S & P Foundations P Ltd., CHENNAI V. ACIT, CHENNAI

CO 93/CHNY/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0334 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 05-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G BASKAR
• Assessee Lawyers: G T VENKATESWARA RAO
• Keywords: Reopening of assessment; Search and seizure; Difference of opinion; Reason to believe; Change of opinion
• Section: 143(3); 142(1); 153A; 147; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , ! , ' #$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1883/MDS/2014 AND C.O.NO.93/MDS/2014 (IN ITA NO.1883/MDS/2014) ( / ASSESSMENT YEAR : 2005-2006) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE IV(2), CHENNAI. ( %& /APPELLANT) VS M/S. S & P FOUNDATION PVT. LTD, TPL HOUSE, 2 ND FLOOR, NO.3, CENOTAPH ROAD, TEYNAMPET, CHENNAI 600 018. [PAN: AAICS 0224K] ( !'%& /RESPONDENT/CROSS OBJECTOR) / APPELLANT BY : SHRI. G.T. VENKATESWARA RAO, CIT / RESPONDENT BY : SHRI. G. BASKAR, ADVOCATE /DATE OF HEARING : 19.03.2015 ! /DATE OF PRONOUNCEMENT : 27.03.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE APPEAL BY REVENUE AND CROSSOBJECTION BY ASSES SEE ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOM E TAX (APPEALS)- II, CHENNAI DATED 28.03.2014. THE REVENUE HAS RAIS ED THE FOLLOWING GROUNDS :- I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 2 -: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN HOLDING THAT THE RE-ASSESSMENT ORDER IS NOT VA LID AND THEREBY HAS WRONGLY DELETED THE ADDITION MADE IN THE SAID ORDE R. 2.A ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE , THE LD.CIT(A) ERRED IN HOLDING THAT THE ASSESSING OFFICER HAS COMPLETEL Y CONSIDERED THE IMPUGNED SEIZED MATERIAL IN THE ORIGINAL ASSESSMENT ORDER AND THUS, WRONGLY HELD THAT THE ASSESSING OFFICER HAS COMPLET ELY CONSIDERED THE IMPUGNED SEIZED MATERIAL IN THE ORIGINAL ASSESS MENT ORDER AND THUS, WRONGLY HELD THAT THE RE-OPENING OF ASSESSMEN T AMOUNTS TO CHANGE OF OPINION. B. ON A COMBINED READING OF THE SEIZED MATERIAL (NS K/B&D/S-136) WITH THE EXPLANATION OF THE ASSESSEE FILED BEFORE THE AS SESSING OFFICER ON 23.12.2009, IT IS EVIDENT THAT THE SAID SEIZED MATE RIAL POINTS TO A CONSIDERATION OF 1,81,27,940/- WHILE THE EXPLANATION DATED 23.12.2009 IS OFFERED ONLY FOR 1,56,65,000/- LEAVING THE BALANCE OF 24,62,840/- C. BY VIRTUE OF THE ABOVE POSITION, THE ASSESSEES BALANCE OF AMOUNT OF 24,62,840/- HAS GONE UNEXPLAINED AND THUS UNASSESSE D IN THE ORIGINAL ASSESSMENT. HENCE, THE ORDER OF THE CIT( A) IS CONTRARY TO THE FACTS AND LEGAL POSITION. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS FAILED TO APPRECIATE THAT THE CONTENTS OF THE SEIZE D MATERIAL WERE NOT FULLY EXPLAINED BY THE ASSESSEE IN THEIR REPLY AT T HE TIME OF ORIGINAL ASSESSMENT AND THEREFORE THE THEN ASSESSING OFFICER HAS NOT FULLY EXAMINED THE SEIZED MATERIAL IN THE ORIGINAL ASSESS MENT ORDER. 4. THE CIT(A) ERRED IN HOLDING THAT THE PERIOD AVAI LABLE FOR RE-OPENING THE ASSESSMENT WAS ONLY 4 YEARS WHILE THE SEC. 147 R.W.S. 149(1)(B) PROVIDES A TIME LIMIT OF 6 YEARS FROM THE END OF TH E ASSESSMENT YEAR AS IS THE CASE IN THE RE-OPENING. 2. SINCE THE ISSUE RAISED IN THE CROSS-OBJECTION IS AG AINST THE ROOT OF THE MATTER WHICH IS BEING LEGAL ISSUE, FIRST WE TAKE UP CROSS- OBJECTION FOR ADJUDICATION. 3. THE BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SE ARCH IN THE CASE OF THE ASSESSEE AND ASSESSMENT U/S. 153A R.W. S.143(3) OF THE INCOME-TAX ACT, 1961 WAS COMPLETED ON 31.12.2009 DE TERMINING I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 3 -: INCOME OF F34,16,452/-. SUBSEQUENTLY, NOTICE WAS IS SUED U/S. 148 OF THE INCOME-TAX ACT ON 29.03.2012. IN RESPONSE TO T HIS NOTICE A RETURN OF INCOME WAS FILED VIDE LETTER DATED 21.11.2012. THE ASSESSEE STATED BEFORE THE ASSESSING OFFICER THAT RETURN ORIGINALLY FILED ON 20.11.2006 MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S. 148 OF THE INCOME- TAX ACT. IN VIEW OF THE ABOVE, RETURN FILED ORIGINA LLY ON 20.11.2006 WAS TREATED AS RETURN FILED IN RESPONSE TO NOTICE U/S.148 OF THE INCOME-TAX ACT AND ACCORDINGLY, NOTICE U/S. 143(2) AND NOTICE U/S. 142(1) OF THE INCOME-TAX ACT WERE ISSUED ON 04.12.2012. CONSEQU ENTLY, RE- ASSESSMENT ORDER WAS PASSED, WHEREIN IT WAS OBSERVE D BY THE ASSESSING OFFICER THAT SALE VALUE OF THE PROPERTY A S PER SEIZURE DOCUMENT NO.136 IN ANNEXURE NSK/B&D/S DATED 20.02. 2008, IT WOULD WORKS OUT TO F1,81,27,940/- AS AGAINST THE SALE OF VALUE OF PROPERTY ADMITTED BY ASSESSEE AT F1,56,65,000/-. ACCORDINGL Y, THE ASSESSING OFFICER ADDED AN AMOUNT OF F24,62,840/- IN THE ASS ESSMENT. AGGRIEVED BY THIS ACTION OF THE ASSESSING OFFICER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCO ME TAX (APPEALS). 4. BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS), TH E ASSESSEE CHALLENGED THE REOPENING OF ASSESSMENT ON THE REASO N THAT IT WAS I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 4 -: CHANGE OF OPINION. THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE ARGUMENT OF THE ASSESSEE COUNSEL BY OBSERVING A S UNDER:- I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND HAVE ALSO GONE THROUGH THE ORIGINAL ASSESSMENT ORDER DAT ED 31.12.2009. I FIND THE SUBMISSIONS OF THE APPELLANT TO BE CORRECT THAT THE ASSESSING OFFICER WHILE PASSING THE ORIGINAL ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143(3) THE ASSESSING OFFICER HAS CONSIDERED THE SEIZED MATERIAL AND AFTER CONSIDERING THE SAME & AP PELLANTS SUBMISSIONS ONLY HE HAS PASSED THE ASSESSMENT ORDER ON THE ISSUE UNDER CONSIDERATION. THEREFORE, THE REOPENING OF A SSESSMENT ON THE BASIS OF SAME SEIZED MATERIAL, THAT HAD BEEN CONSID ERED BY THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL ASSESS MENT, IS AGAINST THE SETTLED POSITION OF LAW AND THUS CANNOT BE APPR OVED. WITHOUT GOING INTO THE ARGUMENT OF THE APPELLANT THAT THE A SSESSMENTS FRAMED UNDER SECTION 153A COULD NOT HAVE BEEN REOPENING UN DER SECTION 148 IN VIEW OF THE NON OBSTANTE CLAUSE WITHIN WHICH SUB -SECTION (1) OF SECTION 153A OPENS, IT IS HELD THAT EVEN OTHERWISE THE REOPENING BY THE ASSESSING OFFICER IS NOT VALID AS THE REOPENING HAS BEEN DONE AFTER FOUR YEARS FROM THE END OF THE ASSESSMENT YEA R UNDER CONSIDERATION AND THERE BEING NO FAILURE ON THE PAR T OF THE APPELLANT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT FOR THAT ASSESSMENT YEAR. THE REOPENING AND THE AD DITION MADE TO THE INCOME OF THE APPELLANT IN THE REASSESSMENT MAD E BY THE ASSESSING OFFICER IS BASED ON THE SAME SEIZED MATER IAL THAT WAS CONSIDERED BY HIM IN THE ORIGINAL ASSESSMENT MADE U NDER SECTION 153A READ WITH SECTION 143(3) WHICH AMOUNTS TO CHAN GE OF OPINION. IN VIEW OF THE FACTS OF THE CASE, AS DISCUSSED ABOV E, THE REOPENING OF THE ASSESSMENT BASED ON THE SAME MATER IAL THAT HAD ALREADY BEEN CONSIDERED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT MADE UNDER SECTION 153A READ WITH SECTIO N 143(3) IS HELD TO BE NOT VALID AND THUS THE ADDITION MADE DURING T HE COURSE OF THE SAME IS ALSO DIRECTED TO BE DELETED. SINCE, I HAVE DECIDED THE ISSUE ON THE LEGAL GROUND RAISED BY THE APPELLANT, THEREFORE, I DO NOT CONSIDER IT NECE SSARY TO DISCUSS THE OTHER GROUNDS RAISED BY THE APPELLANT ON THE MERITS OF THE ADDITIONS MADE. IN THE RESULT, THE APPEAL IS ALLOWED. I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 5 -: 5. AGAINST THIS FINDINGS OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. IN CROSS-OBJECTION THE ASSESSEE CHALLEN GED THE ISSUE OF NOTICE U/S.148 OF THE INCOME TAX ACT IN RESPECT OF ASSESSMENT COMPLETED U/S. 153A OF THE INCOME-TAX ACT. 6. THE LD. COUNSEL FOR THE ASSESSEE SUPPORTED THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CANCELLING IT S RE-ASSESSMENT ORDER AS ITS MERELY PASSED ON CHANGE OF OPINION AND THEREBY DELETING THE ADDITION OF F.24,62,840/- REGARDING ISSUE OF NO TICE U/S.148 TO THE ASSESSEE, THOUGH ORIGINAL ASSESSMENT IN THIS CASE W AS COMPLETED U/S. 153A R.W.S. 143(3) OF THE INCOME-TAX ACT, HE SUBM ITTED THAT THERE IS NON OBSTANTE CLAUSE IN SUB-SECTION (1) OF SEC 153A ASSERTED THAT ASSESSING OFFICER HAS NO JURISDICTION TO ISSUE NOTI CE U/S. 148 OF THE INCOME TAX ACT IN RESPECT OF THOSE SIX ASSESSMENT Y EARS WHICH FALLS WITHIN THE EXCLUSIVE JURISDICTION OF SECTION 153A A ND 143(3) R.W.S. 147 OF THE INCOME TAX ACT. FOR THIS PURPOSE, HE RELIED ON THE ORDER OF THE TRIBUNAL IN THE CASE OF STATE BANK OF INDIA VS. DEP UTY COMMISSIONER OF INCOME TAX 22 ITR (TRI) 609 (MUMBAI). 7. FURTHER, THE LD. COUNSEL SUBMITTED THAT THE ASSESS ING OFFICER HAS NO JURISDICTION TO ISSUE NOTICE U/S. 148 OF THE ACT IN RESPECT OF THOSE SIX ASSESSMENT YEARS WHICH FALLS WITHIN THE EXCLUSIVE J URISDICTION OF SECTION 153A OF THE ACT. HE ALSO RELIED ON THE JUDGMENT OF MADHYA PRADESH I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 6 -: HIGH COURT IN THE CASE OF RAMABALLABH GUPTA VS. ACI T & OTHERS (288 ITR 347) (MP). 8. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THERE IS NO BAR IN REOPENING OF ASSESSMENT U/ S. 147 IN RESPECT OF THE ASSESSMENT WHICH WAS COMPLETED U/S. 153A R.W.S. 143(3) OF THE ACT. HE SUBMITTED THAT WHERE THERE WAS ESCAPED INC OME IN ASSESSMENT COMPLETED U/S. 153A R.W.S. 143(3), THE A SSESSING OFFICER COULD REOPENED THE ASSESSMENT SO AS TO BRING THE E SCAPED INCOME FOR TAXATION. HE SUBMITTED THAT PROVISIONS OF SECTIONS 147 AND 148 WOULD APPLY TO THE ASSESSMENT FOR THE BLOCK PERIOD MADE U NDER CHAPTER XIV- B AND RELIED ON THE JUDGMENT OF CIT VS. PEERCHAND R ATANLAL BAID (HUF) 322 ITR 544 (GAUHATI) WHEREIN IT WAS HELD THAT THE ADDITION OF F.13,66,715/- TO THE UNDISCLOSED INCOME OF THE ASSE SSEE FOR THE BLOCK PERIOD COULD HAVE BEEN MADE ONLY BY GIVING A NOTICE UNDER SECTION 148 OF THE ACT AND NO SUCH NOTICE HAVING BEEN GIVEN THE PROVISIONS OF SECTION 153 OF THE ACT WOULD OPERATE AS A LEGAL BAR FOR ANY SUCH NOTICE TO THE ASSESSEE. THE PROVISIONS OF SECTION 147/14 8 OF THE ACT WOULD APPLY TO AN ASSESSMENT FOR A BLOCK PERIOD MADE UND ER CHAPTER XIV-B OF THE ACT. I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 7 -: 9. WE HAVE HEARD BOTH SIDES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE ORIGINAL ASSESSMENT WAS COMPLETED VIDE ASSESSMENT ORDER DATED 31.12.2009 U/S. 153A R.W.S. 143(3) OF THE ACT , DETERMINING THE INCOME AT F.58,79,492/- . THE ASSESSING OFFICER NOTICED THAT AS PER SEIZED DOCUMENT NO.136 IN ANNEXURE NSK/B&D/S, DATED 20.02.2008, THE VALUE OF PROPERTY SITUATED AT SURVEY NO.176/02, NOLAMBUR IS WORKED OUT AT F.1,18,73,840/- AND OTHER PROPERTY AS PER SEIZED DOCUMENT NO.136 ANNEXURE NSK/B&D/S, DATED 20.02.20 08, SITUATED AT NEW SURVEY NO.72, AT NOLAMBUR VIDE SALE DEED NO .2653 DATED 23.05.2005 VALUED AT F.62,54,100/-. THUS TOTAL VAL UE WORKED OUT AT F.1,81,27,940/-. HOWEVER, THE ASSESSEE DISCLOSED T HE VALUE OF THE PROPERTY AT F.1,56,65,000/-. HENCE, THE ASSESSING OFFICER ISSUED NOTICED U/S.148 SO AS TO REOPEN THE ASSESSMENT TO B RING THE BALANCE AMOUNT OF F.24,62,840/- TO TAX AND THEREAFTER HE CO MPLETED ASSESSMENT U/S. 153A R.W.S 143(3) R.W.S. 147 OF TH E ACT. 10. THE CONTENTION OF THE AUTHORISED REPRESENTATIVE I S THAT WHEN THE ASSESSMENT WAS COMPLETED U/S. 153A R.W.S 143(3 ,) IT CANNOT BE SUBJECTED TO REOPEN ASSESSMENT U/S. 147 OF THE INC OME-TAX ACT SO AS TO ISSUE 148 NOTICE OF THE ACT. IN OUR OPINION TH ERE IS NO MERIT IN THE ARGUMENT OF THE ASSESSEES COUNSEL SECTION 147 OF T HE ACT PERMITS REASSESSMENT OF INCOME THAT HAS ESCAPED ASSESSMENT INCOME IN ANY I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 8 -: ASSESSMENT YEAR SUBJECT TO PROVISIONS OF SECTIONS 1 49 AND 153 OF THE INCOME TAX ACT. REASSESSMENT OF ESCAPED INCOME UND ER SECTION 147 OF THE ACT IS MADE WHERE INCOME CHARGEABLE TO TAX H AS ESCAPED ASSESSMENT EITHER DUE TO THE FAILURE OF THE ASSESSE E TO FILE RETURN OR FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS FOR THE PURPOSES OF ASSESSMENT OR WHERE MATERIAL ALREADY ON RECORD HAD NOT BEEN PROCESSED. IN CASE OF ASSESSMENT U/S. 153A OF THE INCOME TAX ACT, IT CANNOT BE ENVISAGED AS ALL THE MATERIALS RECOVERED IN THE COURSE OF THE SEARCH ARE EXAMINED BY THE ASSESSING OFFICER OR TH ERE CAN BE CASE OF NON-DISCLOSURE OF MATERIAL FACTS BY THE ASSESSEE. 11. THE WHOLE REQUIREMENT IS THAT TO REOPEN THE ASSES SMENT, THE FOLLOWING CONDITIONS LAID DOWN U/S. 147 ARE TO BE FULFILLED: THE ASSESSING OFFICER TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX IF HE HAS REASON TO BELIEVE THAT INCOME FOR ANY ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. THE WORD 'REASON' IN THE PH RASE 'REASON TO BELIEVE' WOULD MEAN CAUSE OR JUSTIFICATION. IF THE ASSESSING OFFICER HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT INCO ME HAD ESCAPED ASSESSMENT, IT CAN BE SAID TO HAVE REASON TO BELIEV E THAT AN INCOME HAD ESCAPED ASSESSMENT. THE EXPRESSION CANNOT BE RE AD TO MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAIN ED THE FACT BY LEGAL I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 9 -: EVIDENCE OR CONCLUSION. THE FUNCTION OF THE ASSESSI NG OFFICER IS TO ADMINISTER THE STATUTE WITH SOLICITUDE FOR THE PUBL IC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYER. AS OBSERVED B Y THE DELHI HIGH COURT IN CENTRAL PROVINCES MANGANESE ORE CO. LTD. V . ITO [1991] 191 ITR662(SC), FOR INITIATION OF ACTION UNDER SECTION 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TIME) FULFILLMENT O F THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STA GE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF. WHETHE R THE MATERIALS WOULD CONCLUSIVELY PROVE THE ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF B Y THE ASSESSING OFFICER IS WITHIN THE REALM OF SUBJECTIVE SATISFACT ION. 12. THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUT ED WITH EFFECT FROM APRIL 1, 1989, AS ALSO SECTIONS 148 TO 152 ARE SUBSTANTIALLY DIFFERENT FROM THE PROVISIONS AS THEY STOOD PRIOR T O SUCH SUBSTITUTION. UNDER THE OLD PROVISIONS OF SECTION 147, SEPARATE C LAUSES (A) AND (B) LAID DOWN THE CIRCUMSTANCES UNDER WHICH INCOME ESCA PING ASSESSMENT I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 10 -: FOR THE PAST ASSESSMENT YEARS COULD BE ASSESSED OR REASSESSED. TO CONFER JURISDICTION UNDER SECTION 147(A) TWO CONDIT IONS WERE REQUIRED TO BE SATISFIED FIRSTLY THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME PROFITS OR GAINS CHARGEABLE TO INCOME T AX HAVE ESCAPED ASSESSMENT, AND SECONDLY HE MUST ALSO HAVE REASON T O BELIEVE THAT SUCH ESCAPEMENT HAS OCCURRED BY REASON OF EITHER (I ) OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY OR TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT OF THAT YEAR. BO TH THESE CONDITIONS WERE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE TH E ASSESSING OFFICER COULD HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTI ON 148 READ WITH SECTION 147(A). BUT UNDER THE SUBSTITUTED SECTION 1 47 EXISTENCE OF ONLY THE FIRST CONDITION SUFFICES. IN OTHER WORDS I F THE ASSESSING OFFICER FOR WHATEVER REASON HAS REASON TO BELIEVE THAT INCO ME HAS ESCAPED ASSESSMENT IT CONFERS JURISDICTION TO REOPEN THE AS SESSMENT. IT IS HOWEVER TO BE NOTED THAT BOTH THE CONDITIONS MUST B E FULFILLED IF THE CASE FALLS WITHIN THE AMBIT OF THE PROVISO TO SECTI ON 147. SO LONG AS THE INGREDIENTS OF SECTION 147 ARE FULFILLED, THE ASSES SING OFFICER IS FREE TO INITIATE PROCEEDING UNDER SECTION 147. 13. IN THE PRESENT CASE, IN OUR OPINION, WE CANNOT SAY THAT THERE IS NO REASON TO REOPEN THE ASSESSMENT. BEING SO, WE CANNOT UPHOLD T HE I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 11 -: ARGUMENT OF THE ASSESSEES COUNSEL THAT ISSUE OF N OTICE U/S. 148 IS BAD IN LAW. THE ASSESSEES COUNSEL RELIED ON THE JU DGMENT OF THE MADHYA PRADESH HIGH COURT IN THE CASE OF RAMBALLAB H GUPTA WHEREIN IT WAS HELD THAT NOTICE U/S. 148 OF THE ACT CAN BE ISSUED TO SIX ASSESSMENT YEARS WHICH FALL SECTION 153A/153C OF TH E ACT. IN THIS CASE THE ASSESSING OFFICER ISSUED NOTICE UNDER SEC TION 153A OF THE INCOME TAX ACT ON 8 TH OCTOBER, 2003 FOR THE ASSESSMENT YEAR 1998- 1999 TO 2003-2004. ON 24 TH MARCH, 2004, A NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE FOR THE ASSESSMENT YEAR 1997-98. THE HIGH COURT HELD THAT NOTICE U/S. 148 FOR THE ASSESS MENT YEAR 1997-98 WAS BAD BEING BEYOND THE SIX YEAR PERIOD PRESCRIBED UNDER SECTION 153A OF THE ACT AND THAT IN THE CASE OF REASSESSME NT AS A RESULT OF RAID, SECTION 148 HAS NO APPLICATION BY VIRTUE OF T HE OVERRIDING EFFECT CONTAINED IN SECTION 153A OF THE ACT. THUS, IT DOE S NOT MEAN THAT ASSESSMENT COMPLETED UNDER SECTION 153A R.W.S.143(3 ) CANNOT BE SUBJECT TO RE-ASSESSMENT. 14. WHILE THE LD. COUNSEL FOR THE ASSESSEE RELIED ON T HE ORDER OF THE TRIBUNAL IN THE CASE OF STATE BANK OF INDIA (MUMBAI ) CITED SUPRA IN THAT CASE HELD THAT: THAT THE ORIGINAL ASSESSMENTS FOR THE ASSESSMENT YE ARS IN QUESTION WERE COMPLETED U/S.143(3) ON FEBRUARY 13, 2004 AND DECEMBER 30, 2004, RESPECTIVELY. THEREAFTER, A SEARCH AND SEIZUR E ACTION WAS I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 12 -: INITIATED IN THE ASSESSEES CASE BY THE DEPARTMENT ON JULY 2, 2005 ON WHICH DATE THE ASSESSMENTS FOR THE TWO ASSESSMENT Y EARS WERE NOT PENDING. THEREFORE, IN VIEW OF THE NON OBSTANTE CLA USE WITH WHICH SECTION 153A(1) OPENS, THE ASSESSING OFFICER HAD NO JURISDICTION TO ISSUE NOTICE U/S. 148 OF THE ACT IN RESPECT OF THO SE SIX ASSESSMENT YEARS WHICH FELL WITHIN THE EXCLUSIVE JURISDICTION OF SECTION 153A OF THE ACT AND ACCORDINGLY THE ASSESSING OFFICER WAS N OT JUSTIFIED IN ISSUING NOTICES U/S. 148 AND IN COMPLETING THE ASSE SSMENTS U/S.143(3) READ WITH SECTION 147 OF THE ACT ON OCTOBER 31, 200 6. THE ASSESSING OFFICER INSTEAD OF COMPLYING WITH THE REQUIREMENT O F SECTION 153A PROCEEDED WITH THE PROVISIONS OF SECTIONS 147 AND 1 48 WHICH WERE NOT APPLICABLE IN THE ASSESSMENT UNDER SECTION 153A OF THE ACT. THEREFORE, THE ASSESSMENTS COMPLETED U/S.143(3) REA D WITH SECTION 147 OF THE ACT WERE WHOLLY WITHOUT JURISDICTION AND LIABLE TO BE QUASHED. 15. THUS, WE ARE COMPLETELY IN AGREEMENT WITH THE FIN DINGS OF THE TRIBUNAL CITED SUPRA THAT AFTER SEARCH AND SEIZURE UNDER SECTION 132, THE ASSESSING OFFICER SHALL PROCEED UNDER SECTION 1 53A OF THE ACT AND HE CANNOT PROCEED U/S.148 OF THE ACT. THERE IS NO B AR ON REOPENING ALL THE ASSESSMENTS WHICH WAS COMPLETED U/S. 153 A R.W. S. 143(3) OF THE INCOME-TAX ACT, IF THERE IS REASON TO BELIEVE THAT INCOME ESCAPED FROM THE ASSESSMENT. 16. ACCORDINGLY, WE ARE INCLINED TO DISMISS THIS GROUN D RAISED BY THE ASSESSEE . 17. THE SECOND ISSUE IN CROSS-OBJECTION IS WITH REGARD TO FACT THAT ASSESSMENT IS ONLY CHANGE OF OPINION. I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 13 -: 18. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF ASSESSMENT ORDER U/S.153A R.W.S. 143(3) DATED 31.12 .2009 PASSED BY THE ASSESSING OFFICER FOR ANALYZING THE MATERIAL SE IZED DURING THE SEARCH, HE HAS CONSIDERED ALL THE MATERIAL FOR THE PURPOSE OF ASSESSMENT AND THERE WAS NO ESCAPEMENT OF INCOME. ACCORDING, TO THE LD. COUNSEL ONLY FOR THE PURPOSE OF MAKING RE-E NQUIRY, HE HAS ISSUED NOTICE FOR REOPENING ASSESSMENT WHICH CANNO T BE DONE. FOR THIS PURPOSE, HE RELIED ON THE JUDGMENT OF RAJASTH AN HIGH COURT IN THE CASE OF MUKESH MODI VS. DCIT AND ANOTHER 366 IT R 418 (RAJ). 19. ON THE OTHER HAND, THE DEPARTMENTAL REPRESENTATIV E RELIED ON THE ORDER OF THE ASSESSING OFFICER U/S. 153(A) OF T HE ACT. THE ASSESSING OFFICER HAS A JURISDICTION FOR ASSESSMENT OR RE-ASSESSMENT PROCEEDINGS FOR ALL THE SIX YEARS TO COMPUTE THE TO TAL INCOME OF THE ASSESSEE INCLUDING UNDISCLOSED INCOME WHERE ACTION HAVE BEEN TAKEN AGAINST THE ASSESSEE U/S.132(1) OF THE ACT. PROCEED ING INITIATED U/S. 153A FOR ALL SIX YEARS SHALL BECOME A SUBJECT MATT ER TO ASSESSMENT U/S.153(A) OF THE ACT AND THE ASSESSING OFFICER SHA LL HAVE FREEHAND, ON ASSESSMENT, ONLY ON THE PROCEEDING THAT ARE PEND ING TO FRAME THE ASSESSMENT AFRESH. BUT IN THE CASE WHERE THE PROCE EDINGS HAVE REACHED FINALITY, THE ASSESSMENT U/S.153A R.W.S.143 (3) AND WHERE I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 14 -: CERTAIN MATERIAL DOCUMENT HAVE BEEN FOUND INDICATIN G UNDISCLOSED INCOME, THE ADDITION SHALL HAVE TO BE RESTRICTED T O THOSE DOCUMENTS OR INCREMENTING DOCUMENTS, CLUBBED ONLY TO ASSESSMENT FRAMED ORIGINALLY. AS LAW DOES NOT PERMIT THE ASSESSING OF FICER TO DISTURB ALREADY CONCLUDED ASSESSMENT, WHETHER ON THE DATE OF INTIMATION OF SEARCH U/S.132 OR REQUISITION OF BOOKS, NO PROCEEDI NGS IS PENDING IN THE SEARCH, MATERIALS FOUND INDICATING INCREMENTING MATERIALS, THE ASSESSING OFFICER ENGROSSES A JURISDICTION WHERE HE HAS CLUBBED TWO SETS OF INCOME, RETURN INCOME AND UNEARTHED INCOME, HAD ARRIVED AT THE TOTAL INCOME. THEREAFTER, IF HE HAD A REASON TO BELIEVE THE SAID ASSESSMENT CAN BE RE-ASSESSED U/S.148 OF THE INCOME TAX ACT AS DISCUSSED IN THE EARLIER PARAS SO AS TO REOPEN THE ASSESSMENT, THERE SHOULD BE SUFFICIENT MATERIALS. 20. THERE IS NO ARBITRARY POWER TO THE ASSESSING OFFICER TO REOPEN ON THE BASIS OF CHANGE OF OPINION. IN THE PRESENT CASE WE HAVE GONE THROUGH THE REASONS FOR REOPENING OF ASSESSMENT. IT CANNOT BE PROPER REASON TO REOPENING. THE ASSESSING OFFICER HAS NO P OWER TO REVIEW HIS OWN ORDER. THE RE-ASSESSMENT HAS TO BE MADE ON FULF ILLMENT OF CERTAIN FREE CONDITION AND IF THE CONCEPT STATING CHANGE OF OPINION IS REMOVED IN THE GRAPH OF RE-ASSESSMENT OR/OF ASSESSM ENT, REDO TAKE I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 15 -: PLACE. ONCE AGAIN TREAT THE CONCEPT OF CHANGE OF O PINION INBUILT TEST TO CHECK TO ABUSIVE POWER BY ASSESSING OFFICER. HE NCE, THE ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS TAN GIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. THE REASON MUST HAVE LIVE LINK WITH THE FOUNDATION OF BELIEF. IN THE PRESENT CASE, THE ASSESSING OFFICER CONSIDERED SEIZED MATERIAL NO.136 IN ANNEXUE NSK/B & D/S DATED 20.02. 2008 AND ALSO SEIZED MATERIAL DOCUMENT NSK/B & D/S DATED 20.02.20 08 WHILE FRAMING ORIGINAL ASSESSMENT AND ARRIVED THE VALUE OF PROPERTY AT F.1,56,65,000/-. THEREAFTER, THE ASSESSING OFFICER CONSIDERED THE SAME SEIZED MATERIAL TO ARRIVE THE VALUE OF SALE PR OPERTY AT F.1,81,27,940/- WHICH IS NOT POSSIBLE. HENCE, IN O UR OPINION, THE RE- ASSESSMENT IS ONLY ON CHANGE OF OPINION WHICH CANN OT BE PERMITTED. 21. ACCORDINGLY, IN OUR OPINION, THE COMMISSIONER OF INCOME TAX (APPEALS) HAS TAKEN CORRECT VIEW IN ANNULLING OF T HE RE-OPENED ASSESSMENT ORDER. ACCORDINGLY, WE UPHOLD THE SAME. 22. THIS GROUND OF THE ASSESSEE IN CROSS-OBJECTION IS ALLOWED AND CONFIRMED THE ORDER OF THE COMMISSIONER OF INCOME T AX (APPEALS) ON THIS ISSUE. THUS, CROSS-OBJECTION FILED BY THE ASS ESSEE IS PARTLY ALLOWED. I.T.A.NO.1883/MDS/2014 & C.O.NO.93/MDS/2014 :- 16 -: 23. SINCE WE HAVE PARTLY ALLOWED THE CROSS-OBJECTION FI LED BY THE ASSESSEE, THE APPEAL BY THE REVENUE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED. 24. IN THE RESULT, CROSS-OBJECTION OF THE ASSESSEE NO. 93/MDS/2014 IS PARTLY ALLOWED AND THE APPEAL BY THE REVENUE IN ITA NO.1863/MDS/2014 IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 27TH OF MARCH, 2 015, AT CHENNAI. SD/- SD/- ( ! ) (CHALLA NAGENDRA PRASAD) ' / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER '# /CHENNAI. $% /DATED:27.03.2015. KV %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.