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TMI Blog2023 (12) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... order dated 28.06.2021 of the Income Tax Appellate Tribunal, whereby appeal bearing No. ITA 7826/Del/2018 filed by the revenue against the assessee (respondent herein) pertaining to the Assessment Year 2011-12 was dismissed. On advance notice, the respondent/assessee entered appearance through counsel. We heard learned counsel for both sides. 2. The appellant/revenue has proposed in this appeal the following questions as substantial questions of law: 2.1 Whether the scope of assessment under section 153A extends to income unearthed on the basis of statements recorded during post search proceedings? 2.2 Whether the decision in the case of CIT Vs Kabul Chawla (2015) 61 Taxman.com 412 (Del) applies to a case where a fresh material/informat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 80IAB of the Act to the extent of Rs. 13,30,50,000/- and added back the same to the income declared in the return of income. Further, the Assessing Officer also initiated penalty proceedings under Section 271(1)(c) of the Act against the respondent/ assessee. Feeling aggrieved, the respondent/assessee challenged the said order of the Assessing Officer by way of appeal before the Commissioner of Income Tax (Appeals). In the course of appellate proceedings before CIT(A), the respondent/assessee raised additional ground contending that since no incriminating material belonging to the assessee was found during the course of the said search proceedings, initiation of proceedings under Section 153A of the Act was bad in law, especia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed under Section 80IAB of the Act. With the help of judgment in the case of Dr. A.V. Sreekumar (supra), learned counsel for appellant/revenue contended that statement of Shri B.P. Singh, though recorded in post-search proceedings, can be the basis of initiation of proceedings under Section 153A of the Act. 5. So far as legal position is concerned, the decision of this court in the case of Kabul Chawla (supra) was upheld by the Supreme Court in the case of PCIT vs Abhisar Buildwell Pvt. Ltd., (2023) SCC OnLine SC 481. The issue as to whether the Assessing Officer can consider all material that is available on record, including that found during the search and make an assessment of total income was considered by different High Courts, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disclosed and the undisclosed income would be brought to tax". iv. Although Section 153A 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not the case in the present matter. In the present matter, admittedly, the assessment for the Assessment Year 2011-12 was finalized on 20.01.2012 and no notice under Section 143(2) of the Act was issued, as such no assessment was pending on the date of search action i.e. 29.10.2013. Also admittedly, in the present case, during the search action against the respondent/assessee no incriminating material was found and the material in the form of statement of Shri B.P. Singh now sought to be relied upon by the appellant/revenue was recorded subsequent to the search action. Therefore, the proposed question of law numbered 2.2 in the memo of appeal cannot be admitted as substantial question of law. 9. In view of the aforesaid, we are unable t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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