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TMI Blog2024 (9) TMI 1573X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of the reassessment action principally on the ground of being barred by time -It is their case that the reassessment action which had come to be initiated after the promulgation of Finance Act, 2021 would not qualify the pre-conditions which are introduced by virtue of the First Proviso to Section 149 (1) - HELD THAT:- Today there cannot possibly be any dispute or contestation on the discovery of incriminating material constituting the foundation for any assessment that may be made under Sections 153A or 153C of the Act. Any dispute that could have possibly be said to exist was ultimately laid to rest by the Supreme Court in Abhisar Buildwell. The only aspect which thus survives for consideration is whether the observations as appearing in Abhisar Buildwell could be read as enabling the respondents to overcome the limitation which stands created in terms of Section 149 of the Act. It is pertinent to note that a reference to Sections 147 and 148 of the Act in Abhisar Buildwell firstly appears where the Supreme Court observed that in cases where a search does not result in any incriminating material being found, the only remedy that would be available to the Revenue would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be introduced in the statute book by Finance Act 2021. It is pertinent to note that both Sections 153A and 153C saw significant amendments which came to be made by virtue of Finance Act, 2021. Both those provisions saw the introduction of a sunset clause and the statute mandating that the scheme of search assessment as introduced in the Act originally by way of Finance Act, 2003 would cease to apply to a search initiated on or after 01 April 2021. Notwithstanding the curtains thus being wrung down on Sections 153A and 153C, the Proviso to Section 149 (1) in unambiguous terms provides that in case reassessment is sought to be initiated for a relevant AY falling prior to 01 April 2021, such an action would have to be in conformity with the time limits specified in Sections 149 (1) (b), Sections 153A or 153C, whichever be applicable, and as those provisions stood immediately before the commencement of Finance Act, 2021. The Proviso is thus representative of a clear legislative policy of reassessments being required to be compliant with time frames which existed in the provisions aforenoted and as they stood before the commencement of Finance Act, 2021. The respondents despite the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith Mr. Shivendra Singh Mr. Yojit Pareek, JSCs. Mr. Puneet Rai, SSC with Mr. Ashvini Kumar Mr. Rishabh Nangia, JSCs. JUDGMENT YASHWANT VARMA, J. 1. This batch of writ petitions impugns the proceedings for reassessment initiated after the decision of the Supreme Court in Principal Commissioner of Income Tax, Central-3 v. Abhisar Buildwell Private Limited (2024) 2 SCC 433. 2. The writ petitioners assail the validity of the reassessment action principally on the ground of being barred by time. It is their case that the reassessment action which had come to be initiated after the promulgation of Finance Act, 2021 would not qualify the pre-conditions which are introduced by virtue of the First Proviso to Section 149 (1) of the Income Tax Act, 1961 [Act]. According to the writ petitioners, the initiation of action under Section 148 of the Act, when tested on the anvil of the First Proviso to Section 149 (1), would lead one to the inevitable conclusion of the reassessment action being barred on the ground of limitation. 3. For sake of convenience, the writ petitioners had placed before us a tabular statement setting out the relevant details pertaining to each of the writ petitions forming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the CIT(A) was assailed by the Revenue before the Income Tax Appellate Tribunal [Tribunal] . That appeal came to be dismissed on 04 July 2017 with the Tribunal taking note of the seminal decision rendered by this Court in Commissioner of Income-tax v. Kabul Chawla 2015 SCC OnLine Del 11555 and which had underlined the import and significance of incriminating material constituting the foundational ground for a search assessment. The decision of the Tribunal was thereafter subjected to challenge before this Court by way of ITA No. 239/2018 which too came to be dismissed on 24 July 2019. 8. This led to the filing of a Special Leave Petition before the Supreme Court. That petition constituted the lead matter in Abhisar Buildwell. The Supreme Court, while ruling on the scope and ambit of a search assessment in Abhisar Buildwell, took note of the consistent view which had been taken by different High Courts and which had in unison held that no additions could be made in respect of completed or unabated assessments in absence of any incriminating material having been gathered in the course of a search. This becomes apparent from the following observations as appearing in paragraph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act is linked with search and requisition under Sections 132 and 132-A 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 153-A 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 the legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under Section 132 or requisition under Section 132-A, as the case may be, shall abate. Subsection (2) of Section 153-A 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 lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the asses see 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 153-A of the Act. 10. The view expressed in Kabul Chawla ultimately came to be affirmed by the Supreme Court as would be evident from paragraph 28 which is extracted hereunder: 28. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in Kabul Chawla and the Gujarat High Court in Saumya Construction (P), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 11. Proceeding then to expound upon the legal position, the Supreme Court rendered the following pertinent observations: 33. As per the provisions of Section 153-A, in case of a search under Section 132 or requisition u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under Section 153-A 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. 34. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153-A of the Act is linked with the search and requisition under Sections 132 and 132-A of the Act. The object of Section 153-A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned under Sections 147/148 of the Act and those powers are saved. 13. As is manifest from the above, the Supreme Court in unambiguous terms held that it would only be in cases where undisclosed income is found on the basis of incriminating material that the AO could be said to have validly assumed jurisdiction to assess income for the ten-year block assessment period constituting the subject matter of Section 153A. It thus held, while affirming the view taken by the Delhi and the Gujarat High Courts, that no addition could be made in respect of completed assessments in the absence of any incriminating material. 14. It becomes relevant to note that the Supreme Court also pertinently observed that in case a search does not result in any incriminating material being found, the only remedy that would be available to the Revenue would be to resort to Sections 147/148 of the Act subject to fulfilment of the conditions mentioned in those provisions. This it held, since in its opinion, the Revenue could not have been left remediless. It thus observed that where a search does not result in any incriminating material being unearthed, the power of the Revenue to initiate reassessment actio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid extract of the said order, a prayer appears to have been made on behalf of the Revenue for an observation being entered enabling it to initiate reassessment proceedings under Section 147. While dealing with the aforesaid, the Supreme Court observed that it would be open for the Revenue to initiate reassessment in accordance with law and if it is permissible under the law . 17. It appears that after the Supreme Court had rendered judgment on Abhisar Buildwell, a Miscellaneous Application [MA] came to be filed at the behest of the Revenue seeking appropriate clarifications including the waiver of limitation in terms as contemplated in Section 150 (2). That application came to be disposed of on 12 May 2023 with the Supreme Court holding: Present Miscellaneous Application has been preferred by the Revenue seeking following prayers: (a) This Hon'ble Court may clarify that the waiver of limitation as stipulated in section 150 (2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on the date the assessment under section 153A or section 153C was passed, a notice under section 148 could have been issued as per the law then in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heels of judgment being pronounced in the Abhisar Buildwell batch and the disposal of the subsequent MA that had been preferred therein, the Central Board of Direct Taxes [CBDT] came to issue Instruction No. 1/2023 on 23 August 2023. Since the same would be of some significance, we deem it appropriate to extract those instructions in their entirety hereinbelow: INSTRUCTION NO. 1 OF 2023 [F. NO. 279/MISC./M-54/2023-ITJ], DATED 23-8-2023 1. On 24-4-2023, the Hon'ble Supreme Court delivered a judgment in a batch of Income-tax matters, the lead matter being Principal Commissioner of Income-tax, Central-III v. Abhisar Buildwell Pvt. Ltd. (CA No. 6580 of 2021) (hereinafter referred to as the Case). The matter of the civil appeal pertained to the scope and ambit of section 153A/153C of the Income-tax Act, 1961 (hereinafter referred to as the Act). 2. The Hon'ble Supreme Court in Civil Appeal No. 6634 of 2021 in the case of DCIT Central Circle 20 v. U.K. Paints (Overseas) Ltd. [2023] 150 taxmann.com 108 delivered a judgement on 25-4-2023 and dealt with the same issue as was in the case of Abhisar Buildwell case in regard to section 153C of the Act. The Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the taxpayers, the Board has decided that no action is required to be taken under section 147/148 of the Act in cases (except cases covered by paragraph 7.2.1 below) where decisions of the appellate authorities have become final because these decisions have not been contested further in appeal. Further, it is decided that the said judgement is required to be applied in the following cases only: (a) The lead and tagged cases in the said judgment. (b) All cases which are pending at appellate levels or before AO or any tax authority. (c) All cases in which contrary decisions has been given by appellate authorities after the Apex Court judgment in the Abhisar Buildwell case dated 24-4-2023. 7. In this regard, the AOs would have to divide the cases impacted by the judgment into two broad categories i.e., (I) pending/abated assessments, and (II) completed/unabated assessments. Pending/abated assessments 7.1 The AO would be required to ascertain assessments falling in the category of assessments that became abated on the date of search or requisition. In such cases, if any proceedings initiated or any order of assessment or reassessment have been annulled in appeal or in any other le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /148 of the Act will be required to be completed by 30th April, 2024. 7.2.2 Cases where appeal is pending (filed either by the Department or assessee or both). Appellate level CIT(A) ITAT High Court Action to be taken The said judgment is required to be brought to the notice of CIT(A). The departmental Representative should bring the said judgment to the notice of the ITAT in the cases covered by the judgement. The Standing Counsel should bring the said judgment to the notice of the High Court in the cases covered by the judgement. Further, as and when the appeals are disposed of by the appellate authorities, action might be required to be taken by AO in appropriate cases under sections 147/148 of the Act read with section 150 of the Act. It is reiterated that the AO will be required to reopen the cases following the currently applicable procedure for reopening as given in para 7.2.1, above. 7.2.3 In all cases where the decisions of appellate authorities rendered after the Apex Court judgment in the Abhisar Buildwell case dated 24-4-2023 are inconsistent with the same, necessary action may be taken to fife Miscellaneous Application (MA) and Notice of Motion (NoM) to the ITAT and Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssary actions within time limits as mentioned below: (a) In lead and tagged cases: - 148A proceedings to be initiated by: 30th September, 2023. - proceedings u/s 147/148 to be completed by: 30th April, 2024. (b) In cases where decisions given by appellate authorities after 24-4-2023 are not in consonance with the Supreme Court decision in the case of Abhisar Buildwell: - Identification of cases where action is to be taken by: 30th September, 2023. - Filing of Miscellaneous Application/Notice of Motion by: 30th November, 2023. Specimen Miscellaneous Application (MA) to file before ITAT To, Dated: The Registrar ITAT Bench. . . . Subject: Miscellaneous Application in the Case of. . . . . . . in the light of Hon'ble Supreme Court Judgement in the Case of Pr.CIT (Central)-3 v. Abhisar Buildwell Pvt Ltd. Civil Appeal No. 6580 of 2021, dated 24-4-2023. Madam/Sir, Refer to the appeal in the Case of. . . . . . . Order dated:. . . . . .. . . 2. The Hon'ble Apex Court vide the abovementioned judgment in the Case of Pr.CIT (Central)-3 v. Abhisar Buildwell Pvt Ltd. Civil Appeal No. 6580 of 2021 dated 24-4-2023, has held that (i) that in Case of search under Section 132 or requisition un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efer to the appeal in the Case of . . . . . . . . . Order dated: . . . . . . 2. The Hon'ble Apex Court vide the above-mentioned judgement in the Case of Pr.CIT (Central)-3 v. Abhisar Buildwell Pvt. Ltd. Civil Appeal No. 6580 of 2021, dated 24-4-2023, has held that: (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 consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of the aforenoted CBDT Instruction and pursuant to a Scheme of Arrangement sanctioned by the National Company Law Tribunal, ABPL was merged with DSL with effect from 25 September 2023. Notwithstanding the same, notices were issued thereafter under Section 148A (b) on 27 September 2023 in the name of the erstwhile ABPL entity, based on the observations made in the special audit report and which culminated in an order and a consequential notice being framed under respective Sections 148A (d) and 148 on 30 November 2023. 21. It becomes pertinent to note that the substratum of the Section 148A (b) notice and on the anvil of which the order of Section 148A (d) had been passed, had been answered in favour of ABPL vide an order of the Tribunal dated 17 January 2024 for AY 2018-19. However and on the basis of the CBDT Instructions, the respondents sought to initiate reassessment proceedings by issuing a notice under Section 148A (b) and which culminated in the order framed under Section 148A (d) on 30 March 2024 and the notice impugned before us of even date for AY 2007-08. 22. Insofar as W.P.(C) 1892/2024 is concerned, we take note of the following facts which led to the institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 56. More fundamentally, a direction, in terms as commended for our consideration by learned counsels appearing for the Revenue, would also not be a finding or direction as contemplated therein. Mr. Vohra, in this context, invited our attention to the judgment of the Constitution Bench in Income Tax Officer, A Ward, Sitapur v. Murlidhar Bhagwan Das where the expression finding and direction was explained in the following words: 9. Now, let us scrutinize the expressions on which strong reliance is placed for the contrary conclusion. The words relied upon are section limiting the time , any person , in consequence of or to give effect to any finding or direction . Pointing out that before the amendment the word sub section was in the proviso but it was replaced by the expression section , it is contended that this particular amendment will be otiose if it is confined to the assessment year under appeal, for it is said that under no circumstances the Income-tax Officer would have to initiate proceedings for the said year pursuant to an order made by an Appellate Assistant Commissioner. This contention is obviously untenable. The Appellate Assistant Commissioner or the Appellate Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. That certainly cannot be the intention of the Legislature. The Madras High Court also in A.S. Khader Ismail v. Income-tax Officer, Salem gave a very wide interpretation to that word, though it did not go so far as the Full Bench of the Allahabad High Court. Ramachandra Iyer J., as he then was, speaking for the Court, observed that the word finding in the proviso must be given a wide significance so as to include not only findings necessary for the disposal of the appeal but also findings which were incidental to it. With respect, this interpretation also is inconsistent with the well-known meaning of that expression in the legal terminology. Indeed, learned counsel for the respondent himself will not go so far, for he concedes that the expression finding cannot be any incidental finding, but says that it must be a conclusion on a material question necessary for the disposal of the appeal, though it need not necessarily conclude the appeal. This concession does not materially differ from the definition we have given, but the difference lies in the application of that definition to the finding given in the present case. A finding , therefore, can be only that which is necessary f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative for the AO to frame an order in draft as opposed to a final order of assessment. Any consequential direction that could be framed would have to be in consonance with the aforesaid finding. That direction would additionally and necessarily have to be in accordance with the scheme of the Act and the statutory prescriptions comprised therein. The same would clearly not warrant or justify the Court enlarging the period of limitation as statutorily prescribed. As is well settled, while courts may, where legally permissible, consider condonation of delay, they are not entitled to expand or enlarge a period of limitation as statutorily prescribed. 26. Mr. Vohra submitted that the issue of whether a finding or direction would enable the respondents to assume power to reassess despite statutory limitations was one which had also been examined by the Court in Orchid Infrastructure Developers Pvt. Ltd. v. Principal Commissioner of Income-tax 2023 SCC OnLine Del 1915. 27. It becomes relevant to note that Orchid Infrastructure too constituted a challenge pertaining to a reassessment action initiated under Section 148 of the Act, notwithstanding a settlement having been ordered by the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t chaos and vagueness. Put otherwise, it would tantamount to simultaneous existence of two concomitant and materially different assessment orders for the same assessment year, which is completely impermissible as per the provisions of the Act and the aforementioned judicial pronouncements. 29. Proceeding further to examine whether the observations in Abhisar Buildwell could constitute a finding or a direction, and which may have sustained a reassessment action, the Court in Orchid Infrastructure held as follows:- 32. Further, the respondent has strenuously relied upon sub-section (1) of section 150 of the Act in juxtaposition with the decision in Abhisar Buildwell P. Ltd., to contend that the same confers an authority on the respondent to issue the impugned notices and reopen the completed assessments under section 147 /148 of the Act. At this juncture, it is significant to extract section 150 of the Act, which reads as under: 150. Provision for cases where assessment is in pursuance of an order on appeal, etc.- (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction for reopening the assessment under section 147/148 of the Act in the case at hand. Even otherwise, the prayer with respect to reopening the assessment taking recourse to section 150 of the Act akin to the instant case, was sought by the Revenue in a Miscellaneous Application titled as Pr. CIT v. Abhisar Buildwell P. Ltd. in the case of Abhisar Buildwell P. Ltd. The hon'ble Supreme Court refused to entertain the said clarification application qua the prayers sought therein and held as under: 1. Present miscellaneous application has been preferred by the Revenue seeking following prayers : (a) This hon'ble court may clarify that the waiver of limitation as stipulated in section 150 (2) is to be read in respect of the date of issue of notice for reassessment under section 148 (i.e.) if as on the date the assessment under section 153A or section 153C was passed, a notice under section 148 could have been issued as per the law then in force, then fresh proceedings for reassessment of such income not arising from the incriminating material found in search can now be initiated pursuant to the findings of this Hon'ble Court in the present appeals/application and may f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overcome the statutory prescription of limitation which otherwise governs the initiation of reassessment. 31. Mr. Vohra also invited our attention to sub-section (2) of Section 150, and which, according to learned senior counsel, operates as an additional fetter upon the assumption of jurisdiction by the respondents while seeking to overcome the limitation which otherwise stands erected by virtue of Section 149 of the Act. Section 150 is extracted hereinbelow:- Provision for cases where assessment is in pursuance of an order on appeal, etc.- 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision [or by a Court in any proceeding under any other law]. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. 35. The position, as enunciated in Kabul Chawla was again reiterated by the Court while dealing with a batch of writ petitions assailing initiation of action under Section 153C in Saksham Commodities Limited v. Income Tax Officer Ward 22(1), Delhi and Another 2024 SCC OnLine Del 2251 . While answering the question of incriminating material, its impact on the entire block period of assessment as well as whether the same would have a cascading effect , we had in Saksham Commodities observed as follows:- 48. In terms of the Second Proviso to Section 153A, all assessment or reassessment proceedings relating to the six AYs' or the relevant assessment year pending on the date of search are statutorily envisaged to abate. Abatement is envisioned to be an inevitable consequence of the initiation of action under Section 153A. Neither issuance of notice nor abatement are predicated upon a formation of opinion by the AO of the searched person that the material is likely to impact the total income of that assessee. However, the spectre of abatement insofar as the other person is concerned would arise only after the jurisdictional AO has formed the requisite satisfaction of the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to justify steps in that direction being taken, unless the incriminating material so found is likely to have an impact on the total income of a particular AY forming part of the six AYs immediately preceding the AY pertaining to the search year or for the relevant assessment year . 51. Ultimately Section 153C is concerned with books, documents or articles seized in the course of a search and which are found to have the potential to impact or have a bearing on an assessment which may be undergoing or which may have been completed. The words have a bearing on the determination of the total income of such other person as appearing in Section 153C would necessarily have to be conferred pre-eminence. Therefore, and unless the AO is satisfied that the material gathered could potentially impact the determination of total income, it would be unjustified in mechanically reopening or assessing all over again all the ten AYs that could possibly form part of the block of ten years. 52. The decisions which hold that an assessment is liable to be revised only if incriminating material be found, even if rendered in the context of Section 153A, would clearly govern the question that stands pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AYs or for that matter all years forming part of the block of ten AYs , appears to have been put in place to cover all possible contingencies. The aforesaid provisions clearly appear to have been incorporated and made applicable both with respect to Section 153A as well as Section 153C ex abundanti cautela. Which however takes us back to what had been observed earlier, namely, the existence of the power being merely enabling as opposed to a statutory compulsion or an inevitable consequence which was advocated by the respondents. 55. Take for instance a case where the material gathered in the search is contemplated to have an adverse impact on the declarations and disclosures made by an assessee pertaining only to AYs 2016-2017 and 2017-2018. What we seek to emphasise is that pending assessments for those two years could validly form subject matter of action under Section 153C and pending assessments in that respect would surely abate. However, that by itself would not be sufficient to either reopen or issue notices in respect of AYs prior to or those falling after those two AYs and which may otherwise fall within the maximum block period of ten years merely because the statute emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y remedy that would be available to the Revenue would be to resort to reassessment. 39. However, the Supreme Court caveated that observation by observing that the initiation of reassessment would be ..subject to fulfilment of the conditions mentioned in Sections 147/148, as in such a situation, the Revenue cannot be left with no remedy . This sentiment came to be reiterated with the Supreme Court observing that the power of the Revenue to initiate reassessment must be saved failing which it would be left with no remedy. It was thereafter observed in paragraph 36.4 of the report that insofar as completed or unabated assessments were concerned, they could be reopened by the AO by invocation of Sections 147/148 of the Act, subject to the fulfillment of the conditions as envisaged/mentioned under Sections 147/148 of the Act and those powers are saved . 40. It thus becomes apparent that the liberty which the Supreme Court accorded and the limited right inhering in the Revenue to initiate reassessment was subject to that power being otherwise compliant with the Chapter pertaining to reassessment as contained in the Act. The observations of the Supreme Court cannot possibly be read or con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me the time frames erected by virtue of Section 144C of the Act. An argument, again founded on Section 150, came to be negated with the Court observing that a direction would have to necessarily be in accordance with the scheme of the Act and the statutory prescriptions comprised therein. It was further observed that it would be wholly incorrect for courts to extend a period of limitation that otherwise stands prescribed in the Act. 44. As was explained in Sumitomo Corporation, the expression finding as occurring in Section 150 of the Act is liable to be understood to be a conclusion or a decision of an authority or tribunal rendered in the context of a particular case and essential for determining the grant of relief. A direction , we had held, would constitute one which an authority was empowered to issue under the Act. Tested on those precepts, we find ourselves unable to countenance the observations appearing in Abhisar Buildwell as amounting to a finding since the principal question in those appeals was with respect to the validity of the search assessments which were undertaken. The Supreme Court had, in order to balance equities, additionally observed that it would be open f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which such return was furnished.] (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served: [Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words nine months , the words twelve months had been substituted.] (3) Notwithstanding anything contained in sub-sections (1) [,(1A)] and (2), an order of fresh assessment [or fresh order under section 92CA, as the case may be,] in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, [or an order under section 92CA, as the case may be] may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, or, as the case may be, the order under section 263 or section 264 is passed by the [Principal Chief Commissioner or Chief Commissioner or Principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner or Commissioner, as the case may be, the order under section 263 or section 264 is passed by [the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be,]: Provided that where it is not possible for the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] to give effect to such order within the aforesaid period, for reasons beyond his control, the Principal Commissioner or Commissioner on receipt of such request in writing from the Assessing Officer, [or the Transfer Pricing Officer, as the case may be,] if satisfied, may allow an additional period of six months to give effect to the order: [Provided further that where an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 requires verification of any issue by way of submission of any document by the assessee or any other person or where an opportunity of being heard is to be provided to the assessee, the order giving effect to the said order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 shall be made within the time specified in sub-section (3).] [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within a period of one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later. (9) The provisions of this section as they stood immediately before the commencement of the Finance Act, 2016, shall apply to and in relation to any order of assessment, reassessment or recomputation made before the 1st day of June, 2016: [Provided that where a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 has been issued prior to the 1st day of June, 2016 and the assessment or reassessment has not been completed by such date due to exclusion of time referred to in Explanation 1, such assessment or reassessment shall be completed in accordance with the provisions of this section as it stood immediately before its substitution by the Finance Act, 2016 (28 of 2016).] Explanation 1. For the purposes of this section, in computing the period of limitation (i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129; or (ii) the period during which the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (3) of section 245R; or (ix) the period commencing from the date on which an application is made before the Authority for Advance Rulings [or before the Board for Advance Rulings] under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of section 245R; or (x) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; or (xi) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the [Assessing Officer; or (xii) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, [* * *] 154, 155 and 158BE and for the purposes of payment of interest under section 244A, this proviso shall also apply accordingly: [Provided also that where the assessee exercises the option to withdraw the application under sub-section (1) of section 245M, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (5) of the said section, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year: Provided also that for the purposes of determining the period of limitation under sections 149, 154 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets requisitioned under section 132A, on or before the 31st day of March, 2021: 48. It is pertinent to note that both Sections 153A and 153C saw significant amendments which came to be made by virtue of Finance Act, 2021. Both those provisions saw the introduction of a sunset clause and the statute mandating that the scheme of search assessment as introduced in the Act originally by way of Finance Act, 2003 would cease to apply to a search initiated on or after 01 April 2021. 49. Notwithstanding the curtains thus being wrung down on Sections 153A and 153C, the Proviso to Section 149 (1) in unambiguous terms provides that in case reassessment is sought to be initiated for a relevant AY falling prior to 01 April 2021, such an action would have to be in conformity with the time limits specified in Sections 149 (1) (b), Sections 153A or 153C, whichever be applicable, and as those provisions stood immediately before the commencement of Finance Act, 2021. The Proviso is thus representative of a clear legislative policy of reassessments being required to be compliant with time frames which existed in the provisions aforenoted and as they stood before the commencement of Finance Act, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uire one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A. F. While the identification and computation of the six AYs hinges upon the phrase immediately preceding the assessment year relevant to the previous year of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it from the end of the assessment year . This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be placed and introduced in the statute book by virtue of Finance Act, 2021, neither effaces nor removes from contemplation the First Proviso to Section 153C (1). Consequently, in cases where a search is conducted after 31 March 2021, the said Proviso would have to be construed and tested with reference to the date when the AO decides to initiate action against the non-searched entity. While in the case of a search initiated after 31 March 2021 there would be no actual hand over of material to the jurisdictional AO, that does not convince us to revert to Section 153A and hold that the block period is liable to be computed from the date of search. That, in our considered opinion, would amount to rewriting Section 153C which would clearly be impermissible. 15. We find ourselves unable to construe or read the First Proviso to Section 149 (1) as requiring us to ignore the First Proviso to Section 153C (1), and for the purposes of computation, reconstruct the point from which the relevant assessment year is liable to be computed in the case of a non-searched person. Notwithstanding the procedure under Section 153C having not been adhered to, by virtue of the search having been cond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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