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TMI Blog2021 (8) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment years. The appellant had also submitted a chart demonstrating that the assessment years in appeal are completed assessment years which has been reproduced in the submissions of the appellant. The tests that the documents belong to the appellant are duly verified. Section 153C of the Act also states that once the assessment is sought to be opened based on the documents belonging to the appellant, further assessment shall be made in accordance with the provisions of section 153A of the Act. There is a further requirement which states that the Assessing Officer must record a satisfaction note that documents must have a bearing on the determination of the total income of the appellant. Both the conditions lead to the conclusion that the documents found must be indicative of escapement of income and that the total income declared by the appellant in its return of income must necessarily be effected by the findings in the seized documents. From the perusal of the satisfaction note, it cannot be held that it is reflective of any undisclosed income or in the nature of incriminating belonging to the assessee the reason being none of the documents either pertained to the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in section 153C/153A would only mean income unearthed during search when the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Company Vs. DCIT dated 09.08.2014 has held that total income includes income unearthed during search and any other income. 7. That the grounds of appeal are without prejudice to each other. 8. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal." ITA No. 4047/D/2017 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and on facts in directing the A.O. to delete the addition of ₹ 12,79,959/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in section 153C/153A would only mean income unearthed during search when the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the premises of PIL relating to the appellant was those that were duly recorded in the regular books of account of the appellant and were in no manner incriminating in nature. Hence, the appellant contended that since they are not incriminating in nature, no assessment can be made on the basis of these documents because no undisclosed income is discernable out of theseseized documents and the years under consideration are completed assessments. In this regard, the ratio of the judgement of the famous case of the Hon'ble Delhi High Court in the case of Kabul Chawla 61 taxmann.com 412 is squarely applicable. 6. The appellant made detailed submission and contended that a bare perusal of the seized documents would reveal that they do not even pertain to the assessment years in question. Hence, no documents incriminating in nature in respect of impugned assessment year were found in search conducted on PIL. 7. We have perused the copy of the satisfaction note which are attached at page no. 21A to 21D of the appellant's paper book and the same is reproduced for ease of reference:- Satisfaction note recorded by the Assessing Officer of PIL 8. We are taking the appeal for the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son", proceedings u/s 153C against such "other person" will be valid. In the case of the assessee the search was conducted on M/s Prakash Industries Ltd. on 30.10.2012 which is before 01.06.2015. Since the search took place before 01.06.2015, the notice u/s 153C can be issued only if the documents seized from the premises of M/s Prakash Industries Ltd. are found to be belonging to the assessee company. For initiating valid proceedings u/s 153C of the Act, recording of clear and positive satisfaction that money, bullion, jewellery or other valuable article or thing or documents or books of account etc. seized belong to/belongs to person other than searched person, is a sine qua non requirement. The above requirement under the law is due to the provisions of section 132(4A) r.w.s. 292C of the Act which presumes that whenever a document is found from a person who is being searched the said document belongs to that searched person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or 'satisfaction' that the document in fact belongs to somebody else. Therefore, if Assessing Officer of the searched person is satisfied that the docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer that a third person has 'undisclosed income' on the basis of evidence or material before him. The material itself should not be vague, indefinite, distinct or remote. If there is no rational or intangible nexus between the material and the satisfaction that a third person has 'undisclosed income', the conclusion would not deserve acceptance. Then the satisfaction is vitiated. It is to this limited extent that the satisfaction can be gone into and examined. The satisfaction, though subjective, must meet the aforesaid criteria. [Para 21]" 12. From the above discussion, following requirements emerge out to initiate valid action u/s 153C: a. First, Assessing Officer of the person searched is to record satisfaction that seized material/documents etc. belong to /belongs to the person other than the searched person. b. Such satisfaction note along with seized material belonging to the person other than searched person must be handed over to the file of assessing officer having jurisdiction over such other person. c. Then, Jurisdictional assessing officer of the person other than searched person has to satisfy himself that documents received must h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. Vs. ACIT (52 taxmann.com 220) which is also discussed and approved by the Hon'ble Supreme Court in the case of Super Malls(supra) wherein it has been held that: It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under Section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would not meet the requirement of the concept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person.We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of the kind required under Section 153C of the said Act. This bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be incriminating. 3. It pertains to the A.Y. 2013-14 and does not pertain to the assessment year in question and has no co-relation with the addition made by the Ld. AO and cannot be said to be incriminating material. NO Copy of trial balance cannot be said to belonging to the assessee. NO This document pertains to A.Y. 2013-14 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The transactions in the seized document have already been recorded in the books of the assessee company. The Ld. AO failed to link these seized documents with the additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 4 1-20 1. These are the computer print-outs of cash-book, bank book, journals and trial balance of the assessee company for the period 01.04.2011 to 31.03.2012. NO These cannot be said to belonging to the assessee NO Pertain to A.Y. 2012-13 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The seized document h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions in the documents have been duly recorded in the books of the assessee. These documents are not incriminating in nature. Even otherwise the Ld. AO did not take any cognizance of the documents while making additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 21 51-97 1.This is the Undated unsigned blank cheque book of assessee company. 2. This cannot be relate to any A.Y. and hence cannot be used for initiating assessment for any A.Y. YES NO NOT PERTAINING TO ANY YEAR Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO Undated, unsigned cheque books cannot be said to be incriminating. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 28 9 1. This document is the certified true copy of board resolution dt. 12.09.2012 of the assessee company for attending AGM of Prakash Industries Ltd. to be held on 29.09.2012. 2. The certified copy found from the premises of M/s Prakash Industries cannot be said to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and assess or reassess the income of the assessee in accordance with the provisions of Section 153A of the Act. Section 153A of the Act requires that a notice be issued to the person sought to be assessed, calling upon the said assessee to file his return of income in respect of each year falling within the specified six AYs. …..in the present case, although the photocopies of the documents handed over to SVP Builders India Ltd. may be copies of the original documents that belong to the assessee, the said photocopies would belong to SVP Builders India Ltd. as the same were handed over to it in connection with the investment made by the Assessee. Similarly, a certified copy of the Assessee's resolution signed by its Directors, would also belong to the SVP Builders India Ltd. even though the minutes of the Board meeting form a part of the record of the Assessee. We find no infirmity with the view taken by the ITAT in this regard. b. Hon'ble High Court of Delhi in the case of Canyon Financial Services Ltd -(64 taxmann.com 309) Turning to the case at hand, the first document referred to in the satisfaction note of the AO of the searched person is an application made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singhad Technical Education Society (84 taxmann.com 290)has settled the issue that the seized documents must be incriminating and must relate to the AYs whose assessments are sought to be reopened. The relevant portion of the judgement of Apex Court is as under: The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact.We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed thereinwas culled out and it showed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34 is concerned, admittedly, the same only consisted of a single page of the record slip of a cheque book and other pages were blank. The record slip only contained three entries reflecting issue of three cheques on 11th August, 2008, 27th August, 2008 and 10th December, 2008 respectively. Thus, it is apparent that the said document had no relevance for the assessment years in question i.e. AYs 2003-04 to 2008-09. In the circumstances, the issue to be addressed is whether proceedings under Section 153C of the Act could be initiated on the basis of this document. The record slip belongs to the Assessee and, therefore, the action of the AO of the searched persons recording that the same belongs to the Assessee cannot be faulted. However, the question then arises is whether the AO of the Assessee was justified in taking further steps for reassessing the income of the Assessee in respect of the assessment years for which the assessments were concluded and in respect of which the seized document had no bearing. In our view, the same would be clearly impermissible as the seized material now available with the AO, admittedly, had no nexus with those assessments and was wholly irrelevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-10. The facts and the questions of law that arise in these appeals are similar to the facts and the controversy involved in RRJ Securities Ltd. (supra). Thus, for the reasons stated in RRJ Securities Ltd. (supra), the third question framed, whether the proceedings under Section 153C of the Act could be initiated against the Assessee, is answered in favour of the Assessee and against the Revenue. IV. Where the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years, the AO has no jurisdiction to make reassessment of that year under section 153C of the Act in absence of any incriminating document 1. Documents found and seized from the premises of M/s Prakash Industries pertaining to the assessee company are tabulated at point no. II. 2. On the basis of seized documents the Ld. AO had made the assessment under section 153C of the Act and made addition of ₹ 23.46 cr. being the share capital and unexplained investments out of which addition of ₹ 77.85 was made on protective basis. 3. Your Honours, seized documents were the ITR and audited balance sheets of the assessee company which were already filed with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in respect of the seized asset, could not be resorted to; the AO had no jurisdiction to make the reassessment under Section 153C of the Act. 7. As per proviso to section 153C of the Act Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: 8. By virtue of second proviso to Section 153A, the assessment/reassessment pending on the date of initiation of search abate. In the context of proceedings under Section 153C of the Act, the reference to the date of initiation of the search in the second proviso to Section 153A has to be construed as the date on which the AO receives the documents or assets from the AO of the searched person. Thus, by virtue of second proviso to Section 153A of the Act as it applies to proceedings under Section 153C of the Act, the assessment/reassessment pending on the date on which the assets/docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersons which were later-on retracted. a. Hon'ble High Court of Delhi in the case of Sunny Infraprojects Ltd. - ITA No. 502 of 2016 on the similar facts has held that: In that view of the matter, the Court is not answering the other aspects concerning the validity of the initiation of the proceedings under Section 153C of the Act and, in particular, whether the material which may be relevant to the year of the search could justify the re-opening of the assessment for the assessments of the earlier years as was done in the present case. The copy of the Satisfaction Note prepared by the AO of the Assessee refers to the "incriminating‟ documents/papers which were seized during the search and seizure action in the case of the Minda Group. These documents are copies of the balance sheet abstracts and company‟s general profile, balance sheet, profit and loss account, auditor‟s account, copies of income tax returns and copy of trial balances. Apart from the above, there was no other material referred to that could give rise to the belief about income having escaped assessment. Each of the above documents was already available with the AO when the initial assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be satisfied that the assets/documents seized during search of another person reflect undisclosed income of an Assessee before commencing an enquiry under Section 153C of the Act, it would be impermissible for him to commence such enquiry if it is apparent that the documents/assets in question have no bearing on the income of the Assessee for the relevant assessment years. c. Hon'ble High Court of Delhi in the case of RRJ Securities Ltd. 62 taxmann.com 391 has held that: the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the undisputed position, no investigation was necessary. Thus, the provisions of section 153C, which are to enable an investigation in respect of the seized asset, could not be resorted to; the AO had no jurisdiction to make the reassessment under Section 153C of the Act. d. Hon'ble High Court of Delhi in the case of Index Securities Pvt. Ltd. (86 taxmann.com 84) In the present case, the two seized documents referred to in the Satisfaction Note in the case of each Assessee are the trial balance and balance sheet for a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustify the assumption of jurisdiction under Section 153 C of the Act against the Assessee. Two of them, viz., the licence issued to the Assessee by the DTCP and the letter issued by the DTCP permitting it to transfer such licence, have no relevance for the purposes of determining escapement of income of the Assessee for the AYs in question. Consequently, even if those two documents can be said to 'belong' to the Assessee they are not documents on the basis of which jurisdiction can be assumed by the AO under Section 153C of the Act. 15. Thus, ld. counsel submitted that the additions made in the impugned assessment orders are not based on incriminating seized material and therefore the ld. CIT(A) has rightly deleted the said addition. 16. On the other hand, ld. CIT-DR had given following written submission. MAY IT PLEASE YOUR HONOUR'S Sub: Written Submission in the above cases - reg. i) In support of the claim of the Revenue that Assessment u/s 153A/153C need not necessarily be based on incriminating material on the basis of various decisions of Hon'ble Jurisdictional High Court of Delhi/ other High Courts and Hon'ble ITAT Delhi Highlights of the case of Anil Kuma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of search/requisition. Under Section 153A and the new scheme provided for, the AO is required to exercise the normal assessment powers in respect of the previous year in which the search took place." (Para 18) • Assessing Officer is bound to issue notices to the assessee to furnish returns for 6 Assessment years. Assessing Officer is empowered to assess or re-assess the total income including undisclosed income of the assessee "Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the "total income" of the aforesaid years. This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee in whose case a search or requisition has been initiated "NOW THERE CAN BE CASES WHERE AT THE TIME WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS "SHALL ABATE". THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROVIDED IN T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, the provisions of Section 153A cannot be invoked. The Assessing Officer has the power under Section 153A to make assessment for all the six years and compute the total income of the assessee, including the undisclosed income, notwithstanding that the assessee filed returns before the date of search which stood processed under Section 143(1) (a)."(Para 22) Highlights of the case of Filatex India Ltd., ITA No. 269/2014 and CM No. 10077/2014 dated 14.07.2014 of Hon'ble Delhi High Court (page 19 to 29 of paper book no. 1) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Filatex India Ltd. (269/2014 and CM No. 10077/2014) by Hon'ble Delhi High Court vide order dated 14-07-2014. The Question of law referred before Hon'ble Delhi High Court in this case is as under :- "Whether the Tribunal erred on facts and in law in not holding that re-computation of book profit, de-hors any material found during the course of search, in the order passed under section 153A of the Act was without jurisdiction, being outside the scope of proceedings under that Section" The Hon'ble Delhi High Court has decided in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... catory that the assessment under section 153A emanates and starts on the foundation of the search, which is the jurisdictional precondition." After that Hon'ble Delhi High Court has discussed the case of Anil Kumar Bhatia decided by Hon'ble Delhi High Court earlier and quoted from para 18 & 22 of this order (mentioned supra) and finely decided in para 4 of this order that after examination of section 153A the submission/contention of the appellant has no merit. Highlights of the case of Raj Kumar Arora, ITA No. 56/2011 dated 11.07.2014 of Hon'ble Allahabad High Court (Page No. 1 to 7 of Paper Book No. 2) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Raj Kumar Arora, ITA No. 56/2011 by Hon'ble Allahabad High Court vide order dated 11-07-2014. The Question of law referred before Hon'ble Allahabad High Court in this case is as under :- "Whether ITAT has erred in law in dismissing the appeal of the department and holding that no addition can be made for gift in assessment completed under section 153A unless some incriminating material was found during the course of search, thus ignoring the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights of the case of Canara Housing Development Company, ITA No. 38/2014 dated 25.07.2014 of Hon'ble Karnataka High Court(page 1 to 18 of paper book no. 1) - ii) The decision of Hon'ble Delhi High Court in the case of Anil Kumar Bhatia has been followed recently in another case of Canara Housing Development Company, ITA No. 38/2014 by Hon'ble Karnataka High Court vide order dated 25-07-2014. In this case the Hon'ble Court has also observed that the decision of Hon'ble special bench in the case of All Cargo Global Logistic Ltd. dated 06/07/2012 is not correct. The Question of law referred before Hon'ble Karnataka High Court in this case is as under:- "When once the proceedings under Section 153A of the Act is initiated, whether the Commissioner of Income Tax can invoke the power under Section 263 of the Act to review the order of assessment passed by the Assessing Authority?" At the end the Hon'ble Court has decided in para 11 that "the Tribunal has proceeded on the assumption by virtue of the judgment of the special bench of the Mumbai, the scope of enquiry under Section 153A is to be confirmed only to the undisclosed income unearthed during search and if there is any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount or document " apart from money, bullion or jewellery etc., seized from the person searched belong to a person other than the person searched u/s 153A, then such books of account or documents etc. shall be handed over to the AO having jurisdiction over such other person and the AO of such other person shall proceed to " assess or reassess income of such other person in accordance with the provisions of section 153A. thus, the effect of subsection (1) of section 153C is that where all the necessary ingredients of this sub-section are satisfied, the matter of making assessment or re-assessment goes back to section 153A. Since the assessment or reassessment of such other person has to be done in accordance with the provisions of section 153A, let us examine the prescription of the relevant parts of section 153A(1), which is as under :- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any lesser number of years for which the incriminating material is found. When we read section 153C in a holistic manner, it becomes evident that the triggering point for assuming jurisdiction on the person other than the person searched u/s 153C is the finding of any money, bullion, jewellery or books of account or document from the person searched. Once any money, bullion, jewllery or books of account or document seized or requisitioned from the person searched are found to be belonging to the other person, then, the assessment or reassessment of such other person is to be necessarily completed in terms of section 153A, which in no uncertain terms refers to six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Further, the use of the word 'shall' in section 153A immediately before clause (a) has left nothing to doubt that the assessment is required to be made for all the six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. As the legislature has not made the making of such assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as referred to in sub-section: (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) No return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) A return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub0section (2) section 143 has expired, or (c) Assessment or re-assessment, if any, has been made, Before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over 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 provide in section 153A". 11. On going through the plain language of sub-section (2) of section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view is also expressed by Hon'ble ITAT Banglore Bench in the case of NandiniDelux vs ACIT, 54 Taxmann.com 162 vide order dated 05.12.2014. The relevant portion of para 6.3.9 of the order is mentioned as below:- "Respectfully following the decision of the Hon'ble High Court of Karnataka in the case of Canara Housing Development Co. (supra), we hold that once the assessment is reopened, the Assessing Officer can take note of the income disclosed in the earlier return, any undisclosed income found during the course of search and also any other income which is not disclosed in the earlier return of income OR which is not unearthed in the course of search under section 132 of the Act, in order to find out and determine what is the 'total income' of each year and then pass the order of assessment. The grounds of appeal raised by the assessee at S.Nos. 2 to 5 are accordingly dismissed for all four assessment years 2005-06 to 2008-09." iii) Also recently SLP filed by Revenue in the case of PCIT Vs Gahoi Foods (P) Ltd (117 taxmann.com 118(SC)) was granted by the Honb'le Apex court against the decision of High Court upholding decision of ITAT that assessment under section 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act dated 31.3.2015, are not based on any incriminating document. As such, facts of the appellant are- squarely covered by the ratio laid down by Hon'blc Jurisdictional High Court of Delhi, in the case of C1T Vs. Kabul Chawla (supra). Similarly, the statement recorded u/s 132(4) of the Act, is not a document, as has been held by the Hon'ble Jurisdictional High Court of Delhi in the case oi C.IT Vs. Raj Pal Bhatia [2011], 333 ITR 315 (Delhi). In view of the above, I agree with the arguments of the appellant and therefore, no addition can be made, in absence of any incriminating document. Accordingly, ground No. 3, is hereby allowed. As, I have already field (supra), while deciding in ground No. 3 that in absence of any incriminating documents found during search action u/s 132 and also assessment was not abated at the time of intiation of action u/s 132 of the Act, on 30.10.2012, no addition can be made, in the assessment order passed u/s 153C of the Act. The facts of the appellant are, squarly covered by the ratios laid down in the above 2 decisions of the Hon'ble Jurisdictional High Court of Delhi. In view of these facts and circumstances, in my considered opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :] [Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.] [(2) Where books of account or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g over the documents or recording of the satisfaction. The satisfaction and the documents belonging to the assessee must have bearing under the determination of the total income of the appellant for six assessment years. The documents must be indicative of escapement of income of the total income declared by the assessee in its return of income must necessarily be affect from the findings in the seized documents. Now it is a well settled law in view of the various judgments cited above that the documents seized must be indicative of undisclosed income and must also pertains to the relevant assessment year. This principle has been upheld by the Hon'ble Supreme Court in the case of CIT vs. Singhad Technical Education Society, 84 taxman.com 90, wherein it was observed and held as under: "The Tribunal permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the Tribunal that as per the provisions of section 153C, incriminating material which was seized had to pertain to the assessment years in question and it is an undisputed fact that th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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