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TMI Blog2022 (5) TMI 1297X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of Section 143(2)? - HELD THAT:- Admittedly notices u/s 153A as well Section 142(1) was issued by Revenue. The assessee did not file return of income within stipulated time as provided in the notice issued u/s 153A of the 1961 Act. This issue should not detain us for long . The Hon ble Madras High Court in recent decision in B.Kubendran v. DCIT [ 2021 (4) TMI 467 - MADRAS HIGH COURT] has recently after detailed discussion considering the distinction between provisions of Section 158BC and 153A decided this issue in favour of Revenue , by holding that in framing assessment u/s 153A , due regard must be given to principles of natural justice, which requirement shall stand satisfied either by issuance of notice u/s 143(2) or questionnaire u/s 142(1) was issued by the AO. Thus in framing assessment u/s 153A, due regard must be given to principles of natural justice, which requirement shall stand satisfied either by issuance of notice u/s 143(2) or questionnaire u/s 142(1) issued by the AO. - There is no specific provision in the Act requiring the assessment u/s 153A to be made after issuing notice u/s 143(2) - Thus, we hold this issue in favour of Revenue in the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 80 - DELHI HIGH COURT] and other judgments of Hon ble High Courts deciding the issue in favour of assessee, without getting elevated to the status of that of the Hon'ble Supreme Court. The sequitur is that the ratio decidendi laid down by the Hon ble jurisdictional High Court in Raj Kumar Arora [ 2014 (10) TMI 255 - ALLAHABAD HIGH COURT] still holds the field and is binding on all the authorities under the jurisdiction of the Hon ble Allahabad High Court. In view of the foregoing discussion and respectfully following the binding precedent, I agree with the learned AM that there is no legal impediment in making an addition, otherwise than on the basis of any incriminating material found during search, in an assessment u/s 153A for a year whose assessment was not pending on the date of search. Whether CIT(A) is justified in deleting the additions instead of restoring the matter to the file of AO - HELD THAT:- The ld. JM countenanced the deletion of the addition on the two legal issues discussed above, viz., the failure of the AO to issue notice u/s 143(2) before making assessment u/s 153A and the addition being not based on any incriminating material. Neither did he g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of CIT(Central) Vs. Kabul Chawla reported in 380 ITR 573(Del.) in this case , ignoring the order of jurisdictional High Court in the case of CIT Vs. Raj Kumar Arora (2014) 52 taxmann.com 172(Alld) wherein it was held that AO has power to reassess returns of assessee not only for undisclosed income found during search operation but also with regard to material available at the time of original assessment. 2b. The assessee has raised following grounds in C.O. filed with tribunal: 1. That in any view of the matter it is not correct to say that the learned Commissioner of Income(Appeal) has erred in deleting the addition of Rs. 2.50 Cr. whereas Commissioner of Income Tax (Appeal) was perfectly justified and correct in deleting the addition by considering the facts of the case. 2. That in any view of the matter the various decision cited by the appellant are fully applicable in the appellant s case and therefore Ground No.-2 in the departmental appeal is liable to be rejected. 3. That in any view of the matter the appellant reserves his right to take any fresh ground of appeal before hearing of the appeal. It is therefore respectfully prayed that a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the provisions of Section 68 of the 1961 Act, vide assessment order dated 29.03.2016 passed by AO u/s 153A r.w.s. 144 of the 1961 Act. 4. Aggrieved by the assessment order dated 29.03.2016 passed by AO u/s 153A r.w.s. 144 of the 1961 Act, the assessee filed first appeal with ld. CIT(A). The assessee submitted before ld. CIT(A) that it is engaged in business of real estate. It was submitted by assessee before ld. CIT(A) that the assessee is maintaining regular books of accounts which are audited and audit report was duly filed with Revenue along with return of income filed by the assessee company. It was submitted that return of income was originally filed by assessee u/s 139(1) of the 1961 Act with Revenue on 30.09.2011, declaring income of Rs. 4,17,790/-. It was claimed that said return of income was processed by Revenue u/s 143(1) of the 1961 Act. It was submitted that complete details/information are available in the audited financial statements for framing assessment. It was claimed that search and seizure operations were conducted by revenue u/s 132(1) of the 1961 Act on 05.12.2013 in the business and residential premises of Hemant Kumar Sindhi who is one of the Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h banking channel , copy of bank statement was enclosed along with confirmation letter of said Shri Ajeya Singh. It was submitted that confirmation letter issued by Sh. Ajeya Singh bears his PAN No. ALUPS0807N. It was submitted that Shri Ajeya Singh belongs to a respectable family of Allahabad , and he is son of Former Prime Minister of India , Shri Vishwanath Pratap Singh . It was submitted that he is residing in Manda at Allahabad. It was submitted that he is running several businesses . It was submitted that since transaction for sale of land did not materialize, therefore, deposit of Rs. 2,50,00,000/- was returned by assessee to Shri Ajeya Singh, through banking channel. The assessee submitted copies of account of Mr. Ajeya Singh in its books of accounts both at the time of receiving the said amount as well at the time of returning of the said amount. The assessee also filed an affidavit from its Director confirming all the facts, before ld. CIT(A) during appellate proceedings. Thus, the assessee contended before ld. CIT(A) that once the identity, creditworthiness , PAN No. and capacity of the creditors are proved by the assessee through various documents, the additions as was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the ld. CIT(A) observed that in the instant case, the proceedings had not abated. The ld. CIT(A) referred to decision of Hon ble Allahabad High Court in the case of Smt. Shaila Agarwal(supra) and decision of Hon ble Delhi High Court in the case of Shri Kabul Chawla(supra) to support its aforesaid view. The ld. CIT(A) observed that the AO has treated the sundry creditor in the name of Shri Ajeya Singh of Rs. 2,50,00,000/- as not genuine since the appellant has not explained the genuineness of transaction. Hence, the AO treated an amount of Rs. 2,50,00,000/- as unexplained and added to the income of the assessee u/s 68 of the 1961 Act. The ld. CIT(A) after examining the audited accounts of the assessee which were filed along with the return of income filed u/s 139(1) on 30.09.2011 and also return of income filed on 15.02.2016 in response to notice u/s 153A , observed that Rs. 2,50,00,000/- was shown by assessee in the name of Shri Ajeya Singh as sundry creditor as on 31.03.2011. The ld. CIT(A) observed that Shri Ajeya Singh had deposited Rs. 2,50,00,000/- with the company for purchase of land through cheque number 000124 of Rs. 2,50,00,000/- of Kotak Mahindra Bank Limited, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Kabul Chawla(supra) and deleted the additions. It was submitted by ld. CIT-DR that it is claimed by assessee that it received the aforesaid amount of Rs. 2,50,00,000/- against sale of land. It was submitted that there is no evidence in the Balance Sheet as for from whom the said amount was received. Our attention was drawn by ld. CIT-DR to the financial statement of the assessee for financial year 2010-11, which is placed in paper book filed by the assessee. The ld. CIT-DR relied upon decision of Hon ble Allahabad High court in the case of CIT, Kanpur v. Raj Kumar Arora , reported in (2014) 52 taxmann.com 172(Alld. HC). The ld. CIT-DR also relied upon decision of Hon ble Allahabad High Court in the case of CIT v. Kesarwani Zarda Bhandar in ITA No. 270 of 2014 .It was submitted that even if no incriminating material was found during search operations conducted by Revenue u/s 132(1) of the 1961 Act, then also AO can assess total income of the tax-payer. The ld. CIT-DR would submit that Hon ble ITAT, Delhi while deciding the appeal of the tax-payer based in Merrut(U.P.) jurisdiction , in the case of Roseberry Mercantile Private Limited v. ACIT in ITA no. 299 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and even the name of the creditor was not disclosed in the financial statements. Thus, it was submitted that it cannot be said that true , proper and complete disclosure was made by the assessee. The ld. CIT-DR brought our attention to page 39/paper book to submit that this is a confirmation filed by Shri Ajeya Singh , which is the only evidence brought on record by assessee. Our attention was also drawn by ld. CIT-DR to page 44-45/paper book , wherein affidavit of Shri Hemant Kumar Sindhi is placed. It was submitted that there is no evidence as to the nature of transaction and as to remittance of money. It was submitted that now it is explained that the money was advanced by Mr. Ajeya Singh as advance towards purchase of land , while in the Balance Sheet it is shown under the sub-head others under the head Sundry Creditors under the Schedule:E-Current Liabilities and Provisions , which explanation now submitted is contradictory to what is stated in Balance Sheet. 5.2 The ld. Counsel for the assessee on the other hand submitted before the Bench that return of income in this case was originally filed by assessee with Revenue u/s 139(1), on 30.09.2011. There was a search and s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheque of Rs. 2,50,00,000/- in favour of the assessee. It was submitted that Shri Ajeya Singh belongs to respectable family and is son of Former Prime Minister of India , Shri V.P.Singh. It was submitted that no incriminating material seized during search operations, are brought on record by the authorities below. It was submitted that the AO did not call for the bank statement of Shri Ajeya Singh. It was submitted that if the same is required to adjudicate the issue, the assessee can bring on record bank statement of Shri Ajeya Singh for which opportunity may be granted. It was submitted that as per mandate of Section 153A of the 1961 Act, the AO has to assess only undisclosed income based on seized material. The ld. Counsel for the assessee relied upon the appellate order passed by ld. CIT(A). It was submitted that C.O. is filed by the assessee in support of the appellate order passed by ld. CIT(A). 5.3 The ld. CIT-DR submitted in rejoinder that onus is on the assessee to discharge burden cast u/s 68 of the 1961 Act . The ld. CIT-DR submitted that the assessee did not brought on record details/evidence to discharge onus cast on it by virtue of provision of Section 68 of the 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... May , 2011. Thus in nuts-shell , so far as search conducted by Revenue u/s 132(1) against the assessee on 05th December 2013 is concerned, no dispute is raised before us , the effective dispute raised is that the additions were made despite the fact that no incriminating material was found and seized during the course of search operations. Proceeding further, The AO issued and served notice dated 05th September 2014 u/s 153A , requiring assessee to file return of income within 15 days of service of notice. The assessee did not filed return of income within stipulated time as stated in the aforesaid notice. The AO issued notice along with questionnaire under the provisions of Section 142(1), dated 03.11.2015 for compliance on 17th November , 2015. The assessee did not comply with the said notice. Thereafter, the AO issued several notices u/s 142(1) , dated 17.11.2015, 30.11.2015, 15.12.2015, 23.12.2015 , 04.01.2016 , 01.02.2016. In response , Shri Hemant Sindhi , Director filed reply in Dak on 09.02.2016 stating that Shri Naresh Kumar Tulsiyani and Shri Ravi Kumar Mehrotra were the Directors of the company and required information may be called from them. The AO issued notices to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 1961 Act, albeit no assessment was framed by Revenue u/s 143(3) of the 1961 Act. It is claimed that return of income was originally filed u/s 139(1) of the 1961 Act by assessee for impugned ay: 2011-12 , on 30.09.2011. The return of income was processed u/s 143(1) of the 1961 Act , and no scrutiny assessment was framed u/s 143(3) of the 1961 Act. The claim is made that last date for issuance of notice u/s 143(2) for framing of assessment u/s 143(3) , as provided under statute during relevant point of time was six months from the expiry of six months from the end of the financial year in which return of income was furnished. Thus, it was claimed that notice u/s 143(2) of the 1961 Act for framing scrutiny assessment ought to have been issued by Revenue , latest by 30.09.2012, and since Revenue did not issued notice u/s 143(2) for framing scrutiny assessment by 30.09.2012, the assessment of the assessee got completed. The search was conducted by Revenue on 05.12.2013 and hence it is claimed that the assessment for the impugned ay is not an abated assessment and hence additions can only be made by Revenue based only on incriminating material found during the course of search. The cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(1)(a) of the 1961 Act. The judgments of Hon ble Jurisdictional High Court in the case of Shri Raj Kumar Arora(supra) and M/s Kesarvani Zarda Bhandar(supra) are subsequent to judgment of Hon ble Jurisdictional High Court in the case of Smt. Shaila Agarwal(supra) relied upon by ld. Counsel for the assessee. Further, on perusal of the aforesaid judgment of Hon ble Allahabad High Court in the case of Mrs. Shaila Agarwal(supra) , it is observed that the Hon ble High Court decided the issue that the assessments which have been completed prior to the initiation of search and where appeal is pending with respect to these completed assessments shall not abate , as provided u/s 153A of the 1961 Act, and it is only the pending assessments which shall abate. So far as , computing income of the assessee (including undisclosed income) for the six years covered for making assessment u/s 153A, pursuant to Search u/s 132(1) of the 1961 Act, the Hon ble High Court did not laid down any ratio of law in the judgment in the case of Mrs. Shaila Agarwal(supra). Rather , the Hon ble Jurisdictional High Court observed in para 16 if as a result of the search , some undisclosed income is found to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a declaration of law by Hon ble Supreme Court as envisaged in Article 141 of the Constitution of India. Reference is drawn to decision of Hon ble Supreme Court in the case of Kunhayammed v. State of Kerala (2000) 113 Taxman 470(SC). We have also observed that this issue whether additions can be made while framing assessment u/s 153A , in the absence of any incriminating material found during the search , was decided by ITAT, Delhi Bench while adjudicating the appeal in the case of the tax-payer situated under the jurisdiction of AO situated at Meerut, U.P. in the case of Roseberry Mercantile Private Limited v. ACIT, Meerut, U.P. in ITA no. 2995/Del/2015 for ay: 2008-09, vide order dated 30.11.2018 , wherein the tribunal decided this issue in favour of Revenue by following the decision(s) of Hon ble Allahabad High Court in the case of Shri Raj Kumar Arora(supra) and M/s Kesarvani Zarda Bhandar(supra). We at tribunal being inferior judicial body to Hon ble Jurisdictional High Court are bound by the decision of Hon ble Allahabad High Court as a matter of judicial disciple, thus, by following the ratio of decision(s) of Hon ble Allahabad High Court in the case of Shri Raj Kumar Aro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt distinguished the decision of Hon ble Supreme Court in the case of Hotel Blue Moon(supra) , which held that notice u/s 143(2) is mandatorily required while framing block assessment u/s 158BC. The Hon ble Madras High Court referred to decision of Hon ble Delhi High Court in the case of Ashok Chaddha v. ITO (2012) 20 taxmann.com 387(Del. HC) ; decision of Hon ble Punjab and Haryana High Court in the case of Tarsem Singla v. DCIT ((2017) 81 taxmann.com 347(P H HC);CIT v. Promy Kuriakose (2017) 79 taxmann.com 405(Ker. HC), and then held that that in framing assessment u/s 153A, due regard must be given to principles of natural justice, which requirement shall stand satisfied either by issuance of notice u/s 143(2) or questionnaire u/s 142(1) issued by the AO. Thus, we hold this issue in favour of Revenue in the instant case. We order accordingly. Now, coming to Merits of the issue, It is observed that the assessee company had received Rs. 2,50,00,000/- on 06th July 2010 , which was credited to its bank account, vide cheque number 124 . The relevant bank statements of the assessee company are filed by assessee in paper book filed with tribunal. It is claimed that the said amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 01.04.2011 to 31.03.2014(page 40/pb). It is also claimed that Shri Ajeya Singh belongs to highly respectable family being son of Former Prime Minister of India, Shri V.P.Singh . It is also claimed that Shri Ajeya Singh is person of means and is running several businesses. The assessee has also filed an affidavit dated 10.01.2017 before ld. CIT(A) , executed by its Director Shri Hemant Kumar Sindhi averring that the aforesaid amount of Rs. 2,50,00,000/- was received by assessee from Shri Ajeya Singh for purchase of land by Shri Ajeya Singh with the assessee. It is further averred in the said affidavit that the said amount was received through banking channel. It is further averred in the said affidavit that the deal was not materialized and hence the said amount was returned to Shri Ajeya Singh through banking channel. This affidavit dated 10.01.2017 is filed for the first time before ld. CIT(A) and is an additional evidence filed for the first time before ld. CIT(A) in first appellate proceedings. The ld. CIT(A) did not forwarded the additional evidences to AO for his comments/remand report and hence principles of natural justice are breached. Reference is drawn to Rule 46A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged to income-tax as income of the assessee of that previous year. The burden/onus is cast on the assessee and the assessee is required to explain to the satisfaction of the AO cumulatively about the identity and capacity/creditworthiness of the creditors along with the genuineness of the transaction to the satisfaction of the AO. All the constituents are required to be cumulatively satisfied. If one or more of them is absent, then the AO can make the additions u/s. 68 of the Act as an income. The use of the word 'any sum found credited in the books' in Section 68 indicates that it is widely worded and the AO can make enquiries as to the nature and source thereof. The AO can go to enquire/investigate into truthfulness of the assertion of the assessee regarding the nature and the source of the credit in its books of accounts and in case the AO is not satisfied with the explanation of the assessee with respect to establishing identity and credit worthiness of the creditor and the genuineness of the transactions, the AO is empowered to make additions to the income of the assessee u/s. 68 of the Act as an unexplained credit in the hands of the assessee company. In the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as income or not, must depend very largely on the facts and circumstances of each case. In the present case the receipts are shown in the account books of a firm of which the appellant and Govindaswamy Mudaliar were partners. When he was called upon to give explanation he put forward two explanations, one being a gift of Rs. 80,000 and the other being receipt of Rs. 42,000 from business of which he claimed to be the real owner. When both these explanations were rejected, as they have been, it was clearly open to the Income-tax Officer to hold that the income must be concealed income. There is ample authority for the position that where an assessee fails to prove satisfactorily the source and nature of certain amount of cash received during the accounting year, the Income-tax Officer is entitled to draw the inference that the receipts are of an assessable nature. The conclusion to which the Appellate Tribunal came appears to us to be amply warranted by the facts of the case. There is no ground for interfering with that finding, and these appeals are accordingly dismissed with costs. Thus, keeping in view the entire factual matrix of the case , we are of the considered view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153A(1) is quoted as under:- (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, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed 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 section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment made under subsection (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.-for the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; 1 Inserted with effect from the 1st day of July, 2012 (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 3. As per the Clause (a) of sub section 1 of section 153A, the other provisions of this Act shall, so far as may be, applied accordingly as if such return of income were a return required to be furnished under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risk management strategy formulated by the Board from time to time: (ii) Any final objection raised by the comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act. Explanation 2.- for the purpose of this section, where,- (i) A search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) A survey is conducted under section 133A, other than under sub section (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) The Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee: or (iv) The Assessing officer is satisfied, with the prior approval of Principal Commissioner or commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess total income of the assessee for six assessment years preceding to the assessment year relevant to the previous year in which such search is conducted or requisition is made. The mandatory nature of completing the assessment or reassessment under section 153A does not obliterate the mandatory requirement of assessment proceedings as prescribed for the return of income filed under section 139 of the Act which are equally applicable to the return of income filed in response to notice under section 153A(1) of the Income Tax Act as provided in Clause (a) of Section 153A(1). The Hon'ble Supreme Court in case of ACIT vs. Hotel Blue Moon 188 taxman 113 has held in para 15 to 18 as under:- 15) We may now revert back to Section 158 BC(b) which is the material provision which requires our consideration. Section 158 BC(b) provides for enquiry and assessment. The said provision reads that the assessing officer shall proceed to determine the undisclosed income of the Block period in the manner laid down in Section 158 BB and the provisions of Section 142, subsection (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply. An analysis of this sub secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14th August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicable and no assessment could be made without issuing notice under Section 143(2) of the Act. However, it is contended by Sri Shekhar, learned counsel for the department that in view of the expression So far as may be in Section 153 BC(b), the issue of notice is not mandatory but optional and are to be applied to the extent practicable. In support of that contention, the learned counsel has relied on the observation made by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chapter XIV-B of the Act, we are in agreement with the reasoning and the conclusion reached by the High Court. 5. It has been held by the Hon'ble Supreme Court that the notice under section 143(2) of the Act is a mandatory condition and cannot be dispensed with. It was also held that the omission on the part of the Assessing Officer to issue notice under section 143(2) cannot be a procedural irregularity and same is not curable. Therefore, once the assessee has filed a return of income, the Assessing Officer is under statutory obligation to issue notice under section 143(2) and failure of the same would render the assessment order as invalid and void ab initio. The Hon'ble Kerela High Court in case of Travancore Diagnostics Private Limited vs. ACIT 390 ITR 167 has also dealt with this issue of validity of reassessment order passed under section 147 read with section 143(3) without issuing notice under section 143(2). The relevant finding of Hon'ble High Court in para 33 and 34 are as under:- 33. The extended question then is whether even if the assessee is deemed to have participated in the proceedings under Section 143, even without the Assessing Officer having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 5 of this judgment assumes climataric importance because in taxation nothing is to be intended and nothing can be presumed. If a notice under Section 143(2) has not been issued, the Assessing Officer cannot claim the benefit under Section 292BB and the claim that the earlier notice extracted in paragraph 29 of the judgment was intended to be the notice issued under Section 143(2) and that substantial compliance under Section 143(2) must be inferred, cannot be countenanced. 6. The Hon'ble High Court has held that when it is admitted that notice under section 143(2) has not been issued, the Assessing Officer losses even the authority to enter into the jurisdiction under section 143 and the participation or otherwise appearance of the assessee would be of no avail. A similar view has been taken by the Hon'ble Calcutta High Court in case of Pr. CIT vs. Oberoi Hotels Private Limited 409 ITR 132. The Hon'ble High Court has given its finding on the substantial questions of law as reproduced in para 2 of the judgment read as under:- 1. Whether the failure to issue a notice under section 143(2) of the Act in the course of reassessment proceedings would vitiate the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search cases. 9. Section 158 B defines undisclosed income , and block period which are the two basic factors for framing the block assessments. 10. Section 158 BA is an enabling section, empowering the assessing officer, to assess undisclosed income as a result of search initiated or requisition made after June 30, 1995, in accordance with the provisions of this Chapter and tax the same at the fixed rate specified in Section 113. Section 158 BB provides the methodology for computation of undisclosed income of the block period. Section 158 BC prescribes the procedure for making the Block assessment of the searched person. Section 158 BD enables assessment of any person, other than the searched person. Section 158 BE sets the time limits for completion of the Block assessments. Section 158 BF provides for immunity from levy of interest under Sections 234A, 234B and 234C and penalties under Section 271(1)(C), 271A and 271B. Section 158 BFA provides for levy of interest and penalty in cases of search on or after January 1, 1997. Section 158 BG specifies the authorities competent to make the block assessment. Section 158 BH provides for application of all the other provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 13. Section 158 BC stipulates that the Chapter would have application where search has been effected under Section 132 or on requisition of books of accounts, other documents or assets under Section 132A. By making the notice issued under this Section mandatory, it makes such notice the very foundation for jurisdiction. Such notice under the Section is required to be served on the person who is found to be having undisclosed income. The Section itself prescribes the time limit of 15 days for compliance. In respect of searches on or after 1.1.1997, the time limit may be given up to 45 days instead of 15 days for compliance. Such notice is prescribed under Rule 12(1A) which in turn prescribes Form 2B for block return. 14. Section 158 BC(b) is a procedural provision for making a regular assessment applicable to Block assessment as well. Section 158 BC(c) would require the assessing officer to compute the income as well as tax on completion of the proceedings to be made. Section 158 BC(d) would authorize the assessing officer to apply the assets seized in the same manner as are applied under Section 132B. 15. We may now revert back to Section 158 BC(b) which is the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or could have indicated that also. A reading of the provision would clearly indicate, in our opinion, if the assessing officer, if for any reason, repudiates the return filed by the assessee in response to notice under Section 158 BC(a), the assessing officer must necessarily issue notice under Section 143(2) of the Act within the time prescribed in the proviso to Section 143(2) of the Act. Where the legislature intended to exclude certain provisions from the ambit of Section 158 BC(b) it has done so specifically. Thus, when Section 158 BC(b) specifically refers to applicability of the proviso thereto cannot be exclude. We may also notice here itself that the clarification given by CBDT in its circular No.717 dated 14th August, 1995, has a binding effect on the department, but not on the Court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of Section 143 of the Act. Accordingly, we conclude even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of Section 158 BC, the provisions of Section 142 and sub-sections (2) and (3) of Section 143 are applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourts cited above that the requirement of notice under section 143(2) while passing the reassessment order under section 147 is mandatory jurisdictional condition and in the absence of such notice, the order passed by the Assessing Officer is invalid and liable to be quashed. Since the return of income filed in response to notice under section 148 as well as under section 153A(1) are treated as if such return is furnished under section 139 of the Income Tax Act therefore, the logical corollary would be that the order passed under section 153A read with section 143/144 of the Act without issuing the notice under section 143(2) is invalid and liable to be quashed. 9. In the case in hand, there is no dispute that the assessee has filed a return of income in compliance of notice under section 153A on 15.02.2016 though the said return was filed after the stipulated time given by the Assessing Officer however, the Assessing Officer passed the impugned assessment order by considering the return of income filed by the assessee and therefore, it is manifest that the belated return filed by the assessee was regularized by the Assessing Officer. Without issuing the notice under section 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration on 30th September, 2011 declaring total income of Rs. 4,17,790/-. It is undisputed fact that the assessment was not pending on 5.12.2013 when a search and seizure operation was conducted under section 132 of the Income Tax Act in case of the assessee. Therefore, the assessment has not got abated by virtue of the initiation of search and seizure action. Consequently the notice issued by the Assessing Officer under section 153A of the Act would be for reassessment of the total income of the assessee. The Assessing Officer in the entire assessment order has not pointed out any incriminating material found or seized during the course of search and seizure proceedings. Even no addition was made by the Assessing Officer on account of undisclosed income while passing the impugned assessment order under section 153A read with section 144 of the Income Tax Act. The only addition made by the Assessing Officer to the total income of the assessee declared in the return of income is on account of sundry creditors of Rs. 2.5 Crores treated as unexplained. It is also not the case of the Assessing Officer that the sundry creditors as recorded in the books of accounts was eith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r reassessment to ascertain the total income of the person is required to be done, however, the same would in that case not result in any addition and the assessments passed earlier may have to be reiterated. 23. The reliance placed by the counsel for the appellant on the case of Anil Kumar Bhatia (supra) also does not help the case of the assessee. The relevant extract of the said judgment reads as under:- 19. 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 Assessing Officer has been given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition shall abate . Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus eme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 153A have to be undertaken. 25. The argument of the learned counsel that the AO is also free to disturb income, expenditure or deduction de hors the incriminating material, while making assessment under Section 153A of the Act is also not borne out from the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. The provisions of Sections 153A to 153C cannot be interpreted to be a further innings for the AO and/or assessee beyond provisions of Sections 139 (return of income), 139(5) (revised return of income), 147 (income escaping assessment) and 263 (revision of orders) of the Act. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess' have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word 'assess' has been used i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o its logical end would mean that even in cases where the appeal arising out of the completed assessment has been decided by the CIT(A), ITAT and the High Court, on a notice issued under Section 153A of the Act, the AO would have power to undo what has been concluded upto the High Court. Any interpretation which leads to such conclusion has to be repelled and/or avoided as held by the Hon'ble Supreme Court in the case of K.P. Varghese (supra). 30. Consequently, it is held that it is not open for the assessee to seek deduction or claim expenditure which has not been claimed in the original assessment, which assessment already stands completed, only because a assessment under Section 153A of the Act in pursuance of search or requisition is required to be made. 11. The Hon'ble High Court has held that in case of search and seizure action under section 132 of the Act though section 153A would be triggered and assessment or reassessment to ascertain the total income of the assessee is required to be done however, the same would in that case not result in any addition in the absence of any incriminating material and the assessment completed earlier may have to be reiterate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;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 AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A 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. Conclusion 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed. 12. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently, it was held that the Assessing Officer was not justified in invoking section 68 of the Act for the purposes of making additions on account of share capital. 3. As far as the above facts are concerned, there is nothing shown to the Court to persuade and hold that the above factual determination is perverse. Consequently, considering all the facts and circumstances of the case, he court is of the opinion that no substantial question of law arises in the impugned order of the Income tax Appellate Tribunal which requires examination. 13. The SLP filed by the Revenue against the judgment of Hon'ble Delhi High Court in case of Pr. CIT vs. Kurli Paper Mills (supra) was dismissed vide order dated 07th December, 2015. In a subsequent judgment, the Hon'ble Delhi High Court in the case of Pr. CIT vs. Meeta Gutgutiya 395 ITR 526 has again considered this issue in appeal in para 55 to 71 reads as under:- 55. On the legal aspect of invocation of Section 153A in relation to AYs 2000-01 to 2003-04, the central plank of the Revenue s submission is the decision of this Court in Dayawanti Gupta (supra). Before beginning to examine the said decision, it is necessary to rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussed the decision in Filatex India Ltd. v. CIT (supra) as well as the above two decisions and observed as under: 31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das (supra), and Filatex India Ltd. v. CIT-IV (supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search. 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 (Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section 153A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the interpretation that for the completed assessments, the same can be tinkered only based on the incriminating material found during the course of search or requisition of documents. 60. In Kabul Chawla (supra), the Court also took note of the decision of the Bombay High Court in Commissioner of Income Tax v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78 (Bom) which accepted the plea that if no incriminating material was found during the course of search in respect of an issue, then no additions in respect of any issue can be made to the assessment under Section 153A and 153C of the Act. The legal position was thereafter summarized in Kabul Chawla (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 61. It appears that a number of High Courts have concurred with the decision of this Court in Kabul Chawla (supra) beginning with the Gujarat High Court in Principal Commissioner of Income Tax v. Saumya Construction Pvt. Ltd. (supra). There, a search and seizure operation was carried out on 7th October, 2009 and an assessment came to be framed under Section 143(3) read with Section 153A(1)(b) in determining the total income of the Assessee of Rs. 14.5 crores against declared income of Rs. 3.44 crores. The ITAT deleted the additions on the ground that it was not based on any incriminating material found during the course of the search in respect of AYs under consideration i.e., AY 2006-07. The Gujarat High Court referred to the decision in Kabul Chawla (supra), of the Rajasthan High Court in Jai Steel (India), Jodhpur v. ACIT (supra) and one earlier decision of the Gujarat High Court itself. It explained in par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading Assessment in case of search or requisition . It is well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153. the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something round during the search or requisition viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the present case stands concluded by the decision of this court In the case of CIT v. Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years ; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 62. Subsequently, in Principal Commissioner of Income Tax- 1 v. Devangi alias Rupa (supra), another Bench of the Gujarat High Court reiterated the above legal position following its earlier decision in Principal Commissioner of Income Tax v. Saumya Construction P. Ltd. (supra) and of this Court in Kabul Chawla (supra). As far as Karnataka High Court is concerned, it has in CIT v. IBC Knowledge Park P. Ltd. (supra) followed the decision of this Court in Kabul Chawla (supra) and held that there had to be incriminating material qua each of the AYs in which additions were sought to be made pursuant to search and seizure operation. The Calcutta High Court in CIT-2 v. Salasar Stock Broking Ltd. (supra), t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra) there that they were not maintaining regular books of accounts and the transactions were not recorded therein. 66. Further, in answer to Question No. 11, the Assessee in Dayawanti Gupta (supra) was confronted with certain documents seized during the search. The answer was categorical and reads thus: Ans:- I hereby admit that these papers also contend details of various transactions include purchase/ sales/ manufacturing trading of Gutkha, Supari made in cash outside Books of accounts and these are actually unaccounted transactions made by our two firms namely M/s Asom Trading and M/s. Balaji Perfumes. 67. By contrast, there is no such statement in the present case which can be said to constitute an admission by the Assessee of a failure to record any transaction in the accounts of the Assessee for the AYs in question. On the contrary, the Assessee herein stated that, he is regularly maintaining the books of accounts. The disclosure made in the sum of Rs. 1.10 crores was only for the year of search and not for the earlier years. As already noticed, the books of accounts maintained by the Assessee in the present case have been accepted by the AO. In response to questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those AYs. 14. The Hon'ble Delhi High Court has concurred with the view as taken in the case of Kabul Chawla (supra) as well as decision of Hon'ble Rajasthan High Court in the case of M/s Jai Steel India vs. ACIT (supra). The SLP filed by the Revenue against the decision in case of Pr. CIT vs. Meeta Gutgutia (supra) was also dismissed by the Hon'ble Supreme Court vide order dated 02nd July, 2018. Therefore, there was a consistent view taken by the Hon'ble High Court in a series of decisions that in the absence of any incriminating material found or seized during the course of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer on account of sundry creditors does not fall either in the category of undisclosed income or an income which has escaped assessment and detected during the course of search and seizure action. Hence the provisions of reassessment proceedings under section 153A of the Act cannot be used for conducting a rowing and fishing enquiry but at the most an income which has escaped assessment in the original proceedings can be brought to tax in the reassessment proceedings. Unless the Assessing Officer assess or reassess the income which relates to the evidence or material found during the course of search and seizure action it would not be open to the Assessing Officer to assess or reassess any other income chargeable to tax which comes to his notice during the course of proceedings under section 153A of the Act. Such income can be assessed alongwith the undisclosed income based on some evidence or incriminating material found during the course of search and seizure operation. Therefore, the law laid down by the Hon'ble Bombay High Court in the case of CIT vs. Jet Airways India Limited 331 ITR 236 is equally applicable in the proceedings under section 153A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT v. Kesarwani Zarda Bhandar in ITA No.270 of 2014, which decisions are binding on tribunal? 3. Whether in the facts and circumstances of the case, the order passed by the Assessing Officer u/s 153A read with Section 144A of the 1961 Act is liable to be quashed or, is liable to be set aside and restored to the file of the Assessing Officer for framing de-novo assessment? 3. The ld. JM, who wrote the dissent, has framed the following questions for reference to the Third Member: (1) Whether in the facts and circumstances of the case, the reassessment order framed under section 153A read with section 144 of the Income Tax Act is invalid and liable to be quashed or not? (2) Whether in the facts and circumstances of the case, the addition made by the Assessing Officer under section 68 of the Income Tax Act on account of Sundry Creditors shown in the books of accounts in the absence of any incriminating material found or seized during the search and seizure action is not sustainable and is liable to be deleted or not? 4. I heard both the sides on 29.03.2022, primarily, with a view to reach consensus on the questions to be framed reflecting the difference of opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no notice u/s 143(2) of the Act was issued by the AO before taking up the assessment u/s 153A and hence, the assessment was rendered null and void. The ld. AM did not concur with such a view in his opinion, while the ld. JM accepted the proposition. This is the first issue before me for consideration as to whether issuance of notice u/s 143(2) is a mandatory jurisdictional requirement for making an assessment u/s 153A, in the absence of which the assessment order becomes null and void. 6.2. Section 153A of the Act, at the relevant time, opens with a nonobstante clause, inter-alia, qua section 147 and provides that when a person is searched after the specified date, 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 clause (b) .. 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 section 139 . Section 153A(1)(b) states that the AO shall: assess or reassess the total income of six assessment years immediately pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f search or requisition. Such assessments have to be mandatorily made by the AO whether or not he considers necessary to expedient to ensure that the assessee has not understated the income. There is no choice with the AO except to make the assessments of the prescribed six assessment years. Once the assessments are to be mandatorily made in search cases, unlike the regular cases giving choice to the AO to make assessment only on considering it necessary or expedient, there is no requirement of acquiring any jurisdiction to do so by firstly issuing notice u/s 143(2). The very factum of search confers jurisdiction on the AO to make assessment under section 153A of the Act. 6.3. It is no doubt true that section 147 also requires issuance of a notice u/s 143(2) as a pre-condition for making assessment or reassessment. However, in view of the fact that section 153A contains non-obstante clause qua section 147, the consequential requirement of issuing notice u/s 143(2) before making assessment u/s 147, also gets obliterated in an assessment u/s 153A. Moreover, section 153A directly empowers the AO to take up the assessment without acquiring any separate jurisdiction. 6.4. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of notice u/s 143(2) for completing the assessment u/s 153C. The above referred three judgments have been considered by the Hon ble Madras High Court in B. Kubendran v. DCIT (2021) 434 161 (Mad) and thereafter, it has been laid down that there is no specific provision in the Act requiring the assessment u/s 153A to be made after issuing notice u/s 143(2). No contrary decision of any other Hon ble High Court, mandating the requirement of notice u/s 143(2) in making assessment u/s 153A, has been placed by the ld. AR before me. 6.6. At this stage, it would be significant to note that a difference of opinion arose between two Members of the Mumbai Bench on this very issue as to whether requirement of issuing notice u/s 143(2) is there before making assessment u/s 153A? The learned Third Member in Smt. Sumanlata Bansal vs. ACIT (TM), vide his order dated 20.05.2015 (ITA Nos.525 to 530/Mum/2008), has decided the issue in favour of the Revenue by holding that the issuance of notice u/s 143(2) is not warranted while framing assessment u/s 153A. In view of the foregoing discussion, the overwhelming legal position is clear by which the four Hon ble High Courts of the country have decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kabul Chawla (2016) 380 ITR 573 (Del) has held that : `Completed assessments can be interfered with by the 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. Similar view has been reiterated by some other High Courts, including, the Hon ble Bombay High Court in CIT vs. Continental Warehousing Corporation (2015) 374 ITR 645 (Bom) and the Hon ble Delhi High Court in Pr.CIT Ors. vs. Meeta Gutgutia (2017) 395 ITR 526 (Del). 7.4. As opposed to that, there are certain High Courts, including the Hon ble jurisdictional High Court, canvassing a view in favour of the Revenue holding that the scope of assessments u/s 153A, for the years whose assessments already stood completed on the date of search, is not restricted only to the incriminating material found during the course of search but also to the material available at the time of original filing of the return. The Hon ble Allahabad High Court in CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial hierarchy, such a view has to make a place for the view of the jurisdictional High Court. It is only for the Hon ble Supreme Court to take a final call on the view of the jurisdictional High Court. Until that is done, the same remains binding on all the authorities under the jurisdiction of the High Court. Any contrary course of action of suo motu disregarding the view of the jurisdictional High Court destroys the fabric of judicial discipline leading to chaos. 7.6. At this occasion, it is pertinent to mention that the undersigned authored the Delhi Tribunal order in Kabul Chawla [since reported at (2014) 151 ITD 0055 (Delhi)], which got approval of the Hon ble Delhi High Court supra. Later on, similar issue came up for consideration before the undersigned in a Third member case in HBN Dairies Allied Ltd. vs. ACIT (2018) 195 TTJ 0969 (Del) (TM). The issue was again decided in favour of the assessee. But, in view of the fact that the Hon ble jurisdictional Allahabad High Court has decided this issue in favour of the Revenue, there is no question of proceeding with any contrary view, which has to bow before that of the Hon ble jurisdictional High Court. 7.7. The principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome that formed the basis of reasons for re-assessment ceased to exist, it was not open to independently assess some other income. The Hon ble High Court in that case was interpreting section 147, which provides that: If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of section 148 to 153, assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of proceedings . It is, therefore, overt that the use of the words `and also in the language of section 147 categorically makes the existence of an income arising out of reasons for re-assessment as a sine qua non for including any other income which comes to the notice of the AO during the course of reassessment proceedings. The important point to accentuate is that a judgment is not interpreted like a legal provision. Each and every word used in a provision carries meaning and has to be brought to its logical conclusion. On the other hand, what is important or has a binding force in a judgment is its ratio decidendi and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment completed u/s 153A because no incriminating material was found during the course of search. It held that `we are of the opinion that in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed, which were subsisting when the search was made, the Assessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the assessee. The Assessing Officer, while exercising the power under Section 153A of the Act, would make assessment and compute the total income of the assessee including the undisclosed income, notwithstanding the assessee had filed the return before the date of search which stood processed under Section 143(1)(a) of the Act. In view of the fact that the only issue for consideration by the Hon ble High Court was the sustainability or otherwise of an addition in the absence of any incriminating material found during the course of search, its ratio decidendi is that `in cases where the assessment have already been completed , which were subsisting when the search was made, the Assessing Officer would be competent to reopen the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the SLP is dismissed by means of reasoned order, then it is a declaration of law by the Hon'ble Supreme Court having binding force under Article 141 of Constitution but will still not attract the doctrine of merger. In Kunhayammed Ors. vs. State of Kerala Anr. (2000) 245 ITR 360 (SC), the Forest Tribunal considering the provisions of Kerala Private Forests (Vesting and Assignment) Act, 1971 held that the land of the appellants therein did not vest in the Government. The State of Kerala approached the Hon ble High Court through an appeal which was dismissed. The State of Kerala filed a petition for special leave under Article 136 of the Constitution which was dismissed by an order reading Special Leave Petition is dismissed on merits . The State of Kerala filed an application for Review before the Hon ble Kerala High Court seeking Review of its earlier order. A preliminary objection was raised before the Hon ble High Court as to the maintainability of the Review petition because of the dismissal of the SLP against it. The Hon ble High Court overruled the preliminary objection. When the matter came up for hearing before the Hon'ble Supreme Court, it held that mere reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, dismissed - are no different from the remarks Special Leave Petition is dismissed on merits or Dismissed on merits , which have been held by the Hon ble Apex Court as dismissal of SLP without reasons, not leading to any declaration of law by the Hon'ble Supreme Court. In the hue of the above discussion, the judgment of the Hon ble Delhi High Court in Meeta Gutgutia (supra) cannot be construed to have either been affirmed by the Hon ble Supreme Court or merged in the order dismissing the SLP against it. This judgment, ergo, ranks pari passu with Kabul Chawla (supra) and other judgments of Hon ble High Courts deciding the issue in favour of assessee, without getting elevated to the status of that of the Hon'ble Supreme Court. The sequitur is that the ratio decidendi laid down by the Hon ble jurisdictional High Court in Rajesh Kumar Arora (supra) still holds the field and is binding on all the authorities under the jurisdiction of the Hon ble Allahabad High Court. In view of the foregoing discussion and respectfully following the binding precedent, I agree with the learned AM that there is no legal impediment in making an addition, otherwise than on the basis of any in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uirement for making assessment u/s 153A of the Act, in the absence of which the assessment order became null and void? b) Whether on the facts and in law, the ld. CIT(A) was justified in holding that no addition , based otherwise than on an incriminating document or material etc. found during the course of search, can be made in the assessment relating to any assessment year falling within the period of six assessment years as prescribed u/s 153A of the Act which is not pending on the date of initiation of the search? c) Whether on the facts and in law, the ld. CIT(A) was justified in deleting the addition rather than restoring the matter to the Assessing Officer for a fresh decision? 3. The Hon ble Vice President vide his appellate order dated 12.04.2012 has concurred with the view taken ld. Accountant Member on the first two questions of differences at para 2(a) and 2(b) above, by answering both the questions in negative. The Hon ble Vice President vide answering question of differences at para 2(c) above, has concurred with the findings of ld. Accountant Member by observing the following: 8.1 Now, I take up the third question as to whether the ld. CIT(A) was justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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