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TMI Blog2023 (8) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... ly those pending assessment proceedings gets merged with the proceedings u/s 153A of the Act. Sub- section (2) of section 153A of the Act provides that if any proceedings or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal proceedings then the assessment or reassessment relating to the assessment years which is abated under 2 nd proviso would stand revived. Therefore, in the case on hand the pending reassessment proceedings u/s 147 of the Act got abated by virtue of 2 nd proviso to section 153A(1) and scope and ambit of assessment proceedings u/s 153A would cover the assessment as could have been passed u/s 147 of the Act because the proceedings u/s 147 will merge with the scope and ambit of the assessment u/s 153A. Thus, the jurisdiction of the AO to make the original assessment and assessment u/s 153A of the Act, so far as pending assessment are concerned, merges into one and consequently only one assessment shall be made on the basis of the finding of the search and any other material existing or brought on record of the AO. Thus, once the reassessment proceedings initiated vide notice u/s 148 stood abated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that multiple assessment proceedings as well as appeal proceedings were pending at different places the assessee could not immediately gather the requisite documents lying at different places for the purpose of filing an appeal before this Tribunal against the impugned order passed by the Ld. CIT(A). A considerable time has elapsed in this process and this has cause a delay of 30 days in filing an appeal. He has pleaded that the delay in filing the appeal is neither intentional nor wilful but due to facts and circumstances as explained. Hence the AR has prayed that the delay in filing the appeal may be condoned and the appeal of the assessee is decided on merits. 3. On the other hand, ld. DR has fairly submitted that he has no objection if delay in filing the appeal is condoned. 4. We have considered rival submissions as well as relevant material on record. We have also gone through the contents of the affidavit filed by the assessee wherein the assessee has explained cause of delay in filing the present appeal and given the relevant details of multiple proceedings pending at different jurisdiction and locations. There is no dispute that the assessee was facing multiple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares and derivatives Rs. 6,36,138/- claimed by the appellant in the return of income has been duly accounted by the appellant in her books of accounts and hence the denial of such loss simply because it was not debited to profit and loss account is without any basis and blatantly false. 6. The learned CIT(A) erred in upholding the contention of the 1,40,431 Assessing Officer that the loss from trading in shares / derivatives is a speculation loss and since the same was not claimed as speculation loss in the return of income (although claimed as a non-speculative loss), the same is not allowed to be carried forward. 7. The learned CIT(A) erred in upholding the addition of Rs. 1,58,802/- equivalent to estimated gross profit on alleged suppressed sales. The learned CIT(A) erred in concluding that the sales are suppressed on account of difference in sales amount as per sales register and as per trading account despite the fact that the appellant had duly reconciled the difference with the help of supporting documents. 8. The appellant craves leave to add, alter or amend any of the grounds of the appeal, at any time before or at the time of hearing. 5. Ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore it is clear that reassessment proceedings initiated vide notice u/s 148 dated 22.03.2013 were pending on the date of search i.e. 16.05.2013. Accordingly, reassessment proceedings pending on the date of search stood abated by virtue of 2nd proviso to section 153A(1). For the sake of completeness section 153A(1) with proviso is quoted as under: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sis of the findings of search and any other material existing or brought on record of the AO. The assessments or reassessments which stand abated in terms of 2nd proviso of section 153A(1) of the Act are required to be made by the AO as his original jurisdiction to frame the assessment. In the provision of section 153A(1) the term assess has been used in the context of an abated assessment proceedings and reassess has been used for completed assessment proceedings which would not abate by virtue of search as they are not pending on the date of initiation of the search. The assessment or reassessment pending on the date of search shall abate and total income for such assessment year shall have to be computed by the AO as a fresh exercise. In another words there will be only one assessment order in respect of each of the six assessment years in which both disclosed and undisclosed income would be brought to tax . Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment u/s 153A merges into one and consequently only one assessment shall be made. Therefore, a mandate is cast upon the assessing officer as per the first provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal 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. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the total income for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the total income taking into consideration the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the total income taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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