Assessment in case of search and seizure - Section 153A - Income Tax - Ready Reckoner - Income Tax

Assessment in case of search and seizure - Section 153A 1. Initiation of assessment in case of search - In case of any person where search is initiated u/s 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 but on or before the 31st day of March, 2021, then the Assessing Officer shall issue a notice to such person u/s 153A 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 6 assessment years and for the relevant assessment year or years 2. Condition for Assessment - a. the AO 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 ₹ 50 lakh 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 u/s 132 is initiated or requisition u/s 132A is made on or after the 1st day of April, 2017 3. 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 but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. 4. Asset shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. 5. Revival of Annulled Order - If any proceeding initiated or any order of assessment or reassessment made under section 153(1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained u/s 153(1) or 153 , the assessment or reassessment relating to any assessment year which has abated shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner 6. Where on the date on which search was initiated, the assessment proceedings was pending on the basis of return furnished by the petitioner and instead of complying with requirement of section 153A regarding issue of notice the AO proceeded with the pending assessment proceedings and passed an assessment order, it was held that the entire action of AO to proceed with assessment proceedings was a nullity. [Abhay Kumar Shroff v CIT 2007 (2) TMI 169 - JHARKHAND HIGH COURT] 7. Where pursuant to search proceedings, a survey was also carried out at another premises held by the assessee in capacity of a director, in view of fact that in block assessment proceedings u/s 153A , assessee himself admitted that undisclosed income reflected in block return related to transactions recorded in documents found in course of survey, addition made on basis of return so filed deserved to be confirmed . 8. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate applicable to such assessment year