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TMI Blog2019 (10) TMI 1463X X X X Extracts X X X X X X X X Extracts X X X X ..... oskote [ 2018 (2) TMI 1830 - ITAT BANGALORE] reopening by the AO in the present case u/s. 147 of the IT Act is arbitrary and not as per law and the proceedings should have been initiated u/s. 153C of the IT Act as it were based on the material found during the search from the premises of the searched person other than the assessee and under these facts, the reopening u/s. 147 is not valid. This ground is allowed. - ITA No. 1151/Bang/2019 - - - Dated:- 11-10-2019 - SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER For the Assessee : Shri V. Chandrasekhar, Advocate For the Revenue : Shri Ganesh R. Ghale, Standing Counsel for Dept. ORDER Per Shri A.K. Garodia, Accountant Member This appeal is filed by the assessee which is directed against the order of ld. CIT(A)-3, Bangalore dated 01.04.2019 for Assessment Year 2009-10. 2. The grounds raised by the assessee are as under. 1. The order of the learned Commissioner of Income-tax [Appeals] passed under Section 250 of the Act, in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case, may be quashed. 2. The appellant d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case. 6. Without prejudice, to the right to seek waiver as per the parity of reasoning of the decision of the Hon'ble Apex Court in the case of Karanvir Singh 349 ITR 692, the Appellant denies itself liable to be charged to interest under section 234 B of the Income Tax Act under the facts and circumstances of the case. 7. The appellant contends that the levy of interest under section 234 B of the Act is also bad in law as the period, rate, quantum and method of calculation adopted by the learned assessing officer on which interest is levied are not discernible and are wrong on the facts of the case. 8. The appellant craves leave to add, alter, amend, substitute or delete any or all of the grounds of appeal urged above. 9. For the above and other grounds to be urged during the course of hearing of the appeal the Appellant prays that the appeal be allowed in the interest of equity and justice. 3. At the very beginning, it was submitted by ld. AR of assessee that as per ground no. 3(a) of his appeal, the assessee is disputing the very initiation of the proceedings u/s. 147 of the IT Act because as per the assessee, the proceedings ought to have been initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. Pepsico India Holdings (P) Ltd. as reported in 379 ITR 295, it was held that if the registered sale deed is found in course of search, it is belonging to the purchaser and not to the vendor although the names of both are mentioned in the said sale deed and the AO has stated that by applying the same analogy, the documents seized in the present case cannot be treated as one which belongs to the assessee and can be treated only as one which relates to the assessee and therefore, the provisions of section 153C are not applicable and the reopening is valid. Regarding the Tribunal order cited by ld. AR of assessee having been rendered in the case of ACIT Vs. Shri Srinivas Rao Hoskote (supra), it was submitted that this Tribunal order is not applicable in the facts of present case. 6. I have considered the rival submissions. First of all, I deal with the remand report of the AO available on page nos. 44 to 46 of the paper book. In this remand report, the AO has noted about the judgment of Hon ble Delhi High Court rendered in the case of M/s. Pepsico India Holdings (P) Ltd. (supra). It is also noted by the AO that in this judgment, it was held by the Hon ble Delhi High Court that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue raised by the parties is no more res integra as the coordinate bench in the matter of G. Koteshwara Rao v. DCIT [(2015) 64 taxmann.com 159] in para 11 to 14 has held as under : 11. A careful study of section 153A to 153C and also the circular issued by the CBDT explaining the procedure of assessment in search cases, it shows that these are separate provisions independent of other provisions relating to reassessment, because of the non obstante clause begins with the said sections. The language used in these sections, i.e. 'notwithstanding anything contained' in section 139, section 147, section 148, section 149, section 151 and section 153 made it clear that provisions of these sections are not made applicable to the assessments covered by the provisions of section 153A. Prior to the introduction of these three sections, there was a separate chapter XIV -B of the Act, by section 158BC to 158BE which governs the search assessments which is popularly known as Block assessment. The earlier provisions provides for single assessment to be made in respect of undisclosed income of Block period consisting of 10 assessment years immediately preceding the assessment year in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome chargeable to tax and section 153A comes in to operation where there is search u/s 132. 13. Under the provisions of section 153A, the Assessing Officer is bound to issue notice to the assessee to furnish the returns of income for each assessment years falling within the six assessment years immediately preceding the assessment year in which search or requisition is made. Another significant feature of this section is that the Assessing Officer is empowered to assess or reassess the total income of the aforesaid period which includes disclosed and undisclosed income. Therefore, the new provisions has given wide powers to the Assessing Officer to assess or reassess the total income of six assessment years falling within the period of those six assessment years immediately preceding the assessment year in which search is conducted. Under the new provisions of section 153A, the statute is provides wide powers to the Assessing Officer in respect of assessments already completed u/s 143(1) or 143(3). If such orders is already in existence prior to the initiation of search, the Assessing Officer is empowered to reopen those proceedings and reassess the total income taking note of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion when there is search u/s 132 or books of accounts, or any other asset or other documents requisitioned u/s 132A. If Assessing Officer justified in proceeding with section 147 to reopen the assessment, then there would be no relevance to section 153A, which was inserted in to the Act to deal exclusively with search cases. The legislators in their wisdom clearly spelt out the provisions of law applicable to search cases by using the word shall to begin with section 153A, made it mandatory that the Assessing Officer bound to issue notice u/s 153A or 153C, thereafter proceed to assess or reassess the total income, where search is conducted u/s 132 or requisition is made u/s 132A. Therefore, in our opinion, the AO is not justified in reopening the assessment u/s 147 and his order is illegal and arbitrary. In view of the above and in view of the decision relied upon by the assessee, we do not find any merit in the appeals filed by Revenue. 8. In my considered opinion, this Tribunal order is squarely applicable in the present case and hence, respectfully following the same, I hold that the reopening by the AO in the present case u/s. 147 of the IT Act is arbitrary and not as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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