9911796707
TMI Blog2025 (3) TMI 808X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... same will not have any legal validity and it is to be quashed. The reliance was also placed in Abhay Kumar Shroff vs CIT and Ors reported in (2007) 210 CTR (Jharkhand) 602 : (2007) 290 ITR 114 (Jharkhand). In the light of the above, it was submitted that though the aforesaid additional ground was not raised before the Id. C.I.T.(Appeals) and is now being raised before the Tribunal for the first time, it is a pure question of law arising from the facts which are on record in the assessment proceedings, therefore, the additional ground may be admitted. For this purpose, the reliance was also placed on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs CIT (1998) 229 ITR 383 (SC) wherein it has been held that "Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." The reliance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 27-11-2008, the A.O. has made similar disallowance u/s 80IA, 80IB, distribution expenses, foreign travelling expense to the extent as confirmed by the ld. CIT(A) and disallowance of staff welfare expense as per assessment order dtd. 27-11-2008 (supra), therefore, in the interest of justice, the said disallowance made by the A.O. may remain to be considered as made in the assessment order u/s 153A r.w.s. 143(3) of the Act. 10. We have carefully considered the submission of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that in this case a search and seizure action u/s 132(1) of the Act was taken place on the assessee on 30-11-2006 and on the date of search the assessment for the year under consideration i.e. A.Y. 2004-05 was pending and the same assessment order was passed by the A.O. u/s 143(3) of the Act on 27-12-2006 i.e. after the date of search. 11. The assessee in the additional ground has challenged the validity of the impugned assessment order on the ground that as on the date of search i.e. on 30-11-2006, the pending assessment had already abated under the second proviso t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also". 15. In the absence of any contrary material placed on record by the Revenue, keeping in view that all the material facts are available on record and the legal ground taken by the assessee goes to the root of the matter, we respectfully following the ratio of the above decisions, admit the additional ground raised by the assessee. 16. On merit, in order to appreciate the submissions of the parties and the relevant provisions of the Act, we find that recently the similar issue came up before the Hon'ble Delhi High Court in Anil Kumar Bhatia (supra) wherein Their Lordships after considering the relevant provisions section of 153A of the Act and CBDT Circular (supra) have observed and held as under:- "16. We now proceed to discuss the correctness of the conclusion of the Tribunal that the Assessing Officer had wrongly invoked Section 153A of the Act. This Section was introduced into the Act by the Finance Act, 2003 w.e.f. 1.6.2003 along with Sections 153B and 153C. Section 153A provides for 'assessment in case of search or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 17. The three sections introduced w.e.f. 1.6.2003 replaced the "Post Search Block Assessment Scheme" in respect of any search under Section 132 or requisition under Section 132A made after 31.5.2003. In Circular No.7 of 2003 dated 5.9.2003 reported in (2003) 263 ITR (St)62, the new Scheme was explained by the CBDT in the following manner: "65. The special procedure for assessment of search cases under Chapter XIV-B be abolished : 65.1 The existing provisions of the Chapter XIV-B provide for a single assessment of undisclosed income of a block period, which means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted and also includes the period up to the date of the commencement of such search, and lay down the manner in which such income is to be computed. 65.2 The Finance Act, 2003, has provided that the provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65.7 This section also provides that assessment in respect of the assessment year relevant to the previous year in which the search is conducted under section 132 or requisition is made under section 132A shall be completed within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed." 65.8 It also provides that in computing the period of limitation for completion of such assessment or reassessment, 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 subsection, or the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee of being re-heard 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to these ten assessment years, the broken period up to the date on which the search was conducted was also included in what was known as „block period. Though a single assessment order was to be passed, the undisclosed income was to be assessed in the different assessment years to which it related. But all this had to be made in a single assessment order. The block assessment so made was independent of and in addition to the normal assessment proceedings as clarified by the Explanation below Section 158BA(2). After the introduction of the group of Sections namely, 153A to 153C, the single block assessment concept was given a go-by. Under the new Section 153A, in a case where a search is initiated under Section 132 or requisition of books of account, documents or assets is made under Section 132A after 31.5.2003, the Assessing Officer is obliged to issue notices calling upon the searched person to furnish returns for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted or requisition was made. The other difference is that there is no broken period from the first day of April of the financial yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings "shall abate". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made". 17. Similar issue came up in Abhay Kumar Shroff (supra) wherein Ther Lordships after considering the relevant provisions of the Act (supra) and CBDT Circular (supra) have observed and held vide para 12 to 16 as under:- "12. From a bare reading of the provisions of sections 153A, 153B and 153C of the Act and the Departmental Circular dated September 5, 2003 (see [2003] 263 ITR (St.) 62), it is manifestly clear that after May 31, 2003, the earlier provision of block assessment in the case of search initiated against the assessee, shall not apply. Instead, the provision that there shall be single assessment on undisclosed income comprising previous years relating to six assessment years preceding in which the search was conducted, shall apply. It further provides that the Assessing Officer shall issue notice to such person requiring him to furnish return of income in respect of six assessment years immediately preceding the assessment year relating to the previous year in which the search was conducted under section 132 or requisiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy of the instant writ application. The said impugned order has also been challenged by the petitioner by filing amendment petition. 16. In the aforesaid facts and circumstances of the case, I am of the definite opinion that the entire action of the respondents in proceeding with the assessment after search in contravention of the provisions of section 153A is vitiated in law. Consequently, the impugned assessment order dated December 28, 2006, purportedly passed under section 143(3) of the Act in a pending assessment proceeding which stood abated is a nullity. As discussed above, continuation of the impugned assessment proceeding after the initiation of search without giving any notice under section 153A of the Act and passing the impugned final order of assessment is illegal, arbitrary and wholly without jurisdiction". 18. Recently Their Lordships of Hon'ble Allahabad High Court in case of Smt. Shaila Agarwal (supra) while considering the provisions of section 153A of the Act and the meaning of words 'abate' and 'pending' referred in the above provision have observed and held as under (headnote) :- "Section 153A of the Income Tax Act, 1961, provides that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A notice under section 153A was issued to the assessee as a result of search and seizure, calling upon the assessee to file returns for six assessment years including the assessment year 2002- 03. The Tribunal held that once a notice under section 153A had been issued after search and seizure operations, according to the provisions of section 153A, all the assessments of the six preceding assessment years prior to the search abated. On appeal to the High Court: Held, that the assessment proceedings did not abate". 19. Similar issue came up before the Special Bench of this Tribunal (in which, one of us was a party) and the Special Bench had an occasion to deal with the scope of interpretation of section 153A of the Act in the case of in All Cargo Global Logistics Ltd. (supra). The Special Bench of the Tribunal after considering the various decisions and CBDT circulars including the Circular No. 7 of 2003 dtd. 5-9-2003 and the decision of the Hon'ble Jharkhand High Court in Abhay Kumar Shroff (supra) [mentioned in the list of cases/circulars] has held as under:- "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of the A.O. b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in the course of search, and undisclosed income or undisclosed property discovered in the course of search." ...... ........ ...... 58. Thus, question No.1 before us is answered a) as under : (a) In assessments that are abated, the A.O. retains the original jurisdiction as well as jurisdiction conferred on him under s. 153A for which assessments shall be made for each of the six assessment years separately ; b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means- (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (i) undisclosed income or property discovered in the course of search. 59. Having come to this conclusion we need not go into various orders of the `Tribunal cited by the rival parties. The decisions inconsistent with the aforesaid view/conclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng statutory provisions. The courts have to decide what the law is and not what it should be. For this proposition, reliance is also placed on the following decisions:- (1) In Union of India vs. Deoki Nandan Aggarwal (1992) Supp. 1 SCC 323, a three judge Bench of Hon'ble Supreme Court held that it is not the duty of the Court either to enlarge the scope of legislation or the intention of the Legislature, when the language of the provision is plain. The Court cannot rewrite the legislation for the reason that it had no power to legislate. The power to legislate has not been conferred on the Courts. The Court cannot add words to a statute or read words into it which are not there. (2) In State of Kerala vs. Mathai Verghese (1986) 4 SCC 746, the Hon'ble Supreme Court has reiterated the well-settled position that the Court can merely interpret the section; it cannot rewrite, recast or redesign the section. In interpreting the provision the exercise undertaken by the Court is to make explicit the intention of the Legislature which enacted the legislation. It is not for the Court to reframe the legislation for the very good reason that the powers to "legislate" have not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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