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TMI Blog2016 (8) TMI 725X X X X Extracts X X X X X X X X Extracts X X X X ..... e being disposed of by this common and consolidated order. ITA. No. 1221/Hyd/2013-Revenue appeal-Assessment year 2003-04 2. Brief facts of the case are that the assessee is an individual deriving income from business and salary. There was a search and seizure operation under section 132 of the Income-tax Act, 1961, in the group cases of AMR Constructions on December 16, 2008. Consequent to the finding of incriminating evidence during the course of search operation in the case of the said company, a search and seizure operation were also conducted in the case of Mr. Lingam Tulasi Prasad and others in January, 2009. Thereafter, notices under section 153A of the Act were issued to the assessee on June 19, 2009, calling for the returns of income for the assessment years 2003-04 to 2008-09. In response to the said notice, the assessee filed his return of income on July 31, 2009, declaring a total income of ₹ 5,47,798. The assessee was also served with the notices under section 143(2)/142(1) of the Act requiring the assessee to file details/information, etc. However, the assessee did not furnish any information as called for nor was there any response from him. Therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record, we find that ground No. 3 raised by the assessee, vide letter dated November 11, 2014, is a legal ground and the relevant facts are all on record. Therefore, respectfully following the judgment of the hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT reported in [1998] 229 ITR 383 (SC), we admit the modified additional ground of Appeal No. 3 and proceed to adjudicate the same as under. 5.1. We have perused the assessment order as well as the order of the Commissioner of Income-tax (Appeals) and we find that there is no recording by the Assessing Officer that any incriminating material has been found from the possession of the assessee during the course of search. Further, we also find that the additions made by the Assessing Officer are not on the basis of any incriminating material found during the course of search but are based on the returns filed by the assessee prior to the date of the search. It is the case of the assessee that when there is no incriminating material found during the course of search, the assessments under section 153A of the Act cannot be made on the basis of the income returned by the assessee or on the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has only granted special leave petition against the ruling of the hon'ble Bombay High Court's finding that no addition can be made in respect of assessments which have become final if no incriminating material is found during search or during section 153A proceedings. It is seen that the hon'ble apex court has not stayed or suspended the operation of the decision of the hon'ble Bombay High Court and, therefore, it cannot be said that the High Court's decision cannot be followed. In the case of CIT v. Raj Kumar Arora [2014] 367 ITR 517 (All), the hon'ble Allahabad High Court was considering the case where in addition to the material found and seized during the course of search, the Assessing Officer had made an addition of also gifts in respect of which no incriminating material was found and it was in these circumstances that the hon'ble High Court held that under section 153A of the Act, 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. In the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six assessment years 'in which both the disclosed and the undisclosed income would be brought to tax'. (iv) Although section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Assessing Officer which can be related to the evidence found, it does not mean that the assessment 'can be arbitrary or made without any relevance or nexus with the seized material. Obviously, an assessment has to be made under this section only on the basis of the seized material'. (v) In the absence of any incriminating material, the completed assessment can be reiterated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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