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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 ..... d "the AO") u/s 153A read with Section 144 of the 1961 Act for ay:2011-12. The assessee has filed Cross Objection(C.O.) bearing number 22/Alld/2017 arising out of ITA No. 103/Alld/2017 for ay: 2011-12. This appeal and the C.O. were heard by Division Bench through video conferencing mode through Virtual Court. 2. The Revenue has raised following grounds of appeal in memo of appeal filed with the tribunal: "1. In view of the facts and circumstances of the case, Ld. CIT(A) has erred in deleting the addition of Rs. 2,50,00,000/- made on account of unexplained ... without appreciating the facts that assessee failed to produce any satisfactory evidence to prove the genuineness during the course of assessment proceedings. 2. In view of the facts and circumstances of the case, Ld. CIT(A) has erred in applying the judgment of Hon'ble Delhi High 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identity , genuineness and creditworthiness of the person. The AO asked the assessee to furnish the evidence of identity, genuineness and creditworthiness of the Shri Ajeya Singh to prove the genuineness of transaction. The AO observed that the assessee has failed to adduce any corroborative evidence in support . The AO observed that the assessee has shown the amount as sundry creditors in the name of Shri Ajeya Singh of Rs.2.50 crore and the assessee has not explained the genuineness of transaction and failed to furnish identity and creditworthiness of Shri Ajeya Singh. The AO observed that the assessee has failed to satisfactory explain the transaction of Rs. 2.50 crore. Thus, the AO held that the amount shown as sundry creditor of Rs. 2.50 crore be treated as unexplained and the AO added the same to be the income of the assessee 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elied upon following judicial decisions: 1. Hon'ble Allahabad High Court decision in the case of Commissioner of Income Tax(Central) , Kanpur v. Smt. Shaila Agarwal , reported in (2012)346 ITR 130(Alld. HC) ( (2011) 16 Taxmann.com 232(Alld. HC)) 2. Hon'ble ITAT , Special Bench decision in the case of All Cargo Global Logistics Limited & Ors. v. DCIT , Mumbai , reported in (2012)147 TTJ 513(Mum. SB) 3. Hon'ble Delhi High Court decision in the case of CIT v. Kabul Chawla (2016) 380 ITR 573(Del. HC) On merits of the issue, the assessee submitted before ld. CIT(A) that said Shri Ajay Singh(trade creditor) deposited the amount of Rs. 2,50,00,000/- with the assessee company for purchase of land and not for the purposes of interest. The assessee submitted before ld. CIT(A) that the deposit was made by Shri Ajeya Singh through 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 P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the date of search. Thus, no assessment got abated on the date of search for the year under consideration. The ld. CIT(A) held that keeping in view above factual facts, the AO could have made addition in this year on the basis of incriminating documents relatable to year under consideration found during the course of search. The ld. CIT(A) observed that the assessee filed return of income u/s 139(1) of the 1961 Act , on 30.09.2011, declaring income of Rs. 4,17,790/- along with audit report and the return of income was processed u/s 143(1) of the 1961 Act. The ld. CIT(A) observed that the assessee filed return of income in compliance to notice issued by AO u/s 153A of the 1961 Act on 15.02.2016 declaring income of Rs. 4,17,790/- , as was originally declared in return of income filed u/s 139(1) of the 1961 Act . Thus, 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 credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te order dated 22.02.2017 passed by ld. CIT(A) , who has filed this appeal with tribunal. The assessee has filed C.O. which is mainly in support of the appellate order dated 22.02.2017 passed by ld. CIT(A). We have heard both the rival parties through Video Conferencing mode through Virtual Court. The ld. CIT-DR opened arguments before the Division Bench. The ld. CIT-DR submitted before the Bench that the AO made additions to the income of the assessee to the tune of Rs. 2,50,00,000/- by invoking provisions of Section 68 of the 1961 Act. The ld. CIT(A) deleted the addition on the ground that no incriminating material was found during the course of search and seizure operations conducted by Revenue u/s 132(1) of the 1961 Act, on 05.12.2013. It was submitted that ld. CIT(A) relied upon the decision of Hon'ble Delhi 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 1961 Act ,while framing assessment u/s 153A of the 1961 Act. The ld. CIT-DR relied upon the decision of Hon'ble Madras High Court in the case of B. Kubendran v. DCIT, Chennai, reported in (2021) 126 taxmann.com 107(Mad. HC) to contend that Hon'ble Madras High Court distinguished the decision of Hon'ble Supreme Court in the case of ACIT v. Hotel Blue Moon (2010) 188 Taxman 113/321 ITR 362(SC) and held that no notice u/s 143(2) is required while framing assessment u/s 153A of the 1961 Act. Our attention was drawn by ld. CIT-DR to page 27/paper book filed by assessee to contend that the disclosure made by assessee in its audited financial statement for fy : 2010-11 is under sub-head 'Other' under the head 'Sundry Creditors' amounting to Rs. 2,50,00,000/- under the Schedule:E-Current Liabilities and Provisions, 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Our attention was also drawn to page 39/paper book , wherein confirmation letter dated 19.02.2016 issued by Ajeya Singh is placed. Our attention was also drawn to page 40 of paper book , wherein statement of account of Shri Ajeya Singh in the books of the assessee for the period 01.04.2011 to 31.03.2014 is placed. Our attention was also drawn to page 42-43/paper book , wherein bank statement of the assessee for 19.10.2013 to 26.03.2014 are placed, to evidence that the repayment of Rs. 2,50,00,000/- was made by the assessee. Our attention was also drawn to page 44-45/paper book, wherein affidavit of Shri Hemant Kumar Sindhi is placed. It was submitted by ld. Counsel for the assessee before the Bench that there is no evidence brought on record by the AO that cash was deposited by Shri Ajeya Singh before issuing 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 stateme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statements for fy:2010-11 and audit report , along with the return of income originally filed on 30.09.2011 under the provisions of Section 139(1). The said return of income was stated to have been processed by Revenue under the provisions of Section 143(1) of the 1961 Act. On 05th December 2013, there was search and seizure operations conducted by Revenue under the provisions of Section 132(1) of the 1961 Act , against Mr. Hemant Kumar Sindhi , Shri Dinesh Kumar Pahuja , residential and office premises of Directors, Partners , Proprietor and other entities in the group. The assessee was admittedly searched on 05th December 2013 as part of the searches conducted on Shri Hemant Kumar Sindhi and Shri Dinesh Kumar Pahuja group. Shri Hemant Kumar Sindhi was Director of the assessee company, effective from 06th 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 2,50,00,000/- being received by assessee from Shri Ajeya Singh through banking channel be sustained? The First issue relates to framing of an assessment based on material which was available at the time of original assessment, while no fresh incriminating material was found relatable to that assessment year in searches conducted by Revenue u/s 132(1) of the 1961 Act. We are presently concerned with ay: 2011-12. The searches were conducted by Revenue u/s 132(1) of the 1961 Act, on 05th December 2013. The claim is made by assessee that no incriminating material was found during the course of search and seizure operations, and the addition of Rs. 2,50,00,000/- was made by the AO to the income of the assessee based on the material available at the time of processing of return of income u/s 143(1) of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has relied upon the Hon'ble Jurisdictional High Court decision in the case of Shri Raj Kumar Arora(supra) and in the case of Kesarvani Zarda Bhandar, Sahson(supra), wherein Hon'ble Jurisdictional High Court has taken a view that purpose and purport of framing assessment u/s 153A is to assess or reassess the total income including undisclosed income, and even in the cases where assessment or reassessment proceedings are already completed and assessment orders were passed , which were subsisting when search operations took place, the AO would be competent to reopen the assessment proceedings already made and determine the total income of the tax-payer including undisclosed income, notwithstanding that the assessee has filed the return of income before the date of search which stood processed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Hon'ble Supreme Court vide orders dated 02nd July, 2018 dismissed the SLP filed by Revenue in PCIT v. Meeta Gutgutia ((2018) 96 taxmann.com 468(SC), against the judgment of Hon'ble Delhi High Court in PCIT v. Meeta Gutgutia(2017) 82 taxmann.com 287(Delhi) wherein Hon'ble Delhi High Court held that no additions can be framed u/s 153A for a particular assessment year without there being an incriminating material qua that assessment year which would justify such an addition. However , it is well settled that if SLP is dismissed in limine by Hon'ble Supreme Court , neither it will lead to merger of judgment of Hon'ble High Court with the dismissal of SLP in limine by Hon'ble Supreme Court as doctrine of merger shall not be applicable in such situation , and such dismissal will also not lead 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016. Thus, 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 reported in (2021) 126 taxmann.com 107(Mad. HC), 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. The Hon'ble Madras High Court 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seizure operations, the amount was not refunded but was refunded by assessee post search operations, after a gap of more than three years. The assessee has filed confirmatory letter dated 19.02.2016 issued by Shri Ajeya Singh (PAN ALUPS0807N),in which Shri Ajeya Singh confirmed that he advanced Rs. 2,50,00,000/- vide cheque number 000124 drawn on Kotak Mahindra Bank Limited to assessee as advance against land Bungalow No. 21 , Colvin Road, Dr. Ram Manohar Lohia Marg ,Allahabad built over Part of Nazul Plot No. 21/1, Clive Road, Village Chikatpur Nasibpur Bakhtiyara , Allahabad , on 05th July 2010( the amount stood credited in assessee's bank account on 06th July , 2010)(page 39/paper book). The assessee has also filed copy of account of Shri Ajeya Singh in its books of accounts from 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 aver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of the assessee as unexplained income under legal fiction created by Section 68 of the Act. Section 68 of the Act creates a legal fiction which does not require that the Revenue has to show the sources of the income before bringing the amount to tax since the amount is found to be credited in the books of the assessee in case the assessee has not offered explanation to the satisfaction of the AO. Thus, Section 68 of the Act cast obligation on the assessee where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source of credit thereof or the explanation offered by the assessee is found not satisfactory in the opinion of the AO, the sum so credited may be treated as income and charged 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee , but the ld. CIT(A) did not forwarded the same to AO for remand report/comments. There is breach of Rule 46A of the 1962 Rules. The Hon'ble Supreme Court dealt with this issue in A. Govindarajulu Mudaliar v. CIT [1958] 34 ITR 807, as under: "Now the contention of the appellant is that assuming that he had failed to establish the case put forward "by him, it does not follow as a matter of law that the amounts in question were income received or accrued during the previous year, that it was the duty of the Department to adduce evidence to show from what source the income was derived and why it should be treated as concealed income. In the absence of such evidence, it is argued, the finding is erroneous. We are unable to agree. Whether a receipt is to be treated 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 clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised in the appeal filed by the Revenue and the Cross Objections filed by the assessee. 2. One of the issue is regarding validity of reassessment order passed by the Assessing Officer under section 153A read with section 144 of the Income Tax Act for want of notice issued under section 143(2) of the Income Tax Act. Section 153(A) contemplates that in case of search under section 132 or requisition under section 132A of the Act initiated after 31st May, 2003, the Assessing Officer shall issue notice to searched person requiring him to furnish the return of income in respect of each of six assessment years falling immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made. For ready reference under section 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 132A is made on or after the 1st day of April, 2017. Explanation 1.- For the purposes of sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment year but not later than ten assessment years from the end of the assessment year rel3evant to the previous year in which search is conducted or requisition is made. Explanation 2.- For the purposes of the fourth provisio, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.' (2) If any proceeding initiated or any order of assessment or reassessment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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: Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant specified authority to issue such notice. Explanation 1.- for the purpose of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means.- (i) Any information flagged in the case of the assessee for the relevant assessment year in accordance with the 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 147/148 are initiated subject to the satisfaction of the conditions prescribed under section 147 of the Act and hence the requirement to form a belief based on some tangible material that income assessable to tax as escaped assessment is a pre-condition whereas the proceedings under section 153A are consequential to the search under section 132 or requisition under section 132A of the Act. The Assessing Officer has the discretion under section 147/148 to initiate as well as to drop the proceedings if he is satisfied after conducting an enquiry or with the reply of the assessee that no income has escaped assessment but the proceedings under section 153A are mandatory in nature and the Assessing Officer is required to assess or re-assess 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This Section even speaks of sub- sections which are to be followed by the assessing officer. Had the intention of the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 158 BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of Section 142, sub-sections (2) and (3) of Section 143. 17) Section 158 BH provides for application of the other provisions of the Act. It reads: "Save as otherwise provided in this Chapter, all the other provisions of this Act shall apply to assessment made under this Chapter." This is an enabling provision, which makes all the provisions of the Act, save as otherwise provided, applicable for proceedings for block assessment. The provisions which are specifically included are those which are available in Chapter XIV-B of the Act, which includes Section 142 and sub-sections (2) and (3) of Section 143. 18) On a consideration of the provisions of 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such notice the assessee appears and participates in the proceedings, then he shall not he heard, subject to the proviso to the said section, that he had not been properly served with notice. We have no hesitation in holding that the Assessing Officer can claim and avail the benefit under Section 292BB and the assessee will be burdened by the rigour of estoppel contained therein only after a notice under Section 143(2) had been validly issued. When it is virtually admitted that no such notice had been issued, the Assessing Officer loses even the authority to enter into the jurisdiction under Section 143 and the participation or otherwise of the assessee would be of no avail. It is here that the words of Rowlat, J. vide supra in paragraph 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 inferr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation. If he accepts the return of undisclosed income as it is, then, there would be no necessity of issuing any notice under Section 143(2) of the Act. However, if the assessing officer is not satisfied with the return so filed, 8 then he is required to issue further notice under Section 143(2) before an assessment order is passed under Chapter XIV-B of the Act. 7. The only question that arises for our consideration in this batch of appeals is, whether service of notice on the assessee under Section 143(2) within the prescribed period of time is a pre-requisite for framing the block assessment under Chapter XIV-B of the Income Tax Act, 1961? 8. Chapter XVI-B prescribes the special procedure for making the assessment of 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 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mode of assessment of undisclosed income, which has been detected as a result of search. It is not intended to be substitute for regular assessment. Its scope and ambit is limited in that sense to materials unearthed during search. It is in addition to the regular assessment already done or to be done. The assessment for the block period can only be done on the basis of evidence found as a result of search or requisition of books of accounts or documents and such other materials or information as are available with the assessing officer. Therefore, the income assessable in Block assessment under Chapter XIV-B is the income not disclosed but found and determined as the result of search under Section 132 or requisition under Section 132A of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the assessing authority to issue notice under Section 143(2) cannot be a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot be dispensed with. The other important feature that requires to be noticed is that the Section 158 BC(b) specifically refers to some of the provisions of the Act which requires to be followed by the assessing officer while completing the block assessments under Chapter XIV-B of the Act. This legislation is by incorporation. This Section even speaks of subsections which are to be followed by the assessing officer. Had the intention of the legislature was to exclude the provisions of Chapter XIV of the Act, the legislature would have 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 provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Calcutta High Court that the issuance of notice under section 143(2) of the Act is mandatory if the Assessing Officer seeks not to accept any part of the return as furnished by the assessee or make an assessment order contrary thereto and even in course of reassessment the notice under section 143(2) cannot be dispensed with. The proceedings under section 153A read with section 143/144 of the Act are in the nature of reassessment in the case in hand and therefore, a valid notice under section 143(2) is a mandatory requirement before passing the assessment order. The non issuance of notice under section 143(2) is a jurisdictional defect which cannot be regularized. It is settled proposition of law as held by the various High Courts 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 Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mandatory conditions for framing the assessment or reassessment under section 153A would result annulment of such order passed by the Assessing Officer. Accordingly, in view of the above discussion, the order passed by the Assessing Officer under section 153A read with section 144 of the Act is invalid and liable to be quashed. 10. The another issue involved in the appeal of the Revenue and the cross objection of the assessee is regarding the addition made by the Assessing Officer of Rs. 2.5 Crores under section 68 of the Income Tax Act on account of sundry creditors shown by the assessee in the balance-sheet as unexplained cash credit. The assessee filed its return of income under section 139 of the Act for the assessment year 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 153A of the Act, the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. Though such a claim by the assessee for the first time under Section 153A of the Act is not completed, the case in hand, has to be considered at best similar to a case where in spite of a search and/or requisition, nothing incriminating is found. In such a case though Section 153A of the Act would be triggered and assessment or 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. 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 assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come that escaped assessments are required to be clubbed together with the total income determined in the original assessment and assessed as the total income. The observations made in the judgment contrasting the provisions of determination of undisclosed income under Chapter XIVB with determination of total income under Sections 153A to 153C of the Act have to be read in the context of second proviso only, which deals with the pending assessment/reassessment proceedings. The further observations made in the context of de novo assessment proceedings also have to be read in context that irrespective of the fact whether any incriminating material is found during the course of search, the notice and consequential assessment under 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under Section 153A of the Act but that would not efface or terminate all the consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty." (emphasis supplied). The said judgment which essentially deals with second proviso to Section 153A of the Act also supports the conclusion, which we have reached hereinbefore. 28. It has been observed by the Hon'ble Supreme Court in K.P. Varghese v. Income Tax Officer : (1981) 131 ITR 597 that "it is well recognized rule of construction that a statutory provision must be so construed, if possible that absurdity and mischief may be avoided." 29. The argument of the counsel for the appellant if taken to 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, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A 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 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2002-03. The question was whether learned Commissioner of Income Tax (Appeals) had erred in law and on the facts in deleting the addition of Rs. 89 Lakhs made by the Assessing Officer under section 68 of the Income Tax Act, 1961 ("the Act") on bogus share capital. But the issue was whether there was any incriminating material whatsoever found during the search to justify the initiation of proceedings under section 153A. 2. The Courts finds that the order of Commissioner of Income Tax (Appeals) reveals that there is a factual finding that "no incriminating evidence related to share capital issued was found during the course of search as is manifest from the order of the Assessing Officer". Consequently, 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 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section 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 Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A 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." 58. In Kabul Chawla (supra), the Court discussed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "assess" and "reassess", which have been found at more than one place in Section 153A of the Act as under: "26. 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 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 interpr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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 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." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, subsection (2) 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 ambigui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 153A of the Act, assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy 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 Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the family firms, were entered in the regular books of account, the answer was: "We and our family firms namely M/s Assam Supari Traders and M/s Balaji Perfumes generally try to record the transactions made in respect of purchase, manufacturing and sales in our regular books of accounts but it is also fact that some time due to some factors like inability of accountant, our busy schedule and some family problems, various purchases and sales of Supari, Gutka and other items dealt by our firms is not entered and shown in the regular books of accounts maintained by our firms." 65. Therefore, there was a clear admission by the Assessees in Dayawanti Gupta (supra) 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 unaccount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is essentially a factual surmise that is logical and plausible. These findings do not call for interference. The second question of law is answered again in favour of the revenue and against the assessee." 69. What weighed with the Court in the above decision was the "habitual concealing of income and indulging in clandestine operations" and that a person indulging in such activities "can hardly be accepted to maintain meticulous books or records for long." These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which 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 basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income which has escaped assessment and came to light during the course of search and seizure action. 15. In the case in hand, since nothing was unearthed during the course of search and seizure action so far as the assessment year under consideration and further the sundry creditors as reported by the assessee in the books of accounts and particularly in the balance-sheet was not disputed or questioned by the department either during the course of search and seizure action or during the post enquiry but this issue was first time taken up by the Assessing Officer during the proceedings under section 153A of the Act. Thus the addition made by the 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 inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Punjab and Haryana in the case of Tarsem Singla v. DCIT (2017) 81 taxmann.com 347 (P&H HC) and Hon'ble High Court of Kerala in the case of CIT vs. Promy Kuriakose (2017) 79 taxmann.com 405 (Ker.HC)? 2. Whether in the facts and circumstances of the case, the mandate of framing assessment u/s 153A of the 1961 Act, pursuant to search u/s 132(1) of the 1961 Act is to assess total income of the tax-payer and not merely income detected during search operations, more so keeping in view ratio of two decision(s) of Hon'ble Jurisdictional High Court in the case of CIT v. Raj Kumar Arora (2014) 52 taxmann.com 172 (All. HC) and in the case 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 reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar under consideration on 15.02.2016 declaring total income of Rs.4,17,790. The assessee had shown a sum of Rs.2.50 crore payable to one Sh. Ajay Singh in the list of Sundry Creditors. On being called upon to prove the genuineness of the transaction by furnishing evidence as to the identity and capacity of Sh. Ajay Kumar Singh, the assessee failed to lead any cogent evidence. The AO made the addition of Rs.2.50 crore u/s 68 of the Act. The ld. CIT(A) deleted the addition. The Revenue approached the Tribunal and the assessee filed its Cross Objection. The assessee raised the first issue before the Tribunal contending that 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 cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial, but making the assessment of such returns is not essential under law. Only in such cases where the AO considers it necessary to ensure that the assessee has not understated his income etc. that he takes up assessment, which is done by firstly acquiring jurisdiction on issuing notice u/s 143(2) of the Act. If the AO does not consider necessary or expedient etc., he need not make an assessment, in which case no notice u/s 143(2) would be required. Thus, it follows that notice u/s 143(2) gives jurisdiction to the AO to take up assessment. On the other hand, section 153A gets triggered for making assessment in case of 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). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Hotel Blue Moon (supra). Similar proposition has been laid down by the Hon'ble Punjab & Haryana High Court in the case of Tarsem Singla v. DCIT (2016) 385 ITR 138 (P&H) holding that no specific notice is required u/s 143(2) when notice u/s 153A(1)(a) was already given. The Hon'ble Punjab & Haryana High Court also considered the judgment in the case of Hotel Blue Moon (supra). Following the judgments in Ashok Chaddha (supra) and Tarsem Singla (supra), the Hon'ble Kerala High Court in CIT vs. Promy Kuriakose (2016) 386 ITR 597 (Ker) reiterated the proposition by holding that there is no requirement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of search because the assessment for the year under consideration was not pending on the date of search and had abated. Au contraire, the ld. JM also relied on certain other judgments to fortify the assessee's contention on this count. 7.3. I have heard the both sides in extenso on this issue. Patently, there are two sets of view of the Hon'ble High Courts on the scope of assessment u/s 153A of an assessment year which was not pending on the date of search either because of its prior completion or because of no time left for taking it up. The Hon'ble Delhi High Court in the case of CIT vs. 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 Corporatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uring the course of search. It is axiomatic as is fortified by Article 227 of the Constitution of India that the law declared by a jurisdictional High Court is binding on all the subordinate Courts and authorities or Tribunal functioning under its superintendence throughout the territories in relation to which it exercises jurisdiction. It is simple and plain that when discordant views are rendered by different High Courts, an inferior authority under one of such High Courts is bound to follow its jurisdictional High Court. Howsoever appealing or convincing the other view may appear, but in the judicial 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 [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its Balance Sheet and no addition on the basis of any incriminating material was made by the AO, there was no scope left for making the addition even if the ratio in Rajesh Kumar Arora (supra) was followed. 7.10. The argument of ld. AR is primarily based on the judgment in Jet Airways (supra), in which the Hon'ble Bombay High Court held that the AO may assess or re-assess the income u/s 147 of the Act in respect of any issue which comes to his notice subsequently in the course of proceedings though the reasons for such issue were not included in the notice but where the alleged escaped income 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer to assess or reassess the total income." 7.12. It is thus, clear that the only subject matter of addition by the AO u/s 153A of the Act in that case was the transaction of gift, which had originally been declared but the assessee could not prove its genuineness in the proceedings u/s 153A and further no incriminating material was found during the course of search. It was in that backdrop that the Hon'ble High Court, deciding the issue in favour of the Revenue, answered the question by holding that the ITAT erred in holding that no addition could be made for gift in the 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 incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is granted, then the SLP gets converted into an appeal. On the other hand, the dismissal of a SLP can be either without assigning any reasons or with reasons. If no reasons are adduced by the Hon'ble Supreme Court and the SLP is dismissed, it does not amount to any declaration of law by the Hon'ble Supreme Court in terms of Article 141 of the Constitution having binding force on all Courts within territory of India nor does the judgment impugned before it gets merged with the order dismissing the SLP. This is not a dismissal of the appeal, but of the leave to file appeal. If 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be easily seen that the Hon'ble Supreme Court has simply dismissed the SLP filed by the Revenue finding no merit in the same. It is not a case of the Hon'ble Supreme Court either considering and deciding the issue on merits in an appeal or giving reasons at the stage of dismissal of SLP. Applying the principles laid down by the Hon'ble Supreme Court in the three cases discussed above, there remains no doubt whatsoever that the dismissal of SLP in Meeta Gutgutia (supra) with the remarks - `We do not find any merit in this petition. The special leave petition is, accordingly, 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 Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Third Member u/s 255(4) of the Income-tax Act, 1961. Both the ld. Members framed separate questions of differences. 2. Hon'ble President , Income Tax Appellate Tribunal nominated Shri R. S. Syal , Hon'ble Vice President as Third Member. Since, separate questions of differences were framed by both the ld. Members, the Hon'ble Vice President, in consultation and concurrence with both the parties, finalized the following question of differences, for adjudication: a)Whether on the facts and in law , the issuance of notice u/s 143(2) is a mandatory jurisdictional requirement 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 rath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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