PALLAVI TOMAR, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, JAIPUR

ITA 1028/JPR/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6269 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: G M MEHTA
• Keywords: Gift; Revision of order; Search and seizure; Block assessment; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 139(5); 147; 27; 148; 132; 139; 15

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1028/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 SMT. PALLAVI TOMAR B-4, GOVIND MARG, ADARSH NAGAR, JAIPUR. CUKE VS. ACIT, CENTRAL CIRCLE-1, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACQPT 5720 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI G. M. MEHTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/07/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 24/07/2018 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A)-4, JAIPUR DATED 03.10.2017 FOR ASSESSMENT YE AR 2013-14 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUN DS OF APPEAL: (1) THAT LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN SUSTAINING ADDITION OF RS. 6,86,686/- BY PRESUMING IT AS UNDI SCLOSED PURCHASE PRICE OF SOCIETY PLOT NO. B-148, SHIVAJI N AGAR, NEVTA, JAIPUR IGNORING THE FOLLOWING FACTS: ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 2 (I) THAT RS. 6,86,686/- IS THE VALUE ADOPTED BY JAI PUR DEVELOPMENT AUTHORITY (JDA) IN THE MONTH OF MARCH 2 014 FOR THE PURPOSE OF CHARGING REGULARIZATION, DEVELOPMENT AND OTHER CHARGES AND BUT THE SAME IS NOT THE PURCHASE PRICE OR DLC RATE OF IMPUGNED PLOT OF LAND. (II) DURING THE COURSE OF ACTION U/S 132 OF IT ACT AT THE RESIDENCE OF ASSESSEE AND OTHER RELATIVES, NO INCRIMINATING M ATERIAL OR OTHER DOCUMENTS EVIDENCING ANY PAYMENT OVER AND ABOVE THE PURCHASE PRICE OF SAID SOCIETY PLOT NO. B-148 WAS FOUND; (J) THAT THE SAID PLOT OF SOCIETY WAS SOLD AFTER CO NVERSION FOR RS. 3,75,000/- ON 10.10.2016 (DLC RATE RS. 3,18,825 /-) WHEREAS THE SAID SOCIETY PLOT WAS PURCHASED IN 1997 WHICH I S OUT OF BLOCK PERIOD. (K) THAT WITHOUT PREJUDICE TO ABOVE SUB-GROUND LD. CIT(A) WAS NOT JUSTIFIED IN NOT ALLOWING BENEFIT UNDER SECTION 48 OF IT ACT FOR COST INFLATION. 2. BRIEFLY STATED, THE FACTS OF CASE ARE THAT A SEA RCH AND SEIZURE OPERATION UNDER SECTION 132(1) OF THE IT ACT WAS CA RRIED OUT ON 30.10.2014 AT THE VARIOUS BUSINESS AND RESIDENTIAL PREMISES OF NIMS GROUP AND THE ASSESSEE IS PART OF THE SAID GROUP. T HEREAFTER, THE AO ISSUED NOTICE UNDER SECTION 153A OF THE ACT AND IN RESPONSE THE ASSESSEE FILED HER RETURN OF INCOME UNDER SECTION 1 53A DECLARING TOTAL INCOME OF RS. 26,26,510/- AS AGAINST TOTAL INCOME O F RS. 24,73,160/- DECLARED EARLIER IN HER ORIGINAL RETURN OF INCOME F ILED UNDER SECTION 139(1) OF THE ACT ON 23.01.2014. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 153A WHEREIN THE ASSESSING O FFICER HAS INTERALIA ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 3 MADE AN ADDITION TOWARDS UNDISCLOSED INVESTMENT IN THE PLOT OF LAND AMOUNTING TO RS. 6,86,686/- . THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) OBJECTING TO THE ADDITION MADE BY THE AO WITHOUT REFERRING TO ANY INCRIMINATING MATERIAL FOU ND AND SEIZED DURING THE COURSE OF SEARCH HOWEVER, THE LD. CIT(A) HAS CO NFIRMED THE ACTION OF THE AO WHILE PASSING THE IMPUGNED ORDER. NOW, TH E ASSESSEE IS IN APPEAL BEFORE US. 3.1 BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMI TTED THAT THE ASSESSEE HAS PURCHASED AN UNAPPROVED SOCIETY PLOT N O. B-148, SHIVAJI NAGAR, VILLAGE NEWTA, TEHSIL SANGANER, JAIPUR IN TH E YEAR 1997 THEREAFTER THE SAME WAS CONVERTED INTO URBAN PLOT O F LAND THROUGH JDA AND REGISTRATION ON RE-ALLOTMENT OF SAID PLOT OF LA ND WAS DONE THROUGH SUB-REGISTRAR IN MARCH, 2014. IN THIS REGARD, THE A SSESSEE HAS INCURRED FOLLOWING EXPENSES/PAYMENTS IN GETTING IT CONVERTED INTO URBAN PLOT OF LAND: S.NO. DATE/YEAR HEAD OF PAYMENT AMOUNT (RS) 1. 1997 - 98 COST OF PLOT (TO HOUSING SOCIETY ) 17,437/ - 2. 05.03.2014 REGULARIZATION ETC TO JDA 14,667/ - 3. 05.03.2014 LEASE DEED STAMPS TO JDA 27,480/ - 4. 14.03.2014 REGISTRATION CHARGES 9,928/ - 5. 2012 - 15 OTHER EXPENSES & COST 5,000/ - COST/PAYMENTS IN CONVERSION OF PLOT INTO URBAN PLOT 74,512/ - 3.2 IT WAS SUBMITTED THAT WITHOUT FINDING ANY INCRI MINATING MATERIAL OR OTHER INFORMATION DURING THE COURSE OF SEARCH ON 30.10.2014 EVIDENCING ANY UNRECORDED INVESTMENTS IN PURCHASE O F ABOVE REFERRED ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 4 PLOT OF LAND, BOTH THE LOWER AUTHORITIES MADE/SUSTA INED ADDITION OF RS. 6,86,686/- IN AVOIDANCE OF THE FOLLOWING FACTS: (1) AS PER THE PROCEDURE FOR CONVERSION OF UNAPPROV ED PLOT OF LAND INTO URBAN PLOT OF LAND, IT IS FIRST SURRENDER ED TO JDA. AFTER PAYMENT OF REGULARIZATION AND LEASE MONEY BY THE OW NER, SAME PLOT IS RE-ALLOTTED TO THE SAME PERSONS BY JDA THRO UGH REGISTRATION IN THE OFFICE OF SUB-REGISTRAR. (2) THE PAYMENTS MADE TO JDA AND OTHER CAPITAL EXPE NSES INCURRED BY ASSESSEE IN MAKING THE PLOT AS URBAN PL OT OF LAND IN MARCH 2014 (WHICH IS COST OF IMPROVEMENT) WERE IGNO RED BUT AMOUNT OF RS. 6,86,686/- FIXED BY JDA IN RE-ALLOTME NT OF SAME PLOT AFTER CONVERSION IN MARCH 2014 WAS MADE BASIS OF ADDITION. (3) ASSESSEE WAS ALREADY THE OWNER OF SAME PLOT OF LAND BUT IT WAS SURRENDERED TO JDA FOR CONVERSION OF URBAN PLOT OF LAND. AFTER PAYMENT OF REGULARIZATION AND OTHER SUMS, IT WAS RE-ALLOTTED THROUGH REGISTRATION IN OFFICE OF SUB-REGISTRAR BY JDA IN NAME OF THE ASSESSEE FOR WHICH PRICE FIXED WAS RS. 6,86,686 /- ON WHICH STAMP DUTY OF RS. 9,928/- WAS PAID. (4) THE PRICE FIXED FOR RE-ALLOTMENT OF SAME PLOT O F LAND THROUGH THE OFFICE OF SUB-REGISTRAR WAS OF MARCH 2014 WHERE AS ADDITION WAS IN HANDS OF ASSESSEE IN A.Y. 2013-14. 3.3 THE LD AR HAS FURTHER CONTENDED THAT WHEN NO IN CRIMINATING MATERIAL WAS FOUND INDICATING ANY UNDISCLOSED INCOM E PERTAINING TO THE YEARS UNDER CONSIDERATION THEN, THE ASSESSING OFFIC ER CANNOT MAKE ADDITION IN THE RETURN OF INCOME DECLARED BY THE AS SESSEE. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE RAJASTHAN ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 5 HIGH COURT IN CASE OF JAI STEEL INDIA VS ACIT 259 C TR 281 AS WELL AS DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CI T V. KABUL CHAWLA 380 ITR 573 AND SUBMITTED THAT THE HONBLE HIGH COU RT HAS HELD THAT IN CASE WHERE NOTHING INCRIMINATING MATERIAL IS FOUND , THOUGH SECTION 153A WOULD BE TRIGGERED AN ASSESSMENT OR REASSESSME NT TO ASCERTAIN TOTAL INCOME IS REQUIRED TO BE DONE, THE SAME WOULD NOT RESULT IN ANY ADDITION AND THE ASSESSMENT MADE EARLIER MAY HAVE T O BE REITERATED. HARMONIOUS CONSTRUCTION OF THE PROVISIONS OF SECTIO N 153A OF THE ACT WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF ABATED PROCEEDINGS AND REAS SESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS WHICH DO NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF SEARCH OR MAKING OF REQUISITION AND CAN BE TINKERED WITH ONLY ON THE BASIS OF INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. THEREFORE, THE HONBLE HIGH COURT HAS HELD THAT IT IS NOT OPEN TO THE ASSESSEE TO SEEK DEDUCTION OR CLAIM RELIEF NOT CLAI MED BY IT IN THE ORIGINAL ASSESSMENT WHICH ALREADY STANDS COMPLETED IN AN ASSESSMENT U/S 153A IN PURSUANT TO SEARCH OR REQUISITION. HENC E, THE LD. AR HAS SUBMITTED THAT IN VIEW OF THE VARIOUS DECISIONS ON THIS POINT AND WHEN NO PROCEEDINGS IN RESPECT OF THE ASSESSMENT YEAR UN DER CONSIDERATION WERE PENDING BEFORE THE AO THEN, THE AO DID NOT HAV E JURISDICTION TO MAKE AN ADDITION WITHOUT REFERRING TO ANY INCRIMINA TING MATERIAL SEIZED DURING THE COURSE OF SEARCH. 3.4 IT WAS FURTHER SUBMITTED BY THE LD. AR THAT SI MILAR ADDITIONS HAVE BEEN MADE IN THE HANDS OF DR. (MISS) SURABHI TOMAR, DR. ESHAN SHARMA, AMIT RANA FOR A.Y. 2013-14 AND IN THE ABSEN CE OF ANY ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 6 INCRIMINATING MATERIAL FOUND DURING COURSE OF SEARC H, THE ADDITIONS MADE BY THE AO HAVE BEEN DELETED BY THE LD. CIT(A). IT WAS ACCORDINGLY SUBMITTED THAT THE ADDITIONS SO MADE BY THE AO BE D IRECTED TO BE DELETED. 4. ON THE OTHER HAND, LD DR HAS RELIED UPON THE AUT HORITIES BELOW AND SUBMITTED THAT ONCE A SEARCH U/S 132 IS CARRIED OUT, IT IS INCUMBENT UPON THE AO TO ASSESS OR REASSESS THE INCOME OF THE ASSESSEE IN RESPECT OF 6 ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SE ARCH IS CONDUCTED OR REQUISITION IS MADE. THE AO HAD NO DISCRETION BUT T O ASSESS OR REASSESS THE TOTAL INCOME OF THE ASSESSEE AS PER THE PROVISI ONS OF SECTION 153A OF THE ACT. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS PURUSED THE MATERIAL AVAILABLE ON RECORD. A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN CASE OF THE ASSESSEES GROUP ON 30.10.2014. THE ORIGINAL RETURN OF INCOME FOR THE ASSESSMENT YEAR WAS FILED U/S 139 (1) ON 23.01.2014 AND THE LAST DAY OF ISSUING NOTICE SECTION 143(2) H AD EXPIRED ON 30.09.2014 BEFORE THE DATE OF SEARCH I.E. 30.10.201 4. THUS, IT IS CLEAR ASSESSMENT PROCEEDINGS WERE NOT PENDING ON 30.10.20 14 I.E. THE DATE OF SEARCH. AS PER SECTION 153A OF THE ACT, ONCE A SEARCH AND SEIZURE ACTION IS CARRIED OUT, THE AO HAS TO ASSESS OR REAS SESS THE TOTAL INCOME OF THE ASSESSEE IN RESPECT OF 6 YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH A SEARCH IS CONDUCTED OR REQUISITION IS MADE. IN CASE THE ASSES SMENT IS PENDING ON THE DATE OF SEARCH THE SAME SHALL BE ABATED AS PER PROVISO TO SECTION ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 7 153A(1) OF THE ACT AND THE AO IS FREE TO ASSESS THE INCOME OF THE ASSESSEE AS REGULAR ASSESSMENT. HOWEVER, IN CASE OF COMPLETED ASSESSMENT AND NOT ABATED DUE TO INITIATION OF SEAR CH U/S 132 OR MAKING OF REQUISITION U/S 132A THE AO HAS TO REASSE SS THE TOTAL INCOME OF THE ASSESSEE AND THEREFORE, THE ASSESSMENT ALREA DY COMPLETED CAN BE TINKERED WITH OR DISTRUSTED UNTIL AND UNLESS INC RIMINATING MATERIAL IS FOUND AND SEIZED DURING THE COURSE OF SEARCH OR REQ UISITION AS CASE MAY BE INDICATING UNDISCLOSED INCOME OF THE ASSESSEE. T HEREFORE, THE SCOPE AND JURISDICTION OF THE AO TO REASSESS THE TOTAL IN COME OF THE ASSESSEE U/S 153A IS LIMITED ONLY TO THE EXTENT OF THE INCOM E DISCLOSED BY THE INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE SEARCH AND SEIZURE ACTION. THE ASSESSING OFFICER HAS REASSESSED THE IN COME OF THE ASSESSEE BY MAKING ADDITION ON ACCOUNT OF UNDISCLOS ED INVESTMENT WITHOUT MAKING ANY REFERENCE TO ANY INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH. THE AO HAS REFERRED TO THE DISCLOSURE IN THE FINANCIAL STATEMENTS OF THE ASSESSEE AND THE SU BSEQUENT ENQUIRIES CONDUCTED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS AND HAD MADE THE ADDITION. THEREFORE, THE ADDITION MADE BY THE A O FOR THE ASSESSMENT YEAR COMPLETED U/S 153A IS UNDISPUTEDLY NOT BASED ON ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT. ONCE, THE ASSESS ING OFFICER HAS COMPLETED THE ASSESSMENT U/S 153A WITHOUT ANY REFER ENCE TO THE INCRIMINATING MATERIAL FOUND THEN, NO ADDITION CANN OT BE MADE TO THE RETURNED INCOME OF THE ASSESSEE. ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 8 6. THE HONBLE DELHI HIGH COURT IN CASE OF CIT V. K ABUL CHAWLA VIDE WHILE CONSIDERING AN IDENTICAL ISSUE HAS HELD IN PA RA 37 AND 39 AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW E XPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTIO N 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR S IX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMEN TS AND REASSESSMENTS PENDING ON THE DATE OF THE SEA RCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE REL EVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS TH ERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESP ECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELAT ABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON T HE DATE OF ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 9 SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESS MENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND E R SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE R ECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE CO URSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME O R PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P R ODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FA VOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE JUR ISDICTION HIGH COURT IN CASE OF JAI STEEL INDIA V ACIT (SUPRA) WHE REIN IT HAS BEEN HELD IN PARA 22 TO 30 AS UNDER:- 22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN REA DING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPAR ENT THAT: (A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE B ASIS OF ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 10 INCRIMINATING MATERIAL AND (C ) IN ABSEN CE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THOUGH SUCH A CLAIM BY THE ASSESSEE FOR THE FIRST T IME UNDER SECTION 153A OF THE ACT IS NOT COMPLETED, THE CASE IN HAND, HAS TO BE CONSIDERED AT BEST SIMILAR TO A CASE WHERE IN SP ITE OF A SEARCH AND/OR REQUISITION, NOTHING INCRIMINATING IS FOUND. IN SUCH A CASE THOUGH SECTION 153A OF THE ACT WOULD BE TRIGGERED A ND ASSESSMENT OR REASSESSMENT TO ASCERTAIN THE TOTAL INCOME OF TH E PERSON IS REQUIRED TO BE DONE, HOWEVER, THE SAME WOULD IN THA T CASE NOT RESULT IN ANY ADDITION AND THE ASSESSMENTS PASSED E ARLIER MAY HAVE TO BE REITERATED. 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA (SUPRA) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDER: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NO TICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEA R FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH OR REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTI ON IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSES S THE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICA NT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BL OCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULA R ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE A SSESSMENTS. 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. THIS MEANS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER I N RESPECT OF EACH OF THE SIX ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT OF ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 11 ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UN DER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO TH E INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWE RED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TA KING NOTE TO THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFF ICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN T HE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY TH E NON OBSTANTE CLAUSE WITH WHICH SUB-SECTION (1) OF SECTI ON 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTIO N 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MA DE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUI RES SANCTION TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NO TICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCL UDED 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. W ITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING T O TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECT ION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF N EED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE 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 ABAT E'. 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 ASSE SSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CA SE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CAN NOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF A FFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING TH E ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB-SECTION (1) OF SECTION 15 3A THAT ANY ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 12 PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE A SSESSEE WHICH ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEEDINGS A BATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSE SSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOM E OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLAR ED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQU ISITION. THE POSITION THUS EMERGING IS THAT THE SEARCH IS INITIA TED OR REQUISITION IS MADE, THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASE WHERE TH E ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPL ETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUES TION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE AS SESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT COND ITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED U NDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY R EASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL A SSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO RE ITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEED INGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN A SSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH WAS INITIATED O R THE REQUISITION WAS MADE.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED A SSESSMENTS HAVE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCO ME, IF ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESC APED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WIT H THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT AND AS SESSED AS THE TOTAL INCOME. THE OBSERVATIONS MADE IN THE JUDGMENT CONTRASTING THE PROVISIONS OF DETERMINATION OF UNDISCLOSED INCO ME UNDER CHAPTER XIVB WITH DETERMINATION OF TOTAL INCOME UND ER SECTIONS ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 13 153A TO 153C OF THE ACT HAVE TO BE READ IN THE CONT EXT OF SECOND PROVISO ONLY, WHICH DEALS WITH THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE FURTHER OB SERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDIN GS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE OF THE FACT WHETHER ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH, THE NOTICE AND CONSEQUENTIAL ASSESSMENT UNDER SECTION 1 53A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS TH E INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153 A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROV ISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH A ND/OR REQUISITION. THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE I NTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEY OND PROVISIONS OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING ASSESSMENT) AND 263 ( REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVIS ION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE W ORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISI ON WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' H AS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS B EEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SE ARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPOR T THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S (SUPRA) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE AN Y SUCH ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 14 INTERPRETATION, THAT WHEREVER THE APPEAL AGAINST SU CH ASSESSMENT OR REASSESSMENT IS PENDING, THE SAME ALONG WITH ASSESS MENT OR REASSESSMENT PROCEEDINGS IS LIABLE TO BE ABATED. TH E PRINCIPLES OF INTERPRETATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRET THE SECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE , AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE EN TIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWA Y ALL THE CONSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASSESSMENT PRO CEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 27 1(1)(C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROU ND FOR NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT TH AT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR ASSESSMENT OR REASSESSMENT RESULTING INTO T HE DEMAND OR PROCEEDINGS OF PENALTY.' (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSIO N, WHICH WE HAVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PR OVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED.' 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARISING OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A), ITAT AND THE HIGH COURT, ON A NOTICE ISSUED UNDER S ECTION 153A OF THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS B EEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED AND/OR AVOIDED A S HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE (SUPRA). 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT B EEN CLAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY S TANDS ITA NO. 1028 /JP/2017 SMT. PALLAVI TOMAR, VS. ACIT 15 COMPLETED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUANCE OF SEARCH OR REQUISITION IS REQUIR ED TO BE MADE. 8. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF T HE CASE WHEN THE ASSESSMENT HAS BEEN COMPLETED U/S153A WITHOUT ANY R EFERENCE TO THE INCRIMINATING MATERIAL EVIDENCING ANY INVESTMENT OV ER AND ABOVE DISCLOSED IN THE FINANCIAL STATEMENTS AND IN LIGHT OF THE BINDING PRECEDENTS AS CITED ABOVE, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE, THE SAME IS DELETED. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/07/2018. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24/07/2018. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. PALLAVI TOMAR, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CENTRAL CIRCLE-1, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1028/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR