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TMI Blog2016 (8) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... , 315/13 and 301/13 are concerning the assessment years 2001-02, 2003-04 and 2004-05 respectively and ITA.Nos.296/13 and 314/13 are concerning the assessment year 2005-06. In these appeals, the Revenue is challenging the common order passed by the Tribunal, by which, out of the six appeals filed by the assessee concerning the assessment years 2001-02 and 2003-04 to 2007-08, appeals for assessment years 2001-02, 2003-04, 2004- 05 and 2005-06 were allowed, appeals for assessment years 2006-07 and 2007-08 were partly allowed and the two appeals filed by the Revenue concerning the assessment years 2004-05 and 2005-06 were dismissed. 2. Briefly stated, facts of the case are that there was a search under section 132 of the Income Tax Act on 13.2.2007 in the case of one P.A.Kuriakose and Paulson P.Varkey group, which is stated to be mainly engaged in hotel and jewellery business. In the course of search in M/s.Matha Enterprises, a concern of the aforesaid group, large scale suppression of sale was found. It was also found that M/s.P.A.Kuriakose Jewellers and M/s.Matha Enterprises had introduced loans and credits in the name of the family members. The respondent assessee is one of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment under section 153C, materials should be recovered in the search. Learned senior counsel for the Revenue impugned this finding of the Tribunal mainly making reference to the judgment of this Court in ITA.169/15 and connected cases and according to him, even in the absence of recovery of incriminating materials, an assessment under section 153C read with section 153A is liable to be sustained. 6. This contention, which was refuted by the learned counsel for the assessee, can be answered in the light of the statutory provisions itself. Section 153C (1) alone, being relevant, read as follows: 153C. Assessment of income of any other person- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. 9. This provision also starts with a non obstante clause excluding the provisions that are excluded in section 153C and it authorises the Assessing Officer to issue notice to the other person mentioned in section 153C, 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 prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to section 143(2). This proviso states that no notice under clause (2) of section 143 shall be served on the assessee after the expiry of 12 months from the month in which the return is furnished. The Tribunal found that the return of income for the assessment years 2001-02, 2003-04, 2004-05 and 2005-06 were filed on 30.7.2001, 28.11.2003, 27.7.2004 and 1.2.2006 respectively. The Tribunal took note of the fact that search was made only on 13.2.2007 and that by that time, 12 months' period had already expired from the date of filing of returns for the assessment years 2001-02, 2003-04, 2004-05 and that even for the assessment year 2005- 06, the period expired on 31.3.2007. On that basis, the Tribunal held that for the assessment year 2001- 02, 2003-04, 2004-05 and 2005-06, the assessment proceedings are terminated/concluded by operation of law and were not pending. Therefore, according to the Tribunal, for these assessment years, the income disclosed in the regular returns before the date of search cannot be re-assessed under section 153C after the search. 14. Learned senior counsel for the Revenue contended that this conclusion of the Tribunal relying on the proviso to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the provisions of section 142, subITA. 296/13 con. cases 14 sections (2) and (3) of section 143, section 144 and section 145 shall, so far as may be, apply. This is not the position under section 153A. The law laid down in Hotel Blue Moon [2010] 321 ITR 362 (SC), is thus not applicable to the facts of the present case. 10. The decision of Lunar Diamonds Ltd. [2006] ITR 1 (Delhi), Vardhman Estate [2006] 287 ITR 368 (Delhi) and Bhan Textiles P. Ltd. [2006] 287 ITR 370 (Delhi) relied upon by learned counsel for the assessee related to the requirement of service of notice upon the assessee within a prescribed time and thus not applicable to be present case. The case of Pawan Gupta [2009] 318 ITR 322 (Delhi) related to a mandatory issue of notice under section 143(2) of the Act in the case of regular assessment as also on block assessment. This being not a case of assessment based on search under section 153A, the same is not applicable to the present case. In the case of Raj Kumar Chawla [2005] 277 ITR (AT) 225 (Delhi) {SB} relied upon by learned counsel for the assessee was that of the Tribunal, wherein, a view was taken that if a return filed under section 148 of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(2). 13. The words so far as may be in clause (a) of sub-section (1) of section 153A could not be interpreted that the issue of notice under section 143(2) was mandatory in case of assessment under section 153A. The use of the words so far as may be cannot be stretched to the extent of mandatory issue of notice under section 143(2). As is noted, a specific notice was required to be issued under clause (a) of sub-section (1) of section 153A calling upon the persons searched or requisitioned to file return. That being so, no further notice under section 143(2) could be contemplated for assessment under section 153A. 16. Following the judgment in Ashok Chaddha (supra), the Punjab Haryana High Court in Tarsem Singla (supra) also reiterated the same legal position. Obviously therefore, there is no requirement of a notice under section 143(2) for completing an assessment under section 153C and if that be so, the question of time limit prescribed under the proviso to section 143 (2) does not have any relevance for assessments under section 153C. Therefore, that finding of the Tribunal that the assessments for the years 2001-02, 2003-04, 2004-05 and 2005-06 are terminated/co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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