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TMI Blog2022 (4) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of an unabated assessment. 3. We have heard the rival submissions and perused the materials available on record. We find that the assessee is engaged in the business of development of commercial and residential projects. There was a search in the premises of the Arihant group and Mahavir group on 18.10.2010. The assessee was also covered u/s 132 of the Act along with other group cases. We find that the assessee had originally filed its return of income for the Asst Year 2009-10 on 29.9.2009 declaring total income of Rs. 3,48,67,680/-. The return was duly processed u/s 143(1) of the Act. The time limit for issuance of notice u/s 143(2) of the Act expired on 30.09.2010. Admittedly, no notice u/s 143(2) of the Act was issued and served on the assessee for the Asst Year 2009-10 on or before 30.09.2010. Consequent to the search, notice u/s 153A of the Act was served on 26.08.2011 and for the year under consideration, the assessee filed the return in response to notice u/s 153A of the Act on 26.09.2011 declaring total income of Rs. 3,48,67,680/-. The assessee pleaded that as on the date of search (i.e on 18.10.2010), the assessment for the Asst Year 2009-10 had become an unabated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. There are three conditions based on which a search action could be initiated u/s 132 of the Act on an assessee. They are :- Section 132(1) - If the concerned authority has in consequence of information in his possession, has reason to believe that - (a) where a person fails to produce the books of accounts and other documents in response to notice u/s 142(1) or summons issued u/s 131(1) of the Act ; or (b) where a person fails to comply with the requirements of summons issued u/s 131(1) of the Act ; or (c) where a person is in possession of any money, bullion, jewellery or other valuable article or thing and such assets represents either wholly or partly income or property which has not been , or would not be, disclosed for the purposes of the Act (hereinafter referred to as the undisclosed income or property) ; then the officer , so authorized could conduct a search and proceed as per the requirements laid down in the said section. He argued that the aforesaid three primary conditions for invoking search proceedings cannot be given a go by while framing section 153A assessments and the instant case falls under section 132(1)(c ) of the Act. 5.2. The provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeding was not pending on the date of search to get itself abated. It is not in dispute that both the ld AO and the ld CITA had admittedly not made any reference to any seized material found during the course of search in their orders relatable to the completed assessment year with regard to the items that were subject matter of disallowances / addition. In this regard, we hold that the disallowances / additions that were made by the ld. AO in section 153A assessment were already forming part of the regular books of accounts and were duly recorded in the regular books of the assessee and cannot be construed as incriminating in nature. Every assessee would be having its regular books of accounts (where books are maintained) and would be filing his regular returns of income and assessments framed accordingly. If such person is subjected to search and the very same regular books of accounts were found at the time of search and if the ld AO tries to take a different view on the already recorded transactions in the said regular books of accounts in the search assessment u/s 153A of the Act which is contrary to the view taken by him in the original scrutiny assessments u/s 143(3) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocessed under section 143(1), cannot be regarded as pending for purpose of section 153A as Assessing Officer is not required to do anything further about such a return and, thus, said assessment cannot be reopened in exercise of power of section 153A-Held yes (Paras 10 and 12) (In favour of assessee)." 6.2. We find that the Co-ordinate Bench of Kolkata Tribunal in the case of ACIT vs Kanchan Oil Industries Ltd in ITA No. 725/Kol/2011 dated 9.12.2015 reported in 2016-TIOL-167-ITAT-KOL had explained the aforesaid provisions as below:- "6.4 In our opinion, the scheme of assessment proceedings should be understood in the following manner pursuant to the search conducted u/s. 132 of the Act :- (a) Notice u/s. 153A of the Act would be issued on the person on whom the warrant of authorization u/s. 132 of the Act was issued for the six assessment years preceding the year of search and assessments thereon would be completed u/s. 153A of the Act for those six assessment years. (b) In respect of the year of search, notice u/s. 143(2) of the Act would be issued and assessment thereon would be completed u/s. 143(3) of the Act. (c) In respect of concluded assessments prior to the year o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of the search shall abate. The total income for such AYs will have to be computed by the Ld AOs as a fresh exercise. (iii) The Ld AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The Ld AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". (iv) Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the Ld AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kar HC) ; Filatex India Ltd vs CIT reported in (2014) 229 Taxman 555 (Del HC) ; Jai Steel (India) vs ACIT reported in (2013) 219 Taxman 223 (Del HC) ; CIT vs Murli Agro Products Ltd reported in (2014) 49 taxmann.com 172 (Bom HC) ; CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd reported in (2015) 374 ITR 645 (Bom HC) and All Cargo Global Logistics Ltd vs DCIT reported in (2012) 137 ITD 287 (Mum ITAT) (SB). We also find that against the decision of the Hon'ble Delhi High Court in 380 ITR 573 (Del), the revenue preferred Special Leave Petition before the Hon'ble Supreme Court and the same was dismissed by the Hon'ble Apex Court which is reported in 380 ITR (St.) 4 (SC). 6.6. We also find that the Hon'ble Calcutta High Court in the case of Principal CIT vs M/s Salasar Stock Broking Ltd in G.A.No. 1929 of 2016 ITAT No. 264 of 2016 dated 24.8.2016 had endorsed the aforesaid view of Hon'ble Delhi High Court in Kabul Chawla's case and also placed reliance on its own decision in the case of CIT vs Veerprabhu Marketing Ltd reported in (2016) 73 taxmann.com 149 (Cal HC). 6.7. We find that the provisions of section 132 of the Act relied upon by the revenue would be relevant onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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