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TMI Blog2013 (6) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. - Decided against the assessee. - D.B. INCOME TAX APPEAL NO.53/2011, D.B. INCOME TAX APPEAL NO.60/2011, D.B. INCOME TAX APPEAL NO.64/2011, D.B. INCOME TAX APPEAL NO.65/2011, D.B. INCOME TAX APPEAL NO.69/2011, D.B. INCOME TAX APPEAL NO.54/2011, D.B. INCOME TAX APPEAL NO.61/2011, D.B. - - - Dated:- 24-5-2013 - Narendra Kumar Jain And Arun Bhansali,JJ. For the Appellant : Mr. Anjay Kothari For the Respondent : Mr. K. K. Bissa JUDGMENT By The Court: (Per Hon'ble Bhansali, J.) These appeals by the respective assesses under Section 260A of the Income Tax Act, 1961 ('the Act') arising out of similar nature orders and involving similar nature substantial questions of law have been considered together and are taken up for disposal by this common judgment. For convenience sake, facts from D.B. Income Tax Appeal No.53/2011 [M/s. Jai Steel (India), Jodhpur Vs. Assistant Commissioner of Income Tax, Jodhpur] are taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over riding all proceedings earlier taken overall. Assessing Officer ('AO') by his assessment order dated 24.02.2006, inter alia, observed and held as under:- The claim of the assessee is not primarily acceptable at this stage as this assessment is inconsiquent to search conducted u/s 132(1) of the Act on 20/02/04. There was no claim in the original return. The proceedings u/s 153A of the Act are analogous to proceedings u/s 147 of the Act to the extent that these proceedings are for the benefit of revenue and not of the assessee. The assessee cannot be permitted to convert the reassessment proceedings as his appeal or revision in disguise, and seek relief in respect of items not earlier claimed in the original return. Reliance is placed on K Sudhakar S. Shanbhag v. Income Tax Officer reported in 241 ITR 865 (Mumbai) where in the decision in the case of judgment of Honorable Supreme Court in the case of CIT v. M/s. Sun Engineering Works Pvt. Ltd. reported in (1992) 198 ITR 297 (SC) has been referred to. The Honorable Supreme Court has held that the assessee cannot claim deduction neither claimed nor allowed in original assessment. Therefore, assessment proceeding in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct year of assessibility of such income falling within such six assessment years. Necessarily the undisclosed income that shall form part of total income would be so taken after defraying for all expenses that are incurred for earning such income by the assessee. Reference to the principle laid in judgment rendered by Apex Court in CIT Vs. Piara Singh (1980) 124 ITR 40 (S.C) is relevant. 23. We, therefore, find ourselves in agreement with the proposition made by the Ld. Departmental Representative that rules of interpretation so applied would not allow making of fresh claims as such. Principle of interpretation laid by Hon'ble Apex Court in Poppatlal Shah Vs. State of Madras, AIR 1953 (S.C) 274 reads as under:- It is a settled rule of construction that to ascertain the legislative intent, all the constituent parts of a statute are to be taken together and each word, phrase, or sentence is to be considered in the light of the general purpose and object of the Act itself. The title and preamble, whatever their value might be as aids to the construction of a statute, undoubtedly throw light on the intent and design of the Legislature and indicate the scope and purpose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to income, expenditure or deduction made in the original assessment proceedings, the assessee or AO is free to determine/claim the same in the assessment proceedings under Section 153A of the Act; for six assessment years, for which, a notice under Section 153A(1)(a) of the Act has been issued and a return has been furnished, the AO was bound to assess the 'total income' of six assessment years immediately preceding the assessment year relevant to the previous year, in which, such search is conducted or requisition is made and, therefore, once the requirement of Section 153A(1)(b) of the Act is to assess the 'total income' in contradistinction to 'undisclosed income', the assessee is entitled to seek deduction, which might not have been sought at the time of original assessment proceedings. Attention was drawn to the language of Section 153A(1)(b) of the Act and to the fact that the Section itself starts with a non obstante clause. Reliance was placed on the judgment of Delhi High Court in Commissioner of Income Tax v. Anil Kumar Bhatia : (2012) 211 TAXMAN 453. Replying to the contentions raised aforesaid, Mr. K.K. Bissa, learned counsel appearing for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent 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 assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [referred to in this sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in case where any assessment or reassessment has abated unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... introduction of Sections 153A to 153C, Chapter XIVB of the Act took care of the assessments to be made in cases of search and seizure, which were called 'block assessment', whereby, a single assessment was required to be in respect of a period of block of ten years prior to the assessment year, in which, the search was made. After the introduction of Sections 153A to 153C, a single block assessment concept has been given a go bye and now the AO has been given the power to assess or reassess the 'total income' of the six years in question in separate assessment orders. To consider the rival submissions made at the Bar in the context of the present case and the substantial question of law framed, the scope of 'assessment and reassessment of total income' under Section 153A(1)(b) and the first and second proviso have to be considered. Further, for answering the above issues, guidance will have to be sought from Section 132(1) of the Act, as Section 153A of the Act cannot be read in isolation, inasmuch as, the same is triggered only on account of any search/requisition under Sections 132 or 132A of the Act. If any books of accounts or other documents relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 153A of the Act is issued, the assessments for six years are at large both for the AO and assessee has no warrant in law. In the firm opinion of this Court from a plain reading of the provision alongwith the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be trigger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings shall abate . The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made. (emphasis supplied) The said judgment also in no uncertain terms holds that the reassessment of the total income of the completed assessments have to be made taking note of the undisclosed income, if any, unearthed during the search and the income that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271 (1)(c) of the Act. The material found in the search may be a ground for notice and assessment under Section 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty. (emphasis supplied) The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. Income Tax Officer : (1981) 131 ITR 597 that it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided. The argument of the counsel for the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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