TMI Blog2023 (7) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of the above. This is only a passing reference in the assessment order the weightage to this observation could be made if AO has power to tinker with the completed assessment. An inquiry, which could be made in the regular assessment, cannot be construed as seized material for just bringing an item in the scope of section 153A - Case followed Abhisar Buildwell Pvt. Limited [ 2023 (4) TMI 1056 - SUPREME COURT] - Decided against revenue. - I.T.A. No. 220/GAU/2019 - - - Dated:- 21-6-2023 - Shri Rajpal Yadav, Vice-President (KZ) And Dr. Manish Borad, Accountant Member For the Assessee : Shri Miraj D. Shah, Advocate For the Revenue : Shri N.T. Sherpa, JCIT ORDER Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals), Guwahati-2, Guwahati dated 15.02.2019 passed for Assessment Year 2013-14. 2. The assessee has originally taken three grounds of appeal. However, during the course of hearing, it has filed revised grounds of appeal, wherein it has raised twelve grounds of appeal. A perusal of all the grounds, i.e. original as well as revised, would rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iminating material. The loans from these three companies were already declared in the accounts and are available in the books. The ld. Assessing Officer in order to bring this aspect within the ambit of section 153A has observed that during the course of search and seizure action, Inspector of Income Tax was deputed to verify the existence of the above mentioned companies. This one observation cannot be construed that Department was able to lay its hand on incriminating material, which can justify the addition on these loans as unexplained one in an assessment under section 153A. During the course of search, Department was not sitting in a regular assessment proceeding to examine each and every claim if ever made by the assessee and then held it is incorrect claim because some Inspectors have given a report. There should be something more to be recovered from the assessee exhibiting that loans, which are shown by the assessee in its books of account, were non-genuine. Therefore, with the help of recent decision rendered by the Hon ble Delhi High Court in the case of CIT vs.- Kabul Chawla reported in 380 ITR 573 (Del.). He emphasized that addition in the total income of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vi) Completed assessments can be interfered with by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. 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 153 A 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 the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs. 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the Hon ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. 11. The position of law in other decisions referred by the Id. Counsel for the assessee is identical; particularly we have considered the judgment of Hon ble Calcutta High Court in the case of PCIT vs. Salasar Stock Broking Pvt. Ltd. 12. It is also pertinent to observe that the Hon ble Supreme Court had recently considered this issue and silenced all controversies on the scope of section 153A in the judgment rendered in the case of PCIT vs.- Abhisar Buildwell Pvt. Limited reported in 149 taxmann.com399 (SC). The Hon ble Supreme Court has concurred with the decisions of the Hon ble Delhi High Court in the case of Kabul Chawla as well as Hon ble Gujarat High Court in the case of Saumya Construction. The relevant part of the judgment of the Hon ble Supreme Court reads as under:- As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the total income in respect of each assessment year falling within six assessment years. However, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appeals and review petition preferred by the Revenue are hereby dismissed. No Costs . 13. In the light of above, if we examine the facts of the present case, then it would reveal that original return was filed by the assessee on 30.09.2013. The time limit to scrutinize this return was expired much before the search, i.e. 17.09.2015. The Department was unable to lay its hand on any incriminating material. The ld. Assessing Officer is examining the loans shown by the assessee in the books of account. The ld. Assessing Officer has observed that during the accounting year, assessee has taken unsecured loans from three companies. This part is already available in the regular books and must have been reflected in the return. If Department wish to undertake an exercise for examining, then, it ought to have scrutinised the return. The ld. Assessing Officer has not made reference of any document seized during the course of search. He has examined the Bank accounts and already available amounts in the accounts. The only reference to the seized material made by the ld. Assessing Officer is that during the course of search and seizure action, Inspector of the Department was deputed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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