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TMI Blog2019 (9) TMI 950X X X X Extracts X X X X X X X X Extracts X X X X ..... with due care and given a finding that the additional ground could not be admitted at that stage. Therefore, the factual conclusion drawn by the Tribunal are not open to review by way of application u/s 254(2) of the I.T.Act. If the assessee wants to challenge the conclusion or finding given by the Tribunal on rejection of the additional ground, which is not supported by any evidence on record, the remedy lies to the assessee elsewhere. Order of the Tribunal could be challenged as it considered all relevant details minutely and drew necessary factual inferences in a fair, reasonable and impartial manner. We, therefore, see no reason to entertain the miscellaneous applications, as there is no mistake apparent on record within the meaning of section 254 - miscellaneous applications filed by the assessee are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of section 153A to 153D of the Act brought on Statute by the Finance Act, 2003 w.e.f. 1.6.2003. These provisions have replaced the earlier provisions relating to special procedure for assessment of search cases in section 158B to 158BI of the Act. In the instant case, the action was taken in the hands of the assessee u/s. 153C r.w.s. 153A of the Act consequent to the search conducted u/s. 132 of the Act. Therefore, provisions of section 153C stand applicable in the case of present assessee to frame the assessment. For the sake reference, we prefer to reproduce section 153A to 153C of the Act hereunder: "153A. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall - (a) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le at the rate or rates as applicable to such assessment year. 153B. (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,- (a) in respect of each assessment year falling within six assessment years referred to in clause (b) of 53[sub-section (1) of] section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed : Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or one year from the end of the financial year in which books of account or documents or assets seized or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 92CA is made, the provisions of clause (a) or clause (b) of this sub-section, shall, notwithstanding anything contained in clause (i) of the second proviso, have effect as if for the words "two years", the words "three years" had been substituted: Provided also that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing [on or after the 1st day of April, 2005 but before the 1st day of April, 2009] and during the course of the proceedings for the assessment or reassessment of total income in case of other person referred to in section 153C, a reference under sub-section (1) of section 92CA- (i) was made before the 1st day of June, 2007 but an order under subsection (3) of section 92CA has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the period of limitation for making the assessment or reassessment in case of such other person shall, notwithstanding anything contained in clause (ii) of the second proviso, be the period of thirty-three months from the end of the financial year in which the last of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely after the exclusion of the aforesaid period, the period of limitation referred to in clause (a) or clause (b) of this 67[subsection] available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. (2) The authorisation referred to in clause (a) and clause (b) of sub-section (1) shall be deemed to have been executed,- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 8.2 From a plain reading of these sections, we find that section 153A is procedural section which deals with the mode of assessment. A notice u/s. 153A of the Act can only be issued to such person where a search is initiated u/s. 132 of the Act or books of account or other documents or any assets are requisitioned u/s. 132A of the Act after 31st day of May, 2003, requiring him to furnish within such period as may be specified in the notice, return of income in respect of each assessment year following within six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisitioned is made. Thereafter assessment would be framed as per the provisions of section 143 of the Act. Section 153C deals with the situation where the AO is satisfied that any money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisitions belongs or belong to a person other than the person referred to in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In other words, the person who has passed the order in the case of the searched person u/s. 153A of the Act is required to record the satisfaction note before completion of assessment u/s. 153A of the Act. 8.3 The contention of the assessee is that satisfaction is said to have been recorded by the AO who has passed the order u/s. 153A of the Act in the case of the assessee and it is also satisfaction note to that effect that there exists income tax belonging to any person other than the searched person in respect of whom search was made u/s. 132 of the Act or requisition of books of account were made u/s. 132A of the Act. The satisfaction note is to be recorded by the AO who has initiated proceedings for completion of assessment u/s. 153A of the Act and also it should be recorded. It is also to be noted that for the purpose of s. 153C a satisfaction note is sine qua non and must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) At the time of or along with initiation of proceedings against the searched person u/s. 153A of the Act; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecovered during search had not been handed over to the AO having jurisdiction in the matter. No proceeding under s. 158BC had been initiated. There is, thus, a patent non-application of mind. A prescribed form had been utilized. Even the status of the assessee had not been specified. It had only been mentioned that the search was conducted in the month of November, 1995. No other information had been furnished. The provisions contained in Chapter XIVB are drastic in nature. It has draconian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened. As the AO has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the AO having jurisdiction over the matter, the impugned judgments of the High Court cannot be sustained." 8.5 In the present case, there was a search u/s. 132 of the Act in M/s. Kunhitharuvai Memorial Charitable Trust, Calicut which revealed that the assessee received training charges from Colleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als connected with the assessments u/s. 153C are part of record of the Assessing Officer which the assessee could have asked for or get copy of the same by making a request in accordance with rule. The failure on the part of the assessee to do the needful will not support the assessee's case. In other words, the assessee has not brought on record all the facts necessary for adjudication of the issue. The latches on the part of the assessee is to be viewed as a factor against the assessee. From the judgment of the Supreme Court in the case of National Thermal Power Corporation Ltd. vs. CIT (229 ITR 383), the following principles emerge regarding the right of the parties to raise a new plea for the first time before the Tribunal: a) It is the discretion of the Tribunal to admit or not to admit a new ground to be raised before it. b) If the Tribunal is required to consider only the question of law arising from the facts which are on record in the assessment proceedings. Such question should be allowed to be raised. c) That the proceedings before the tax authorities are for correctly assessing the tax liability of an assessee in accordance with law. 8.6 In our opinion, the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available in the departmental records. The reliance by the Tribunal on the decision in the case of Dr RP.Patel's case (supra) is hence an error of law. The appellant now submits that Honourable tribunal should have appreciated that the additional ground did not pertain to any additional relief or claim to which the appellant was entitled but not claimed before the lower authorities. The additional ground pertained to assumption of jurisdiction. The entire records relating to the same were in the possession of the department only and not with the appellant. The department should have produced all their records to rebut the ground taken by the appellant and it was not for the appellant to obtain this internal departmental records and to produce the same before the honorable tribunal. It is submitted that the honorable tribunal has erred in concluding that the additional ground cannot be admitted for the reason that the challenge to notice issued u/s 153A (a) read with section 153C of the Act was not raised before the authorities below. On the contrary the Honourable Tribunal should have held that the additional ground which was a purely on a legal issue going to the root of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rived at by the Tribunal are perverse. It is not necessary for the Tribunal to state in its judgment specifically or in express words that it has taken into account the cumulative effect of the circumstances or has considered the totality of the facts, as if that were a magic formula; if the judgment of the Tribunal shows that it has, in fact, done so, there is no reason to interfere with the decision of the Tribunal." 6.1 It is to be noted that at the time of hearing of the appeals on earlier occasion, the assessee / the learned Counsel for the assessee only raised the additional ground and made limited argument in this regard and not filed any application for filing additional evidence under Rule 29 of the I.T.Rules. There was not a word uttered by the learned AR during the course of original hearing of the appeals inviting our attention to the evidence required to consider the additional ground by the Tribunal. Rather as noted by the Tribunal in its order, the learned Counsel for the assessee only argued on the point of admission of additional ground. Since the production of additional evidence required by the assessee as additional ground is directly linked to the examinatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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