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TMI Blog2020 (2) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... ments were framed by the Asst. Commissioner of Income Tax, Central Circle-32, Mumbai (in short ACIT/ AO) for the A.Ys. 2003-04, 2005-06, 2006-07, 2007-08 vide order dated 20.12.2010 under section 143(3) read with section 153A of the Income-tax Act, 1961 (hereinafter the Act ). 2. The first common issue in these three appeals of assessee is as regards to the order of CIT(A) confirming the action of the AO in making addition without any seized material despite the fact that these are search assessments. The assessee s grounds states that the Principal condition is that there should have been seized material and only then assessment can be framed under section 153A of the Act. The facts and circumstances are identical in these three years. The first ground raised as under: - 2003-04 1. On the facts and circumstances of the appellant s case and in the law the Ld. CIT(A) erred in confirming the additions made by the AO despite the fact that the additions are not based on any seized material. 2005-06 1. On the facts and circumstances of the appellant s case and in the law the Ld. CIT(A) erred in confirming the additions made by the AO despite the fact that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icable where a search or requisition is initiated after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. We find that there is no divergence of views in so far as the provision contained in section 153A till the 1st proviso. The divergence starts from the second proviso which states that pending assessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made u/s 153A. The case of Ld. Counsel for the assessee is that necessary corollary to this provision is that completed assessment shall n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision and the submissions, we find that this provision also makes it clear that the abatement of pending proceedings is not of such permanent nature that they cease to exist for all times to come. The interpretation of the Ld. Counsel, though not specifically stated, would be that on annulment of the assessment made u/s 153(1), the AO gets the jurisdiction to assess the total income which was vested in him earlier independent of the search and which came to an end due to initiation of the search. The provision contained in section 132 (1) empowers the officer to issue a warrant of search of the premises of a person where any one or more of conditions mentioned therein is or are satisfied, i.e. - a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced, b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or c) he is in possession of any money or bullion etc. which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been provided under section 153B. The question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results: - a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) in respect of non-abated assessments, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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