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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 ..... de fresh assessments and assessed additional income of the assessee on account of deemed dividend u/s 2(22)(e) of the Income Tax Act, on protective basis, at Rs.500000/-, Rs.2500000/- Rs.16600000/- & Rs.17000000/- in relation to above mentioned Assessment Years 2003-04, 2005-06, 2006-07 & 2007-08 respectively. 3. The CIT(A) upheld the action of the AO for passing the Assessment Order u/s. 153A of the Income Tax Act. However he confirmed the additions of Rs.500000/- in relation to A.Y. 2003-04, Rs.5258919/- in relation to A.Y.2006- 07 and Rs.3803928/- for A.Y.2007-08 on substantive basis and deleted the remaining additions made by the AO. 4. The assessee is thus in appeals before us against the action of the CIT(A) in upholding of assessment proceedings made by the AO under section 153A of the Act and further against the confirmations of additions by him on substantive basis. Whereas revenue is in appeals against the action of the CIT(A) in reducing the quantum of additions made by the AO u/s 2(22) EUR of the Act in relation to A.Y. 2006-07 & 2007-08. 5. The learned representative of the assessee, at the outset has submitted, as admitted by the learned DR also, that the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;ble Supreme Court in the case of "Rajesh Jhaveri Stock Brokers P. Ltd." (2007) 291 ITR 500 (SC). His contention has been that in the case in hand the assessment was not done originally u/s. 143(3) hence the estimation in question has been rightly made u/s. 153A of the Act by the AO. He has further contended that the principal laid down by the Special Bench of the Tribunal in the case of "All Cargo Global Logistics Ltd." 137 ITD 287 can be applied to the case where the original assessment was completed u/s. 143(3) of the Act and not to the case where the return was processed u/s. 143(1) of the Act. 9. We have considered the submissions of the learned DR. So far so the reliance placed by him in the case of "Rajesh Jhaveri Stock Brokers P. Ltd." (supra) is concerned, we may observe that the issue before the Hon'ble Supreme Court in that case was regarding the reopening of the assessment u/s. 147 of the Act. The Hon'ble Supreme Court held that the proposition of law laid down by the Hon'ble Gujarat High Court in the case of "Adani Exports v. Deputy CIT", (1999) 240 ITR 224 (Guj) was not applicable in that case. In the case of "Adani Exports" (supra), where the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ]. Once the limitation period as prescribed vide proviso to clause (ii) of sub section (2) of section 143 is expired, it is not open to the AO to assess the income u/s. 143(3) of the Act and the return filed by the assessee u/s. 139 is deemed to be accepted, which however, can be re-opened u/s. 147 of the Act subject to the fulfillment of ingredients of section 147 and within the time period as prescribed u/s. 149 of the Act, as discussed in the preceding para. So under such circumstances if the return is processed u/s. 143(1) and not u/s. 143(3) and after the prescribed period of limitation, the same cannot be assessed u/s. 143(3) though it may be interpreted as mere intimation assessment or otherwise, but the same shall be deemed to be accepted by the AO and it will not have any different colour other than the return which is processed u/s. 143(3) of the Act. The only distinguishing feature as held by the Hon'ble Supreme Court in the case of "Rajesh Jhaveri Stock Brokers P. Ltd." (supra), would be that if to a set of facts and circumstances, the AO has applied his mind and he was of the belief that there was no escapement of income then for invoking the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he word 'assess' has been used in the context of abated proceedings and 'reassess' has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only on the basis of the incriminating material found during the course of search or requisition of documents. The Hon'ble High Court while reproducing the proposition of law laid down by the Hon'ble Supreme Court in the case of "K P Varghese v. ITO" (1981) 24 CTR 358 "that it is recognized rule of construction that a statutory proviso must be so construed, if possible, that absurdity and mischief may be avoided" has observed that if the argument of the counsel for the assessee was to be accepted, it would mean that even in case where the appeal arises out of the completed assessment has been decided by the CIT(A) or Tribunal and the High Court, on a notice issues u/s. 153A of the Act, the AO would have power to undo what has been concluded by the High Court. Any interpretation which leads to such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of eight plots, Hon'ble Court held that the AO can estimate the income in respect of all 32 plots. The fact was that incriminating material was found in that case. The other judgment of the Hon'ble Delhi High Court in the case of "CIT vs. Chetan Dass Lachman Dass" [2012] 211 Taxmann 61, strongly relied upon by the learned DR, is also of no help to the revenue but to the assessee only. In the said case the Hon'ble Delhi High Court, in para 11 of the order, though has held that there is no condition in section153A that additions should be strictly made on the basis of evidence found during the course of search or other post search material or information available with the AO which can be related to the evidence found and that the seized material can be relied upon to also draw inference that there can be similar transactions throughout the relevant period, yet, at the same time it has been further observed that this however, does not mean that assessment u/s 153 A can be arbitrarily made without any relevance or nexus with the seized material. The proposition of law which emerges out in the light of the law laid down by the Rajasthan High Court in the case of "Jai St ..... X X X X Extracts X X X X X X X X Extracts X X X X
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