Meghmani Dyes & Intermediates Ltd., Ahmedabad V. The Dy.CIT.,Cent.Circle-1(1), Ahmedabad

CO 249/AHD/2008

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8190 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 2 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-12-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 14-10-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Keywords: Business income; Block assessment; Reassessment proceedings
• Section: 143(3); 153A; 234B; 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO. 2904 TO 2908/AHD/2008 A. Y.: 2000-01 TO 2004-05 THE D. C. I. T., CENT. CIRCLE-1(1), ROOM NO.303, AAYKAR BHAVAN, AHMEDABAD VS MEGHMANI DYES AND INTERMEDIATES, 302, WHITE CROSS, SARDAT PATEL SOCIETY, GULBAI TEKRA, AHMEDABAD P. A. NO. AABCM 6639 D (APPELLANT) (RESPONDENT) C.O. NO.249 TO 253/AHD/2008 (IN ITA NO. 2904 TO 2908/AHD/2008) MEGHMANI DYES AND INTERMEDIATES, 302, WHITE CROSS, SARDAT PATEL SOCIETY, GULBAI TEKRA, AHMEDABAD P. A. NO. AABCM 6639 D VS THE D. C. I. T., CENT. CIRCLE-1(1), ROOM NO.303, AAYKAR BHAVAN, AHMEDABAD (CROSS OBJECTOR) (RESPONDENT) DEPARTMENT BY SHRI SHELLEY JINDAL, CIT DR ASSESSEE BY SHRI S. N. SOPARKAR WITH SHRI D. K. PARIKH, AR DATE OF HEARING: 14-12-2012 DATE OF PRONOUNCEMENT: 11-01-2013 O R D E R PER BENCH: THESE FIVE APPEALS ARE FILED BY THE REVENUE AGGRIEVED BY THE COMMON ORDER OF THE LEARNED CIT(A) -III, AHMEDABAD DATED 23-05-2008 IN APPEAL NO. CIT(A)-III/282 TO 28 6/CC-1(1)/07-08, FOR ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 2 THE ASSESSMENT YEARS 2000-01 TO 2004-05 PASSED U/S 250 READ WITH SECTION 153A AND 143(3) OF THE I. T. ACT. THE CROSS OBJECTIONS ARE FILED BY THE ASSESSEE AGAINST THE AFORESAID ORDER OF THE LEA RNED CIT(A). BOTH THE PARTIES CONCEDED THAT THE ISSUES INVOLVED IN THE AP PEALS OF THE REVENUE AS WELL AS IN THE CROSS OBJECTIONS OF THE ASSESSEE ARE COMMON AND SIMILAR IN NATURE FOR ALL THE ASSESSMENT YEARS AND, THEREFORE, ALL THE APPEALS OF THE REVENUE AND THE CROSS OBJECTIONS OF THE ASSESSEE WE RE HEARD TOGETHER AND THE SAME ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.2904 TO 2908/AHD/2008 REVENUES APPEAL FOR AY 2000-01 TO 2004-04 2. GROUNDS NO.5 AND 6 RAISED BY THE REVENUE IN THEI R APPEALS ARE GENERAL IN NATURE AND THE SAME DO NOT SURVIVE FOR A DJUDICATION. THE SURVIVING COMMON GROUNDS NO.1 TO 4 RAISED BY THE RE VENUE IN ALL THEIR APPEALS ARE REPRODUCED HEREIN UNDER FOR REFERENCE: 1. THE CIT(A) HAS ERRED IN LAW AND IN FACTS IN DIR ECTING TO EXCLUDE 90% OF NET INCOME FROM DEPB BENEFITS INSTEAD OF ENT IRE DEPB INCOME, WITHOUT CONSIDERING THE FACT THAT NO EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR EARNIN G THE DEPB INCOME. 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLD ING THAT THE DUTY PAID SHOULD BE DEDUCTED FROM DEPB INCOME FOR W ORKING OUT NET INCOME FROM DEPB, WITHOUT CONSIDERING AND APPRECIATING THE LEGAL POSITION THAT ANY EXPENDITUR E ON PAYMENT OF DUTY WAS WHOLLY AND EXCLUSIVELY FOR THE PURPOSES OF EXPORT BUSINESS AND NOT FOR EARNING DEPB INCOME AS HELD BY THE HONBLE ITAT IN THE CASE OF EASTMAN INDUSTRI ES LTD. VS. DCIT, 110 TTJ 798 (DEL.). 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLD ING THAT 90% OF THE NET INTEREST INCOME SHOULD BE EXCLUDED UNDER ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 3 EXPLANATION (BAA) BELOW SECTION 80 HHC OF THE ACT F OR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S. 80 HHC OF THE ACT WITHOUT CONSIDERING THE LEGAL POSITION THAT THE PHR ASE USED THEREIN IS ANY RECEIPT AND NOT NET INCOME. THE LD. CIT(A) HAS ALSO FAILED TO CONSIDER THE DECISIONS OF THE HO NBLE HIGH COURT IN THE CASES OF RANI PALIWAL 268 ITR220 (P & H); CHENNAPANDI 282 ITR 389 (MAD.) AND K. S. SUBBIAH PI LLAI AND CO. PVT. LTD. 260 ITR 304 (MAD.) WHEREIN IT WAS CLE ARLY HELD THAT THE GROSS INTEREST IS REQUIRED TO BE EXCLUDED. 4. THE CIT(A) HAS FURTHER ERRED IN LAW AND ON FACTS IN CONSIDERING THE ENTIRE INTEREST EXPENSES AS EXPENSES RELATING T O THE INTEREST RECEIPTS, WITHOUT EXAMINING THE NEXUS BETW EEN THEM, WHILE DIRECTING TO EXCLUDE 90% OF NET INTEREST INCO ME FOR THE PURPOSES OF DEDUCTION U/S. 80 HHC OF THE ACT. C. O. NO.249 TO 253/AHD/2008 (IN ITA NO.2904 TO 2908/AHD/2008) (ASSESSEES C. O. FOR AY: 2000-01 TO 2004-05) 3. GROUND NO.6 RAISED BY THE ASSESSEE IN ALL ITS CR OSS OBJECTION IS GENERAL IN NATURE AND DOES NOT SURVIVE FOR ADJUDICA TION. THE CRUX OF THE COMMON GROUNDS NO.1 TO 5 RAISED IN ALL THE CROSS OB JECTIONS ARE (I) INVOKING THE PROVISIONS OF SECTION 153A AND (II) LE VY OF INTEREST U/S 234B OF THE ACT. HOWEVER, THE SAME ARE REPRODUCES HEREIN U NDER FOR THE SAKE OF REFERENCE: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAVE SHOULD UPHELD THE ASSESSEES CONTENTION THAT I T WAS NOT AT ALL A FIT CASE FOR INVOKING THE PROVISIONS OF SE CTION 153A FOR ANY OF THE YEARS INVOLVED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) SHOULD HAVE APPRECIATED THAT IN RESPECT OF THIS PAR TICULAR ASSESSEE NO INCRIMINATING MATERIAL OR ANY UNDISCLOS ED ASSET ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 4 WAS FOUND AT ALL AND HENCE THE ASSESSING OFFICER WA S NOT JUSTIFIED IN REOPENING THE ASSESSMENTS OF THESE YEA RS BY INVOKING THE PROVISIONS OF SECTION 153A. 3. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE THE CIT(A) SHOULD HAVE REALIZED THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND AT ALL AND NO UNDI SCLOSED ASSET HAD SURFACED THE ASSESSING OFFICER SHOULD HAV E NOT FRAMED THE ASSESSMENT ORDERS U/S. 153A FOR ANY OF T HE YEARS. 4. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE THE CIT(A) SHOULD HAVE REALIZED THAT THE A SSESSING OFFICER WAS NOT JUSTIFIED IN EMBARKING UPON THE PRO CESSING AND SCRUTINY OF THE ASSESSMENT IN A FASHION WHICH WAS P ERMISSIBLE IN A REGULAR ASSESSMENT U/S. 143(3) BUT IN THIS PAR TICULAR CASE IT WAS NOT PERMISSIBLE U/S. 153A 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) HAS ERRED IN NOT ACCEPTING THE ASSESSEES PLEA THAT IT WAS NOT AT ALL A FIT CASE FOR LEVY OF INTEREST U/S. 234B OF THE I. T. ACT. 4. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINES S OF MANUFACTURING AND DEALING IN DYES AND INTERMEDIATES WHICH WERE SOLD IN THE INTERNATIONAL MARKET. A SEARCH WARRANT WAS ISSU ED AND EXECUTED IN THE NAME OF THE ASSESSEE ON 22-09-2005. THE AO THEREAFT ER, ISSUED NOTICE U/S 153A OF THE ACT ON 17-01.2006 IN ORDER TO FRAME THE ASSESSMENT ORDER FOR ALL THE RELEVANT ASSESSMENT YEARS. THE ASSESSEE FIL ED ITS RETURN OF INCOME ON 31-08-2006 FOR ALL THE RELEVANT ASSESSMENT YEARS , DECLARING ITS RESPECTIVE TOTAL INCOME IN RESPONSE TO THE NOTICE I SSUED U/S 153A OF THE ACT DATED 17-01-2006. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED BY THE LEARNED AO ON 31-12-2007 FOR ALL THE RELEVANT A SSESSMENT YEARS WHEREIN CERTAIN DISALLOWANCES WERE MADE BY THE LEAR NED AO AND THUS DETERMINED THE TOTAL INCOME OF THE ASSESSEE. ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 5 ITA NO.2904 TO 2908/AHD/2008 REVENUES APPEAL FOR AY 2000-01 TO 2004-04 5. AT THE BEGINNING OF THE HEARING, THE LEARNED AR POINTED THAT THE FIRST TWO GROUNDS RAISED BY THE REVENUE IN THEIR APPEALS WITH RESPECT TO THE ISSUE OF DEPB FOR ALL THE RELEVANT ASSESSMENT YEARS ARE COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF TOPMAN EXPORTS VS CIT REPORTED IN 342 ITR 49 AND PRAYED THAT THE SAME MAY BE FOLLOWED. THE LEARNED DR SUPPORTED THE ORDER OF THE AO. ON PERUSING THE FACTS OF THE CASE AND THE DECISION CIT ED BY THE LEARNED AR WE FIND THAT BOTH THE REVENUE AUTHORITIES DID NOT HAVE THE BENEFIT OF THE DECISION OF THE HONBLE APEX COURT CITED SUPRA, SIN CE THE DECISION WAS RENDERED ON 8-12-2012 MUCH AFTER THE DECISION RENDE RED BY THE REVENUE AUTHORITIES. THEREFORE IN THIS SITUATION, WE ARE OF THE CONSIDERED VIEW THAT THE MATTER NEEDS TO BE REMITTED BACK TO THE FILE OF THE LEARNED CIT(A) TO PASS APPROPRIATE ORDER IN THE LIGHT OF THE DECISION RENDERED BY THE HONBLE APEX COURT CITED SUPRA. ACCORDINGLY THIS ISSUE IS R EMITTED BACK TO THE FILE OF LEARNED CIT(A). 6. WITH RESPECT TO GROUNDS NO.3 AND 4 RAISED BY THE REVENUE IN THEIR APPEALS IN REGARD TO THE TREATMENT OF NET INTEREST INCOME U/S 80 HHC EXPLANATION (BAA) OF THE ACT, THE LEARNED AR POINTE D OUT AT THE OUTSET THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY T HE DECISION OF THE HONBLE APEX COURT IN THE CASE OF ACG ASSOCIATED CA PSULES PVT. LTD. VS CIT AND CIT VS BHARAT RASAYAN LTD. REPORTED IN 343 ITR 89. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNED AO AND ALSO, POINTED OUT THAT ONLY BUSINESS INCOME OF THE ASSESSEE AND BUSINESS EXPENS ES OF THE ASSESSEE IS TO BE NETTED OFF FOR WHICH THE LEARNED DR DID NO T HAVE ANY OBJECTION FOR VERIFICATION. AFTER HEARING THE RIVAL SUBMISSIONS W E FIND THAT THE REVENUE DID NOT HAVE THE BENEFIT TO CONSIDER THE DECISION O F THIS CASE ALSO SINCE THE ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 6 DECISION WAS RENDERED BY THE HONBLE SUPREME COURT ON 08-02-2012. THEREFORE, IN THE INTEREST OF JUSTICE WE REMIT THIS ISSUE ALSO BACK TO THE FILE OF THE LEARNED CIT(A) TO PASS APPROPRIATE ORDER IN THE LIGHT OF THE DECISION OF THE HONBLE APEX COURT AND ALSO AFTER CONSIDERIN G THE SUBMISSIONS OF BOTH THE PARTIES. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E ALLOWED FOR STATISTICAL PURPOSE. C. O. NO.249 TO 253/AHD/2008 (IN ITA NO.2904 TO 2908/AHD/2008) (ASSESSEES C. O. FOR AY: 2000-01 TO 2004-05) 8. WITH RESPECT TO THE CROSS OBJECTIONS RAISED BY T HE ASSESSEE, THE FIRST FOUR GROUNDS RAISED ARE WITH RESPECT TO THE I SSUE OF INVOKING OF PROVISIONS OF SECTION 153A OF THE ACT IN ALL ASSESS MENT YEARS. THE FIFTH GROUND IS RELATES TO LEVY OF INTEREST U/S 234B OF T HE ACT WHICH WE HEREBY DISMISS AS CONSEQUENTIAL. 9. THE LEARNED AR SUBMITTED BEFORE US THAT IN THE C ASE OF THE ASSESSEE COMPANY, NO UNDISCLOSED ASSET WAS DISCOVERED OR NO INCRIMINATING DOCUMENTS OR MATERIALS WERE FOUND DURING THE COURSE OF SEARCH CONDUCTED IN THE CASES OF SANJAY R. SHAH AND MAGHMANI GROUP U /S 132 (1) OF THE ACT. THE LEARNED AR RELIED ON THE FOLLOWING CASES T O SUPPLEMENT HIS ARGUMENTS: (I) MEGHMANI INDUSTRIES LTD. ITA NO.3400 TO 3402/ AHD/2008 FOR THE ASSESSMENT YEAR 2002-03 TO 2004-05 DATED 16-01- 2009 (ITAT AHMEDABAD). ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 7 (II) HALIOS FOODS ADDITIVES PVT. LTD. ITA NO.3900 AD 3901/MUM/2009 FOR THE ASSESSMENT YEARS 2001-02 AND 2002- 03 DATED 16-7-2010 (ITAT MUMBAI). (III) RAKESHKUMAR HIRALAL THAKKAR ITA NO. 3218 TO 3222/AHD/2007 FOR THE ASSESSMENT YEARS 1999-2000 TO 2004- 05) DATED 30-11-2010(ITAT AHMEDABAD). (IV) ALL CARGO GLOBAL LOGISTICS LTD. VS DCIT REPORT ED IN [2012] 23 TAXMAN 103 (MUM) (SB) FOR THE ASSESSMENT YEARS 20 04-05 TO 2009-10. 9.1 ON THE OTHER HAND, THE LEARNED DR RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS ANIL KUMAR BHATIA REPORTED IN [2012] 24 TAXMAN 98 (DEL) WHEREIN IT IS HELD THA T RE-ASSESSMENT U/S 153A IS TO BE MADE WITHOUT ANY FETTERS. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD AND THE ORDERS CITED BOTH BY THE REVENUE AUT HORITIES AND THE ASSESSEE. THE HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA SUPRA HAS CATEGORICALLY HELD THE ISSUE IN FAVOUR OF THE ASSESSEE AS UNDER: SINGLE BLOCK ASSESSMENT CONCEPT IS NO LONGER THERE UNDER SECTION 153A AFTER THE INTRODUCTION OF THE GROUP OF SECTIONS NAM ELY, 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 INITIA TED UNDER SECTION 132 OR REQUISITION OF BOOKS OF ACCOUNT, DOCUMENTS O R ASSETS IS MADE UNDER SECTION 132A AFTER 31-5-2003, THE ASSESSING O FFICER IS REQUIRED TO ISSUE NOTICES CALLING UPON THE SEARCHED PERSON TO FURNISH RETURNS FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PR ECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH WAS CONDUCTED OR REQUISITION WAS MADE. THE POINT OF DIFFERENCE IS THAT THERE IS NO BROKEN PERIOD FROM THE FIRST DAY O F APRIL OF THE FINANCIAL YEAR IN WHICH THE SEARCH TOOK PLACE OR TH E REQUISITION WAS MADE AND ENDING WITH THE DATE OF SEARCH/REQUISITION . UNDER SECTION 153A AND THE NEW SCHEME, THE ASSESSING OFFICER IS R EQUIRED TO ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 8 EXERCISE THE NORMAL ASSESSMENT POWERS IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE. [PARA 18] ASSESSING OFFICER HAS POWER TOO ASSESS TOTAL INCOM E WHICH INCLUDES BOTH DISCLOSED AND UNDISCLOSED INCOME UNDER THE PROVISIONS OF SECTION 153A, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT Y EARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH THE SEARCH OR REQUISITION WAS MADE. ANOTHER I MPORTANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EM POWERED TO ASSESS OR REASSESS THE TOTAL INCOME OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESS MENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISC LOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERV ED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVE R, THE ASSESSING OFFICER HAS THE POWER TO ASSESS OR REASSE SS THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONL Y ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSE SSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. [PARA 19] REASSESSMENT UNDER SECTION 153A IS TO BE MADE WITHO UT ANY FETTERS A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESP ECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SEC TION 143(1) (A) OR SECTION 143(3). IF SUCH AN ORDER IS ALREADY IN EXIS TENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF TH E SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE U NDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. FOR TH IS PURPOSE, THE RESTRICTIONS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSE SSMENT UNDER SECTION 147 AND 148, HAVE BEEN REMOVED BY THE NON O BSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF SECTION 153A O PENS. THE TIME- LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLI CABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTIO N TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOP EN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 9 COVERED BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMPLETION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS AL SO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH A LL 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 153 A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF NEED B E. [PARA 20] NOW THERE CAN BE CASES WHERE AT THE TIME WHEN THE S EARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PEN DING. IN SUCH A CASE, THE SECOND PROVISO TO SUB-SECTION (1) OF SE CTION 153A SAYS THAT SUCH PROCEEDINGS SHALL ABATE. THE POSITION E MERGING IS THAT WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE , IF ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE PENDING COMPLETION THE Y WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE T HE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOU LD ALSO BE INCLUDED, BUT IN CASES WHERE THE ASSESSMENT OR REAS SESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSM ENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL I NCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEA RCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY AB ATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENT S ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVI SIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DE TERMINATION IN THE ORDERS PASSED UNDER SECTION 153A WOULD BE SIMIL AR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT E SCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR TH4 SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE. [PARA 21 ] NOTWITHSTANDING THAT RETURNS FILED FOR CONCERNED AS SESSMENT YEARS STOOD PROCESSED UNDER SECTION 143(1) (A) SECTION 153A CAN BE INVOKED. ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 10 IN THE LIGHT OF ABOVE DISCUSSIONS, IN VIEW OF THE T RIBUNAL THAT SINCE THE RETURNS OF INCOME FILED BY THE ASSESSEE FOR ALL THE SIX YEARS UNDER CONSIDERATION BEFORE THE SEARCH TOOK PLACE WERE PRO CESSED UNDER SECTION 143(1)(A), THE PROVISIONS OF SECTION 153A C ANNOT BE INVOKED, COULD NOT BE UPHELD. UNDER SECTION 153A THE ASSESSI NG OFFICER HAS THE POWER TO MAKE ASSESSMENT FOR ALL THE SIX YEARS AND COMPUTE THE TOTAL INCOME OF THE ASSESSEE, INCLUDING THE UNDISCL OSED INCOME, DESPITE THE FACT THE ASSESSEE FILED RETURNS BEFORE THE DATE OF SEARCH WHICH STOOD PROCESSED UNDER SECTION 143(1) (A). THE OTHER REASON GIVEN BY THE TRIBUNAL WAS THAT NO MATERIAL WAS FOUN D DURING THE SEARCH; THIS IS FACTUALLY UNSUSTAINABLE SINCE THE E NTIRE CASE AND ARGUMENTS BEFORE THE DEPARTMENTAL AUTHORITIES AS WE LL AS THE TRIBUNAL HAD PROCEEDED ON THE BASIS THAT THE DOCUME NTS EMBODYING THE TRANSACTION WITH M WAS RECOVERED FROM THE ASS ESSEE. IF IT IS NOT IN DISPUTE THAT THE DOCUMENT WAS FOUND IN THE COURS E OF THE SEARCH OF THE ASSESSEE, THEN SECTION 153A IS TRIGGERED. ON CE THE SECTION IS TRIGGERED, IT APPEARS MANDATORY FOR THE ASSESSING O FFICER TO ISSUE NOTICES UNDER SECTION 153A CALLING UPON THE ASSESSE E TO FILE RETURNS FOR THE SIX ASSESSMENT YEARS PRIOR TO THE YEAR IN W HICH THE SEARCH TOOK PLACE. THERE ARE CONTRADICTIONS IN THE ORDER O F THE TRIBUNAL. THEREFORE, BOTH THE REASONS GIVEN BY THE TRIBUNAL F OR HOLDING THAT THE ASSESSMENTS MADE UNDER SECTION 153A WERE BAD IN LAW DO NOT COMMEND THEMSELVES. [PARA 22] 10.1 FROM THE ABOVE ORDER OF THE HONBLE HIGH COURT IT IS EVIDENT THAT THE REVENUE IS EMPOWERED TO REOPEN THE PROCEEDINGS U/S 153A WITHOUT ANY FETTERS AND REASSESS THE TOTAL INCOME INVOKING ITS ORIGINAL JURISDICTION FOR ALL THE RELEVANT ASSESSMENT YEARS IN SPITE OF THE FACT THAT ASSESSMENT FOR CERTAIN ASSESSMENT YEARS ARE ABATED AND FOR CERTAIN ASSESSMENT YEARS ARE CONCLUDED. THEREFORE, FOLLOWING THE ORDER OF THE HO NBLE DELHI HIGH COURT CITED SUPRA, WE DO NOT FIND ANY MERIT IN THE ARGUME NT OF THE ASSESSEE FOR CHALLENGING THE VALIDITY OF THE ASSESSMENT U/S 153A OF THE ACT BY STATING THAT NO UNDISCLOSED ASSETS WERE DISCOVERED AND NO I NCRIMINATING DOCUMENTS OR OTHER MATERIALS WERE FOUND DURING THE COURSE OF SEARCH AND, THEREFORE, ASSESSMENT U/S 153A OF THE ACT IS BAD IN LAW. ACCORDINGLY, WE DISMISS THESE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTIONS. ITA NO.20/94 TO 2098/AHD/2008 & CO NO.249 TO 253/AH D/2008: (AY: 2000-01 TO 2004-05) MEGHMANI DYES AND INTERMEDIATES 11 11. IN THE RESULT, THE APPEALS OF THE REVENUE FOR A LL THE RELEVANT ASSESSMENT YEARS ARE ALLOWED FOR STATISTICAL PURPOS E AND THE CROSS OBJECTIONS OF THE ASSESSEE FOR ALL THE RELEVANT ASS ESSMENT YEARS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11-01-2013. SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA LAKSHMIKANTA DEKA / DEKA / DEKA / DEKA / COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASSISTANT REGISTRA R, ITAT, AHMEDABAD 1. DATE OF DICTATION: 04-01-2013/07-01-13 DIRECT ON COMPUTER 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: -01-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./ P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: