SAMIR NARAIN BHOJWANI, MUMBAI V. ACIT CEN CIR 24 & 26, MUMBAI

CO 46/MUM/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2640 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-12-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 06-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUNIL K JHA
• Assessee Lawyers: YOGESH A THAR
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Question of law; Block assessment; Notional interest; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 260A; 147; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH , MUMBAI BEFORE SRI MAHAVIR SINGH, J M AND SRI ASHWANI TANEJA , AM ITA NO. 6347 /MUM/201 4 (A.Y: 20 05 - 06 ) ITA NO. 6348 /MUM/201 4 (A.Y:20 06 - 07 ) ITA NO. 6349 /MUM/201 4 (A.Y:20 07 - 08 ) ITA NO. 6350 /MUM/201 4 (A.Y:20 08 - 09 ) ASST. COMMISSIONER OF INCOME TAX CC - 24 & 26 CENTRAL RANGE - 5, MUMBAI - 400020 VS. SHRI SAMIR NARAIN BHOJWANI 1 ST FLOOR, SAMIR COMPLEX, ST. ANDREWS ROAD, OPP. HOLY FAMILY HOSPITAL, BANDRA(W), MUMBAI - 4000 5 0 PAN NO. AABPB9150H APPELLANT .. RESPONDENT CO NO . 4 6 /MUM/201 6 ( IN ITA NO. 6347 /MUM/201 4 A.Y:20 05 - 06 ) CO NO . 47 /MUM/201 6 ( IN ITA NO. 6349 /MUM/201 4 A.Y: 20 07 - 08 ) CO NO . 48 /MUM/201 6 ( IN ITA NO. 6350 /MUM/201 4 A.Y: 20 08 - 09 ) SHRI SAMIR NARAIN BHOJWANI 1 ST FLOOR, SAMIR COMPLEX, ST. ANDREWS ROAD, OPP. HOLY FAMIL Y HOSPITAL, BANDRA(W), MUMBAI - 400050 PAN NO.AABPB9150H VS. ASST. COMMISSIONER OF INCOME TAX CC - 24 & 26 CENTRAL RANGE - 5, MUMBAI - 400020 APPELLANT .. RESPONDENT REVENUE BY .. SHRI. SUNIL K JHA , CIT DR ASSESSEE BY .. SHRI. YOGESH A THAR, AR DATE OF HEA RING .. 13 - 1 2 - 2016 DATE OF PRONOUNCEMENT .. 13 - 12 - 2016 ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 2 O R D E R PER BENCH : THESE FOUR APPEALS B Y THE REVENUE AND THREE CROSS OBJECTION S BY ASSESSEE ARE ARISING OU T OF THE DIFFERENT ORDER S OF CIT (A) - 39 , MUMBAI IN APPEAL NO S . CIT (A) - 39/IT - 113,114,1 15 & 137/2013 - 14 ALL DATED 21 - 07 - 2014 . THE ASSESSMENT S WERE FRAMED BY THE ACIT CENTRAL CIRCLE - 24 & 26 , MUMBAI FOR THE ASSESSMENT YEARS 2005 - 06, 2007 - 08 & 2008 - 09 VIDE HIS ORDER S OF SAME DATE 25 - 03 - 201 3 U/S 143(3 ) R. W. S. 153A OF THE INCOME TAX ACT, 1961 ( HEREINAFTER THE ACT) . 2. THE ONLY ISSUE IN THESE THREE APPEALS OF REVENUE IN ITA NOS. 6347,6349&6350/MUM/2014 IS AGAINST THE ORDER OF CIT(A) IN HOLDING THAT THERE IS NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH AND RECORDED THE FACT THAT ONLY INCRIMINATING MATERIAL FOUND DURING THE A.Y. 2011 - 12. 3. AT THE OUTSET LEARNED COUNSEL FOR THE ASSESSEE SHRI YOGESH A THAR STATED THAT IN ASSESSEES CASE TRIBUNAL (THIS BENCH) HAS ALREADY HEARD A MATTER ON THIS VERY ISSUE ON 01 ST DECEMBER 2016 AND EXACT LY IDENTICAL ISSUE WAS BEFORE THE BENCH. HE REFERRED TO THE ASSESSMENT ORDERS FRAMED IN ALL THESE THREE YEARS WHEREIN THE ISSUE WAS WHETHER INCOME EARNED FROM LETTING OUT OF FLATS IS BUSINESS INCOME OR RENTAL INCOME TO BE ASSESSED AS INCOME FROM HOUSE PROP ERTY OR INCOME FROM BUSINESS . THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT IN ALL THESE THREE YEARS THE ASSESSMENT WAS COMPETED U/S 143(3) ASSESSING THE INCOME AS BUSINESS INCOME BY THE AO AND SUBSEQUENTLY IN LIEU OF SEARCH CONDUCTED U/S 132 OF THE ACT ON 30 - 11 - 2010 IN THE GROUP CASES, A NOTICE U/S 153A WAS ISSUED AND ASSESSMENT WAS FRAMED ASSESSING THE SAME INCOME FROM LETTING OUT OF FLAT AS RENTAL INCOME UNDER THE HEAD INCOME FROM THE HOUSE PROPERTY AND CIT(A) DELETED THE SAME. NOW, LEARNED COUNSEL FO R THE ASSESSEE STATED THE SAME ARE THE ARGUMENT AS MADE IN A.Y. 2006 - 07 WHILE ARGUING ITA NO. 3814/MUM/2014 ON 01 ST DECEMBER 2016. WHEN A QUERY WAS PUT TO THE LEARNED CIT DR HE FAIRLY CONSIDERED THE POSITION AND STATED THE ISSUE IS EXACTLY COVERED IN A.Y. 2006 - 07. ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 3 4. WE HAVE GONE THROUGH THE CASE RECORDS AND FIND THAT THE ONLY ISSUE IN THESE THREE YEARS IS AS REGARDS TO ASSESSMENT U/S 153A R. W. S. 143(3) OF THE ACT ON THE SAME INCOME FROM LETTING OUT OF FLAT AS RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY INSTEAD OF ASSESSED BY THE AO ORIGINALLY U/S 143(3) AS INCOME FROM BUSINESS. WE FIND THAT THE AO HAS ALREADY CONCEDED THE POSITION THAT THERE IS NO SEARCH MATERIAL OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH EXCEPT FOR THE A.Y. 201 1 - 12. WE HAVE ALREADY ADJUDICATED THIS ISSUE IN ITA NO.3814/MUM/2014, WHEREIN, WE HAVE CONSIDERED THE FACTS AS UNDER: - THE LEARNED COUNSEL FOR THE ASSESSEE STATED A SEARCH AND SEIZURE ACTION ON THE ASSESSEE THAT WAS CONDUCTED U/S 132 OF THE ACT ON THE RE SIDENCE AND BUSINESS PREMISES OF THE ASSESSEE ON 30 - 11 - 2010. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, ASSESSMENT WAS ALREADY FRAMED IN ASSESSEES CASE FOR A.Y. 2006 - 07 VIDE ORDER U/S 143(3) DATED 10 - 07 - 2008 AND AO HAS CONSIDERED THIS VERY ISSUE, WHEREIN THE INCOME DECLARED BY ASSESSEE FROM HOUSE PROPERTY WAS ASSESSED AS RENTAL INCOME AND ACCORDINGLY, THE ASSESSMENT WAS MADE. NOW, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT THERE IS NO INCRIMINATING MATERIAL AND QUA THE SAME REVENUE HAS FILED A LETTER FROM AO I.E. THE DCIT CENTER CIRCLE 3(4), MUMBAI VIDE LETTER NO. DCIT CC - 3(4)/REVISED FORM NO. 36/2016 - 17 DATED 13 - 12 - 2016 WHEREIN, IT IS MENTIONED AS UNDER: - IN THE CASE MENTIONED ABOVE, AS IT IS STATED IN THE GROUNDS OF APPEAL, INCRIMINATING M ATERIAL WAS FOUND FOR A.Y. 2011 - 12 FOR WHICH ADDITIONS HAVE BEEN MADE WHILE ASSESSING TOTAL INCOME OF A.Y. 2011 - 112 U/S 143(3) OF THE I.T. ACT, 1961. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE ONCE REVENUE ADMITTED THAT INCRIMINATING MATERIAL WAS FOUND FOR A.Y. 2011 - 12 BUT NOT FOR A.Y. 2006 - 07, NO ASSESSMENT U/S 153A OF THE ACT CAN BE FRAMED. THE LEARNED DR ALSO CONCEDED TO THE POSITION. WE FIND THAT THIS ISSUE NOW STANDS COVERED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVAL) LTD. (2015) 374 ITR 645 (BOMBAY), WHEREIN ALSO CONSIDERING THE JUDGMENT OF THE SPECIAL BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS 137 ITD 287(SB) (MUM), CONSIDERED THE ISSUE THAT, WHETHER THERE IS SCOPE OF ASSESSMENT U/S. 153A OF THE ACT IN RESPECT TO COMPLETED ASSESSMENT WHICH IS LIMITED ONLY TO UNDISCLOSED INCOME AND UNDISCLOSED ASSETS FOUND DURING THE COURSE OF SEARCH OR NOT? HON' BLE HIGH COURT HELD THAT ON A PLAIN READING OF SECTION 153 OF THE ACT IT BECOMES CLEAR THAT ON INITIATION OF THE PROCEEDINGS U/S. 153A OF THE ACT, ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 4 IT IS ONLY THE ASSESSMENT/REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH U/S. 132 OF THE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINAL FOR THOSE ASSESSMENT YEARS COVERED U/S. 153A OF THE ACT. HON'BLE HIGH COURT ALSO DISCUSSED THE CBDT CIRCULAR NO. 8 OF 2003 DATED 18.09.2003 RE PORTED IN 263 ITR (ST.) 61 AT PAGE 1 07 WHEREIN CBDT HAS CLARIFIED THAT ON INITIATION OF PROCEEDINGS U/S. 153A OF THE ACT THE PROCEEDINGS PENDING IN APPEAL, REVISION OR RECTIFICATION PROCEEDINGS AGAINST FINAL ASSESSMENT SHALL NOT ABATE. IT IS ONLY BECAUSE THE FINAL ASSESSMENTS DO NOT ABATE THE APPEAL, REVISION OR RECTIFICATION PENDING AGAINST FINAL ASSESSMENTS WOULD NOT ABATE. THEREFORE, HON'BLE HIGH COURT REJECTED THE ARGUMENTS OF THE REVENUE THAT ON INITIATION OF PROCEEDINGS U/S. 153A OF THE ACT, THE REASSESSMENT FINAL FOR ASSESSMENT YEAR S COVERED U/S. 153A OF THE ACT STANDS ABATED. ONLY THE PENDING ASSESSMENTS GET REVIVED U/S. 153A OF THE ACT. HON'BLE HIGH COURT FURTHER HELD THAT ONCE ASSESSMENT HAS ATTAINED FINALITY, THEN THE AO WHILE PASSING INDEPENDENT ASSESSMENT ORDER U/S. 153A/ 143(3) OF THE ACT COULD NOT DISTURB THE ASSESSMENT ORDER WHICH HAS ATTAINED FINALITY UNLESS THE MATERIAL GATHERED IN THE COURSE OF SEARCH U/S. 132/153A OF THE ACT ESTABLISHED THAT THE FINALITY ATTAINED IN THE ASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF SEARCH. THE RELEVANT PORTION OF THE JUDGMENT READS AS UNDER: - 27. HOWEVER, THE REVENUE'S ARGUMENT WAS THAT ONCE PROCEEDINGS UNDER SECTION 153A OF THE ACT ARE INITIATED, THEN, THE ORIGINAL ASSESSMENT / REASSESSMENT ORDER ALREADY PASSED IN THE ASSESSMENT YEARS COVERED UNDER SECTION 153A STAND ABATED AND THE ASSESSING OFFICER IS OBLIGED TO PASS FRESH ASSESSMENT / REASSESSMENT ORDERS AND DETERMINE THE TOTAL INCOME AFRESH FOR THOSE ASSESSMENT YEARS. THUS, EARLIER ASSESSMENT ORDERS ABA TE AS THE PROCEEDINGS IN WHICH THEY ARE PASSED HAVE NO LEGAL CONSEQUENCE WAS THE ARGUMENT. ONCE THE NOTICE UNDER SECTION 153A WAS ISSUED AND AN ASSESSMENT ORDER PASSED PURSUANT THERETO, IT IS THAT ORDER WHICH WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE. 28. IN DEALING WITH THOSE ARGUMENTS, THE DIVISION BENCH OUTLINED THE AMBIT AND SCOPE OF THE POWERS CONFERRED BY SECTION 153A AND OBSERVED THUS: 8) WE FIND IT DIFFICULT TO ACCEPT THE ABOVE CONTENTION RAISED ON BEHALF OF THE REVENUE. THE OBJE CT OF INSERTING SECTIONS 153A, 153B AND 153C BY FINANCE ACT, 2003 BY DISCARDING THE EXISTING PROVISIONS RELATING TO SEARCH CASES CONTAINED IN CHAPTER XIV B OF THE INCOME - TAX ACT, AS STATED IN THE MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL 200 3 (SEE 260 ITR (ST) 191 AT 219) WAS THAT UNDER THE EXISTING PROVISIONS RELATING TO SEARCH ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 5 CASES, OFTEN DISPUTES WERE RAISED ON THE QUESTION, AS TO WHETHER A PARTICULAR INCOME COULD BE TREATED AS `UNDISCLOSED INCOME' OR WHETHER A PARTICULAR INCOME COULD BE SAID TO BE RELATABLE TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH, ETC. WHICH LED TO PROLONGED LITIGATION. TO OVERCOME THAT DIFFICULTY, THE LEGISLATURE BY FINANCE ACT 2003, DECIDED TO DISCARD CHAPTER XIV B PROVISIONS AND INTRODUCE SECTIONS 153A, 153B AND 153C IN THE IT ACT. 9) WHAT SECTION 153A CONTEMPLATES IS THAT, NOTWITHSTANDING THE REGULAR PROVISIONS FOR ASSESSMENT/REASSESSMENT CONTAINED IN THE IT ACT, WHERE SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A ON OR AFTE R 31/5/2003 IN THE CASE OF ANY PERSON, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME WITHIN THE TIME STIPULATED THEREIN, IN RESPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVA NT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE AND THEREAFTER ASSESS OR REASSESS THE TOTAL INCOME FOR THOSE ASSESSMENT YEARS. THE SECOND PROVISO TO SECTION 153A PROVIDES FOR ABATEMENT OF ASSESSMENT/REASSESSMENT PROCEEDINGS WHICH ARE PENDING ON THE DATE OF SEARCH/REQUISITION. SECTION 153A (2) PROVIDES THAT WHEN THE ASSESSMENT MADE UNDER SECTION 153(A)(1) IS ANNULLED, THE ASSESSMENT OR REASSESSMENT THAT STOOD ABATED SHALL STAND REVIVED. 10) THUS ON A PLAIN READING OF SECTION 153A OF THE INCOME - TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF THE PROCEEDINGS UNDER SECTION 153A, IT IS ONLY THE REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH UNDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF T HE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINALISED FOR THOSE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE ACT. BY A CIRCULAR NO. 8 OF 2003 DATED 18 - 9 - 2003 (SEE 263 ITR (ST) 61 AT 107) THE CBDT HAS CLARIFIED THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE PROCEEDINGS PENDING IN APPEAL, REVISION OR RECTIFICATION PROCEEDINGS AGAINST FINALISED ASSESSMENT/REASSESSMENT SHALL NOT ABATE. IT IS ONLY BECAUSE, THE FINALISED ASSESSMENTS/REASSESSMENTS DO NOT ABATE, THE APPEAL REV ISION OR RECTIFICATION PENDING AGAINST FINALISED ASSESSMENT/REASSESSMENTS WOULD NOT ABATE. THEREFORE, THE ARGUMENT OF THE REVENUE, THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE ASSESSMENTS/REASSESSMENTS FINALISED FOR THE ASSESSMENT YEARS COVERE D UNDER SECTION 153A OF THE INCOME - TAX ACT STAND ABATED CANNOT BE ACCEPTED. SIMILARLY, ON ANNULMENT OF ASSESSMENT MADE UNDER SECTION 153A (1) WHAT STANDS REVIVED IS ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 6 THE PENDING ASSESSMENT / REASSESSMENT PROCEEDINGS WHICH STOOD ABATED AS PER SECTION 153A (1 ). 11) IN THE PRESENT CASE, AS CONTENDED BY SHRI MANI, LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSMENT FOR ASSESSMENT YEAR 1998 - 99 WAS FINALISED ON THE 29 - 12 - 2000 AND SEARCH WAS CONDUCTED THEREAFTER ON 3 - 12 - 2003. THEREFORE, IN THE FACTS OF THE PRESENT CASE, INITIATION OF PROCEEDINGS UNDER SECTION 153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 29 - 12 - 2000. 12) ONCE IT IS HELD THAT THE ASSESSMENT FINALISED ON 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED UNDER SECTION 80 HHC OF THE INCOM E - TAX ACT AS WELL AS THE LOSS COMPUTED UNDER THE ASSESSMENT DATED 29 - 12 - 2000 WOULD ATTAIN FINALITY. IN SUCH A CASE, THE A.O. WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143 (3) OF THE I.T. ACT COULD NOT HAVE DISTURBE D THE ASSESSMENT / REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME - TAX ACT ESTABLISH THAT THE RELIEFS GRANTED UNDER THE FINALISED ASSESSMENT/ REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. 13) IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SE CTION 80 HHC WAS ERRONEOUS. IN SUCH A CASE, THE A.O. WHILE PASSING ORDER UNDER SECTION 153A READ WITH SECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALISED ON 29.12.2000 RELATING TO SECTION 80 HHC DEDUCTION AND CONSEQUENTLY THE C.I.T. COUL D NOT HAVE INVOKED JURISDICTION UNDER SECTION 263 OF THE ACT. 29. WE ARE NOT IN AGREEMENT WITH MR. PINTO THAT THESE OBSERVATIONS ARE MADE IN PASSING OR THAT THEY ARE NOT BINDING ON US BECAUSE THE ESSENTIAL CONTROVERSY BEFORE THE BENCH WAS SOMEWHAT DIFFER ENT. HE URGES THAT WAS ONLY IN RELATION TO THE LEGALITY AND VALIDITY OF THE ORDER OF THE COMMISSIONER UNDER SECTION 263 OF THE IT ACT. HAD THAT BEEN THE CASE, THE DIVISION BENCH WAS NOT REQUIRED TO TRACE OUT THE HISTORY OF SECTION 153A OF THE IT ACT AND TH E POWER THAT IS CONFERRED THEREUNDER. WHEN THE REVENUE ARGUED BEFORE THE DIVISION BENCH THAT THE POWER UNDER SECTION 153A CAN BE INVOKED AND EXERCISED EVEN IN CASES WHERE THE SECOND PROVISO TO SUB - SECTION (1) IS NOT APPLICABLE THAT THE DIVISION BENCH WAS R EQUIRED TO EXPRESS A SPECIFIC OPINION. THE PROVISION DEALS WITH THOSE CASES WHERE ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE ASSESSMENT YEARS FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN SUB - SECTION (1) OF SECTION 153A WERE PEN DING. IF THEY WERE ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 7 PENDING ON THE DATE OF THE INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, THEY ABATE. IT IS ONLY PENDING PROCEEDINGS THAT WOULD ABATE AND NOT WHERE THERE ARE ORDERS MADE OF ASS ESSMENT OR REASSESSMENT AND WHICH ARE IN FORCE ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF THE REQUISITION. AS THAT SPECIFIC ARGUMENT WAS CANVASSED AND DEALT WITH BY THE DIVISION BENCH AND THAT IS HOW IT WAS CALLED UPON TO INTERPRET SECTION 153A O F THE IT ACT, THEN, EACH OF THE ABOVE CONCLUSIONS RENDERED BY THE DIVISION BENCH WOULD BIND US. 30. EVEN OTHERWISE, WE AGREE WITH THE DIVISION BENCH WHEN IT OBSERVES AS ABOVE WITH REGARD TO THE AMBIT AND SCOPE OF THE POWERS CONFERRED UNDER SECTION 153A OF THE ACT. SINCE WE ARE NOT REQUIRED TO TRACE OUT THE HISTORY AND WE CAN DO NOTHING BETTER THAN TO REPRODUCE THE OBSERVATIONS AND CONCLUSIONS AS ABOVE THAT WE ARE NOT REPEATING THE SAME. EVEN IF THE EXERCISE OF POWER UNDER SECTION 153A IS PERMISSIBLE STILL THE PROVISION CANNOT BE READ IN THE MANNER SUGGESTED BY MR. PINTO. NOT ONLY THE FINALISED ASSESSMENT CANNOT BE TOUCHED BY RESORTING TO THOSE PROVISIONS, BUT EVEN WHILE EXERCISING THE POWER CAN BE EXERCISED WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR B OOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER 31ST MARCH, 2003. THERE IS A MANDATE TO ISSUE NOTICES UNDER SECTION 153(1)(A) AND ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING TH E ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. THUS, THE CRUCIAL WORDS SEARCH AND REQUISITION APPEAR IN THE SUBSTANTIVE PROVISION AND THE PROVISOS. THAT WOULD THROW LIGHT ON THE ISSUE OF APPLIC ABILITY OF THE PROVISION. IT BEING ENACTED TO A SEARCH OR REQUISITION THAT ITS CONSTRUCTION WOULD HAVE TO BE ACCORDINGLY. THAT IS THE CONCLUSION REACHED BY THE DIVISION BENCH IN MURLI AGRO (SUPRA) WITH WHICH WE RESPECTFULLY AGREE. THESE ARE THE CONCLUSIONS WHICH CAN BE REACHED AND UPON READING OF THE LEGAL PROVISIONS IN QUESTION. 31. WE, THEREFORE, HOLD THAT THE SPECIAL BENCH'S UNDERSTANDING OF THE LEGAL PROVISION IS NOT PERVERSE NOR DOES IT SUFFER FROM ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD. THE SPECIAL BENCH IN THAT REGARD HELD AS UNDER: THE PROVISION UNDER SECTION 153A IS APPLICABLE WHERE A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. IN SUCH A CASE THE AO IS OBLIGED TO ISSUE NOTICE U/S 153A IN RESPECT OF 6 PRECEDING YEARS, PRECEDIN G THE YEAR IN WHICH SEARCH ETC. HAS BEEN INITIATED. THEREAFTER HE HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF THESE SIX YEARS. IT IS OBLIGATORY ON THE PART OF THE AO TO ASSESS OR REASSESS TOTAL INCOME OF THE SIX YEARS AS PROVIDED IN SECTION 153A(1)(B) AN D REITERATED IN THE 1ST PROVISO TO THIS SECTION. THE ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 8 SECOND PROVISO STATES THAT THE ASSESSMENT OR REASSESSMENT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR REQUISITION SHALL ABATE. WE FIND THAT THERE IS NO DIVERGENCE OF VIEWS IN SO FAR AS THE PROVISI ON CONTAINED IN SECTION 153A TILL THE 1ST PROVISO. THE DIVERGENCE STARTS FROM THE SECOND PROVISO WHICH STATES THAT PENDING ASSESSMENT OR REASSESSMENT ON THE DATE OF INITIATION OF SEARCH SHALL ABATE. THIS MEANS THAT AN ASSESSMENT OR REASSESSMENT PENDING ON THE DATE OF INITIATION OF SEARCH SHALL CEASE TO EXIST AND NO FURTHER ACTION SHALL BE TAKEN THEREON. THE ASSESSMENT SHALL NOW BE MADE U/S 153A. THE CASE OF LD. COUNSEL FOR THE ASSESSEE IS THAT NECESSARY COROLLARY TO THIS PROVISION IS THAT COMPLETED ASSESSME NT SHALL NOT ABATE. THESE ASSESSMENTS BECOME FINAL EXCEPT IN SO FAR AND TO THE EXTENT AS UNDISCLOSED INCOME IS FOUND IN THE COURSE OF SEARCH. ON THE OTHER HAND, IT HAS BEEN ARGUED BY THE LD. STANDING COUNSEL THAT ABATEMENT OF PENDING ASSESSMENT IS ONLY FOR THE PURPOSE OF AVOIDING TWO ASSESSMENTS FOR THE SAME YEAR, ONE BEING REGULAR ASSESSMENT AND THE OTHER BEING ASSESSMENT U/S 153A. IN OTHER WORDS THESE TWO ASSESSMENTS COALESCE INTO ONE ASSESSMENT. THE SECOND PROVISO DOES NOT CONTAIN ANY WORD OR WORDS TO TH E EFFECT THAT NO REASSESSMENT SHALL BE MADE IN RESPECT OF A COMPLETED ASSESSMENT. THE LANGUAGE IS CLEAR IN THIS BEHALF AND THEREFORE LITERAL INTERPRETATION SHOULD BE FOLLOWED. SUCH INTERPRETATION DOES NOT PRODUCE MANIFESTLY ABSURD OR UNJUST RESULTS AS SECT ION 153A (I)(B) AND THE FIRST PROVISO CLEARLY PROVIDE FOR ASSESSMENT OR REASSESSMENT OF ALL SIX YEARS. IT MAY CAUSE HARDSHIP TO SOME ASSESSES WHERE ONE OR MORE OF SUCH ASSESSMENTS HAS OR HAVE BEEN COMPLETED BEFORE THE DATE OF INITIATION OF SEARCH. THIS IS HARDLY OF ANY RELEVANCE IN VIEW OF CLEAR AND UNAMBIGUOUS WORDS USED BY THE LEGISLATURE. THIS INTERPRETATION DOES NOT CAUSE ANY ABSURD ETC. RESULTS. THERE IS NO CASUS OMISSUS AND SUPPLYING ANY WOULD BE AGAINST THE LEGISLATIVE INTENT AND AGAINST THE VERY RUL E IN THIS BEHALF THAT IT SHOULD BE SUPPLIED FOR THE PURPOSE OF ACHIEVING LEGISLATIVE INTENT. THE SUBMISSIONS OF THE LD. COUNSELS ARE MANIFOLD, THE FOREMOST BEING THAT THE PROVISION U/S 153A SHOULD BE READ IN CONJUNCTION WITH THE PROVISION CONTAINED IN SECT ION 132(1), THE REASON BEING THAT THE LATTER DEALS WITH SEARCH AND SEIZURE AND THE FORMER DEALS WITH ASSESSMENT IN CASE OF SEARCH ETC, THUS, THE TWO ARE INEXTRICABLY LINKED WITH EACH OTHER. BEFORE PROCEEDING FURTHER, WE MAY NOW EXAMINE THE PROVISION CONTA INED IN SUB - SECTION (2) OF SECTION 153, WHICH HAS BEEN DEALT WITH BY LD. COUNSEL. IT PROVIDES THAT IF ANY ASSESSMENT MADE UNDER SUBSECTION (1) IS ANNULLED IN APPEAL ETC., THEN THE ABATED ASSESSMENT REVIVES. HOWEVER, IF SUCH ANNULMENT IS FURTHER NULLIFIED, THE ASSESSMENT AGAIN ABATES. THE CASE OF THE LD. COUNSEL ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 9 IS THAT THIS PROVISION FURTHER SHOWS THAT COMPLETED ASSESSMENTS STAND ON A DIFFERENT FOOTING FROM THE PENDING ASSESSMENTS BECAUSE APPEALS ETC. PROCEEDINGS CONTINUE TO REMAIN IN FORCE IN CASE OF COMPL ETED ASSESSMENTS AND THEIR FATE DEPENDS UPON SUBSEQUENT ORDERS IN APPEAL. ON CONSIDERATION OF THE PROVISION AND THE SUBMISSIONS, WE FIND THAT THIS PROVISION ALSO MAKES IT CLEAR THAT THE ABATEMENT OF PENDING PROCEEDINGS IS NOT OF SUCH PERMANENT NATURE THAT THEY CEASE TO EXIST FOR ALL TIMES TO COME. THE INTERPRETATION OF THE LD. COUNSEL, THOUGH NOT SPECIFICALLY STATED, WOULD BE THAT ON ANNULMENT OF THE ASSESSMENT MADE U/S 153(1), THE AO GETS THE JURISDICTION TO ASSESS THE TOTAL INCOME WHICH WAS VESTED IN HIM EARLIER INDEPENDENT OF THE SEARCH AND WHICH CAME TO AN END DUE TO INITIATION OF THE SEARCH. THE PROVISION CONTAINED IN SECTION 132 (1) EMPOWERS THE OFFICER TO ISSUE A WARRANT OF SEARCH OF THE PREMISES OF A PERSON WHERE ANY ONE OR MORE OF CONDITIONS MENTIO NED THEREIN IS OR ARE SATISFIED, I.E. - A) SUMMONS OR NOTICE HAS BEEN ISSUED TO PRODUCE BOOKS OF ACCOUNT OR OTHER DOCUMENTS BUT SUCH BOOKS OF ACCOUNT OR DOCUMENTS HAVE NOT BEEN PRODUCED, B) SUMMONS OR NOTICE HAS BEEN OR MIGHT BE ISSUED, HE WILL NOT PRODUCE THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MENTIONED THEREIN, OR C) HE IS IN POSSESSION OF ANY MONEY OR BULLION ETC. WHICH REPRESENTS WHOLLY OR PARTLY THE INCOME OR PROPERTY WHICH HAS NOT BEEN AND WHICH WOULD NOT BE DISCLOSED FOR THE PURPOSE OF ASSESSMENT, C ALLED AS UNDISCLOSED INCOME OR PROPERTY. WE FIND THAT THE PROVISION IN SECTION 132 (1) DOES NOT USE THE WORD 'INCRIMINATING DOCUMENT'. CLAUSES (A) AND (B) OF SECTION 132(1) EMPLOY THE WORDS 'BOOKS OF ACCOUNT OR OTHER DOCUMENTS'. FOR HARMONIOUS INTERPRETATI ON OF THIS PROVISION WITH PROVISION CONTAINED IN SECTION 153A, ALL THE THREE CONDITIONS ON SATISFACTION OF WHICH A WARRANT OF SEARCH CAN BE ISSUED WILL HAVE TO BE TAKEN INTO ACCOUNT. HAVING HELD SO, AN ASSESSMENT OR REASSESSMENT U/S 153A ARISES ONLY WHEN A SEARCH HAS BEEN INITIATED AND CONDUCTED. THEREFORE, SUCH AN ASSESSMENT HAS A VITAL LINK WITH THE INITIATION AND CONDUCT OF THE SEARCH. WE HAVE MENTIONED THAT A SEARCH CAN BE AUTHORISED ON SATISFACTION OF ONE OF THE THREE CONDITIONS ENUMERATED EARLIER. TH EREFORE, WHILE INTERPRETING THE PROVISION CONTAINED IN SECTION 153A, ALL THESE CONDITIONS WILL HAVE TO BE TAKEN INTO ACCOUNT. WITH THIS, WE PROCEED TO LITERALLY INTERPRET TO PROVISION IN 153A AS IT EXISTS AND READ IT ALONGSIDE THE PROVISION CONTAINED IN SE CTION 132(1). THE PROVISION COMES INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. ON SATISFACTION OF THIS CONDITION, THE AO ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 10 IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF INCOME OF SIX YEAR S IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE WORD USED IS 'SHALL' AND, THUS, THERE IS NO OPTION BUT TO ISSUE SUCH A NOTICE. THEREAFTER HE HAS TO ASSESS OR REASSESS TOTAL INCOME OF THESE SIX YEARS. IN THIS RESPECT ALSO, THE WORD USED IS 'SHALL' AND, THER EFORE, THE AO HAS NO OPTION BUT TO ASSESS OR REASSESS THE TOTAL INCOME OF THESE SIX YEARS. THE PENDING PROCEEDINGS SHALL ABATE. THIS MEANS THAT OUT OF SIX YEARS, IF ANY ASSESSMENT OR REASSESSMENT IS PENDING ON THE DATE OF INITIATION OF THE SEARCH, IT SHALL ABATE. IN OTHER WORDS PENDING PROCEEDINGS WILL NOT BE PROCEEDED WITH THEREAFTER. THE ASSESSMENT HAS NOW TO BE MADE U/S 153A (1)(B) AND THE FIRST PROVISO. IT ALSO MEANS THAT ONLY ONE ASSESSMENT WILL BE MADE UNDER THE AFORESAID PROVISIONS AS THE TWO PROCEED INGS I.E. ASSESSMENT OR REASSESSMENT PROCEEDINGS AND PROCEEDINGS UNDER THIS PROVISION MERGE INTO ONE. IF ASSESSMENT MADE UNDER SUB - SECTION (1) IS ANNULLED IN APPEAL OR OTHER LEGAL PROCEEDINGS, THEN THE ABATED ASSESSMENT OR REASSESSMENT SHALL REVIVE. THIS M EANS THAT THE ASSESSMENT OR REASSESSMENT, WHICH HAD ABATED, SHALL BE MADE, FOR WHICH EXTENSION OF TIME HAS BEEN PROVIDED UNDER SECTION 153B. THE QUESTION NOW IS - WHAT IS THE SCOPE OF ASSESSMENT OR REASSESSMENT OF TOTAL INCOME U/S 153A (1) (B) AND THE FI RST PROVISO? WE ARE OF THE VIEW THAT FOR ANSWERING THIS QUESTION, GUIDANCE WILL HAVE TO BE SOUGHT FROM SECTION 132(1). IF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND FOUN D IN THE COURSE OF SEARCH IN OUR HUMBLE OPINION SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO ACCOUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME UNDER THE AFORESAID PROVISION. SIMILAR POSITION WILL OBTAIN IN A CASE WHERE UNDIS CLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS INTERPRETATION WILL PRODUCE THE FOLLOWING RESULTS: - A) IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE ORIGINAL ASSESSMEN T AND ASSESSMENT U/S 153A MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE SEPARATELY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO, (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 ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 11 COURSE OF SEARCH, AND UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SEA RCH. 54. IT MAY BE MENTIONED HERE THAT LD. COUNSEL FOR ALL CARGO GLOBAL LOGISTICS LTD. WAS QUESTIONED ABOUT THE SCOPE OF PENDING ASSESSMENTS AS IT WAS HIS CONTENTION THAT ALL SIX ASSESSMENTS ARE TO BE MADE, IF NECESSARY, ON THE BASIS OF UNDISCLOSED INCOME DISCOVERED IN THE COURSE OF SEARCH. HE WAS SPECIFICALLY QUESTIONED ABOUT THE JURISDICTION OF THE AO TO MAKE ORIGINAL ASSESSMENT ALONG WITH ASSESSMENT U/S 153A, MERGING INTO ONE. HOWEVER HE TOOK AN EVASIVE VIEW SUBMITTING THAT THIS QUESTION NEED NOT BE DEC IDED IN HIS CASE ALTHOUGH THE QUESTION OF JURISDICTION U/S 153A WAS VEHEMENTLY PRESSED ON ACCOUNT OF WHICH GROUND NO.1 IN THE APPEAL FOR ASSESSMENT YEAR 2004 - 05 WAS ADMITTED AS ADDITIONAL GROUND. HE ALSO WANTED THE ADDITIONAL GROUND TO BE RETAINED IN CASE OF ANY FUTURE CONTINGENCY. 32. WE WOULD BE FAILING IN OUR DUTY IF WE DO NOT NOTE THE RELIANCE PLACED BY MR. PINTO ON THE JUDGMENTS RENDERED BY THE HIGH COURT OF DELHI AT NEW DELHI AND THE HIGH COURT OF KARNATAKA. MR. PINTO WOULD SUBMIT THAT THE ABOVE OBS ERVATIONS AND CONCLUSIONS OF THE SPECIAL BENCH AND REPRODUCED BY US ARE SPECIFICALLY DISAPPROVED IN COMMISSIONER OF INCOME TAX VS. ANIL KUMAR BHATIA BY THE DELHI HIGH COURT. WE DO NOT FIND THIS ARGUMENT TO BE ACCURATE. IN ANIL KUMAR BHATIA AS WELL THE ASSE SSMENT INVOLVED THE YEARS 2000 - 01, 2002 - 03 AND 2005 - 06. ONE OF THE QUESTIONS AND WHICH WAS TERMED AS SUBSTANTIAL QUESTION OF LAW WAS THE CORRECTNESS OF THE TRIBUNAL'S ORDER HOLDING THAT THE ASSESSING OFFICER WRONGLY INVOKED SECTION 153A OF THE IT ACT. THE FACTS AS NOTED WERE THAT IN THE CASE OF AN INDIVIDUAL ASSESSEE AND WHO WAS CARRYING ON BUSINESS IN THE NAME AND STYLE OF M/S. A.K. TRADERS, THERE WAS A SEARCH OF HIS RESIDENCE AND BUSINESS PREMISES ON 13TH DECEMBER, 2005 UNDER SECTION 132 OF THE ACT. PURSU ANT TO THE SEARCH, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153A OF THE IT ACT AND CALLED UPON THE ASSESSEE TO FILE THE RETURN OF INCOME FOR THE SIX YEARS AS ENVISAGED IN THAT SECTION. NOTICES UNDER SECTION 142(1) AND 143(2) ALONGWITH A DETAILED Q UESTIONNAIRE WERE ISSUED IN RESPONSE TO WHICH THE ASSESSEE SUBMITTED AN EXPLANATION. AFTER CONSIDERATION THEREOF, THE ASSESSING OFFICER MADE ADDITIONS TO THE INCOME RETURNED IN RESPECT OF THE ASSESSMENT YEARS UNDER CONSIDERATION WHICH INCLUDED AN AMOUNT OF RS.1,50,000/ - GIVEN BY THE ASSESSEE AS A LOAN TO SMT. MOHINI SHARMA ON 10TH DECEMBER, 2003. THIS INFORMATION WAS MADE AVAILABLE BUT THE LOAN WAS NOT REFLECTED IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 - 04. THE ASSESSING OFF ICER, THEREFORE, CONCLUDED THAT THIS LOAN WAS GIVEN OUT OF UNACCOUNTED INCOME OF THE ASSESSEE. ACCORDINGLY, THE SAME WAS ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 12 ADDED IN THE INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 - 04 AND AN ORDER WAS MADE TO THAT EFFECT. AGAINST THIS ADDITION, THE AP PEAL WAS PREFERRED BEFORE THE COMMISSIONER OF INCOME TAX CONTENDING, INTER ALIA, THAT THE SEIZED PAPER ON THE BASIS OF WHICH THE ADDITION WAS MADE DID NOT CONTAIN THE SIGNATURE OF THE ASSESSEE; THAT NO LOAN WAS GIVEN TO MOHINI SHARMA. THERE WAS NO ADMISSIO N OF THE STATEMENT OF MOHINI SHARMA TO THAT EFFECT AND THERE WAS ONLY A PROPOSAL. THE COMMISSIONER OF INCOME TAX CONFIRMED THIS ADDITION IN THE ASSESSING OFFICER'S ORDER. IN RESPECT OF ASSESSMENT YEARS 2004 - 05 AND 2005 - 06 THERE WERE APPEALS BEFORE THE COMM ISSIONER OF INCOME TAX (APPEALS) QUESTIONING THE ADDITIONS MADE IN THE ASSESSMENT ORDERS FOR THOSE YEARS. WHILE DISPOSING OF THESE APPEALS, THE COMMISSIONER OF INCOME TAX DIRECTED THE ASSESSING OFFICER TO ASSESS THE NOTIONAL INTEREST ON THE LOAN GIVEN TO M OHINI SHARMA WHICH ADDITION HE CONFIRMED IN HIS APPELLATE ORDER. THESE TWO ORDERS OF THE COMMISSIONER WERE CARRIED IN APPEAL TO THE TRIBUNAL AND THEREAFTER THE DELHI HIGH COURT NOTED THE TRIBUNAL'S CONCLUSIONS. IT NOTED THE ARGUMENTS BEFORE THE TRIBUNAL AN D THEREUPON THE TRIBUNAL HAVING DELETED THESE ADDITIONS AND THE NOTIONAL INTEREST, THE MATTER WAS TAKEN IN APPEAL TO THE HIGH COURT OF DELHI UNDER SECTION 260A OF THE IT ACT BY THE REVENUE. 33. THE ARGUMENTS, THEREFORE, HAVE BEEN NOTED AND FROM PARAGRAPHS 16, SECTION 153A WAS ANALYSED. 34. MR. PINTO HEAVILY RELIED ON PARAGRAPHS 18, 19 AND 20 OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF DELHI. HE ALSO RELIED ON PARAGRAPH 21 TO CONTEND THAT THE SPECIAL BENCH DECISION HAS NOT BEEN APPROVED BY THE HIGH COURT OF DELHI. 35. THE DELHI HIGH COURT'S JUDGMENT MUST BE SEEN IN THE CONTEXT OF THE ESSENTIAL CONTROVERSY BEFORE IT. PERTINENTLY, THAT CONTROVERSY AROSE BECAUSE OF A SEARCH BEING CONDUCTED AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE. FOUNDATION OF THE ACTION UNDER SECTION 153A BEING THE SEARCH THAT THE HIGH COURT OF DELHI WAS REQUIRED TO CONSIDER THE AMBIT AND SCOPE OF THE POWERS. FURTHER, PERTINENTLY THE DELHI HIGH COURT DID NOT IGNORE ANY OF THE PROVISIONS. THOSE ARE CORRECTLY UNDERSTOOD BY THE D ELHI HIGH COURT. WE DO NOT SEE HOW AND WHERE THE DELHI HIGH COURT DISAPPROVES THE VIEW TAKEN BY THE TRIBUNAL THAT ITS OBSERVATIONS CAN BE READ TORN FROM THE CONTEXT. ONCE THESE OBSERVATIONS AND NOTED BY US FROM THE PARAGRAPHS CITED BY MR. PINTO ARE READ AS A WHOLE AND IN ENTIRETY, IT IS NOT POSSIBLE TO AGREE WITH MR. PINTO THAT THE HIGH COURT OF DELHI REACHED A CONCLUSION DIFFERENT THAN THE VIEW TAKEN BY OUR DIVISION BENCH. ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 13 36. SIMILAR IS THE CASE WITH THE DIVISION BENCH JUDGMENT OF THE HIGH COURT OF KARNA TAKA AT BANGALORE. THERE AS WELL A REAL ESTATE FIRM WAS THE ASSESSEE. A RETURN OF INCOME WAS FILED AND WHEN AN ORDER UNDER SECTION 143(3) OF THE ACT CAME TO BE PASSED ON 31ST DECEMBER, 2010, FOR ASSESSMENT YEAR 2008 - 09 THAT A SEARCH TOOK PLACE IN THE PREMI SES OF THE ASSESSEE ON 12TH APRIL, 2011. IN THE COURSE OF SEARCH, INCRIMINATING MATERIAL LEADING TO UNDISCLOSED INCOME WAS SEIZED. THEREFORE, THE PROCEEDINGS UNDER SECTION 153A OF THE ACT CALLING UPON THE ASSESSEE TO FILE RETURN OF INCOME UNDER SECTION 153 A(1)(A) CAME TO BE INITIATED BY A NOTICE DATED 13TH JANUARY, 2012. RETURN OF INCOME WAS FILED PURSUANT TO RECEIPT OF SUCH NOTICE AND FOR SIX YEARS AS REQUIRED BY THE PROVISION. WHEN THIS RETURN WAS UNDER CONSIDERATION ON 14TH MARCH, 2013, THE COMMISSIONER OF INCOME TAX INITIATED PROCEEDINGS UNDER SECTION 263 OF THE ACT ON THE GROUND THAT THE ORDER DATED 31ST DECEMBER, 2010 IN RELATION TO THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008 - 09 AND HOLDING THAT THE SAME IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST O F THE REVENUE CAME TO BE PASSED. THE ASSESSEE FILED HIS OBJECTION BUT THE COMMISSIONER MAINTAINED HIS ACTION UNDER SECTION 263. THAT IS HOW THE AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL TO THE TRIBUNAL AND BEFORE THE TRIBUNAL IT WAS CONTENDED THAT ON CE SECTION 263 OF THE ACT HAS BEEN INVOKED DURING THE PENDENCY OF PROCEEDINGS UNDER SECTION 153A OF THE ACT, THEN, THAT WAS IMPERMISSIBLE. THAT WAS IMPERMISSIBLE FOR THE ASSESSMENTS INCLUDING FOR THE ASSESSMENT YEAR 2008 - 09 STAND REOPENED. ONCE THEY ARE RE OPENED, THEN, THERE IS NO ORDER OF ASSESSMENT IN FORCE AND IN REGARD TO WHICH ANY ACTION UNDER SECTION 263 OF THE IT ACT CAN BE INITIATED. IT IS IN DEALING WITH THIS ARGUMENT AND WHICH WAS NEGATIVED BY THE TRIBUNAL THAT ALL THE OBSERVATIONS OF THE HIGH COU RT OF KARNATAKA HAVE BEEN MADE. IN PARAGRAPHS 5 AND 6, THE ARGUMENTS HAVE BEEN NOTED AND THEREAFTER THE PROVISION HAS BEEN REPRODUCED. IN PARAGRAPH 9, EXTENSIVE REFERENCE HAS BEEN MADE TO THE JUDGMENT IN ANIL KUMAR BHATIA OF THE HIGH COURT OF DELHI (SUPRA) AND THEN THE FOLLOWING OBSERVATIONS IN PARAGRAPHS 10 AND 11 ARE MADE: 10. SECTION 153A OF THE ACTS START WITH A NON OBSTANTE CLAUSE. THE FETTERS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSESSMENT U NDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS. THE TIME - LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 14 UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIME - LIMIT PRESCRIBED FOR COMPL ETION 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 TH E TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF NEED BE. THEREFORE, IT IS CLEAR EVEN IF AN ASSESSMENT ORDER IS PASSED UNDER SECTION 143(1) OR 143(3) OF THE ACT, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. AFTER SUCH REOPENING OF THE ASSESSMENT, THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE TOTAL I NCOME OF THE AFORESAID YEARS. THE CONDITION PRECEDENT FOR APPLICATION OF SECTION 153A IS THERE SHOULD BE A SEARCH UNDER SECTION 132. INITIATION OF PROCEEDINGS UNDER SECTION 153A IS NOT DEPENDENT ON ANY UNDISCLOSED INCOME BEING UNEARTHED DURING SUCH SEARCH. THE PROVISO TO THE AFORESAID SECTION MAKES IT CLEAR THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. IF ANY ASSESSMENT PROCEEDINGS ARE PENDING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THE AFORESAID SUB - SECTION ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132, THE SAID PROCEEDING SHALL ABATE. IF SUCH PROCEEDINGS ARE ALREADY CONCLUDED BY THE ASSESSING OFFICER BY INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE LEGAL EFFECT IS THE ASSESSMENT GETS REOPENED. THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF TH E UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. HE 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. THIS MEANS THAT THERE CAN 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. WHEN ONCE THE PROCEEDINGS ARE INITIATED UNDER SECTION 153A OF THE ACT, THE LEGAL EFFECT IS EVE N IN CASE WHERE THE ASSESSMENT ORDER IS PASSED IT STANDS REOPENED. IN THE EYE OF LAW THERE IS NO ORDER OF ASSESSMENT. RE - OPENED MEANS TO DEAL WITH OR BEGIN WITH AGAIN. IT MEANS THE ASSESSING OFFICER SHALL ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 15 ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS. ONCE THE ASSESSMENT IS REOPENED, THE ASSESSING AUTHORITY CAN TAKE NOTE OF THE INCOME DISCLOSED IN THE EARLIER RETURN, ANY UNDISCLOSED INCOME FOUND DURING SEARCH OR AND ALSO ANY OTHER INCOME WHICH IS NOT DISCLOSED IN THE EARLIER RETURN OR WHICH IS NOT UNEARTHED DURING THE SEARCH, IN ORDER TO FIND OUT WHAT IS THE TOTAL INCOME OF EACH YEAR AND THEN PASS THE ASSESSMENT ORDER. THEREFORE, THE COMMISSIONER BY VIRTUE OF THE POWER CONFERRED UNDER SECTION 263 OF THE ACT GETS NO JURISDICTION TO INITIATE PR OCEEDINGS UNDER THE SAID PROVISION BECAUSE THE CONDITION PRECEDENT FOR INITIATING PROCEEDINGS UNDER SECTION 263 IS ANY ORDER PASSED UNDER THE ACT BY THE ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ONCE THE OR DER PASSED BY THE ASSESSING OFFICER GETS REOPENED, THERE IS NO ORDER WHICH CAN BE SAID TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH CONFERS JURISDICTION ON THE COMMISSIONER TO EXERCISE THE POWER OF THE JURISDICTION. 11 . THE TRIBUNAL HAS PROCEEDED ON THE ASSUMPTION BY VIRTUE OF THE JUDGMENT OF THE SPECIAL BENCH OF THE MUMBAI, THE SCOPE OF ENQUIRY UNDER SECTION 153A IS TO BE CONFINED ONLY TO THE UNDISCLOSED INCOME UNEARTHED DURING SEARCH AND IF THERE IS ANY OTHER INCOME W HICH IS NOT THE SUBJECT MATTER OF SEARCH, THE SAME CANNOT BE TAKEN INTO CONSIDERATION. THEREFORE, THE REVISIONAL AUTHORITY CAN EXERCISE THE POWER UNDER SECTION 263. IN THE ENTIRE SCHEME OF 153A OF THE ACT, THERE IS NO PROHIBITION FOR THE ASSESSING AUTHORIT Y TO TAKE NOTE OF SUCH INCOME. ON THE CONTRARY, IT IS EXPRESSLY PROVIDED UNDER SECTION 153A OF THE ACT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS WHICH MEANS THE SAID TOTAL INCOME INCLUDES INCOME WHICH WAS RET URNED IN THE EARLIER RETURN, THE INCOME WHICH WAS UNEARTHED DURING SEARCH AND INCOME WHICH IS NOT THE SUBJECT MATTER OF AFORESAID TWO INCOME. IF THE COMMISSIONER HAS COME ACROSS ANY INCOME THAT THE ASSESSING AUTHORITY HAS NOT TAKEN NOTE OF WHILE PASSING TH E EARLIER ORDER, THE SAID MATERIAL CAN BE FURNISHED TO THE ASSESSING AUTHORITY AND THE ASSESSING AUTHORITY SHALL TAKE NOTE OF THE SAID INCOME ALSO IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHEN THE EARLIER PROCEEDINGS ARE REOPENED AND THAT INCOME ALS O SHALL BECOME THE SUBJECT MATTER OF SAID PROCEEDINGS. IN THAT VIEW OF THE MATTER THE REASONING GIVEN BY THE TRIBUNAL IS NOT JUSTIFIED. THE COMMISSIONER DID NOT HAVE JURISDICTION TO INITIATE ANY PROCEEDINGS UNDER SECTION 263 OF THE ACT. 37. WE DO NOT SEE AS TO HOW WHILE ALLOWING THE APPEAL OF THE ASSESSEE AND SETTING ASIDE THE ORDER OF THE COMMISSIONER UNDER SECTION 263 COULD THE JUDGMENT BE SAID TO BE LAYING DOWN A ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 1 6 PROPOSITION AND AS CANVASSED BY MR. PINTO. TRUE IT IS THAT THE ASSESSMENT WHICH HAS TO BE MADE IN PURSUANCE OF THE NOTICE IS IN RELATION TO THE SIX YEARS. AN ORDER WILL HAVE TO BE MADE IN THAT REGARD. WHILE MAKING THE ORDER THE INCOME OR THE RETURN OF INCOME FILED FOR ALL THESE ASSESSMENT YEARS IS TO BE TAKEN INTO ACCOUNT. A REFERENCE WILL HAVE TO BE MADE TO THE INCOME DISCLOSED THEREIN. HOWEVER, THE SCOPE OF ENQUIRY, THOUGH NOT CONFINED AS HELD BY THE HIGH COURT OF KARNATAKA, IT ESSENTIALLY REVOLVES AROUND THE SEARCH OR THE REQUISITION UNDER SECTION 132A AS THE CASE MAY BE. WE DO NOT FIND ANYTH ING IN THESE OBSERVATIONS AND REPRODUCED ABOVE WHICH WOULD ENABLE US TO CONCLUDE THAT THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF MURLI AGRO REQUIRES RECONSIDERATION OR DOES NOT LAY DOWN A CORRECT PRINCIPLE OF LAW. WE CANNOT, THEREFORE, ACCEDE TO THE SUBMISSIONS OF MR. PINTO AND REVISIT ANY OF THE CONCLUSIONS RENDERED BY THE DIVISION BENCH OF THIS COURT. IN VIEW OF THE FACTS IN ENTIRETY AND THE LEGAL PRINCIPLES ENUNCIATED BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CONTINENTAL WAREHOUSING CORP ORATION (NHAVA SHEVA) LTD., SUPRA, AND MUMBAI SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS, SUPRA, WE ARE OF THE VIEW THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE PRESENT CASE FOR THIS ASSESSMENT YEAR , AS ADMITTED BY THE AO IN HIS LETTER DATED 30.11.2016 AND DESPITE NUMBER OF OPPORTUNITIES REVENUE COULD NOT PRODUCE ANY INCRIMINATING MATERIAL BEFORE THE BENCH AND THE ASSESSMENT IS ALREADY COMPLETED FOR THIS ASSESSMENT YEAR ORIGINALLY, THE ASSESSMENT FRA MED U/S. 153A OF THE ACT IS IN VALID AND HENCE, QUASHED. THE APPEAL OF REVENUE IS DISMISSED. 5. IN VIEW OF THE ABOVE FACTS, WE CONFIRM THE ORDERS OF CIT(A) ON JURISDICTIONAL ISSUE IN ALL THE THREE YEARS AND ACCORDINGLY, THE APPEALS OF REVENUE ON THIS ISSUE AR E DISMISSED. 6. AS REGARDS TO THE CROSS OBJECTIONS OF THE ASSESSEE ARE CONCERNED, THE SAME HAVE BEEN RAISED ON THE MERITS, SINCE WE HAVE ADJUDICATED THE REVENUES APPEALS ON LEGAL ISSUE AND DISMISSED THE SAME, WE NEED NOT ADJUDICATE THIS CROSS OBJECTIONS OF THE ASSESSEE. HENCE, CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS. 7. COMING TO REVENUES APPEAL IN ITA NO.6348/MUM/2014 FOR THE A.Y. 2006 - 07, IS AGAINST THE ORDER OF CIT(A) RECTIFY THE CHARGING OF INTEREST U/S 234B(3) OF THE ACT. ITA NO. 6347 , 6348, 6349 & 6350/MUM/2014 CO NO . 46 , 47 & 48 /MUM/201 6 17 8. AT THE OU TSET, THE LEARNED COUNSEL FOR THE ASSESSEE STATED THAT ONCE REVENUES APPEAL FOR A.Y. 2006 - 07 HAS BEEN ADJUDICATED IN ITA NO.3814/MUM/2014 AND ALLOWED IN FAVOUR OF ASSESSEE ON JURISDICTIONAL ISSUE, THIS APPEAL OF REVENUE WILL NOT SURVIVE. THE LEARNED SR. D R CONCEDED THE POSITION. THIS APPEAL OF REVENUE IS DISMISSED. 9. IN THE RESULT, ALL THE FOUR APPEAL S OF REVENUE ARE DISMISSED AND THE THREE CROSS OBJECTION S OF THE ASSESSEE ARE DISMISSED AS INFRUCTUOUS . ORDER PRONOUNCED IN THE OPEN COURT ON 13 - 12 - 2016 . SD/ - SD/ - ( ASHWANI TANEJA ) ( MAHAVIR SINGH) ACCO U NTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 13 - 12 - 2016 SUDIP SARKAR/SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASSISTA NT REGISTRAR ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT (A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUA RD FILE. //TRUE COPY//