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TMI Blog2024 (11) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... revious year in which the search was conducted or the requisition under Section 132A of the Act was made this is in terms of second proviso, which was inserted by Finance Act, 2012 with effect from 01.07.2012. By its very nature, Section 153C of the Act is an enabling provision, which enables the Assessing Officer to assume jurisdiction to assess/reassess the income of the Assessee, in cases where the jurisdictional conditions as set out in Section 153C are satisfied. The non obstante provision as contained in Section 153C(1) of the Act must necessarily be construed in the aforesaid context. In the facts of the present case, the Revenue disputes that a satisfaction note by the AO of the searched person (Jain Brothers) was forwarded to the AO of the Assessee along with the requisite documents. Thus, in the facts of the present case, the jurisdictional conditions to initiate further steps under Section 153C of the Act were not satisfied. However, the AO had received certain information from the AO. A report was also received from the Investigation Wing, Mumbai regarding the Assessee purchasing units of a penny stock during the financial year 2010-11. Based on the aforesaid informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 26.12.2018 passed under Section 147 read with Section 143(3) of the Act in respect of assessment year [AY] 2011-12 was dismissed. 3. The assessment of the Assessee s income chargeable to tax for the previous year relevant to the AY 2011-12 was reopened by issuance of a notice under Section 148 of the Act on the basis of information and evidence unearthed during the course of the search conducted on Shri Anand Kumar Jain and Shri Naresh Kumar Jain group on 17.12.2015. And, the Assessee s income was reassessed under Section 147 of the Act. 4. The learned ITAT held that the Assessing Officer [hereafter AO] was required to frame the assessment/reassessment under Section 153C of the Act and was precluded from proceeding under Section 147 of the Act. Accordingly, the learned ITAT set aside the assessment order for the aforesaid singular reason. QUESTION OF LAW 5. This Court by an order dated 20.03.2024 admitted the present appeal in respect of the following question of law: Whether in the facts and circumstances of the case, the ITAT was correct in holding that provisions of section 153C have overriding effect on the provisions of section 147 of the Income Tax Act, 1961? FACTUAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is relevant to note the reasons, as recorded by the AO in the assessment order dated 26.12.2018, for initiating the reassessment proceedings. The same are set out below: 1. In this case an information has been received from O/o ACIT, CC-26, new Delhi that during search and seizure operation on Anand Kumar Jain and Naresh Kumar Jain group of cases on 17.12.2015 (Jain Brothers entry operators). A large volume of documents were seized. On examination of the documents seized during the course of search and the bank statement of the shell companies obtained thereafter highlighted the name of Sh. Naveen Kumar Gupta as a major beneficiary of the Jain Brothers. The report states that Sh. Naveen Gupta was an accomplice of Jin Brothers in this illegal business for many years. The assessee has named all the companies created by Jain brothers as bogus companies which were managed only for the entry business. The report explains at length the entire procedure of giving / receiving an entry in lieu of cash from the various beneficiaries including the assessee. It is stated in the report that during 01.04.2009 to 31.03.2016, Sh. Naveen Kumar Gupta has taken entries from Jain brothers and thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al found during the search operations conducted under Section 132 on any other person or as a result of requisition made under Section 132A of the Act. And, since the provisions of Section 153C of the Act are special provisions, the same would override the other provisions relating to assessment/reassessment under the Act including Section 147 of the Act. He contended that since Section 153C of the Act sets out a specified procedure for conducting the assessment, the same cannot be side stepped. 16. Mr Rai, learned counsel appearing on behalf of the Revenue countered the said submission. He contended that the assessments were reopened not only on the basis of the material / information collected pursuant to search conducted in respect of Jain Brothers but also on the basis of the information received from the Investigation Wing. He also contended that since the material collected during the search did not belong to the Assessee, the proceedings under Section 153C of the Act could not have been initiated. 17. Mr Rai relied heavily on the decision of the Supreme Court in Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P) Ltd. [2023] 149 taxmann.com 399 (SC) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of Section 153A. Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub- section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal pre-requisite would stand satisfied. The AO of such other person was then required to examine the said material received by the AO of the searched person and if it was found that the same had a bearing on the determination of the income of such other person, the AO could proceed to issue a notice under Section 153C of the Act. 24. It is relevant to note that Section 153C of the Act was amended by virtue of the Finance Act, 2015 with effect from 01.06.2015. Prior to the said amendment, Sub-section (1) of Section 153 of the Act read as under: 153-C. Assessment of income of any other person. (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in Section 153-A, then, the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against other person an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 132 of the Act prior to 01.06.2015, that is the date on which the amended Section 153C of the Act came into force. The Supreme Court accepted that Section 153C of the Act is a machinery provision and the substituted provision would also apply in respect of searches conducted prior to 01.06.2015. 27. As noted above, the first jurisdictional condition to be satisfied for invoking Section 153C of the Act is the satisfaction of the AO of the searched person that the valuable articles, books of accounts or documents belong to a third party (a person other than the searched person) or contains information pertaining to the such other person. Once the AO of a searched person reaches to the said conclusion, he has to record his satisfaction and transmit the material to the AO exercising jurisdiction in respect of the third party. 28. At the stage of recording a satisfaction that the valuable articles or documents, which were found or requisitioned, belong to a third party, it is not necessary for the AO to form any opinion that the valuable articles, books of account or documents would reflect any undisclosed income of such a person. The AO has to merely forward the said materia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The total income for such assessment years will have to be computed by the Assessing Officer as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the total income of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six assessment years in which both the 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 Assessing Officer 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 reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oviso 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 132A, as the case may be, shall abate. Sub-section (2) of section 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, sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Act. 32. The decision in the case of Commissioner of Income Tax v. Kabul Chawla9 and Principal Commissioner of Income Tax v. Saumya Construction (P.) Ltd.10 were rendered in the context of Section 153A of the Act. It is relevant to note that although it was held that assessment/reassessment can be made only on the basis of incriminating material unearthed during the search or requisitioned yet it was accepted that in cases where search was conducted under Section 132 of the Act or requisition was made under Section 132A of the Act, it was necessary for the AO to issue a notice under Section 153A of the Act calling upon the assessee to furnish the return of income for the six assessment years preceding the assessment year relevant to the previous year in which the search was conducted or the requisition was made, as the case may be. In cases where the assessment / reassessment had abated by virtue of Section 153A of the Act, the AO was required to complete the said assessment. However, in a case of unabated or concluded assessments, the AO could reassess the same on the basis of incriminating material found during the search or requisitioned. However, if no incriminating ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich speaks of the commencement point being the handing over of documents or assets seized or requisitioned to the Assessing Officer of the other person and it in turn proceeding to issue notice to assess or reassess the income of the non-searched entity in accordance with section 153A. However, the initiation of action under section 153C is significantly premised upon the Assessing Officer being satisfied that the books of account or documents and assets seized or requisitioned having a bearing on the determination of the total income of such other person . This is manifest from the provision employing the expression if, that Assessing Officer is satisfied..... . It would therefore necessarily follow that the issuance of a notice under Section 153C is clearly not intended to be an inevitable consequence to the receipt of material by the jurisdictional Assessing Officer. That the Assessing Officer before commencement of action under section 153C is also obliged to be satisfied that the material so received would have a bearing on the determination of the total income of such other person is an aspect of significance and constitutes a fundamental point of distinction between section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned falling within last six years preceding the search. Therefore, on true interpretation of Section 153-A of the 1961 Act, in case of a search under Section 132 or requisition under Section 132-A 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 incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 material found during the course of search under Section 132 or requisition under Section 132-A of the 1961 Act. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under Sections 147/148 of the Act and those powers are saved. [emphasis added] 36. The decision in the case of Commissioner of Income Tax v. Kabul Chawla9 and Principal Commissioner of Income-tax, Central- 3 v. Abhisar Buildwell (P) Ltd.4 was rendered in the context of Section 153A of the Act. However, the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfaction to the aforesaid effect; (c) transmitting the same to the AO of the other person (person other than the searched person); (d) the AO of the non-searched person being satisfied that the material information received has a bearing on the determination of the total income; and, (e) the AO of such non searched person issuing a notice to commence assessment / reassessment proceedings. Indisputably, if any of the aforesaid conditions are not satisfied, the income of such other person cannot be assessed or reassessed under Section 153C of the Act. According to the Assessee (and as accepted by ITAT), in such circumstances, the AO would also be precluded from initiating the proceedings under Section 147 of the Act. This is the central issue that is required to be addressed. 42. The Assessee s contention is founded essentially on two grounds. First, that Section 153C of the Act commences with a non obstante provision. And second, that the scheme under Sections 153A and 153C of the Act is a special scheme for assessment in cases where the same is premised on a search conducted under Section 132 or under Section 132A of the Act. Therefore, the special scheme would override the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st-effective, efficient and meaningful search assessment procedure. However, the experience on implementation of the special procedure for search assessments (block assessment) contained in Chapter XIV-B, has shown that the new scheme has failed in its objective of early resolution of search assessments. The new procedure postulates two parallel streams of assessment, i.e., one of regular assessment and the other for block assessment during the same period, i.e., during the block period Controversies have sprung up questioning the treatment of a particular income as undisclosed and whether it is relatable to the material found during the course of search etc. Even where the facts are clear, litigation on procedural matters continue to persist. The new procedure has thus spawned a fresh stream of litigation. It is proposed to provide that the provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after 31st May, 2003 by inserting a new section 158BI in the Income-tax Act. It is also proposed to insert three new sections 153A, 153B and 153C in the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment, the period during which the assessment proceeding is stayed by an order or injunction of any court, or the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section, or the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee of being reheard under the proviso to section 129, or in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded. If, after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case maybe, is less than sixty days, such remaining period shall be extended to sixty days an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts or any assets are requisitioned under section 132A after May 31, 2003. In such cases, the Assessing Officer shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, return of income in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted under section 132 or requisition was made under section 132A. 65.5 The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. 65.9 The new section 153C provides that where an Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 65.10 An appeal against the order of assessment or reassessment under section 153A shall lie with the Commissioner of Income-tax (Appeals). 65.11 Consequential amendments have also been made in sections 132, 132B, 140A, 234A, 234B, 246A and 276CC to give reference to section 153A in these sections. 65.12 These amendments will take effect from June 1, 2003. 47. Under the erstwhile scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and in case of search, there shall be block assessment for six years. Search assessments/Block assessments under Section 153-A are triggered by conducting of a valid search under Section 132 of the 1961 Act. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of Sections 153-A/153-C is detection of undisclosed income by undertaking extraordinary power of search and seizure i.e. the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153-A/153-C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 49. In Amar Jewellers Ltd. v. Assistant Commissioner of Income Tax 5 , the Gujarat High Court had examined the contentions as advanced before this Court and considered the import of the non obstante clause under Section 153C of the Act. In its decision, the Gujarat High Court had observed as under: 46. A non obstante clause is generally appended to a section with a view to give the enacting part of the section, in case of conflict, an overriding effect over the provision in the same or other Act mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the non obstante clause, these impediments are removed by means of the non obstante clause. Thus, by enacting the non obstante clause in the section, the formalities of issuing notice under section 139, application of the provisions of section 147, 148, 149 or 151 for reopening a case for escaped assessment, taking of approval from the concerned authorities for reopening the assessment and the time limit for completion of regular assessment have been done away with. Thus, assumption of jurisdiction by the Assessing Officer under section 153A has been made simple and easy. 50. Section 153A is a self-contained code for each assessments. The section states that on initiation of search, the Assessing Officer can issue a notice calling for the returns of income for six assessment years preceding the previous year in which the search has taken place. The non obstante clause obviates the need to comply with the requirement of the regular provisions. *** *** *** 55. Thus, having regard to the aforesaid discussion, we have reached to the conclusion that the argument of Mr. Hemani as regards the non obstante clause contained in section 153A and its effect is without any merit. It is difficul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to assume jurisdiction. If the jurisdictional conditions are satisfied, it is not necessary for the AO to assume jurisdiction in such cases. In Agni Vishnu Ventures Pvt. Ltd. v. Deputy Commissioner of Income Tax Judgement dated 28.06.2023 in W.P. No. 24407/2021 , the Madras High Court had highlighted the difference between the provisions of Sections 153A and 153C of the Act. It is relevant to refer to the following passages from the said decision: 63. Assessments made either under section 153A or 153C can be sustained only if those assessments are based upon incriminating materials found in the course of search indicating concealed assets/taxable income that have escaped assessment. The scheme of assessment under sections 153A and 153C is available to the Department in addition to all other methods of assessment, revision and reassessment and each scheme has its distinct set of conditions and stipulations, that must be strictly adhered to. *** *** *** 76. The ingredients of section 153A are: (i) Initiation of search or requisition under the applicable statutory provisions, (ii) Such search/requisition being after May 31, 2003 but before May 31, 2021. 77. The ingredients of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminating materials have a bearing on the determination of the total income of that third party. 80. Notice under section 153C would have to be issued only upon the concurrent satisfaction of both conditions as aforesaid. To this extent, there is, in my considered opinion, a clear and marked distinction between the provisions of sections 153A and 153C. The contention of the Revenue that a mandate is cast upon the Assessing Officer of the third party to issue notice under section 153C for all the years comprising the block, mechanically and automatically, is thus rejected. 81. To clarify, it is only where the satisfaction note recorded by the receiving Assessing Officer, i.e., the Assessing Officer of the third party reflects a clear finding that the incriminating material received has a bearing on determination of total income of the third party for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, that such notice would have to be issued for all the years. 82. It thus flows from the provision that the receiving Assessing Officer must apply his mind to the materials received and ascert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched person to submit a return of income in respect of each assessment year falling within the six assessment years and for the relevant assessment year . Upon submission of that return of income, the Assessing Officer stands empowered statutorily to assess or reassess the total income of six assessment years immediately preceding the assessment year corresponding to the year of search and for the relevant assessment year . The expression relevant assessment year has been duly defined by Explanation 1 placed in Section 153A and is explained to include those years which fall beyond the six assessment years spoken of earlier but not later than ten assessment years from the end of the assessment year relevant to the Financial Year in which the search was conducted. 38. As was held in SSP Aviation Ltd v. Deputy Commissioner of Income Tax, the Assessing Officer of the searched person while proceeding to transmit the material gathered in the course of the search to the Assessing Officer of the other person is not obliged to form any opinion with respect to escapement of income or for that matter the material likely to have an impact on the total income of the non-searched entity. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile seeking to explain the objective of the amendments which were proposed to be incorporated declared as follows: *** *** *** 42. It would also be apposite to notice the Notes on Clause 53 of the Finance Bill, 2014, which sought to amend Section 153C and which is reproduced hereinbelow: Clause 53 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in sub-section (1) of the aforesaid section provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person, other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wer being available to be invoked for the relevant assessment year , and which extended the power to be exercised over a ten year block, being simultaneously introduced in those provisions. The Legislature clearly intended both these provisions to form part of a cohesive scheme and to be complementary to each other. However, the aspects of satisfaction and of the material likely to implicate or influence were not added in Section 153A. The fact that any additions that may be ultimately made upon a culmination of assessment under Section 153A being indelibly founded on the material gathered in the course of the search is a separate issue all together. *** *** *** 48. In terms of the Second Proviso to Section 153A, all assessment or reassessment proceedings relating to the six assessment years 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 Assessing Officer of the searched person that the material is likely to impact the total income of that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yalbagh Educational Institute v. State of U.P. 2001 SCC OnLine All 342 the Court held as under: 10. ..The non-obstante clause is appended to a provision to give overriding effect over any existing law which is inconsistent with the new enactment, where both cannot be read harmoniously; for, even apart from such clause, a later law abrogates earlier laws clearly inconsistent with it. It can be invoked only in case of irreconcilable conflict where both cannot be read harmoniously. But, where the provisions of two or more Acts can co-exist and can be enforced or applied without abrogating or eroding the provisions of other Act, the non-obstante clause will have no effect. Therefore, where the provision of this Act cannot be read harmoniously with the provisions of any other law in force at the commencement of this Act, in that situation the provisions of this Act shall have overriding effect, otherwise not. 55. In Parayankandiyal Eravath Kanapravan Kalliani Amma (Smt) v. K. Devi (1996) 4 SCC 76 , the Court held as under: 77. Non obstante clause is sometimes appended to a section in the beginning, with a view to give the enacting part of the section, in case of conflict, an overriding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... primacy to certain provisions of the enactment in case of conflict with the statutory provisions as mentioned in the clause. The non obstante clause indicates the provisions/ enactments, which are overridden and the main enactment that overrides those provisions. Thus, if a non obstante clause sets out an enabling provision or one that confers jurisdiction, as the main enactment, which is to override other provisions, it stands to reason that the overriding effect of that enactment will become operative only when the enabling provisions are used or the jurisdiction is assumed. In relation to an enabling provision, the non obstante clause can be construed to only mean that recourse to those provisions is available inspite of other provisions that are overridden. The non obstante provision, in such circumstances, cannot be construed to mean that recourse to a provision, which by nature is an enabling provision, is necessary and by implication, the other provisions in respect of which, the main enactment is accorded primacy are inoperative and nugatory. Re-assessments under Section 153C of the Act and under Section 147/148 of the Act provide a machinery provision for reassessments in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use, the AO is not required to follow the procedural rigours of Section 148 of the Act. Subject to obtaining the approval under Section 153D of the Act, if necessary, the AO is not required to seek any approval from the specified authority, as required under Section 148/151 of the Act for issuing a notice under Section 153C of the Act and can proceed to assess / reassess income for the concerned assessment years. 60. However, if the AO does not take recourse to Section 153C of the Act but proceeds under Section 147 of the Act he would necessarily have to follow the due procedure as specified for initiating such proceedings. 61. The assumption that provisions of Section 153C of the Act precludes any proceeding under Section 147 of the Act by virtue of the non obstante clause, is unpersuasive. The scheme of Sections 153C of the Act indicates that the said provision was enacted to simplify the procedure, while maintaining the necessary safeguards, for assessment / reassessment in cases where assets belonging to the assessee or books of account or documents, which contain information pertaining to the assessee are found pursuant to a search conducted under Section 132 of the Act or req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a search is conducted under Section 132 of the Act or requisition is made under Section 132A of the Act. In the said case, the time period thus available for completion of the assessment as specified under Section 153B of the Act had expired. Thus, this is a case where by virtue of Section 153A of the Act, the AO has assumed jurisdiction but had not completed the assessment within the prescribed period. 64. We are, respectfully, unable to concur with the decision of the Karnataka High Court in The Pr. Commissioner of Income Tax Anr. v. M/s VSL Mining Company Pvt. Ltd.2. In the said case, the Court concluded that once material pursuant to a search is relied on, the AO is required to follow the procedure as contemplated under Sections 153A, 153B and 153C of the Act and recourse of regular proceedings are barred. 65. In the facts of the present case, the Revenue disputes that a satisfaction note by the AO of the searched person (Jain Brothers) was forwarded to the AO of the Assessee along with the requisite documents. Thus, in the facts of the present case, the jurisdictional conditions to initiate further steps under Section 153C of the Act were not satisfied. However, the AO had re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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