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TMI Blog2021 (4) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... ugned orders into two batches, 2012-13, 2014-15 and 2017-18 being batch I and 2015-16, 2016-17 being batch II. 3. The admitted facts in common to both sets of writ petitions are that a search was conducted in the premises of C.Vijayabaskar on 07.04.2017. All files relating to the searched entity as well as those associated to him were centralized on 24.09.2019. Notices under Section 153C were issued on 25.10.2019. Incidentally the petitioner points out that the impugned orders of assessment refer to a notice under Section 143(2) that is stated to have been issued on nil.12.2019. 4. However, no notices have, admittedly been issued under Section 143(2) for any of the years in question. If the reference is to notice dated 07.12.2019, this is a questionnaire under Section 142(1) of the Act and not a notice under Section 143(2) of the Act. However, nothing turns on this error which is immaterial to decide the legal issue raised. The petitioner filed responses to the questionnaires and after taking note of the same, assessments have come to be completed on 30.12.2019 in terms of Section 143(3) read with Section 153C of the Act. 5. As regards the first set of writ petitions, the issues ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicated that reference to Section 143(2) therein was not mandatory, but optional. This was negated by the Court stating that where an Assessing Officer intended to make an assessment for repudiation of the return filed by an assessee under Section 158BC, he has necessarily to apply the provisions of Sections 142, 143(2) and (3). The petitioner before me, relies upon this decision greatly. 11. Per contra, Mr.Srinivas, relies on the following decisions: 1. CIT Vs. Rangroopchand Chordia ((2016) 241 Taxman 221 (Madras) 2. Tarsem Singla Vs DCIT ((2016) 385 ITR 138 (Punjab & Haryana)) 3. Ashok Chaddha Vs ITO ((2011) 337 ITR 399 (Delhi) 4. CIT Vs Promy Kuiakose ((2016) 386 ITR 597 (Kerala)) 5. CIT Vs. Vijaybhai N.Chandrani ((2013) 357 ITR 713 (SC)) 6. J.R. Tantia Charitable Trust Vs DCIT ((2011) 15 taxmann.com 311 (Rajasthan) 12. Revenue argues that the language of Section 158BC is different from that of Section 158C and where the former specifically refers to a notice under Section 143(2), the latter merely states that a notice may be issued to the assessee and that the provisions of this Act shall, so far as may be, apply accordingly, as if such return were a return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Rangroopchand Chordia, a Division Bench of this Court dealt with a statutory appeal filed by the revenue under Section 260A of the Act. The appeal had been admitted on two substantial questions relating to whether an addition of undisclosed income may be made on the basis of loose sheets found in the search, particularly when the assessee therein had accepted, in his sworn statement, that the information contained in the sheets reflected his undisclosed income. In that case the assessee had not filed a return within the time stipulated in the notice issued under Section 158BC. The return had been filed one year and seven months after the date of the notice and there was only three days left for the department to complete the assessment. 16. The Bench thus stated that a notice under Section 143(2) could not be issued, since the issuance of such notice contemplated adherence to the principles of natural justice. Since the assessee had created a situation to his advantage by defaulting on the requirement to comply with the notice under Section 158BC, he should not be permitted to take advantage of such default. It was in that context that the Bench held that the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued to the assessee before the completion of assessment s. 153A of the Act provides procedure for assessment in case where a search is initiated or documents are requisitioned. The relevant portion of s. 153A is reproduced here under: "Sec. 153A -Assessment in case of search or requisition [1] Notwithstanding anything contained in s. 139, s. 147, s. 148, s. 149, s. 151 and s. 153, in the case of a person where a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A after the 31st day of May, 2003, the AO 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 in cl. (b), in the prescribed 3 form and verified in the prescribed manner and setting forth such other particulars as may be prescribed 3 and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under s. 139 ;" 9. There is no specific provision in the Act requiring the assessment made under s. 153A to be after issue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 149, etc. Clause(a) thereof provides for issuance of notice to the person searched under s. 132 or where documents etc are requisitioned under s. 132(A), to furnish a return of income. This clause nowhere prescribes for issuance of notice under s. 143(2). Learned counsel for the assessee/appellant sought to contend that the words, "so far as may be applicable" made it mandatory for issuance of notice under s. 143(2) since the return filed in response to notice under s. 153A was to be treated as one under s. 139. Learned counsel relies upon R.Dalmia v. CIT (supra) wherein the question of issue of notice under s. 143(2) was examined with reference to s. 148 by the Supreme Court in the context of s. 147. The Apex Court held as under (page 488): "As to the argument based upon ss. 144A, 246 and 263, we do not doubt that assessments under s. 143 and assessments and reassessments under s. 147 are different, but in making assessment and re-assessments under s. 147 the procedure laid down in sections subsequent to s. 139, including that laid down by s. 144B, has to be followed." 12. The case of R. Dalmia v CIT (supra) primarily was with regard to applicability of s. 144B and s. 153 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has been issued. 24. I am, thus in agreement with the ratio of the decisions cited above and answer this legal issue in favour of the revenue. 25. On the question of adherence to the principles of natural justice, the relevant sequence of dates and events is that a notice under Section 153C was issued on 25.10.2019 in regard to a search conducted in 2017. Unfortunately neither the affidavit filed in support of the writ petitions nor the impugned orders of assessment anywhere mention the date of search and it was only in the course of the submissions made orally that the date of search was noted by me as 07.11.2017. The limitation for completion of assessments would be the 31st of December, 2019. The impugned orders state that centralization of the assessments took place only on 24.09.2019 and pursuant to the centralization, notices under Section 153C were issued on 25.10.2019, leaving barely a period of a little over two months for completion of six search assessments. 26. The notice under Section 153C called upon the petitioner to file returns within a period of 8 days from service of the notice and the returns have been filed on 07.12.2019, in all cases, beyond the period gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing basic and primary details from the petitioner. 30. Be that as it may, a reply was filed by the petitioner to the questionnaire on 13.12.2019 as well a further response to show cause notice on 19.12.2019 wherein he states: '19/12/2019 From . . . . To . . . . Respected Sir, SUB: - Furnishing of particulars to your Show Cause Notice - Completion of Assessment - Reg. REF:- PAN - DHMPK7405P / DCIT / Cent. Circle 2(1)/Chennai / AY2015-16/Your Notice No.ITBA/AST/F/153C(SCN)/2019- 20/1020563310(1) dated 16/11/2019. My reply letter dt.25.11.2019 filed on 18.12.2019. ********** In response to the above mentioned Show Cause Notice, the following further particulars are furnished. 1) In the first place I object to your jurisdiction u/s 153 C of the IT Act, 1961 there was no seized material found at Shri. C. Vijayabaskar's search to warrant assessment jurisdiction u/s 153 C of the Act on me from the issues raised by you in your assessment proceedings notice it is observed that the assessment on me is being proceeded with on the basis of valuation report, which is an opinion having more than two views and not on the seized materials. 2) The assessee submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te to the said officer within a period of sixty days from the date of receipt of such reference.' 34. The Investigating officer is thus, empowered to refer an issue to valuation even during the process of search. However, such report has to be put to the assessee and his full and complete response sought prior to using the same against him. This has not been done in the present case. Thus, while the reference to valuation is in order, the decision making process is flawed and in violation of the principles of natural justice. 35. There is no explanation set forth in counter or at the time of hearing to explain why the assessment had been taken up for completion, at the very fag end of limitation and for this reason, I believe I would have been justified, had I annulled the assessments, as a second innings is not to be granted to the department, merely as a matter of rote. However, and solely as a matter of prudence, I set aside the assessments with a direction to the respondent to issue notices afresh, hear the petitioner and pass orders of assessments within a period of eight (8) weeks from today, with sufficient time being given to the petitioner to putforth his submission ..... 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