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TMI Blog2025 (5) TMI 1404X X X X Extracts X X X X X X X X Extracts X X X X ..... rable orders from this tribunal. 4.0 We have heard rival submissions in the light of material available on records. Brief factual matrix of the case, as seen from the order of the Ld.AO, is that the assessee had entered into a partnership for carrying land development activities with one Cholan Building & Estates. Return of income was filed u/s 139(4) on 06.02.2011 declaring an income of Rs. 3,05,61,060/- and agriculture income of Rs. 36,80,000/-. The return was accepted u/s 143(1) on 07.07.2011. Meanwhile, a search was conducted u/s 132 on 20.10.2011 at the premise of the assessee leading to seizer of incriminating documents marked as annexure-A/NG/B & D/1-4. The assessee filed a return of income for AY-2011-12 disclosing an amount of Rs. 3,75,00,000/- as additional income declared u/s. 132. Post centralization of this case, notice u/s 153A was issued on 29.08.2012. Notice u/s 143(2)/142(1) was issued on 23.12.2012. In response thereof assessee filed return of income again declaring an income of Rs. 3,05,61,060/- and agriculture income of Rs. 36,80,000/-. In para 5 of the order the Ld.AO has recorded that incriminating documents were seized vide annexure page 45 of NR/PKM/L&S/S-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding was pending for earlier years on date of search. Thus, no assessment proceeding was pending on the date of search to have got it abated. The Ld.CIT(A) recorded that for AY-2010-11 the Ld.AO had made additions of Rs. 2,94,19,950/- and Rs. 36,86,000/- even though no seized material for the impugned year was found. In this regard, we have noted from para 6.8 to 6.11 of order of Ld.CIT(A) that he has relied upon the decisions of this tribunal in the case of Smt.Rita Agarwal, ITA No.3264/Chny2019 and M/s.Saravana Stores ITA No.676/Chny/2017 before deleting the impugned additions. Thus, it has been observed :- "...6.8 The decisions relied upon by the Appellant, more particularly by the Jurisdictional ITAT will support the contention that addition in respect of unabated assessment cannot be made without any reference to the seized material. The jurisdictional tribunal in the case of Smt.Reeta Agarwal vs DCIT in ITA No.3264/Chny/2019 has clearly held that no addition can be made in an unabated assessment where assessment was not pending as on the date of search and no in criminating material was seized during the search. 6.9 Further, the Jurisdictional tribunal in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges (Textile), annual maintenance (TNM) and also in relation to interest paid on various loans and advances. The assessee filed original return of income for the relevant assessment year 2006-07 on 23.10.2006 and also has filed complete details in respect to the items added by the AO in consequence to search proceedings. We are of the view that once there is no incriminating material and assessment is concluded without any incriminating material, no addition or disallowance based on assessee's documents can be made. We find the issue is covered in favour of the assessee by the Mumbai Bench of the Tribunal in ITA Nos.3575 to 3577, 2580 to 3584, 3736 & 3737/Mum/2011 & 7382 to 7385, 7387, 7388& 7390/Mum/2013, order dated 24.05.2017, wherein it was held as under:- 5. In view of the above given facts, the learned Counsel for the assessees' argued that the issue of assumption of jurisdiction by the AO and making addition while framing assessment u/s 153A read with section 143(3) of the Act, the assessment is without jurisdiction in respect to assessment of gifts already disclosed. Now, before us the learned CIT DR. could not support the orders of CIT(A) or on query from the Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. The relevant portion of the judgment reads as under: - "31. We, therefore, hold that the Special Bench's understanding of the legal provision is not perverse nor does it suffer from any error of law apparent on the face of the record. The Special Bench in that regard held as under:- "The provision under section 153A is applicable where a search or requisition is initiated after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. We find that there is no divergence of views in so far as the provision contained in section 153A till the 1st proviso. The divergence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal etc., then the abated assessment revives. However, if such annulment is further nullified, the assessment again abates. The case of the Ld. Counsel is that this provision further shows that completed assessments stand on a different footing from the pending assessments because appeals etc. proceedings continue to remain in force in case of completed assessments and their fate depends upon subsequent orders in appeal. On consideration of the provision and the submissions, we find that this provision also makes it clear that the abatement of pending proceedings is not of such permanent nature that they cease to exist for all times to come. The interpretation of the Ld. Counsel, though not specifically stated, would be that on annulment of the assessment made u/s 153(1), the AO gets the jurisdiction to assess the total income which was vested in him earlier independent of the search and which came to an end due to initiation of the search. The provision contained in section 132 (1) empowers the officer to issue a warrant of search of the premises of a person where any one or more of conditions mentioned therein is or are satisfied, i.e. - a) summons or notice has been issued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 merge into one. If assessment made under sub-section (1) is annulled in appeal or other legal proceedings, then the abated assessment or reassessment shall revive. This means that the assessment or reassessment, which had abated, shall be made, for which extension of time has been provided under section 153B. The question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other word ..... X X X X Extracts X X X X X X X X Extracts X X X X
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