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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 ..... just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment. In our considered opinion, this would be the correct understanding of the provisions of section 153A of the Act , as otherwise, the necessity of bifurcation of abated and unabated assessments in section 153A of the Act would become redundant and would lose its relevance. We find that this issue had been the subject matter of adjudication in the case of CIT vs Continental Warehousing Corporation (Nhava Sheva) Ltd [ 2015 (5) TMI 656 - BOMBAY HIGH COURT] which had been decided in favour of the assessee and accordingly would bind this tribunal Thus we hold that the assessment framed u/s 143(1) of the Act for the Asst Year 2009-10 , which was unabated / concluded assessment, on the date of search, deserves to be undisturbed in the absence of any incriminating material found in the course of search and accordingly the disallowances / additions made thereon are hereby directed to be deleted. - Appeal of assessee allowed. - ITA No.4342/Mum/2017 - - - Dated:- 5-4-2022 - Shri M.Balaganesh, Accountant Member And Ms. Kavitha Rajagopal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Kabul Chawla reported in 380 ITR 573 (Del), the income originally assessed u/s 143(1) of the Act could not be disturbed unless there is any incriminating material found in the course of search relatable to such assessment year. The ld. AO however did not heed to the contentions of the assessee and proceeded to make the following disallowances / additions in the assessment framed u/s 143(3) r.w.s. 153A of the Act on 25.03.2013:- a) Interest income treated as income from other sources ₹ 77,95,481/- b) Addition on account of bogus purchases - ₹ 15,77,250/- c) Disallowance u/s 40(a)(i) - ₹ 7,00,234/- 4. The assessee pleaded that for making the aforesaid additions / disallowances, the ld AO had not referred to any single seized document found during the course of search and hence it could be safely concluded that there was absolutely no incriminating material found during the course of search for making the aforesaid additions / disallowances. However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 153A of the Act use the expression assess or reassess total income and hence the search assessment could be framed u/s 153A of the Act irrespective of any incriminating materials. 6. In response to this, the ld AR stated that the assessment for the Asst Year 2009-10 was originally completed u/s 143(1) of the Act as the case was not selected for scrutiny by issuance of notice u/s 143(2) of the Act on or before 30.9.2010. Hence the assessment for the Asst Year 2009-10 would fall under the category of completed / unabated assessment. He reiterated the submissions made before the lower authorities with regard to framing of additions in section 153A assessments without any incriminating material found thereon. The ld AR stated that the decision relied upon by the ld DR in the case of Smt Dayawanti by Hon ble Delhi High Court supra had been duly distinguished by the Hon ble Delhi High Court in its subsequent decision rendered in the case of PCIT vs Best Infrastructure (India) Pvt Ltd and Others reported in 397 ITR 82 (Del). In the said decision, it was specifically held that the statements recorded u/s 132(4) of the Act does not constitute incriminating material for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) or intimation u/s 143(1) of the Act, then it would only result in giving another innings to the ld AO to review his own earlier decision on the very same set of facts and figures. This would make the entire scheme of the Act meaningless and the ld AO would be conferred with unfettered powers to review the earlier decisions taken either by him or by his predecessor on the very same issue , which in our considered opinion, cannot be the intention of the statute. That s why the legislature had duly drawn a distinction between the completed and abated assessments. The provisions of section 153A of the Act are reproduced hereunder for the sake of convenience :- [Assessment in case of search or requisition 153A. [(1)] 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 notice to such person requiring him to furnish within such period, as may be specified in the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) In respect of concluded assessments prior to the year of search, no addition could be made in the relevant assessment year unless any incriminating material is found during the course of search with respect to the relevant assessment year. (d) Pursuant to the search u/s. 132 of the Act, the pending proceedings would get abated. In respect of abated assessments, the total income needs to be determined afresh in accordance with the provisions of section 153A and other provisions of the Act. 6.4.1 The concluded assessments for the purpose of section 153A of the Act shall be - (i) assessment years where assessments are already completed u/s. 143(1) and time limit for issuance of notice u/s. 143(2) of the Act has expired or; (ii) assessment years where assessments are already completed u/s. 143(3) of the Act ; unless they are reopened u/s. 147 of the Act for some other purpose in both the scenarios stated above. 6.4.2 The scheme of assessment proceedings contemplated u/s. 153A of the Act are totally different and distinct from the proceedings contemplated u/s. 147 of the Act and these procedures of assessment operate in different fields and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al. (v) In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi) Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the Ld AO. (vii) Completed assessments can be interfered with by the Ld AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern AYs 2002-03, 2005-06 and 2006-07, on the date of the search the said assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 only for the purpose of conducting the search action and initiating proceedings u/s 153A of the Act. Once the proceedings u/s 153A of the Act are initiated, which are special proceedings, the legislature in its wisdom bifurcates differential treatments for abated assessments and unabated assessments. At the cost of repetition, we state that in respect of abated assessments (i.e pending proceedings on the date of search) , fresh assessments are to be framed by the ld AO u/s 153A of the Act which would have a bearing on the determination of total income by considering all the aspects, wherein the existence of incriminating materials does not have any relevance. However, in respect of unabated assessments, the legislature had conferred powers on the ld AO to just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment. In our considered opinion, this would be the correct understanding of the provisions of section 153A of the Act , as ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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