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TMI Blog2024 (12) TMI 1162X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that both grounds raised in all four appeals are identical and pertains to the issue of assumption of jurisdiction by the AO for framing of assessment u/s 153A of the Act in consequent to search conducted u/s 132 of the Act. The Ld. Counsel for the assessee drew our attention to the following additional grounds: "1. The learned CIT-A has erred both in law and in facts in confirming addition on account of unsecured loan despite the fact that no incriminating material or no undisclosed income or any evidence has been found during the search at the premises of the Appellant and therefore the addition under Section 153A is not sustainable. 2. The learned CIT-A has erred in law and in facts as the approval to be taken under Section 153D is mechanical. The approval for Section 153D of the Income Tax Act, 1961 has to be separate for each assessment year and cannot be a common approval. Further, the approval under Section 153D is mechanical in nature." 3. The Ld. Counsel stated that identical grounds have been raised in all four appeals of the assessee. He argued that these additional grounds raised by the assessee are purely jurisdictional. The first ground is covered by the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh not raised before the authorities) which bears on the tax liability of the assessee, whether the Tribunal has jurisdiction to examine the same ? 5. Under Section 254 of the Income-tax Act, the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power of the Tribunal in dealing with appeals is thus expressed in the widest possible terms. The purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item. We do not see any reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits." 6. In view of the decision of the Hon'ble Supreme Court and given the facts that this additional ground raised regarding the assessment framed U/s 153A i.e., search assessment based on no incriminating material, even though the original assessment is unabated, we admit this ground and are adjudicating the same. 7. The first additional ground raised by the assessee is that, in the case of an unabated assessment, while framing a search assessment U/s 153A of the Act in consequent to search conducted u/s 132 of the Act, the primary contention is that incriminating material is necessary for framing such an assessment. 8. The brief facts are that a search and seizure action U/s 132 of the Act was conducted in Air will Group of Cases on 30.09.2015. In view of the search operation, the group cases were centralized to Central Circle, Noida, and accordingly, notices U/s 153A of the Act were issued f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed up Amount in Rs. M/s Indo-gulf Infrastructure and Investment Pvt. Ltd. 1,00,00,000/- Visgi 5,00,000/- Total 4,20,45,440/- The Assessing Officer required the assessee to provide the identity, genuineness and creditworthiness of these creditors or unexplained loans, but the assessee could not explain except for filing the details of the balance sheet which were filed during the course of the original assessment proceedings. The Assessing Officer further noted that the assessee had not established the identity, genuineness and creditworthiness of these unsecured loans or accommodation entries. Therefore, he added the amount of unexplained unsecured loans U/s 68 of the Act at Rs. 4,20,45,440/- and unexplained cash credits U/s 68 of the Act at Rs. 4,00,000/-. 9. Aggrieved, the assessee preferred an appeal before the CIT(A). 10. The CIT(A), after going through the facts of the case, confirmed the action of the Assessing Officer on both the additions by discussing the provisions of Section 68 of the Act, on both the issues i.e., the addition of unexplained unsecured loans as well as unexplained cash credits of Rs. 4,20,45,440/- and Rs. 4,00,000/-, respectively. 11. Aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the assessment order and the order of the CIT(A), and noted the argument from both sides. The Admitted facts are that the nature of additions made by the Assessing Officer (i) unsecured loans, unsecured cash credits, expenditure noted in the profit and loss account, and advances from customers, i.e, suspense account, which is part of account of the assessee, are disclosed in the financials of the assessee. It means that the addition is based on the accounts of the assessee filed in the financial statements along with return of income originally. It means that there is no incriminating material or seized material pertaining to these four assessment years, and the addition is based on the financials filed by the assessee along with the original return. In view of the above facts, we have gone through the decision of the Hon'ble Supreme Court in the case of Abhisar Buildwell (2022-23) for 54 ITR 212, as cited by the Ld. Counsel for the assessee, wherein Hon'ble Supreme Court has finally held how to frame search assessment and what are the requisitions. The dictum is as under:- "14. In view of the above and for the reasons stated above, it is concluded as under:- i) that in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver, it is required to be noted that as per the second proviso to Section 1534, the assessment or re-assessment, 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 making of requisition under Section 1324, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law." 16.1 We noted from the above judgment of the Hon'ble Supreme Court and the facts of the present case, that Hon'ble Supreme court has categorically held that an assessment U/s 153A of the Act is linked with the search and requisition made U/s 132 and 132A of the Act, and the objects of Section 153A is to bring under tax the undisclosed income, which is found during the course of search or pursuant to search or requisition. Further, the Hon'ble Supreme Court held that only in a case where the undisclosed income was found on the basis of incriminating material, the Assessing Officer would frame the jurisdiction to assess or reassess the total income for the entire six block assessment year period ..... X X X X Extracts X X X X X X X X Extracts X X X X
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