Lalitha Devi, Kakinada V. The ACIT, Rajahmundry

ITA 111/VIZ/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3859 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DEBAKUMAR SONOWAL
• Assessee Lawyers: P PRABHAKARA MURTHY
• Keywords: Assessment record; Block assessment; Documents seized; Set aside
• Section: 143(3); 153A; 143(1); 68; 148; 263; 132

Judgement Text

ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . .. . . . . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NOS.111 & 112/VIZAG/2017 ( / ASSESSMENT YEARS: 2007-08 & 2008-09) LALITHA DEVI KAKINADA ACIT, CENTRAL CIRCLE RAJAHMUNDRY [PAN NO. ACDPL3732F ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI P. PRABHAKARA MURTHY, AR / RESPONDENT BY : SHRI DEBA KUMAR SONOWAL, DR / DATE OF HEARING : 12.03.2018 / DATE OF PRONOUNCEMENT : 04.04.2018 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3 {CIT(A)} , VISAKHAPATNAM FOR THE ASSESSMENT YEARS 2007-08 & 2008-09. ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 2 2. ASSESSEE FILED RETURN OF INCOME IN THIS CASE ON 23.11.2007 ADMITTING TOTAL INCOME OF RS.1,47,830/-. SUBSEQUEN TLY, A SEARCH U/S 132 OF THE ACT WAS CARRIED OUT IN THE GROUP CASES OF TH E ASSESSEE ON 3.2.2009 AND ASSESSMENT WAS REOPENED U/S 153C OF TH E ACT BY INVOKING THE PROVISIONS OF SECTION 153C OF THE ACT. DURING THE SEARCH ASSESSMENT PROCEEDINGS, THE A.O. FOUND THAT THE ASSESSEE HAD R ECEIVED UNSECURED LOANS OF RS.1,61,900/- FROM VARIOUS PERSONS. AS FO LLOWS: 1. A. NARENDRA ` 17000 2. CH. HANUMANTHA RAO ` 15000 3. G. MANI ` 17000 4. K. RAMACHANDRA RAO ` 16000 5. S. SUBBA RAO ` 17000 6. P. CHANDRA SEKHAR ` 16000 7. P. GAYATRINATH ` 15000 8. M. RAMA KRISHNA ` 17000 9. K. DORA BABU ` 16000 10. N. VENKATESWARA RAO ` 15000 SINCE THE ASSESSEE COULD NOT FURNISH ANY EXPLANATIO N WITH REGARD TO THE SOURCE AND NATURE OF CREDITS, THE A.O . COMPLETED THE ASSESSMENT BY MAKING ADDITION OF RS.1,61,000/- AND DISALLOWED THE INTEREST RELATABL E TO THE UNSECURED. 3. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE A.O. AS UNDER: 8.4) I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMIS SIONS AND THE FACTS OF THE CASE. THERE IS NO DISPUTE REGARDING TH E ACTION U/S.132 OF THE ACT CARRIED ON 03.02.2008 IN THE GROUP CASES. IT IS ALSO NOT DISPUTED BY ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 3 THE AR THAT CERTAIN DOCUMENTS WERE SEIZED WHEREIN T HE DETAILS OF INCOME OF APPELLANT WAS MENTIONED. THE AR HAS RAISE D A DOUBT AS TO HOW THE ASSESSING OFFICER WAS SATISFIED ON THE SAID MATERIAL IN ORDER TO INVOKE PROVISIONS U/S.153C OF THE ACT. I HAVE PERUS ED THE MATERIAL ON RECORD. IT CONTAINS TRANSACTIONS RELATING TO CONSTR UCTION OF RESIDENTIAL HOUSE. IT IS ALSO SEEN THAT THE APPELLANT AND OTHER GROUP MEMBERS HAVE CONTESTED IN CAPITAL GAINS CLAIM U/S.54F AS WELL AS LOANS OBTAINED FROM VARIOUS PERSONS. THESE TWO ITEMS HAVE DIRECT BEARIN G ON THE INCOME OF THE APPELLANT. IN VIEW OF THE FACTS DISCUSSED ABOVE , I CONSIDER THAT THE ASSESSING OFFICER HAS CORRECTLY ASSUMED JURISDICTIO N U/S.153C. FURTHER, THE APPELLANT HAD COMPLIED WITH THE PROCEEDINGS BY FILING REPLIES AND OTHER DETAILS WITHOUT OBJECTION IN THE ASSESSMENT P ROCEEDINGS. THOUGH THE APPELLANT CAN AGITATE ON LEGAL ISSUES BEFORE TH E APPELLATE AUTHORITIES, IT CANNOT BE A ROUTINE GROUND BEYOND R EASONABLE TIME AND WITHOUT ADEQUATE MATERIAL. IN VIEW OF THE FACTS AND LEGAL POSITION DISCUSSED ABOVE, THE PLEA OF THE APPELLANT IS REJEC TED AND THE ORDER OF THE ASSESSING OFFICER IS HELD AS VALID. 8.5) THE SOLITARY ISSUE THAT NEEDS ADJUDICATION IN THIS CASE IS CASH CREDITS OF RS.1,61,000/- BORROWED FROM 10 PEOPLE. I T IS SEEN FROM PAPER BOOK THAT THE APPELLANT HAS REPAID LOANS TO 5 PEOPLE AND REMAINING 5 PEOPLE ARE OUTSTANDING. HOWEVER, DURING THE APPELLATE PROCEEDINGS, THE AR OF THE APPELLANT FILED ANOTHER PAPER BOOK ON 20.10.2016 WHICH REVEALED THAT REPAYMENTS WERE MADE IN THE CASE OF SRI P. CHANDRASEKHAR (RS.16,000/-), SRI M. RAMAK RISHNA (RS.17,000/-), SRI K. DORABABU (RS.16,000I-) AND SR I N. VENKATESWARA RAO (RS.15,000/-) PRIOR SEARCH ACTION. THE REMAINING 5 WERE REPAID DURING THE YEAR 2010 I.E., SUBSEQUENT TO SEARCH. 8.6) IT IS ALSO A FACT THAT THE LOANS WERE ACCEPTED IN CASH. THE AR WAS ASKED TO SUBSTANTIATE THAT THE PAYMENTS WERE RE FLECTED IN THE BOOKS OR BANK ACCOUNT OF CREDITORS FOR WHICH HE EXPRESSED HIS INABILITY. THE AR WAS ALSO REQUESTED TO SUBSTANTIATE THE SOURCE OF CR EDITORS EITHER BY BANK ENTRIES OR BY SALARY CERTIFICATE IN ORDER TO S UPPORT THEIR CLAIM THAT THESE LOANS WERE ADVANCED OUT OF THEIR OWN SAVINGS FROM SALARY. THE AR AGAIN EXPRESSED HIS INABILITY TO FURNISH THE DETAIL S. THE FACTS AND CIRCUMSTANCES OF THE CASE HAVE NOT CHANGED FROM THE ASSESSMENT PROCEEDINGS TILL THE APPELLATE PROCEEDINGS. THE FAC T THAT REMAINS UNCHANGED IS THE CONFIRMATION LETTERS FROM CREDITOR S. A MERE FILING OF CONFIRMATION LETTERS MAY NOT ABSOLVE THE LEGAL RESP ONSIBILITY OR OBLIGATION OF APPELLANT IN THE ABSENCE OF CORROBORATIVE EVIDEN CE WITH ENTRIES IN THE BANK ACCOUNT OF APPELLANT AND CREDITORS. SUCH ATTEM PT WAS NOT MADE BY THE APPELLANT EVEN DURING THE REMAND AND APPELLATE PROCEEDINGS. THE CONFIRMATION LETTERS AND THE CLAIM OF REPAYMENT OF LOAN REMAIN SELF SERVING STATEMENTS. THE RIGORS OF SECTION 68 ARE ST RINGENT IN THE CASE OF CREDITS. WHAT THE APPELLANT NEEDS TO DEMONSTRATE IS IDENTITY, ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 4 GENUINENESS AND CREDITWORTHINESS OF LOAN CREDITORS. ABSENCE OF ANY ONE OF THESE ELEMENTS WILL RENDER THE LOAN AS UNEXPLAIN ED AND LIABLE TO BE TAXED U/S.68 OF THE ACT. IN THE INSTANT CASE, THE A PPELLANT HAD FAILED TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF CREDI TORS. 8.7) IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, I UPHOLD THE ADDITION OF RS.1,61,000 - ON ACCOUNT OF LOAN CREDITORS MADE BY THE ASSESSING OFFICER. HAVING HELD THAT THE LOANS A UNEXPLAINED, THE INTEREST CLAIMED BY THE APPELLANT IS ALSO HELD AS UNEXPLAINED EXPENDITU RE ACCORDINGLY, THE CLAIM OF THE APPELLANT IS HEREBY REJECTED AND THE O RDER OF THE ASSESSING OFFICER IS CONFIRMED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US. DURING THE APPEAL HEARING, THE LD. A.R. ARGUED THAT IN THIS CASE, THE ASSESSEE HAS FILED A RETURN OF INCOME ON 23.11.2007 AND THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE AC T GOT EXPIRED ON 30.9.2008. THEREFORE, THE ASSESSMENT IS COMPLETED ASSESSMENT, HENCE, THE ADDITIONS IF ANY REQUIRED TO BE MADE ONLY ON IN CRIMINATING MATERIAL BUT NOT ON THE MATERIAL ACCOUNTED IN THE BOOKS OF A CCOUNTS. THE LD. A.R. ARGUED THAT UNSECURED LOANS WERE RECORDED IN T HE BOOKS OF ACCOUNTS AS EVIDENCED FROM THE ASSESSMENT ORDER. H ENCE, THE ASSESSMENT MADE BY THE A.O. U/S 153C OF THE ACT IS REQUIRED TO BE QUASHED. 5. ON THE OTHER HAND, THE LD. D.R. STRONGLY SUPPORT ED THE ORDERS OF THE LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME ON 23.11. 2007 AND THE NOTICE ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 5 U/S 143(2) OF THE ACT REQUIRED TO BE ISSUED ON OR B EFORE 30.9.2008. THEREFORE, THE ASSESSMENT IS COMPLETED ASSESSMENT. IN THE CASE OF SEARCH ASSESSMENTS, COMPLETED ASSESSMENTS SHOULD NO T BE DISTURBED UNLESS THE INCRIMINATING MATERIAL IS AVAILABLE. ANY ADDITION REQUIRED TO BE MADE U/S 153C OF THE ACT IS ONLY ON THE BASIS OF IN CRIMINATING MATERIAL BUT NOT FROM THE ASSESSMENT RECORDS. THIS VIEW IS SUPPORTED BY THE ORDER OF THIS TRIBUNAL IN THE CASE OF BHAVANASI ANJ ANEYULU IN ITA NO.354 AND 359/VIZAG/2017 DATED 19.1.2008 RELIED UP ON BY THE ASSESSEE. THE ITAT, VISAKHAPATNAM IN ITS ORDER IN THE CASE OF P.R AMA RAJU IN ITA NO.424 TO 426/VIZAG/2013 DATED 31/07/2017 EXPRESSED THE SAME VIEW RELYING ON THE SPECIAL BENCH DECISION IN THE CASE O F ALL CARGO LOGISTICS LTD. THE LD. A.R RELIED ON THE ORDER OF THIS TRIBUN AL IN ITA NOS.300 TO 305/VIZAG/2012, IN CASE OF L. SURYAKANTHAM VS. ACIT , WHERE IN THE ITAT HAS CONSIDERED SIMILAR ISSUE AND HELD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH AND ALSO THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THER E WAS A SEARCH ACTION U/S 132 OF THE ACT. DURING THE COURSE OF SEA RCH, INCRIMINATING DOCUMENTS FOUND REVEALS THAT THE ASSE SSEE HAS INFLATED LABOUR CHARGES FOR THE ASSESSMENT YEARS 20 08-09 & 2009- 10. BASED ON THE DOCUMENTS FOUND DURING SEARCH, TH E ASSESSEE ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 6 HAS ACCEPTED THAT HE HAS INFLATED 10% LABOUR CHARGE S AND WHICH IS COMMON IN THIS LINE OF BUSINESS. CONSEQUENT TO SEA RCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALI ZED AND ACCORDINGLY FRESH ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUING NOTICE U/S 153A/153C OF THE ACT FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE ASSESSEE HAS FILED REVISED RETU RNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND ADMITTED THE ADDI TIONAL INCOME DISCLOSED DURING THE COURSE OF SEARCH. THE CASE HA S BEEN SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNTS AND RELEVANT BILLS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RE SPONSE, THE ASSESSEE FILED WRITTEN SUBMISSION AND STATED THAT T HE BOOKS OF ACCOUNTS ARE NOT AVAILABLE AND HENCE CANNOT BE FURN ISHED. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE NET PROFIT FROM THE BUSINESS SHALL NOT BE ESTIMATED. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPLY AND CONTENDED THAT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 2005-06 AND 2007-08 CANNOT BE TINKERE D WITH, AS THERE WAS NO INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH FOR THE ABOVE ASSESSMENT YEARS AND AS SUCH N O ADDITIONS CAN BE MADE TO THE RETURNED INCOME. IT IS FURTHER S UBMITTED THAT AS PER SEC. 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH THE ASS ESSMENT PROCEEDINGS HAD BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN REA CHED A FINALITY, SUCH ASSESSMENT COULD NOT BE MADE U/S 153 A OF THE ACT UNLESS THERE WAS SEIZED MATERIALS. 20. THE A.O. HAS PASSED REASSESSMENT ORDERS U/S 153 A/153C OF THE ACT FOR ALL THE SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE YEAR IN WHICH SEARCH WAS CONDUCTED. ACCORDING TO T HE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS OF A.O. FOR MAKING ASSESSMENT/REASSESSME NT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE I N THE OLD PROCEDURE OF BLOCK ASSESSMENTS. THE NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SE CTION 153A OF THE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSE SSMENT YEARS IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COMPLETED OR PENDING AS ON THE DATE OF SEARCH. THE REFORE, THE A.O. HAS REASSESSED THE INCOME OF SIX ASSESSMENT YE ARS AND RECOMPUTED THE PROFITS AFRESH AFTER CONSIDERING THE RELEVANT FACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENTS UNLES S THERE WAS A SEIZED MATERIAL. THE ASSESSEE FURTHER CONTENDED THA T WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H AND TIME ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 7 LIMIT FOR ISSUE OF NOTICES U/S 143(2) OF THE ACT HA S BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAV E BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THEN THE A.O. HAS NO POWER TO REASSESS THE INCOME OF THOSE COMPLETED ASS ESSMENT YEARS. 21. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ISSUE NO LONGER RES INTEGRA, AS THE ISSUE HAS BEEN ALREADY DECIDED BY THE ITAT, SPECIAL BENCH AND HELD THAT WHERE THE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H, THE A.O. LOSSES JURISDICTION U/S 153A OF THE ACT TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLET ED ASSESSMENTS, THE NATURAL MEANING ASSIGNED TO IT SHO ULD BE GIVEN TO INTERPRET THE PROVISIONS IN SUCH A WAY THAT WHICH S HALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT EXPLAINED THE PROCEDURE OF ASSESSMENTS, ABA TED ASSESSMENTS AND THE MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WHICH WAS FURTHER SUPPORTED BY CIRCULAR NO. 7 OF 2003 ISSUED BY THE CBDT. WHEN THE LAW HAS EXPLAINED THE POSITION OF ABATED ASSESSMENTS, THEN THE SAME WAY THE COMPLETED ASSESSMENT SHOULD BE TREATED SO AS TO UNDERSTAND THAT THOSE AS SESSMENTS ARE REACHED FINALITY AND WHICH CANNOT BE TINKERED WITH UNLESS THERE WAS A SEIZED DOCUMENT. THEREFORE, WE ARE OF THE CON SIDERED OPINION THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSMENTS ARE MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASS ESSMENT YEAR SHALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS O F SEARCH AND OTHER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPECT OF NON ABATED OR COMPLETED ASSESSMENTS, THE ASSESSM ENT WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER REL EVANT DOCUMENTS FOUND DURING THE COURSE OF SEARCH, BUT NO T PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT. 22. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE D OCUMENT AVAILABLE ON RECORD, WE FIND THAT THE ASSESSMENT FO R THE ASSESSMENT YEAR 2004-05 TO 2007-08 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE FACT THAT THE ASSESSMENT HAS B EEN COMPLETED U/S 143(1) & 143(3) OF THE ACT ARE NOT MATERIAL. TH E TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPI RED. ON FURTHER VERIFICATION OF THE DOCUMENTS AVAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOCUMENTS FOUND DURING T HE COURSE OF SEARCH IN RESPECT OF ASSESSMENT YEAR 2004-05 TO 200 7-08. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOME OF THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY SEIZED MATERIALS. AC CORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR TH E ASSESSMENT YEAR 2004-05, 2005-06 & 2007-08. ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 8 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITA T, SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGI STICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE BENCH OF T HIS TRIBUNAL, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: IN ASSESSMENTS THAT ARE ABATED, THE AO ARETAINS TH E ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO T HE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE C ONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 24. THE ASSESSEE RELIED UPON, A.P. HIGH COURT DECIS ION IN THE CASE OF CIT VS. M/S. AMR INDIA LTD. IN ITTA NO.354 O F 2014 DATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT THE A.O . HAS NO JURISDICTION TO RE-AGITATE THE ASSESSMENTS WHICH WE RE ALREADY COMPLETED AND SUBSIDING. THE RELEVANT PORTION IS E XTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER O F THE LEARNED TRIBUNAL. IT APPEARS THAT THE LEARNED TRIBUNAL FOUND ON FACT T HAT AFTER COMPLETION OF ASSESSMENT PROCEEDINGS AND AFTER REAC HING FINALITY THEREON, THE ASSESSING OFFICER TRIED TO REAGITATE T HE ASSESSMENTS. ACCORDING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY H ELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSISTING. WE TH EREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE DECIDED IN THIS APPEA L. HENCE, THE APPEAL IS DISMISSED. THERE WILL BE NO O RDER AS TO COSTS. 7. THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HO NBLE ITAT KOLKATA BENCH IN THE CASE OF SMT. YAMINI AGARWAL VS . DCIT (CENTRAL CIRCLE)-3, KOLKATA REPORTED IN 83 TAXMAN.COM 209 AF TER CONSIDERING THE DECISION OF SPECIAL BENCH RULING IN THE CASE OF ALL CARGO LOGISTICS AND THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 9 CANARA HOUSING AND THE BOMBAY HIGH COURT DECISION I N THE CASE OF ANIL KUMAR BHATIA AND EXPRESSED A VIEW THAT IN RESP ECT OF ASSESSMENTS COMPLETED PRIOR TO THE DATE OF SEARCH T HE SCOPE OF PROCEEDINGS U/S 153A OF THE ACT HAS TO BE CONFINED ONLY TO THE MATERIAL FOUND IN THE COURSE OF SEARCH. FOR THE SA KE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARA-25 & 26 OF THE CITED O RDER. 25. WE THEREFORE HOLD THAT THE SCOPE OF THE PROCEEDING S U/S.153A IN RESPECT OF ASSESSMENT YEAR FOR WHICH ASSESSMENT HAV E ALREADY BEEN CONCLUDED AND WHICH DO NOT ABATE U/S.153A OF THE AC T, THAT THE ASSESSMENT WILL HAVE TO BE CONFINED TO ONLY INCRIMI NATING MATERIAL FOUND AS A RESULT OF SEARCH. THE NEXT ASPECT TO BE CONSIDERE D IS AS TO WHEN RETURNS OF INCOME FILED U/S.139 OF THE ACT ARE SHOWN TO HAV E BEEN ACCEPTED WITHOUT AN INTIMATION U/S.143(1) OF THE ACT OR WITH OUT ANY NOTICE ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT CONTEMP LATED BY THE PROVISO THERETO, CAN BE SAID TO BE ASSESSMENT PROCEEDINGS C ONCLUDED THAT HAVE NOT ABATED U/S.153A OF THE ACT. SECTION 153A OF THE ACT, USES THE EXPRESSING 'PENDING ASSESSMENT OR REASSESSMENT'. WH EN A RETURN IS FILED AND WHEN NEITHER AN ACKNOWLEDGEMENT OR INTIMATION U /S.143(1)OF THE ACT IS ISSUED NOR A NOTICE U/S.143(2) OF THE ACT IS ISS UED WITHIN THE TIME LIMIT LAID DOWN IN THE PROVISO TO SECC.143(2) OF THE ACT, THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE CLOSED. IN THE P RESENT CASE, THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THEREFORE TH E PROCESS HAS ATTAINED THE FINALITY WHICH CAN ONLY BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUDED THAT MAKING OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT, WITHOUT THE BACKING OF INC RIMINATING MATERIAL, IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASS ESSMENT ON THE DATE OF SEARCH STOOD COMPLETED BY ABSENCE OF ISSUE OF INTIM ATION UNDER SECTION 143(1) OF THE ACT OR BY NOT ISSUING NOTICE U/S.143( 2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THE PROVISO TO SEC.143(2) O F THE ACT, RESULTS IN AN ASSESSMENT PROCEEDINGS AND WHERE SUCH ASSESSMENT PR OCEEDINGS ARE COMPLETED PRIOR TO THE DATE OF SEARCH THEN THEY DO NOT ABATE IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. T HE DECISION OF THE ITAT KOLKATA BENCH RENDERED IN THE CASE OF SHRI BISHWANA TH GARODIA (SUPRA) ON IDENTICAL FACTS OF THE CASE AS THAT OF THE ASSESSEE IN THE PRESENT CASE, CLEARLY SUPPORTS OUR CONCLUSIONS AS ABOVE. 26. IN THE LIGHT OF THE DISCUSSION ABOVE, OUR CONCLUSI ON IS THAT IN THE PRESENT CASE, THE ISSUE DEALT WITH BY THE AO IN THE ASSESSMENT ORDER U/S.153A OF THE ACT, COULD NOT AND OUGHT NOT TO HAV E BEEN EXAMINED BY THE AO IN THE ASSESSMENT PROCEEDINGS U/S.153A OF TH E ACT AS THE SAID ISSUE ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 10 STOOD CONCLUDED WITH THE ASSESSEE'S RETURN OF INCOM E BEING ACCEPTED PRIOR TO THE DATE OF SEARCH AND NO NOTICE HAVING BEEN ISS UED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THAT SECTION . SUCH ASSESSMENT DID NOT ABATE ON THE DATE OF SEARCH WHICH TOOK PLACE ON 28. 3.2008. IN RESPECT OF ASSESSMENTS COMPLETED PRIOR TO THE DATE OF SEARCH T HAT HAVE NOT ABATED, THE SCOPE OF PROCEEDINGS U/S.153A OF THE ACT HAS TO BE CONFINED ONLY TO MATERIAL FOUND IN THE COURSE OF SEARCH. SINCE NO MA TERIAL WHATSOEVER WAS FOUND IN THE COURSE OF SEARCH, THE ADDITIONS MADE B Y THE AO IN THE ORDER OF ASSESSMENT FOR BOTH THE ASSESSMENT YEARS COULD NOT HAVE BEEN SUBJECT MATTER OF PROCEEDINGS U/.S.153A OF THE ACT. CONSEQU ENTLY, THE SAID VARIOUS ADDITIONS MADE IN THE ORDERS OF ASSESSMENT OUGHT NO T TO HAVE OR COULD NOT BE MADE BY THE AO. GR.NO.1 RAISED BY THE ASSESSEE I N BOTH THE APPEALS ARE ACCORDINGLY ALLOWED. 8. AS PER THE PROVISIONS OF SECTION 153C OF THE ACT ALSO, THE A.O. REQUIRED TO ISSUE THE NOTICE ONLY ON THE BASIS OF MONEY, BULLION, JEWELLERY, OTHER ARTICLE OR THING SEIZED OR REQUISI TIONED BELONGED TO OR ANY BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUIS ITIONED PERTAINS TO OR PERTAIN TO THE ASSESSEE. FOR READY REFERENCE WE EXTRACT SECTION 153C OF THE ACT, WHICH READS AS UNDER; 153C(1) NOT WITHSTANDING ANYTHING CONTAINED IN SECT ION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BEL ONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN T HE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED O VER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON [AND THA T ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF AC COUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETER MINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB- SECTION (10 OF SECTION 153A]. 9. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION AND LAW, RESPECTFULLY FOLLOWING THE VIEW TAKEN BY THE COORDI NATE BENCH OF THIS ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 11 TRIBUNAL, WE HOLD THAT INVOKING PROVISIONS OF SECTI ON 153C OF THE ACT WITHOUT HAVING INCRIMINATING MATERIAL IS BAD IN LAW AND ACCORDINGLY WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND A LLOW THE APPEAL OF THE ASSESSEE. ITA 112/VIZAG/2017: 10. DURING THE APPEAL HEARING, THE LD. A.R. HAS NOT PRESSED THE GROUNDS OF APPEAL RAISED IN THIS APPEAL HENCE THE A PPEAL FILED BY THE ASSESSEE IS DISMISSED AS NOT PRESSED. 11. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NO.111/VIZAG/2017 IS ALLOWED AND ITA NO.112/VIZAG/2 017 IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON APR18. ( . ) ( . .. . . . . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : VG/SPS ITA NO.111 & 112 /VIZAG/2017 LALITHA DEVI, KAKINADA 12 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SMT. LALITHA DEVI, W/O SRI BHAWA RLAL JAIN, D.NO.5-3- 25, LATCHIRAJUVARI STREET, KAKINADA-533 001, EAST G ODAVARI DISTRICT. 2. / THE RESPONDENT THE ACIT, CENTRAL CIRCLE, RAJAH MUNDRY 3. + / THE PRINCIPAL CIT-2, VISAKHAPATNAM 4. + ( ) / THE CIT (A)-3, VISAKHAPATNAM 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM