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TMI Blog2010 (2) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the assessee replied that as per provisions of section 153A, returns of income for six preceding assessment years to the assessment year in which search had been conducted had to be filed. However, the assessee also mentioned in the said reply that return of income for assessment year 2004-05 had already been filed under section 139 of the Income-tax Act, 1961, therefore, the same could be considered as a return of income for the purpose of making an assessment. The Assessing Officer, however, relying on the provisions of section 153B(1)(b) of the Income-tax Act, 1961, held that time-limit for completing the assessment for this year was 31-3-2006, and the same could not be observed unless the return of income was required under the special provisions relating to search cases. He further held that the language used in sections 153A and 142(1) was not different. Accordingly, he rejected the relevant contentions of the assessee. The Assessing Officer, accordingly, issued notice under section 143(2) on 6-3-2006, and proceeded for completing the assessment in terms of provisions of sections 153A & 153B read with other procedural provisions of the Act and completed the assessment by d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein was not to apply and, therefore, the assessment order could not be termed as invalid for the reason that notice under section 143(2) had been served beyond the period of 12 months from the end of the month in which such return was furnished. He further contended that absurdity had to be avoided and if a literal construction resulted into such a situation then it was preferable to make a purposive construction to further the objects of the Act. For this proposition, he placed reliance on the decision of the Hon'ble Supreme Court in the case of CIT v. J.H. Golta [1985] 156 ITR 323, and in the case of Shree Sajjan Mills Ltd. v. CIT [1985] 156 ITR 585 (SC). 6. The Learned counsel, on the other hand, contended that the provisions of section 153A, provided for assessment/reassessment of total income of each of six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. Hence, assessment year 2004-05, being the search year was not at all covered under the provisions of section 153A. In this regard, he placed reliance on the following :- (i) Circular No. 7 of 2003, dated 5-9-2003, reported in 263 ITR (St.) 62 Pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 132A is made has to be done in accordance with the provisions of section 153A/153B of the Act. (ii) If so, then whether time limit for service of notice under section 143(2) of the Act shall also apply and how such time limit shall be determined. 11. Before proceeding further, we consider it relevant to reproduce relevant provisions of sections 153A & 153B as under :- "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 requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed :" 12. If we analyze the provisions of section 153A again, then, it emerges that this section operates in the following fields :- (1) It gives jurisdiction to the Assessing Officer to issue notice for six back assessment years and to assess or reassess total income of such six assessment years. (2) The Assessing Officer has to assess or reassess the total income in respect of each assessment year falling within such six assessment years. (3) The pending assessment or reassessment relating to any assessment year falling within the period of such six assessment years shall abate. (4) The tax is to be charged at the rate or rates as applicable to specific assessment year falling in such block. (5) Save as otherwise provided in sections 153A, 153B and section 153C, all other provisions of the Act shall apply. (6) No time limit has been prescribed for issue of notice under section 153A nor any time limit has been prescribed for filing of return pursuance to n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in respect of cases covered by section 132 or section 132A. 14. It is further pertinent to note that new scheme of assessment in respect of search conducted after May 31, 2003, is materially different from special procedure of search assessment contained in Chapter XIV-B which was abandoned as to controversies sprung up questioning treatment of particular income as undisclosed and whether there Was any material found during the course of search relatable thereto. In this background, when we read, the provisions of section 153A, it is noted that it starts with a non-obstante clause overriding the provision of sections 139, 147, 148, 149, 150, 151 and 153. It is also noted that return under section 153A has to be in prescribed form. The other important effect of provision of section 153A(1) is that it gives a jurisdiction to the Assessing Officer to initiate assessment proceedings by issuing notice under this section. This section also creates an outer limit of the six back assessment years for which an assessment/reassessment could be done under this section in case of search/requisition made under section 132/132A. However, in our view; there cannot be a mandatory jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be any prejudice to the assessee merely because an Assessing Officer proceeds to make an assessment in case of year of search as per the provisions of section 153A read with section 153B, particularly when time limit of service of notice under section 143(2), subject to provisions of section 153B, would also be applicable (reasons on this aspect are given later in this order). 16. We also find that as per Explanation (i), time limit prescribed under section 153B for completion of assessment under section 153A is to override the time limit provided for completion of assessment under section 143 or 144 in section 153 of the Act. We further find that the heading of section 153B is "Time limit for completion of assessment under section 153A". It is a settled principle that heading of a particular section also indicates about nature and scope of such provision and if viewed in this perspective, then, it would again be clear that assessment of the previous year, in which search took place, is required to be completed as per the provisions of section 153A read with section 153B of the Act. In this regard, memorandum explaining the Finance Bill, 2000 as reported in 260 ITR (St.) 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction over such other person receives the books of account or documents, etc. before the due date of furnishing the return of income for such assessment year, then also, the assessment would be completed in the manner provided under section 153A of the Act because in that case, the Assessing Officer can assess/reassess under section 153C(1) in routine course. We are, accordingly, of the view that if under specific circumstances as provided under section 153C(2) assessment of a person covered under section 153C has to be completed in the manner provided in section 153A of the Act, then, there should not be any no doubt that the assessment in case of a searched person for the year of search has to be completed under section 153A read with section 153B of the Act. 19. In view of the above discussion, we hold that the ld. CIT(A) was not correct in law in holding that assessment for the previous year in which search took place or requisition was made had to be completed under the normal provisions of the Act. 20. Now, we shall deal with the second issue. The ld. Departmental Representative has contended that though the notice under section 143(2) was required to be served, howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer to assess the total income of an assessee as per provisions of law and, secondly, it requires that in doing so, the Assessing Officer shall follow the principles of natural justice by giving due opportunity to the assessee before completing the assessment and, therefore, when reassessment is made under section 147, then only the second aspect of the provisions of section 143 comes into play. We are further of the view that the second aspect as mentioned above rather makes it obligatory on the part of the Assessing Officer to serve the notice under section 143(2) within the time limit prescribed thereunder as there is no exemption from such requirement in sections 153A, 153B and 153C of the Act. We are further of the view that the provisions of Explanation (i) to section 153A are materially different from the provisions of section 158BC(b) as in that section, the words "so far as may be" existed and such words are not used by the Legislature in such explanation. Having stated so, it is also important to note that in case of block assessment under section 158BC in spite of having a different wordings, judicial opinion was that notice under section 143(2) was requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice issued under section 153A and not from 1-11-2004 when return for assessment year 2004-05 had been filed by the assessee. 22. We further add that the time period of 12 months for service of notice under section 143(2) of the Act is the outer limit for making an assessment under section 143(3) as such or under section 143(3) read with section 147 of the Act. Hence, such time limit has to be exercised in a manner so as the Assessing Officer can complete the assessment under section 153A or under section 53C, read with section 153A within the time limit prescribed under section 153B(b) of the Act. To put it differently, time limit prescribed under section 143(2) for service of notice cannot extend the time limit prescribed for completion of assessment under section 153B(1)(b) of the Act. This is also so because as per Explanation (i) to section 153A, the time limit prescribed for completion of assessment proceedings under section 153B(1)(b) would prevail over the limit prescribed as per the provisions of section 143(2) of the Act. Accordingly, we hold that condition of time limit for service of notice under section 143(2) shall also apply to assessment/reassessment proceedings c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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