loan. The above evidence and findings further makes your loans from these two companies non-genuine . iii) Careful Study of the assessment orders reveal that, there are three directors in M/s. Success Vyapar Ltd. i.e. Shri Rishikant A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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/share capital/share premium and unsecured loans. All the incriminating evidence including statements of Directors of alleged creditors i.e. M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd. have been confronted to the appellant, who could not submit any satisfactory explanation regarding the genuineness of the transaction and credit capacity of the creditors. The income and the Bank Statements of the creditors as disclosed and furnished for these relevant assessment years are summarized in the following tables; Creditors Income disclosed in ITR S. No. Name of the creditor A.Y. 2012-13 A.Y. 2013-14 A.Y. 2014-15 A.Y. 2015-16 A.Y. 2016-17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and Circumstances of the case, it is concluded that, appellant has miserably failed to prove the credit capacity and genuineness of the transaction. 7.7 Thus, from the above detailed discussion, it is concluded that, the Creditor's entities M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd. are paper companies, providing the accommodation entries in the form of capital gains/share capital/share premium and unsecured loans and according transactions of unsecured loans are non-genuine and unsubstantiated. 7.8 On the issue of cross examination, undersigned is of the view that, the incriminating dairy/documents found from the search of Shri Subodh Agarwal and the statement of dummy directors of the alleged creditors companies M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd. were shown and confronted to the appellant. It is also seen from the assessment orders that, AO has tried his best to call the persons, copies of whose statements in favour of the revenue were given to the appellant. Further, Hon'ble ITAT Mumbai in the case of GTC industries Ltd Vs. ACIT (1998] 65 ITD 380 [Bom.] has observed and noted that, where statements of witness were only seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creditworthiness of the creditors. Hence, addition made by Assessing Officer is perfectly justified. 7.10 It is also an established law that mere filing of confirmation letter and the ITR copies are not enough to prove the credit capacity of the creditor. Hon'ble Kolkata High Court in the case of CIT Vs Korlav Trading Company Ltd.(Cal) 232 ITR 280 and CIT Vs Precision Finance P. Ltd. (Cal) 208 ITR 465 have observed and held that mere filing of confirmation and transaction through the banking channel is not enough to prove the genuineness of cash credit and it can be assessed. Further, Hon'ble Apex Court in the case of Shri Roshan D.Hatti Vs CIT (SC) 107 ITR 938 held that in the case of credits in the name of third party, it is the duty of the appellant to prove the identity or credit capacity of the creditors to advance money and genuineness of transaction. In the instant case, the undersigned is of the view that the credit capacity of the creditor and genuineness of the transaction is not proved by the appellant company. 7.11 Further, Delhi High Court in the case of PCIT Vs Vikram Singh (2017)85 taxmann.com 104 has observed and held that even if transaction of lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o prove the vital ingredients of creditworthiness of the creditors' and genuineness of the transaction. Therefore, undersigned find no reason to interfere with the addition made by Assessing Officer, u/s 68 of the Act. The same is therefore, confirmed and ground of appeal of the appellant is dismissed for each assessment year i.e. A.Y. 2012-13 for A.Y. 2016-17. 15. In the Second Set of appeals (leading Income Tax Appeal No.12 of 2022), relating to Goldie Masale Group of cases, we find that in assessement order passed under Section 153A of the Act, 1961, the Assessing Officer and in appeal, the CIT(A) have very exhaustively dealt with evidences including incriminating materials found at the time of search/ survey and have recorded detailed findings of fact based on consideration of relevant evidences on the point of bogus unsecured loan and bogus LTCG/ STCG. It would be appropriate to reproduce the relevant portion of the order of the CIT(A), dated 29.03.2019 in Appeal No.CIT(A)-IV/10334, 10335, 10375/DCIT-CC-I/KNP/2017-18/957 to 959 containing findings of fact are reproduced below:- 6.3 The undersigned has carefully gone through the assessment order, grounds of appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Allahabad High Court after perusing the satisfaction note and all the seized material dismissed the writ petitions and concluded that this group is involved in clandestine activity of taking cash and making dubious transactions in cheque, thereby laundering the money . This group is also centralized with the Central Circle and at page number 8, 9 and 11 of BK-8 of the seized material which mentions bogus transactions with Success Vyapar Limited. The similar findings have been made by the AOs in Kolkata of Success Vyapar Limited and Neil Industries Limited where they have disallowed losses claimed by these two companies in sale of Nikki Global Finance Limited as being held bogus and part of racket of LTCG/ STCG/unsecured loan. The above evidence and findings further makes your loans from these two companies non-genuine. iii) Careful study of the assessment orders reveal that there are three directors in M/s. Success Vyapar Ltd. i.e. Shri Rishikant Awasthi, Shri Abhishekh Basu and Shri Pradeep Dey AO has scanned and reproduced the statements of Shri Abhishekh Basu and Shri Pradeep Dey. From the perusal of these statements, it is evident that, actual business acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Industries Ltd. who accepted on oath that, their companies are involved in providing the accommodation entries of LTCG/share capital/share premium and unsecured loans. All the incriminating evidence including statements of Directors of alleged creditors i.e. M/s Success Vyapar Ltd. and M/s. Neil Industries Ltd. have been confronted to the appellant, who could not submit any satisfactory explanation regarding the genuineness of the transaction and credit capacity of the creditors. Also, there is no agreement or the co-lateral security arrangements between the appellant and creditors companies. A careful, perusal of Bank statements of these two lenders reveal the astonishing similarity in the pattern of fund flow. It is invariably noted that the creditors account were deposited with cheque of equivalent or more amount of credit on the same date or prior to advancing the loan to the appellant company. Thus, the evidence submitted by the appellant does not inspire the confidence regarding credit capacity of the creditors and genuineness of the transactions, especially considering the fact that, lenders have disclosed meager income in their returns and each credit of unsecured loans t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in clause (23 FB) of section 10. The present facts of the case are squarely covered by the provisions of law mentioned here-in-above, wherein it was imperative for the appellant to prove the identity and creditworthiness of he creditors along with the genuineness of transaction. Examination of financial statements like balance sheet Profit loss account, as reproduced by AO in assessment order reveal that this alleged company is not carrying any genuine business activities and are disclosing meager profits for last 5 assessment years including the relevant assessment year under appeal. This fact is apparent from discussion in para-4, page 24 to 31 of the assessment order. In the instant case, appellant has miserably failed to prove genuineness of the transaction and creditworthiness of the creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 deponent of the statement had provided the minute details relating to the transactions, It appears that the retraction statement was made purely to avoid clutches of law which had caught up with him and laid bare his nefarious activities. Further, jurisdictional Hon'ble Allahabad High Court in the case of Moti Lal Padampat Udyog Ltd. Vs. CIT 293 ITR 656 has laid down the correct preposition of law of cross examination and held as follows: Right of cross-examination of persons from whom the Assessing Officer has collected the evidence is not required by law. The requirement of the statute for a valid assessment would be met if all the evidence collected which is to be used against the assessee while framing the assessment order is placed before the assessee and he is given opportunity to rebut the evidence. Therefore it is concluded that, AO has followed the principle of natural justice by producing and confronting all the incriminating seized documents and statements recorded in favour of revenue to the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Santosh Agrawal Goldiee group, who has obtained bogus entries of LTCG/STCG amounting to Rs 1,94,24,887/-. It is seen that share of M/s. Nikki Global Finance Ltd. was sold by appellant gaining astronomical LTCG of Rs.23,16,765/- Rs.1,71,08,122/- for A.Y. 2012-13 A.Y. 2014-15 respectively. Examination of financial statements like balance sheet Profit loss account, as reproduced by AO in assessment order reveal that this alleged company is not carrying any genuine business activities and are disclosing meager profits for last 5 assessment years including the relevant assessment year under appeal. This fact is apparent from discussion in para-4, page 24 to 31 of the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht from beneficiary 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 compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed preposition of law that, if an, exemption 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars 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. 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, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment has to be made only on the basis of incriminating 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 appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Act. 65.3 Further three new sections 153A, 153B and 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication is made and ending with the date on which the order under subsection (1) 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed income would be brought to tax. Consequently, even though an assessment order has been passed 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn before the date of search which stood processed under Section 143(1)(a) of the Act ? 10. As is evident Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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