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TMI Blog2013 (12) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer observed that while computing tax, the taxable income was wrongly taken as Rs.26,34,59,42,364, hence, the mistake was rectified under section 154 of the Act on December 31, 2004 revising the total income at Rs.26,35,49,42,360. The Assessing Officer further observed that the assessee, in a note to its annual report for the financial year 2004-05 relevant to the assessment year 2005-06 has mentioned that the excess depreciation claimed by the assessee in the past years amounting to Rs. 2,950 crores has been offered to tax in the financial year 2004-05. However, in the note to the computation of income, the assessee has claimed refund on account of these payments as according to the assessee as per the consistent method followed by the assessee the valuation of securities done by the assessee in the past years are in order. The method adopted by the assessee was not found to be in conformity with the Central Board of Direct Taxes and the Reserve Bank of India guidelines. Accordingly notice for reopening the assessment under section 148 dated August 28, 2006 was issued and served on the assessee. The assessee filed reply vide their letter dated September 29, 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt orders for the same assessment year. 1.2 The appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the reassessment proceedings were not in accordance with law and the provisions of the Income-tax Act, 1961. 1.3 The appellant submits that the reassessment proceedings be held to be bad in law and struck down." 5. At the time of hearing learned counsel for the assessee submits that in this case a search action under section 132 of the Act was conducted at the premises of one of the branches at Tiruchengode in Tamil Nadu on July 2, 2005 wherein some of the documents pertaining to deposits were seized. The Assessing Officer issued notice under section 153A of the Act on May 4, 2007 and in response the assessee vide letter dated May 17, 2007 requested to treat the return of income filed originally as having been filed in response to the said notice. The Assessing Officer after issuing statutory notices under section 143(2) and 142(1) of the Act, however, completed the assessment for the same assessment year 2001-02 at the same very income, i.e. Rs. 30,53,53,17,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the learned Commissioner of Income-tax (Appeals), the same may not be admitted. He further submits that the assessee is advised by the battery of advocates and chartered accountants, therefore, the additional ground taken by the assessee, at this stage, is not permissible. He further submits that other appeals of the assessee on the similar issues are pending, therefore, it is better to decide the impugned appeals along with the other pending appeals. 7. We have carefully considered the submission of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that in this case a search and seizure action under section 132(1) of the Act was taken place on the assessee on July 2, 2005 and on the date of search proceeding under section 148 of the Act were not initiated which initiated on August 28, 2006 for the assessment year 2001-02 and on July 25, 2006 for the assessment year 2002-03 and the assessments were completed on October 31, 2006. 8. The assessee in the additional ground has challenged the validity of the impugned assessment order on the ground that as on the date of search, i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w can be raised at any stage of the proceedings under the Income-tax Act. The ground raised in appeal by the assessee based on section 10(23C)(iiiad) is certainly a pure question of law and on the same facts the issue was found in favour of the respondent. So much so, we feel the respondent was rightly found to be eligible to raise the additional and alternate ground of exemption which was found in their favour." 12. In the absence of any distinguishing feature brought on record by the Revenue, keeping in view that all the material facts are available on record and the legal ground taken by the assessee goes to the root of the matter, we respectfully following the ratio of the above decisions, admit the additional ground raised by the assessee and reject the plea taken by the learned Departmental representative. 13. On merit, learned counsel for the assessee submits that since in this case, after the date of search, i.e., on July 2, 2005, the assessment had to be made under the provisions of section 153A 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Recently, their Lordships of the hon'ble Delhi High Court in CIT v. Anil Kumar Bhatia [2012] 211 Taxman 453 (Delhi) ; [2012] 24 taxmaan.com 98 (Delhi) after considering the relevant provisions of section 153A of the Act and Central Board of Direct Taxes Circular No. 7 of 2003 dated September 5, 2003 ([2003] 263 ITR (St.) 62) have observed and held as under : "16. We now proceed to discuss the correctness of the conclusion of the Tribunal that the Assessing Officer had wrongly invoked section 153A of the Act. This section was introduced into the Act by the Finance Act, 2003 w.e.f. June 1, 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2003 reported in [2003] 263 ITR (St.) 62, the new Scheme was explained by the CBDT in the following manner : "65. The special procedure for assessment of search cases under Chapter XIV-B be abolished : 65.1 The existing provisions of the Chapter XIV-B provide for a single assessment of undisclosed income of a block period, which means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted and also includes the period up to the date of the commencement of such search, and lay down the manner in which such income 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 158B 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for requisition under section 132A, as the case may be, was executed. 65.8 It also provides that in computing the period of limitation for completion of such assessment or reassessment, the period during which the assessment proceeding is stayed by an order or injunction of any court ; or the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section, or the time taken in reopening the whole or any part of the proceeding or 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 availab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be made in a single assessment order. The block assessment so made was independent of and in addition to the normal assessment proceedings as clarified by the Explanation below section 158BA(2). After the introduction of the group of sections namely, 153A to 153C, the single block assessment concept was given a go-by. Under the new section 153A, in a case where a search is initiated under section 132 or requisition of books of account, documents or assets is made under section 132A after May 31, 2003, the Assessing Officer is obliged to issue notices calling upon the searched person to furnish returns for the six assessment years immediately preceding the assessment 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 Assessing Officer is required to exercise the normal assessment powers in respect of the previous year in which the search took place. &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ballabh Gupta [2007] 288 ITR 347 (MP) it has been held (page 348-349, headnote) as under : "Held, dismissing the petition, (i) that while deciding the legality of notice issued under section 148, it was not necessary to look into the provisions of section 153A because both sections operate in different fields and spheres. Admittedly, the assessment year 1997-98 in question did not fall within the six years as per the requirement of section 153A and hence no action could be taken for making reassessment under section 153A in respect of the assessment year 1997-98. (ii) That the case of the assessee was not that the notice did not satisfy the requirements of section 148. On the other hand, it clearly showed that, firstly, the notice under section 148 could be issued for the assessment year 1997-98 being well within time. Secondly, the Assessing Officer was empowered and had an authority to issue such notice. Thirdly, the notice contained reasons as required under section 148 which were supplied to the assessee and, lastly, on the strength of the material collected in the raid conducted on October 8, 2003, in the premises ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 words, harmonious interpretation will produce the following results : (a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment under section 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the Assessing Officer, (b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the impugned assessment completed under section 143(3) read with section 147 of the Act is a nullity and as such the assessment order dated October 31, 2006 passed under section 143(3) read with section 147 of the Act is illegal, arbitrary, wholly without jurisdiction and, hence, the same is quashed. 21. Since we have decided the issue on the legal ground raised by the assessee, therefore, we do not consider it necessary to discuss the other grounds raised by the assessee on merits of the additions sustained. Accordingly the other grounds taken by the assessee are rejected. I. T. A. No. 5421/Mum/2011 (for the assessment year 2002-03) 22. The additional ground raised by the assessee is as under : "Validity of reassessment proceedings : 1.1 The Assessing Officer has erred in making multiple assessment orders for the same assessment year. 1.2 The appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the reassessment proceedings were not in accordance with the law and the provisions of the Income-tax Act, 1961. 1.3 The appellant submits that the reassessment proceedings be held to be bad in law and struck down." ..... X X X X Extracts X X X X X X X X Extracts X X X X
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