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TMI Blog2014 (10) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... , which were subsisting when the search was made, the AO would be competent to reopen the assessment proceeding already made and determine the total income of the assessee - the reasons given by the Tribunal that no material was found during the search cannot be sustained, since it has been held that the AO has the power to reassess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of the original assessment - relying upon CIT v. Anil Kumar Bhatia [2012 (8) TMI 368 - DELHI HIGH COURT] - the Tribunal has committed an error in dismissing the appeal of the Revenue – thus, the order of the Tribunal is set aside and the matter is remitted back for re-consideration – Decided in favour of revenue. - IT Appeal No. 56 of 2011 - - - Dated:- 11-7-2014 - TARUN AGARWALA AND DINESH GUPTA, JJ. JUDGEMENT Tarun Agarwala J.- For the assessment year 2000-01, the assessee filed the regular return of income on August 29, 2000, showing a total income of ₹ 14,03,630. In the regular return of income, the assessee has showed income from salary from M/s. So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal of Delhi in the case of Anil Kumar Bhatia v. Asst. CIT [2010] 1 ITR (Trib) 484 (Delhi). The Tribunal held that the process of return under section 143(1) of the Act stood completed prior to the search in which the gift deeds were considered and since no incriminating materials in relation to the gift deeds were found in the search, no addition on such gift could be made in assessment proceedings under section 153A of the Act. The Tribunal, accordingly, held that no addition could be made on the gift. The Revenue, being aggrieved by the order of the Tribunal has filed the present appeal under section 260A of the Act praying that the following substantial questions of law arise : 1. Whether Income-tax Appellate Tribunal has erred in law in dismissing the appeal of the Department and holding that no addition can be made for gift in the assessment completed under section 153A unless some incriminating material was found during the course of search, thus ignoring the provisions of law as contained in section 153A which required the Assessing Officer to assess or reassess the total income as defined in section 2(45) of the Income-tax Act, 1961 ? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) of section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.-For the removal of doubts, it is hereby declared that (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section ; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 65.6 The new section 153B provides for the time limit for completion of search assessments. It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year, falling within six assessment years under section 153A within a period of two years from the end of the financial year in which the last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 65.10 An appeal against the order of assessment or reassessment under section 153A shall lie with the Commissioner of Income-tax (Appeals). 65.11 Consequential amendments have also been made in sections 132, 132B, 140A, 234A, 234B, 246A and 276CC to give reference to section 153A in these sections. 65.12 These amendments will take effect from June 1, 2003. Earlier, Chapter XIV-B provided for assessment to be made in cases of search and seizure, which was known as post-search block assessment scheme because this Chapter provided for single assessment to be made in respect of a block period of 10 assessment years prior to the assessment in which the search was made. With the introduction of section 153A to section 153C of the Act, the single block assessment concept was given a goby. Under section 153A of the Act, in case where a search was initiated under section 132 of the Act or requisition of books of account, documents or assets was made under section 132A after May 31, 2003, the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the undisclosed income, notwithstanding the assessee had filed the return before the date of search which stood processed under section 143(1)(a) of the Act. In the light of the aforesaid, the reasons given by the Tribunal that no material was found during the search cannot be sustained, since we have held that the Assessing Officer has the power to reassess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of the original assessment. We find that the Tribunal dismissed the appeal while relying upon the decision of a co-ordinate Bench of the Tribunal in the case of Anil Kumar Bhatia v. Asst. CIT [2010] 1 ITR (Trib) 484 (Delhi). We find that the said decision of the co-ordinate Bench of the Tribunal was set aside by the Delhi High Court in CIT v. Anil Kumar Bhatia [2013] 352 ITR 493 (Delhi) ; [2012] 24 taxmann.com 98 (Delhi). We find that the Tribunal only dismissed the appeal on this legal issue and had not considered the matter on the merits. For the reasons stated aforesaid, the Tribunal has committed an error in dismissing the appeal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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