JIGNESH P. SHAH, MUMBAI V. DCIT CEN CIR 46, MUMBAI

ITA 3173/MUM/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88285 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 03-02-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 23-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Assessee Lawyers: CHETAN KARIA
• Keywords: Search and seizure; Deemed dividend; Reassessment proceedings
• Section: 143(3); 80HHC; 153A; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI N. K. BILLAIYA ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 JIGNESH P. SHAH 10 TH FLOOR, HIRALAY BUILDING, ASHOK NAGAR CHS JVPD SCHEME, VILE PARLE (W), MUMBAI 400 049 PAN:-AELPS 9392 A VS. DCIT CEN CIR-46 MUMBAI (APPELLANT) (RESPON DENT) ASSESSEE BY : SHRI CHETAN KARIA REVENUE BY : SH RI KISHAN VYAS DATE OF HEARING : 03 .02.2015 DATE OF ORDER : 13 .02.2015 O R D E R PER AMIT SHUKLA, JM: THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSES SEE, AGAINST ORDER DATED 02.02.2010 & 08.02.2010 FOR THE A.YS. 2 002-03 AND 2004- 05 RESPECTIVELY, PASSED BY LD. CIT(A)-38, MUMBAI F OR THE QUANTUM OF ASSESSMENT PASSED U/S 153 A R.W.S. 143(3) OF THE IN COME-TAX ACT. SINCE THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS A RE COMMON THEREFORE, SAME ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLID ATED ORDER. 2. IN VARIOUS GROUNDS OF THE APPEAL, ASSESSEE HAS M AINLY CHALLENGED THE ADDITION ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22 )(E) OF RS.1,69,68,750/- IN THE A.Y. 2002-03 AND SUM OF RS. 4,62,91,123/-IN THE ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 2 A.Y. 2004-05. BESIDES THIS, THE ASSESSEE HAS ALSO F ILED PETITION FOR ADMISSION OF FOLLOWING AS ADDITIONAL GROUND, WHICH IS COMMON IN BOTH THE YEARS EXCEPT FOR VARIATION IN THE FIGURES OF DE EMED DIVIDEND. 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN CONFIRMING AND THE LEARNED ASSESSING OFFICER ERRED IN PASSING THE ASSESSMENT ORDER U/S 153A AND THE SAME IS WITHOUT J URISDICTION AND BAN IN LAW. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING AND THE LEARNED ASSESSING OFFICER ERRED IN MAKING ADDITION OF RS.1,69,68,750/- U/S 2(22)(E) IN ASSESS MENT ORDER U/S 143(3) R.W.S. 153A AND THE SAME IS WITHOUT JURISDIC TION AND BAD IN LAW. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND ASSESSING OFFICER ERRED IN DETERMINING AMOUNT OF DE EMED DIVIDEND AT RS.1,69,68,750/- 4. THE APPELLANT PRAYS THAT: I) ASSESSMENT ORDER U/S 143(3) R.W.S. 153A MAY BE CAN CELLED AS WITHOUT JURISDICTION AND BAD IN LAW, II) ADDITION OF S.1,69,68,750/- U/S 2(22)(E) MAY BE DEL ETED AS BEING WITHOUT JURISDICTION AND BAD IN LAW, III) ANY OTHER RELIEF YOUR HONOURS MAY DEEM FIT. 3. SINCE THE AFORESAID ADDITIONAL GROUNDS RAISED B Y THE ASSESSEE ARE PURELY LEGAL GROUNDS ARISING OUT OF FACTS AND MATER IAL ON RECORD AND DOES NOT REQUIRE ANY INVESTIGATION OR VERIFICATION OF FA CTS THEREFORE, IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF NATIONAL THERMAL POWER COMPANY LTD. VS. CIT REPORTED IN (199 8) 229 ITR 383, WE ARE ADMITTING THE ADDITIONAL GROUNDS. 4. THE BRIEF FACTS QUA THE ISSUE RAISED IN THE ADDI TIONAL GROUND ARE THAT, ASSESSEE IS AN INDIVIDUAL HAVING SALARY INCOM E AND INCOME FROM OTHER SOURCES. RETURN OF INCOME FOR THE A.Y. 2002-0 3 WAS FILED ON 31.03.2003 U/S 139 AT AN INCOME OF RS.14,69,770/- A ND FOR THE A.Y. 2004-05, RETURN WAS FILED ON 31.03.2005 U/S 139 AT AN INCOME OF ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 3 RS.9,82,210/-. AFTER THE FILING OF THE RETURN OF IN COME, NO NOTICE U/S 143(2) WAS ISSUED WITHIN THE TIME LIMIT PRESCRIBED UNDER THE STATUTE, WHICH WAS 31.03.2004 FOR THE A.Y. 2002-03 AND 31.03 .2006 FOR THE A.Y. 2004-05. THUS, THE RETURN OF INCOME STOOD ASSESSED AND HAD ATTAINED FINALITY. THEREAFTER SEARCH AND SEIZURE ACTION U/S 132(1) WAS CARRIED OUT BY THE INVESTIGATION WING MUMBAI IN THE CASE OF COM MODITIES EXCHANGE GROUP ON 19.06.2007. THE ASSESSEE BEING THE MEMBER OF FINANCIAL TECHNOLOGIES INDIA LTD., WAS ALSO COVERED UNDER THE SAME SEARCH AND SEIZURE ACTION. IN PURSUANCE OF SEARCH ACTION U/S 1 32(1), NOTICES U/S 153A WAS ISSUED TO THE ASSESSEE ON 25.10.2007 FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR OF THE YEAR OF THE SEARCH, WHICH INCLUDED THE AFORESAID ASSESSMENT YEA RS. IN RESPONSE TO THE SAID NOTICES THE ASSESSEE FILED HIS RETURN OF I NCOME ON 26.11.2007 ON THE SAME INCOME WHICH WAS DECLARED IN THE ORIGIN AL RETURN OF INCOME FILED U/S 139. IN THE ASSESSMENT ORDER PASSED U/S 1 53A, READ WITH SECTION 143(3), THE ADDITION ON ACCOUNT OF DEEMED D IVIDEND OF RS.1,69,68,750/- FOR THE A.Y. 2002-03 AND RS.4,65,7 6,000/- FOR THE A.Y. 2004-05 WAS MADE, VIDE SEPARATE ORDER DATED 31.03.2 009. 5. BEFORE US, LEARNED COUNSEL SUBMITTED THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION, NO INCRIMINATING DOCUMEN T, MATERIAL OR UNACCOUNTED ASSETS WERE FOUND FROM THE ASSESSEE. EV EN FOR THE YEAR OF SEARCH I.E. A.Y. 2008-09, NO ADDITION HAS BEEN MADE . THE ASSESSING OFFICER WITHOUT THERE BEING ANY INCRIMINATING MATER IAL FOUND IN THE COURSE OF SEARCH RELATING TO THE DEEMED DIVIDEND HA S MADE THE ADDITION ON THE BASIS OF INFORMATION ALREADY AVAILABLE IN TH E RETURN OF INCOME. THIS IS ALSO EVIDENT FROM THE COPY OF PANCHNAMA AND STATEMENT ON OATH OF THE ASSESSEE RECORDED AT THE TIME OF SEARCH, THE COPY OF WHICH HAVE ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 4 BEEN PLACED IN THE PAPER BOOK FORM PAGES 135 TO 139 . EVEN IN THE ASSESSMENT ORDER THERE IS NO WHISPER ABOUT ANY MATE RIAL OR DOCUMENT FOUND AT THE TIME OF SEARCH RELATING TO THE TRANSAC TION OF DEEMED DIVIDEND. THE LD. AO HE HAS NOTED THE FACTS ABOUT R ECEIVING OF THE PAYMENTS BY THE ASSESSEE FROM M/S. LOTUS INVESTMENT , WHICH WAS A DIVISION OF M/S. LA-FIN FINANCIAL SERVICES PVT. LTD . IN WHICH THE ASSESSEE HELD 50% OF SHARE, FROM THE BALANCE SHEETS AND RECO RDS ALREADY FILED ALONG WITH THE RETURN OF INCOME. SINCE THE ASSESSME NT FOR THE A.YS. 2002-03 & 2004-05 HAD ATTAINED FINALITY BEFORE THE DATE OF SEARCH AND DOES NOT GET ABATED IN VIEW OF SECOND PROVISO TO SE CTION 153A, THEREFORE, WITHOUT THERE BEING ANY INCRIMINATING MA TERIAL FOUND AT THE TIME OF SEARCH, NO ADDITION OVER AND ABOVE THE INCO ME WHICH ALREADY STOOD ASSESSED CAN BE MADE. THIS PROPOSITION HE SAI D, IS SQUARELY COVERED BY THE DECISION OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT REPORTED IN (2012) 137 ITD 287 (SB) (MUM) . EVEN THE HONBLE JURISDICTIONAL (BOMBAY) HIGH COURT IN THE CASE OF CIT VS. M/S. MURLI AGRO PRODUCTS LTD. ITA NO. 36 OF 2009 ORDER DATED 29.10.2010, HAS CLEARLY HELD THAT, ONCE THE ASSESSMENT HAS ATTAINED FINALIT Y BEFORE THE DATE OF SEARCH AND NO MATERIAL IS FOUND IN THE COURSE OF PR OCEEDINGS U/S 132(1), THEN NO ADDITION CAN BE MADE IN THE PROCEEDINGS U/S 153A. THIS PROPOSITION HAS BEEN REITERATED BY HONBLE RAJASTHA N HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT REPORTED IN (2013) 259 C TR (RAJ) 281 . THUS, THE ADDITION OF DEEMED DIVIDEND MADE BY THE A SSESSING OFFICER IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A FOR THE IMP UGNED ASSESSMENT YEARS. ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 5 6. ON THE OTHER HAND LD. DR SUBMITTED THAT, THE ACT DOES NOT ENVISAGES THAT THE ASSESSMENTS WHICH HAVE ATTAINED FINALITY CANNOT BE DISTURBED OR VARIED IF NO INCRIMINATING MATERIAL IS FOUND QUA THE ADDITION MADE. THERE IS NO CONCEPT OF UNDISCLOSED INCOME ENS HRINED IN SECTION 153A. IN SUPPORT OF HIS CONTENTION, HE STRONGLY PLA CED RELIANCE ON THE DECISION OF ITAT MUMBAI BENCH IN THE CASE OF SATISH L. BABLADI VS. DCIT PASSED IN ITA NOS. 1732 & 2109 ORDER DATED 19.03.2013. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE LEGAL ISSUE RAISED IN THE ADDITIONAL GROUNDS AND THE MATERIAL PLACED ON R ECORD. THE CHRONOLOGY OF EVENTS RELATING TO STATUS OF ASSESSME NT OF THE IMPUGNED ASSESSMENT YEARS ARE AS UNDER:- EVENT DATES A.Y. 2002-03 A.Y. 2004-05 DATE OF FILING OF RETURN OF INCOME U/S 139 31.03.2003 31.03.2005 TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) UNDER THE STATUTE 31.03.2004 31.03.2006 TIME LIMIT FOR COMPLETING ASSESSMENT U/S 143(3) 31.03.2005 31.03.2007 DATE OF SEARCH 19.06.2007 19.06.2007 FROM THE ABOVE, IT IS EVIDENT THAT, PRIOR TO THE D ATE OF SEARCH, THE ASSESSMENT FOR BOTH THE ASSESSMENT YEARS HAD ATTAIN ED FINALITY AS THE RETURN INCOME STOOD ASSESSED BEFORE THE DATE OF SEA RCH. ACCORDINGLY, THE ASSESSMENT FOR THE A.YS. 2002-03 & 2003-04 DOES NOT GETS ABATED IN VIEW OF THE SECOND PROVISO TO SECTION 153A. THE RELEVANT PROVISIONS OF SECTION 153 A READS AS UNDER:- ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 6 '153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INIT IATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL-- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING F ORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROV ISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS I F SUCH RETURN WERE A RETURN REQUIRED TO 'BE FURNISHED UNDER SECTI ON 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, I F ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PENDING ON TH E DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKIN G OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE : 8. FROM THE PERUSAL OF THE AFORESAID PROVISION, IT IS EVIDENT THAT, WHERE SEARCH HAS BEEN INITIATED U/S 132 OR REQUISIT ION HAS BEEN MADE UNDER SECTION 132A, IT IS INCUMBENT UPON THE ASSESS ING OFFICER TO ISSUE NOTICES REQUIRING THE PERSON SEARCHED TO FILE RETUR N OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CO NDUCTED. THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE TOT AL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. THUS, IT IS STATUTORY MANDATE UPON THE ASSESSMENT OFFICER TO AS SESS OR REASSESS THE ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 7 TOTAL INCOME ON WHICH A PERSON CAN BE SAID TO BE AS SESSABLE UNDER THE PROVISIONS OF THE ACT. THE FIRST PROVISO COVERS THE INCOME WHICH IS TO BE ASSESSED I.E. EMANATING NOT ONLY, FROM THE DECLARED SOURCES BUT ALSO FROM ANY MATERIAL FOUND DURING THE COURSE OF SEARCH . HOWEVER IF THE ASSESSMENT HAS ALREADY BEEN MADE OR FINALIZED BEFOR E THE DATE OF SEARCH, THEN THE AO CAN REASSESS THE TOTAL INCOME O N THE BASIS OF MATERIAL FOUND OR GATHERED DURING THE COURSE OF SEA RCH OVER AND ABOVE THE INCOME WHICH ALREADY STOOD ASSESSED. HOWEVER, T HE SECOND PROVISO CARVES OUT EXCEPTION/LIMITATION THAT, PENDING ASSES SMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR FOLLOW ING WITHIN THE PERIOD OF SIX YEARS ON THE DATE OF SEARCH, THE SAME GETS ABATED. IN OTHER WORDS, THE ASSESSMENTS WHICH HAVE NOT ATTAINED FINA LITY AND ARE PENDING ON THE DATE OF SEARCH, THEN THE SAME DOES NOT GETS ABATED. THE ASSESSMENTS WHICH HAVE ABATED, FRESH DETERMINATION OF TOTAL INCOME WOULD BE REQUIRED WHICH CAN BE MADE ON THE BASIS OF MATERIAL ALREADY ON RECORD AS WELL AS MATERIAL GATHERED DURING THE C OURSE OF SEARCH. HOWEVER, THE ASSESSMENTS WHICH HAVE ALREADY ATTAINE D FINALITY AND DOES NOT GET ABATED, THEN THEY HAVE TO BE ASSESSED ON TH E SAME INCOME AND CANNOT INCLUDE ANY TIME OF INCOME FOR WHICH NO INCR IMINATING MATERIAL HAS BEEN FOUND. THE REASON BEING THAT THE ASSESSMEN TS WHICH ARE PENDING AND GET ABATED, THE ENTIRE INCOME HAS TO BE DETERMINED WHICH INCLUDES MATERIAL ALREADY ON RECORD AND ALSO THE MA TERIAL FOUND AS A RESULT OF SEARCH. HOWEVER, STATUTE HAS CARVED OUT T HE EXCEPTION TO THOSE ASSESSMENTS WHICH HAVE ATTAINED FINALITY, BECAUSE T HOSE ASSESSMENTS DOES NOT GET ABATED. IN SUCH A SITUATION, THE INCOM E WHICH HAS ALREADY BEEN ASSESSED, THE SAME CANNOT BE DISTURBED UNLESS SOME INCRIMINATING INFORMATION OR MATERIAL IS FOUND SUGGESTING THAT TH E INCOME WHICH ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 8 ALREADY STOOD ASSESSED REQUIRES TO BE REASSESSED ON THE BASIS OF NEW MATERIAL FOUND. THIS PROPOSITION HAS BEEN UPHELD AN D CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MU RLI AGRO PRODUCTS LTD. (SUPRA) IN THE FOLLOWING MANNER:- 10). THUS ON A PLAIN READING OF SECTION 153A OF TH E INCOME-TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF PROCEED INGS UNDER SECTION 153A, IT IS ONLY THE ASSESSMENT/REASSESSMEN T PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH U NDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF THE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREAD Y FINALIZED FOR THOSE ASSESSMENT YEARS COVERED' UNDER SECTION 1 53A OF THE ACT. BY A CIRCULAR NO.8 OF 2003 DATED 18-9-2003 (SE E 263 ITR (ST) 61 AT 107) THE CBDT HAS CLARIFIED THAT ON / IN ITIATION OF PROCEEDINGS UNDER SECTION 153A, THE PROCEEDINGS PEN DING IN APPEAL, REVISION OR RECTIFICATION PROCEEDINGS FINAL IZED ASSESSMENT/ AGAINST REASSESSMENT SHALL NOT ABATE. IT IS ONLY BE CAUSE, THE FINALIZED ASSESSMENTS/REASSESSMENTS DO NOT ABATE, T HE APPEAL, REVISION OR RECTIFICATION PENDING AGAINST FINALIZED ASSESSMENTS/REASSESSMENTS WOULD NOT ABATE. THEREFOR E, THE ARGUMENT OF THE REVENUE, THAT ON INITIATION OF PROC EEDINGS UNDER SECTION 153A, THE ASSESSMENTS/REASSESSMENTS FINALIZ ED FOR THE YEARS COVERED UNDER SECTION 153A OF THE INCOME-TAX ACT STAND ABATED CANNOT BE ACCEPTED. SIMILARLY ON ANNULMENT O F ASSESSMENT MADE UNDER SECTION 153A (1) WHAT STANDS REVIVED IS THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS WHI CH 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 THE AS SESSMENT YEAR 1998-99 WAS FINALISED ON 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 W OULD NOT AFFECT THE ASSESSMENT FINALISED ON 29-12-2000. 12) ONCE IT IS HELD THAT THE ASSESSMENT FINALISED O N 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED U NDER SECTION 80HHC OF THE INCOME-TAX ACT AS WELL AS THE LOSS COM PUTED UNDER THE ASSESSMENT DATED 29-12-2000, WOULD ATTAIN FINAL ITY. IN SUCH A CASE, THE AO WHILE PASSING THE INDEPENDENT ASSESSME NT ORDER UNDER SECTION 153A READ WITH SECTION 143 (3) OF THE I.T. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/ REASSESSME NT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS G ATHERED IN THE ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 9 COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME-TAX ACT ESTABLISH THAT THE RELIEFS GRANTED UNDER THE FI NALISED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153 A PROCEEDINGS. 13) IN THE PRESENT CASE, THERE IS NOTHING ON RECORD ' TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH O R DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF U NDER SECTION, 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE A .O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A REA D WITH SECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSM ENT ORDER FINALIZED ON 29.12.2000 RELATING TO SECTION 80 HHC DEDUCTION AND CONSEQUENTLY THE CIT COULD NOT HAVE INVOKED JURISDI CTION UNDER SECTION 263 OF THE ACT. THE PRINCIPLE AND THE RATIO REITERATED IN PARA 12 O F THE AFORESAID ORDER MAKES IT ABUNDANTLY CLEAR THAT, THE ASSESSING OFFIC ER WHILE PASSING THE ASSESSMENT ORDER U/S 153A CANNOT DISTURB THE ASSESSMENTS/REASSESSMENT ORDER WHICH HAD ATTAINED F INALITY, UNLESS MATERIAL GATHERED IN THE COURSE OF SEARCH ESTABLISH ES THAT THE EARLIER ASSESSMENT FINALIZED IS CONTRARY TO THE FACT. 9. THIS PRINCIPLE HAS AGAIN BEEN REITERATED BY THE HONBLE RAJASTHAN HIGH COURT, WHEREIN LORDSHIPS AFTER ANALYZING THE E NTIRE PROVISION OF SECTION 153A, HELD AND CONCLUDED AS UNDER:- 22. THE UNDERLYING PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER S. 153A OF THE ACT IS, THEREFORE, TO A SSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISC LOSED. THE PURPOSE OF SECOND PROVISO IS ALSO VERY CLEAR, IN AS MUCH AS ONCE AN ASSESSMENT OR REASSESSMENT IS 'PENDING' ON THE D ATE OF INITIATION OF SEARCH OR REQUISITION AND IN TERMS OF S. 153A A RETURN IS FILED AND THE AO IS REQUIRED TO ASSESS THE SAME, THERE CANNOT BE TWO ASSESSMENT ORDERS DETERMINING THE TOTAL INCO ME OF THE ASSESSEE FOR THE SAID ASSESSMENT YEAR AND THEREFORE , THE PROVISO PROVIDES FOR ABATEMENT OF SUCH PENDING ASSESSMENT A ND REASSESSMENT PROCEEDINGS AND IT IS ONLY THE ASSESSM ENT MADE UNDER S. 153A OF THE ACT THAT WOULD BE THE ASSESSME NT FOR THE SAID YEAR. ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 10 23. THE NECESSARY COROLLARY OF THE ABOVE SECOND. PR OVISO IS THAT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS, WHICH H AVE ALREADY BEEN 'COMPLETED' AND ASSESSMENT ORDERS HAVE BEEN PA SSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND. SUCH O RDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUI SITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROC EEDINGS ARE PENDING. IN SUCH CASES, WHERE THE ASSESSMENT ALREAD Y STANDS COMPLETED, THE AO CAN REOPEN THE ASSESSMENTS OR REA SSESSMENTS ALREADY MADE WITHOUT FOLLOWING THE PROVISIONS OF SS . 147, 148 AND 151 OF THE ACT AND DETERMINE THE TOTAL INCOME OF TH E ASSESSEE. 24. THE ARGUMENT RAISED BY THE COUNSEL FOR THE APPE LLANT TO THE EFFECT THAT ONCE A NOTICE UNDER S. 153A OF THE ACT IS ISSUED, THE ASSESSMENTS FOR SIX YEARS ARE AT LARGE BOTH FOR THE AO AND ASSESSEE HAS NO WARRANT IN LAW. 25. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SS. 132 AND 132A OF THE ACT, IT IS APPARENT T HAT: . (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND A BATED IN TERMS OF SECOND PROVISO TO S. 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS H AVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCO ME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THUS, RESPECTFULLY FOLLOWING THE AFORESAID PROPOSIT ION BY THE HONBLE HIGH COURTS, WE HOLD THAT IN THIS CASE, THE ASSESSM ENT FOR THE A.YS. 2002-03 AND 2004-05 HAD ATTAINED FINALITY AND ADMIT TEDLY THERE BEING NO INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH RELATING TO THE ADDITION MADE ON ACCOUNT OF DEEMED DIVIDEND, TH EREFORE, SUCH AN ADDITION DE HORS ANY MATERIAL FOUND DURING THE COURSE OF THE SEARCH , CANNOT BE ROPED IN THE ASSESSMENT MADE U/S 153A BY THE ASSESSING OFFICER. ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 11 10. NOW, COMING TO THE DECISION OF ITAT MUMBAI BENC H IN THE CASE OF SATISH L. BABLADI, AS RELIED UPON LD. DR, FROM THE PERUSAL OF THE SAID DECISION IT IS SEEN THAT THE TRIBUNAL HAS STRONGLY RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA REPORTED IN (2013) ITR 493 (DELHI). THE HONBLE DELHI HIGH COURT WITH REGARD TO THE QUESTION, AS TO WHETHER ANY ADDITION CAN BE MADE IN RESPECT OF COMPLETED ASSESSMENT WHEN NO INCRIMINATI NG MATERIAL WAS FOUND HAS BEEN LEFT OPEN TO BE ANSWERED. OTHER OBS ERVATIONS MADE BY THE HONBLE HIGH COURT IS IN THE FORM OF OBITER DICTA BECAUSE THIS SPECIFIC ISSUE HAS BEEN LEFT OPEN. MOREOVER THE HON BLE JURISDICTIONAL HIGH COURT IN CASE OF MURLI AGRO PRODUCTS LTD. (SUP RA) HAS CATEGORICALLY CLARIFIED THAT THE ASSESSMENT WHICH HAD ATTAINED FI NALITY CANNOT BE DISTURBED UNLESS INCRIMINATING MATERIAL IS FOUND IN THE COURSE OF SEARCH. THEREFORE, THE DECISION OF THE TRIBUNAL IN S.L. BAB LADIS CASE, CANNOT BE RELIED UPON AS THEY HAVE NOT CONSIDERED THE RATIO A ND PRINCIPLE LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT. 11. ACCORDINGLY, THE ADDITION ON ACCOUNT OF DEEMED DIVIDEND OF RS.1,69,68,750/- IN THE A.Y. 2002-03 AND ADDITION O F RS.4,62,91,123/- ON ACCOUNT OF DEEMED DIVIDEND U/S 2(22)(E) IS DELET ED AS SAME IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A. THE ADDITI ONAL GROUND THUS RAISED BY THE ASSESSEE IS ALLOWED. IN VIEW OF THE F INDING GIVEN HERE-IN- ABOVE, WE ARE NOT GOING INTO THE MERITS OF THE ADDI TION AS DISCUSSED BY THE AO AS WELL AS LD. CIT(A), AS THEY HAVE BECOME P URELY ACADEMIC. ITA NO. 1553 & 3173/MUM/2010 ASSESSMENT YEAR: 2002-03 & 2004-05 12 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF FEBRUARY, 2015. SD/- SD/- (N.K. BILLAIYA) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 13.02.2015 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR L BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.