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TMI Blog2025 (3) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... st regarding the assessee's status on the "searched" persons on 23rd July, 2015. We wish to reiterate here that the assessment year before is assessment year 2014-15, wherein, the assessee had filed its return of income on 30th September, 2014. Meaning thereby that its assessment on the date of search was indeed an abated one going by section 153(A1) 2nd proviso, and therefore, we are of the considered view that going by statutory provisions containing a non-obstante clause "notwithstanding anything contained in section 139..........", the learned lower authorities have erred in law and on facts in assessing it under the normal provision than the foregoing specific provision applicable in case of searched person. 5. Learned counsel has further quoted this tribunal's order in ITA No.1074/Pn/2007 deciding the very issue against the department as under: "5. The assessee vide petition dated. 12-9-2012 made a request for admission of additional ground of appeal which reads as under:- "The ld. Commissioner of Income tax (Appeals) erred in confirming the assessment order under section 143(3) of the Income Tax Act passed on 27-12-2006 without considering the fact that a search and sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." The reliance was also placed in the case of ITO vs M.M. Textiles reported in (2010) 122 I.T.D 435 (Mum) wherein it was held that when additional legal grounds are raised, before the Tribunal after obtaining leave from the Tribunal, such legal grounds should be accepted by the Tribunal provided facts are on record in the assessment proceedings. It was, therefore prayed that such additional ground be admitted. 7. At the time of hearing the ld. Counsel for the assessee while reiterating the same submissions as submitted in the petition dtd. 12- 9-2012 further submits that in view of the decision cited in the said petition, the additional ground raised by the assessee be admitted. He also placed on record a copy of the assessment order for the same A.Y. i.e. A.Y. 2004-05 passed after the search u/s 153A r.w.s. 143(3) of the Act dtd. 27-11-2008. 8. On merit of the additional ground of appeal, the ld. Counsel for the assessee submits that there is no dispute that as on the date of search i.e. on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal ground has challenged the validity of the impugned assessment order on the ground that as on the date of search i.e. on 30-11-2006, the pending assessment had already abated under the second proviso to section 153A of the Act and in support he placed on record the copy of the assessment order dtd. 27- 11-2008 passed u/s 153A r.w.s. 143(3) of the Act and also relied on CBDT Circular and various decisions (supra). 12. A larger bench of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) observed that the question of law which arose from the fact as found by the income-tax authority any legal issue can be raised at any stage. The hon'ble Supreme Court observed that (page 387) : "where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee". 13. Similarly in the case of CIT vs. Jai Parabolic Springs Ltd. [2008] 206 ITR 42 (Delhi) it was observed that (headnote) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 153A of the Act. This Section was introduced into the Act by the Finance Act, 2003 w.e.f. 1.6.2003 along with Sections 153B and 153C. Section 153A provides for 'assessment in case of search or requisition'. It runs as follows: "153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing 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 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 asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come is to be computed. 65.2 The Finance Act, 2003, has provided that the provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after May 31, 2003, by inserting a new section 158BI in the 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 assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... giving an opportunity to the assessee of being re-heard under the proviso to section 129, or in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (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 ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year relevant to the previous year in which the search was conducted or requisition was made. The other difference is that there is no broken period from the first day of April of the financial year in which the search took place or the requisition was made and ending with the date of search/requisition. Under Section 153A and the new scheme provided for, the AO is required to exercise the normal assessment powers in respect of the previous year in which the search took place. 19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the „total income of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition "shall abate". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g him to furnish return of income in respect of six assessment years immediately preceding the assessment year relating to the previous year in which the search was conducted under section 132 or requisition was made under section 132A of the Act. 13. The second proviso to section 153A makes it clear that assessment or reassessment 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 shall abate. In other words, if on the date of initiation of search or requisition under section 132 or section 132A any assessment or reassessment proceeding is initiated relating to any assessment year falling within the period of six assessment years, it shall stand abated and the assessing authority cannot and shall not proceed with such pending assessment after initiation of search or requisition as contemplated hereinabove. 14. The word "abate" or "abatement" has not been defined in the Act or in the circular. According to Chambers Dictionary the word "abate" means demolition or to put an end to. The Law Lexicon defines the word "abate", which means to throw down, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act and the meaning of words 'abate' and 'pending' referred in the above provision have observed and held as under (headnote) :- "Section 153A of the Income Tax Act, 1961, provides that where notice under this section is issued as a result of any search under section 132, assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to under section 153, pending on the date of initiation of search under section 132 or requisition under section 132A shall abate. The words "pending on the date of initiation of search under section 132 or making of requisition under section 132A, as the case may be," have to be assigned their simple and plain meaning. Where the assessment or reassessment is finalised, there are no pending proceedings to abate and be restored to the file of the Assessing Officer. The word "abatement" is referable to something which is pending, alive, or is subject to deduction. Abatement refers to suspension or termination of proceedings either of the main action, or proceedings ancillary or collateral to it. Proceedings which have already terminated are not liable for abatement unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Abhay Kumar Shroff (supra) [mentioned in the list of cases/circulars] has held as under:- "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to asses or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In other words pending proceedings will not be proceeded with thereafter. The assessment has now to be made u/s 153A (1)(b) and the first proviso. It also means that only one assessment will be made under the aforesaid provisions as the two proceedings i.e. assessment or reassessment proceedings and proceedings under this provision merged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of search. 59. Having come to this conclusion we need not go into various orders of the `Tribunal cited by the rival parties. The decisions inconsistent with the aforesaid view/conclusion stand disapproved and the decisions consistent with this view/conclusion are approved". 20. Applying the ratio of the above decisions to the facts of the present case, we find that the search and seizure was initiated by the Department in assessee's case on 30-11-2006 on which date the assessment for A.Y. 2004-05 was pending which was completed on 27- 12-2006 u/s 143(3) of the Act. We further find that there is no dispute that the assessee is covered under the search action u/s 132(1) of the Act dtd. 30-11-2006. Consequently notice u/s 153A of the Act was issued to the assessee on 12-10-2007 and in response, the assessee filed its return of income on 15-11-2007 declaring total income of Rs. 1,64,50,999/- as against the income originally shown at Rs. 1,62,08,636/- in the return filed u/s 139(1) of the Act. It is also not in dispute that as on the date of search, the assessment proceeding for the A.Y. 2004-05 was pending and the regular assessment was completed on 27-12-2006 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to make explicit the intention of the Legislature which enacted the legislation. It is not for the Court to reframe the legislation for the very good reason that the powers to "legislate" have not been conferred on the Court. (3) In Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. vs. Custodian of Vested Forests (1990) (Supp) SCC 785 the Hon'ble Supreme Court observed that in seeking legislative intention Judges not only listen to the voice of the Legislature but also listen attentively to what the Legislature does not say. 4. The Hon'ble Supreme Court in the case of Federation of Andhra Pradesh Chambers of Commerce and Industry v. State of Andhra Pradesh reported in [2001] 247 ITR 36 (SC) reiterated the basic principle that (page 39):- "it is trite law that a taxing statute has to be strictly construed and nothing can be read into it..... In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used." The Hon'ble Supreme Court further went on to hold that (page 39) "th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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