TMI Blog2022 (11) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... mpower the AO to make block assessment merely because of any admission made by Assessee during the search operation. Similarly, this Court in CIT v. Sunil Aggarwal [ 2015 (11) TMI 286 - DELHI HIGH COURT ] has held that when a statement recorded under Section 132(4) of the Act, 1961 is retracted, then, the AO would require some corroborative material before making any additions/disallowances on the basis of the statement. This Court in the following decisions has considered and distinguished the decision of Dayawanti (supra) holding that the decision of Dayawanti [ 2016 (11) TMI 211 - DELHI HIGH COURT ] was rendered in the peculiar facts and circumstances of that case and the ratio of Kabul Chawla [ 2015 (9) TMI 80 - DELHI HIGH COURT ] has not been diluted. EFFECT OF JUDGMENT OF THE PUNJAB HARYANA HIGH COURT AND THE SUPREME COURT - Insofar as the judgment [ 2004 (7) TMI 359 - HIGH COURT OF PUNJAB AND HARYANA] of the Punjab Haryana High Court is concerned, the said judgment is prior to the search.A special audit under Section 142(2A) of the Act, 1961 was also made in the case of Respondent in the original assessment proceedings for AY 1998-99, which has also not been pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears pursuant to the search carried out on 22nd September, 2005 at the premises of the Respondent-Assessee under Section 132 of the Act, 1961. 2. Both the appellate authorities, viz., CIT(Appeal) and the ITAT have returned concurrent findings of fact that no incriminating material was found during the search conducted on 22nd September, 2005 warranting assessment under Section 153A of the Act, 1961. SUBMISSIONS ON BEHALF OF THE REVENUE 3. The appeals and questions of law, as formulated by the Appellant Revenue are premised on the submission that it is not necessary that incriminating material is found during search under Section 132 of the Act, 1961 for an order under Section 153A of the Act, 1961 to be passed even where original assessments have attained finality and have not abated. The questions of law as suggested in one of the appeal being ITA 527/2019 are reproduced hereinbelow:- A. Whether Ld. ITAT has erred in dismissing the appeal of the revenue by relying on the decision of the Hon ble High Court in CIT v. Kabul Chawla 380 ITR 573 CIT , without properly appreciating the provisions contained in section 153A of the IT Act which does not require to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as incriminating material/document on the basis of which addition/disallowance can be made under Section 153A of the Act, 1961. For the said proposition, reliance was placed on the decision of this Court in the case of Smt. Dayawanti Gupta v. CIT : [2017] 390 ITR 496 . 6. Since none had appeared for the Respondent-assessee despite being served, this Court had requested Mr. Sachit Jolly, Advocate, to appear as Amicus Curiae. SUBMISSIONS ON BEHALF OF THE LEARNED AMICUS CURIAE 7. Mr. Sachit Jolly, learned Amicus Curiae submitted that in terms of Section 153A(1) of the Act, 1961 where search is initiated under Section 132 of the Act, 1961 assessments for six assessment years preceding the date of search may be reopened and completed under that Section. He stated that this Court as well as other High Courts have consistently held that no addition under Section 153A can be made in the absence of incriminating material found during the search, particularly where original assessments have already concluded. 8. Learned Amicus Curiae submitted that the second proviso to Section 153A(1) of the Act, 1961 provides that if any assessment or reassessment proceedings relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search. Pertinently, even the limitation for issuance of notice under Section 143(2) of the Act had expired much before the date of search and therefore, no proceedings could in any case have been pending on the date of search. Thus, this case will also be classified under the category of unabated . 9. According to the learned Amicus Curiae, it, therefore, followed that all the Assessment Years in question fall in category 1, i.e., where assessment proceedings had attained finality and no proceedings were pending on the date of search. He emphasised that the CIT(A) and the ITAT have quashed the assessment orders passed under Section 153A of the Act, 1961 solely on the legal ground that the additions/disallowances made in these assessments were not based on any incriminating documents found during search proceedings. 10. He pointed out that neither before the ITAT nor in the appeal memorandum filed before this Court, it has been contended by the Revenue that there was any incriminating material found during the course of search on the basis of which additions had been made in the assessment order(s) under Section 153 A of the Act, 1961. 11. He lastl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of the six years. In other words there will be only one assessment order in respect of each of the six AYs in which both the disclosed and the undisclosed income would be brought to tax . iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so be relevant to point out this Court in the case of CIT v. Harjeev Aggarwal: [2016] 229 DLT 33, in the context of erstwhile provisions of Block Assessment, has held that the statement recorded during the course of search, on a standalone basis, without any reference to material found/discovered during the search would not empower the AO to make block assessment merely because of any admission made by Assessee during the search operation. Similarly, this Court in CIT v. Sunil Aggarwal: 379 ITR 367 has held that when a statement recorded under Section 132(4) of the Act, 1961 is retracted, then, the AO would require some corroborative material before making any additions/disallowances on the basis of the statement. 18. That apart, this Court in the following decisions has considered and distinguished the decision of Dayawanti (supra) holding that the decision of Dayawanti (supra) was rendered in the peculiar facts and circumstances of that case and the ratio of Kabul Chawla (supra) has not been diluted: CIT v. Meeta Gutgutia: [2017] 395 ITR 526 CIT v. Best Infrastructure (India) (P.) Ltd.: [2017] 397 ITR 82 CIT v. Dharampal Premchand Ltd: [2018] 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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