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TMI Blog2016 (6) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... ven if no documents are unearthed or any statement made by the assessee during the course of search under section 132 and no materials are received for the aforespecified period of six years, the assessee is bound to file a return, is the scheme of the provision. Even though the second proviso to Section 153A speaks of abatement of assessment or reassessment pending on the date of the initiation of search within the period of six assessment years specified under the provision that will also not absolve the assessee from his liability to submit returns as provided under Section 153A(1)(a). This being the scheme of the provisions of the Act, the Appellate Tribunal ought to have considered the issue with specific reference to the facts involved in the case and as provided under Section 153A. However, we find that the Tribunal without appreciating the facts and circumstances has proceeded purely on the basis that the cases at hand were covered under the Special Bench decision in All Cargo Logistics Ltd. (2012 (7) TMI 222 - ITAT MUMBAI(SB) ). In our view the course adopted by the Tribunal was not the proper one to decide the question with regard to the sustainability of the order pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t conclusion perverse and uncalled for ? (b) Whether on the facts and in the circumstances of the case and when the Assessing Officer is empowered to assess and reassess income for six prior period assessment years notwithstanding the provisions in sections 139, 147, 148, 149, 151 and 153 is not the above approach of the Tribunal one putting an artificial cap on section 153A ? 4. The facts required for the disposal of the above appeals are common in nature and they are as follows: 5. The parties are hereinafter referred to as Revenue and assessee for convenience. The assesses are partnership firms which are carrying on Chit business and money lending business by way of gold loans and pro-note loans. Head office of the firms is at Palayamparambu with three branches at Chalakudy, Annamanada and Mala. The firms are belonging to E.T. Devassy Group. A search under Section 132 was conducted on 26.3.2008 at the premises of some of the firms and residence of Partners. A search under Section 132 was also conducted at the business premises of M/s.New Kerala Investments, Palayamparambu.P.O., Thrissur. Consequent to search the Assessing Officer issued notice under Section 153A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed our attention to Section 153A of the Income Tax Act and contended that the word incriminating is not used anywhere in the said provision and therefore by incorporating such a provision the Tribunal was expanding the scope of the said provision. It is also contended by the learned Senior Counsel that Section 153A can be invoked by the Assessing Officer if and when the search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132A. In that event, learned Senior Counsel contends that the Assessing Officer is vested with powers to issue notice to such person requiring him to furnish within such period as may be specified in the notice, the return of income in respect of each assessment 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 the Income Tax Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. 9. It is also contended that as per Section 153A(1)(b) when such a procedure is adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 21 appeals has conceded that an amount of ₹ 2.75 Crores was not disclosed by him while submitting the returns. It is also contended by the learned Senior Counsel for the revenue that in the remand report the Assessing Officer has stated that there are documents unearthed in the form of day book and ledger relating to assessment years 2006 - 2007 to 2008 - 2009 and seized from the business premises of the assessee firms. It is further contended in that regard by the Revenue that since materials belonging to the assessee firms were found and seized in the course of a search and seizure operation conducted under Section 132 of the IT Act, the Assessing Officer was bound to issue notices to the assessee firms to furnish return for each assessment year falling within the six assessment years immediately preceding the assessment year relating to the previous year in which the search was made. Thus according to the Revenue, under the provisions of law notice under Section 153A are to be issued for all the six assessment years irrespective of whether materials relating to all these assessment years were found or seized during the course of the search. That apart it is contended by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer acting in pursuance of the authorisation will not be sufficient to vitiate the action taken, provided the officer has, in executing the authorisation, acted bonafide. Learned Senior Counsel also invited our attention to the judgement of this court in V. Kunhambu and sons v. Commissioner of Income-Tax [(1996) 219 ITR 235] to explain the nature of Section 132(4) of the Act wherein it is provided that the authorised officer may, during the course of search or seizure, examine on oath any person who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income Tax Act, 1922 (11 of 1922), or under this Act. Further the explanation contained thereunder reads thus: Explanation .- For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the assessment under Section 153A. In order to substantiate the said contention, learned Senior Counsel has invited our attention to the common judgement of the Bombay High Court in Commissioner of Income-Tax v. Continental Warehousing Corporation and All Cargo Global Logistics Ltd. reported in [2015]374 ITR 645] and the judgement of the Delhi High Court in Commissioner of Income Tax v. Kabul Chawla reported in [(2016) 380 ITR 573 (Delhi)]. Learned Senior Counsel contended that in both the judgements the respective courts were considering the question of incriminating materials unearthed during the search operations in order to invoke power under Section 153A vis-a-vis its application to pending proceedings, its abatement and concluded proceedings. 15. The issue that was raised by the assessee before the 1st Appellate Authority as well as the Tribunal with regard to the initiation of proceedings under Section 153A was that since the assessment for the years 2002 - 2003 to 2005 -2006 were concluded as on the date of the search and no proceedings were pending, the scope of assessment under Section 153A for these assessment years was restricted to the incriminatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot produced in the course of original assessment and undisclosed income or property found during the course of search. Learned counsel also contended that going by the first proviso to Section 153A it is categoric and clear that an assessment under Section 153A can be made only on unearthed materials to the relevant assessment years. According to the counsel, in such circumstances, the Tribunal was right in dismissing the appeals on the said ground also. 17. After considering the rival submissions and appreciating and perusing the pleadings and documents produced by the Revenue and the written submissions made by the learned counsel for the assessee, we find that the Tribunal without taking any efforts to find out the facts and circumstances involved in the cases on hand has relied on the decision of the Special Bench of the ITAT in All Cargo Logistics Ltd (supra) and has held that there was no need to interfere with the order passed by the Appellate Tribunal. In order to consider the issue, we think it is profitable to extract Section 132 (1) and clause (a) and sub-section (4). 132. Search and seizure (1) Where the Director General or Director or the Chief Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act, 1922 or under the Act 1961. Therefore, going by the said provision not only the books, documents etc. etc. that are unearthed during the course of search but a statement made by such person during such examination can also be used in evidence in any proceeding under the Income Tax Act, 1961. Thus viewing the provision in such manner, it is an admitted fact that the Managing Partner of the firms in question has given a voluntary statement to the Assessing Officer that there is a undisclosed income of ₹ 2.75 Crores, which according to the learned counsel, was retracted by the Managing Partner subsequently. Thus it can be seen that even according to the assessee, there was a disclosure made by giving a statement during the course of search and therefore, the Assessing Officer, by virtue of the power conferred on him under section 153A was competent to issue notice under the said provision and require the assessee firms to furnish the returns as provided thereunder. Neither under section 132 or under section 153A, the phraseology incriminating is used by the Parliament. Therefore, any material which was unearthed during search operations or any statement made durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under sub- section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or 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. (ii) in an 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. 20. On a plain reading of Section 153A, it is clear that once search is initiated under Section 132 or a requisition is made under Section 132A after the 31st day of May 2003, the Assessing Officer is empowered to issue notice to such person requiring him to f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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