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TMI Blog2014 (3) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... ch action - reassessments made by the AO u/s 153A in the case in which the assessments have already been concluded, without any incriminating material being found during the search action conducted u/s 132 of the Act, are liable set aside – thus, the additions made by the AO in assessments proceedings u/s 153A also set aside – Decided in favour of Assessee. - ITA Nos.2889/Mum/2011, ITA Nos.2890/Mum/2011, ITA Nos.2891/Mum/2011, ITA Nos.2930/Mum/2011, ITA Nos.2931/Mum/2011 - - - Dated:- 26-2-2014 - Shri D. Karunakara Rao And Shri Sanjay Garg,JJ. For the Petitioner : Shri Vijay Mehta For the Respondent : Shri S. J. Singh ORDER Per Sanjay Garg, Judicial Member: These cross appeals i.e. three by the assessee and two by the revenue arise out of the common order of the Commissioner of Income Tax (Appeals)-40, [hereinafter referred to as CIT(A)] Mumbai, dated 25.01.2011 pertaining to A.Ys. 2003-04, 2006-07 2007-08. As common issues are involved in these appeals, they were heard together and are being disposed of by this common order for the sake of convenience and brevity. 2. A search and seizure operation was carried out in the case of the assessee on 19.07.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial against the assessee. 7. On the other hand, the contention of the learned DR has been that the earlier the return filed by the assessee for AY 2006-07 2007-08 were processed by the AO u/s 143(1) of the Act which amounts to just the intimation and cannot be said to be an assessment. He has further contended that as per the provisions of section 153 A it is mandatory for the AO to assess or reassess the income of the assessee for six earlier years irrespective of the availability of any incriminating material. 8. We have considered the respective submissions of the ld. representatives of the parties and have also gone through the record. This issue relating to the validity of assessment made u/s 153A without having any incriminating material found during the search action u/s 132 of the Act, has recently came into consideration before the co-ordinate bench of the Tribunal in the case of The ACIT Cent. Cir. 33, Mumbai Vs.Shri Jayendra P Jhaveri, ITA Nos.: 2141, 2142, 2143 2144/M/2012 CO Nos.248, 249, 250 251/M/13 decided on 20.02.2014 (One of us being party to that order), wherein the co-ordinate bench of the Tribunal has discussed the issue in detail and has mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiate re-assessment proceedings even when intimation u/s. 143(1) had been issued. So the proposition of law laid down in the case of Rajesh Jhaveri Stock Brokers P. Ltd. (supra) relates to the powers of the AO for re-opening of assessment u/s. 147in relation to the assessment proceedings conducted under section 143(1) viz-a-viz u/s 143(3) of the Act. (as were in force during the relevant period, since section 143 has been further amended vide Finance Act 2008 w.e.f 01.04.2008.) It is to be noted that powers of the AO to re-open an assessment u/s. 147 is subject to limitation of time period as prescribed u/s. 149 of the Act. So the reasonable conclusion will be that whether the return was processed u/s. 143(1) or u/s. 143(3), if the AO has a reason to believe that any income chargeable to tax has escaped assessment, he can re-open the assessment u/s. 147 by issuing notice u/s. 148 but within the time limit as prescribed u/s. 149 of the Act. 10. So far so, the question as to the processing of return u/s. 143(1) viz-a-viz assessment made u/s. 143(3) is concerned, it may further be observed that after processing of return u/s. 143(1) the same can be assessed u/s. 143(3) by issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of All Cargo Global Logistics Ltd. (supra), has held that assessment u/s. 153A can be made on the basis of incriminating material found during the search. The Hon'ble Rajasthan High Court in the case of Jai Steel (India) v. ACIT (2013) 259 CTR 281 has held that in case nothing incriminating is found on account of search or requisition, the question of reassessment of the concluded assessment does not arise. Under such circumstances, it is not open to the assessee to seek deduction or claim expenditure which has not been claimed in the original and already concluded assessment, in the case of assessment u/s. 153A in pursuance of search action. Hon'ble High Court rejected the argument of the learned counsel for assessee to the effect that once the notice u/s. 153A is issued, the assessments for six years are at large both for the AO and the assessee. It has been further held by the Hon'ble High Court that the provisions of section 153A to 153C cannot be interpreted to be further innings to the AO and/or assessee beyond the provisions of section 139(return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263( revision of orders) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law as it may amount to defeating one of the statutory provisions in the grab of acting under other provisions of the statute. Once assessment u/s. 143(3) had been annulled by higher authorities on the ground of legality of notice u/s. 143(2) of the Act, re-opening u/s. 147 on that very ground would mean nothing else but the abuse of process of law. Hence, the contention of the learned DR that as the return was processed u/s. 143(1) and it was a mere intimation hence, the AO had reason to believe that income had escaped assessment and it was open to the AO to re- assess the income u/s. 153A, even without any incriminating material found during the search action, is not tenable. 12. The learned DR has further relied on the judgment of the Hon'ble Andhra Pradesh High Court in the case of Gopal Lal Badruka Vs. DCIT , 346 ITR 106 (AP) to stress the point that the AO can use evidence other than that found during the course of search while framing the assessment u/s. 153A of the Act. The said judgment of Hon'ble Andhra Pradesh High Court has been duly discussed by the Special Bench of the Tribunal in the case of All Cargo Global Logistics Ltd. (supra), holding that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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