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TMI Blog2023 (9) TMI 1217X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be deleted. X X X X Extracts X X X X X X X X Extracts X X X X ..... y other reasons which may be adduced at the time of hearing, it is prayed that the Order of the Assessing officer be directed to set aside. 4. The Appellant craves leave to add, to alter or amend all or any of the aforesaid grounds of appeal." 3. Since the additional grounds are legal in nature, relying on the following the Hon'ble Supreme Court judgment in the case of M/s National Thermal Power Co. Ltd. Vs. CIT, 229 ITR 383 (SC), the additional grounds are admitted. 4. The brief facts of the case are that assessee is carrying on activities in mining, gas unit and windmill to generate power. The assessee furnished return of income u/s. 139(1) of the Act on 31.10.2002 vide Ack. No.262 with ITO, Ward 1(2)(3), Mumbai. A search action u/s. 132 was conducted on 26.10.2007 in the case of Shri Narendra Kumar Baldota group. Certain documents were found and seized from the premises of the assessee. Accordingly, a notice u/s. 153A of the Act was issued on 06.08.2008 in response to the notice u/s. 153A, the assessee filed a letter (dated 20.08.2008) on 01.09.2008 stating that earlier return filed on 31.10.2002 be treated as a return in response to notice u/s. 153A. Thereafter, statutory n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment/ reassessment pending before the AO. Therefore the completed assessment cannot be interfered by the AO without reference to any incriminating material found during the course of search. Therefore, the addition made solely on the basis of financial statements and confirmed by the CIT(Appeals) is not correct and the assessment order is to be set aside. In support of his arguments, the ld. AR relied on the judgment of the Hon'ble Supreme Court in the case of PCIT v. Abhisar Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC). 8. The ld. DR relied on the orders of the lower authorities and submitted that the addition made towards disallowance on aircraft expenses and depreciation, there may be some loose documents or statements recorded which has not been quoted by the AO in his order and only because of that the addition made u/s. 153A order cannot be deleted. He further submitted that during the assessment proceedings, the AO has given a categorical finding that assessee was asked to produce the log book repeatedly, in spite of the same the assessee did not file the log book which clearly shows that the personal use of aircraft cannot be denied. Accordingly, he submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... source. 4.1 The submissions on behalf of the assessees in a tabulated form thus are as under: S. N. Particulars Assessment u/s 143(3) pending and abated Reassessment u/s 147 pending and abated Unabated assessments i. No Incriminating found in material search. AO entitled to assess entire income, a pending regular assessment stood abated. Scope of assessment u/s 153A must be restricted to grounds of reopening of assessment, which was pending on date of search and stood abated as a result of search. AO not entitled to go beyond scope of pending assessment. No assessment u/s 153A in absence of any incriminating material. Originally concluded assessment which has attained finality cannot be disturbed more so when no material found in search. ii. No incriminating material found in search. Information/document from sources other than search available with AO AO entitled to assess entire income, as pending regular assessment stood abated. Scope of assessment u/s 153A must be restricted to: (a) grounds on which proceedings reopened; and (b)additional specific information coming to knowledge AO through modes other than search. AO not entitled to reopen entire assessment a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Dipak Jashvantlal Panchal [2017] 88 taxmann.com 611/397 ITR 153/2017 (2) TMI 862 (Guj.) 4. CIT v. Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 58 taxmann.com 78/232 Taxman 270/374 ITR 645 (Bom.) 5. Pr. CIT v. Delhi International Airport (P.) Ltd. [2022] 140 taxmann.com 440/443 ITR 382 (Kar.) 6. Kabul Chawla (supra) 7. Pr. CIT v. Meeta Gutgutia [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526 (Delhi) 8. Chintels India Ltd. v. Dy. CIT [2017] 84 taxmann.com 57/249 Taxman 630/397 ITR 416 (Delhi) 9. Sri. S.M. Kamal Pasha v. Dy. CIT [IT Appeal No. 155 of 2017, dated 2-8-2022]/2022 (8) TMI 966 (Karnataka) 10. Pr. CIT v. Jay Infrastructure and Properties (P.) Ltd. [Tax Appeal No. 740 of 2016, dated 10-10- 2016]/2016 (10) TMI 1022 (Gujarat) 11. Smt. Jami Nirmala v. Pr. CIT [2021] 132 taxmann.com 267/[2022] 284 Taxman 141/ [2021] 437 ITR 573 (Orissa) 12. Smt. Smrutisudha Nayak v. Union of India [2022] 136 taxmann.com 162/286 Taxman 119/[2021] 439 ITR 193 (Orissa) 13. CIT v. Veerprabhu Marketing Ltd.. [2016] 73 taxmann.com 149/388 ITR 574 (Cal.) 14. Pr.CIT v. Salasar Stock Broking Ltd. [G.A. No. 1929 of 2016, ITAT No. 264 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the' assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act." 8. For the reasons stated hereinbelow, 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 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 cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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