NAVRATTAN KOTHARI, Jaipur V. ACIT, Jaipur

ITA 425/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1847 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 24-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VRINDER MEHTA
• Assessee Lawyers: S R SHARMA; R K BHATRA
• Keywords: Reopening of assessment; Depreciation; Search and seizure; Document seized; Question of law; Tangible material; Difference of opinion; Block assessment; Reason to believe; Documents seized; Change of opinion; Reassessment proceedings
• Section: 143(3); 153A; 32; 147; 131; 68; 148; 132; 10; 139

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; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 425/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 SHRI NAVRATTAN KOTHARI, B-1, B-2, KOTHARI HOUSE, PRITHVIRAJ ROAD, C-SCHEME, JAIPUR. CUKE VS. THE ACIT, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AACPK6149G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S. R. SHARMA (C.A.)& SHRI R.K. BHATRA (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VRINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 13/11/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 13/12/2017 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 31.03.2017 OF CIT (A), JAIPUR FOR A.Y. 2008-09. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED IN LAW IN CONFIRMING THE ACTION OF LD. AO BY HOLDING THAT INITIATION OF PROCEEDINGS U/S 148 IN C ASE OF ASSESSEE IS VALID AND THEREBY UPHOLDING THE CONSEQUENT REASS ESSMENT ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 2 PASSED BY LD. AO. THE LD. CIT(A) HAS ERRED IN LAW W HILE UPHOLDING THE SAID ACTION OF LD. AO WITHOUT APPRECIATING:- (A) THAT ADDITION MADE IN REASSESSMENT BY AO WAS MADE PROTECTIVELY AND THUS THERE WAS NO REASON TO BELIEV E BUT THERE WAS ONLY REASON TO SUSPECT. (B) IGNORING THAT FOR INITIATION OF PROCEEDINGS THERE W AS NO VALID APPROVAL OF COMPETENT AUTHORITIES AS MANDATED BY SECTION 151 OF I.T. ACT, 1961. 1. THAT THE INITIATION OF PROCEEDINGS U/S 147 AND ISSU E OF NOTICE U/S 148 OF I.T. ACT, 1961 IN CASE OF ASSESSEE BY LD . AO IS OTHERWISE ALSO WRONG AND BAD IN LAW IN AS MUCH AS F OR INITIATING PROCEEDING U/S 147 THE LD. AO CONSIDERIN G THE DOCUMENTS SEIZED IN SEARCH ACTION U/S 132 ON A THIR D PARTY WHICH LD. AO HELD TO PERTAIN TO OR INFORMATION CONT AINED THEREIN RELATE TO THE ASSESSEE AND THUS ON THESE FA CTS OF THE CASE THE LD. AO IN LAW COULD ONLY INITIATE ACTION U /S 153C OF THE I.T.ACT, 1961. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN EXERCISING THE POWER OF ENH ANCEMENT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW IN MAKING SUBSTANTIVE ADDITION O F RS. 16,72,19,309/- AS UNDISCLOSED INVESTMENT MADE IN C ASH U/S 68 IN THE HANDS OF ASSESSEE AS AGAINST RS. 14,24,1 2,650/- MADE BY AO ON PROTECTIVE BASIS AS UNDISCLOSED INV ESTMENT WITHOUT APPRECIATING THE FACTS OF THE CASE PROPERLY . THE LD. CIT(A) WHILE CONFIRMING/ENHANCING THE SAID ADDITION :- (A) WRONGLY DIRECTED FURTHER ENQUIRY U/S 250(4) TO AN O FFICER OTHER THAN ASSESSING OFFICER OF ASSESSEE AND RELYIN G AND CONSIDERING THE REMAND/ENQUIRY REPORT SENT BY SAID OTHER OFFICER WHILE ONLY THE ASSESSING OFFICER OF ASSESSE E CAN BE DIRECTED TO SEND REQUIRED REPORT U/S 250(4). (B) WITHOUT AFFORDING PROPER OPPORTUNITY OF CROSS EXAMI NATION AS THE SAID CROSS EXAMINATION HAS TO BE BEFORE THE ADJUDICATING AUTHORITY/OFFICER AND NOT BEFORE ANY O THER OFFICER. ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 3 (C) HAS ERRED IN LAW IN ALLOWING THE DCIT-CENTRAL CIRCL E-1 TO REVIEW THE ORDER OF ACIT CENTRAL CIRCLE-2 AND FURTH ER ERRED IN HIMSELF BEING DIRECTED BY THE REMAND REPORT RATH ER THAT DECIDING THE SAME IN APPEAL HIMSELF. (D) WRONGLY HELD THAT ASSESSEE BELONGS TO RAJENDRA JAIN GROUP AND CONSIDERING AND RELYING ON VARIOUS ABSOLUTELY W RONG FACTS AS APPEAR FROM APPEAL ORDER; (E) ONLY RELYING ON STATEMENT OF THIRD PARTY-MADAN MOHA N GUPTA WITHOUT EXAMINING THE AUTHENTICITY THEREOF WH ICH IS UNSUPPORTED WITH ANY EVIDENCE OR CORROBORATIVE EVID ENCE ON RECORD MORE SO WITHOUT ANY TESTIMONY OR EXAMINAT ION OF THE PRIMARY PERSONS I.E. FARMERS WHO WERE OWNERS OF IMPUGNED LAND FOR WHICH UNDISCLOSED INVESTMENT IN C ASH BY ASSESSEE IS ALLEGED AND EVEN NO PROCEEDINGS UNDER I .T. ACT HAVE TAKEN PLACE IN THE CASES OF THESE FARMERS. (F) RELYING ON STATEMENTS OF THIRD PARTY MADAN MOHAN GU PTA WHO WAS CHANGING HIS STAND TIME AND AGAIN AND MAKIN G CONTRADICTORY STATEMENTS; (G) RELYING ON STATEMENTS OF MADAN MOHAN GUPTA FOR MAKI NG ADDITION OF UNDISCLOSED INVESTMENT MADE IN CASH IGN ORING THAT MADAN MOHAN GUPTA AND OTHER CONNECTED PARTIES DENIED/NOT ACCEPTED ANY CASH RECEIPT/PAYMENT. (H) RELYING ON THE STATEMENT OF MADAN MOHAN GUPTA WHO HIMSELF WAS INTERESTED PARTY AND WAS BENEFITTED BY HIS OWN STATEMENTS. (I) RELYING ON JUMBLED NOTINGS IN DIARY SEIZED/IMPOUNDE D IN THE COURSE OF SEARCH/SURVEY FROM MADAN MOHAN GUPTA WHEREIN ALLEGEDLY SOME NOTINGS ARE IN CODE FIGURES AND SOME IN FULL FIGURES AND ARE NOTINGS OF NAMES IN ABBREVIATED FORM AND THEREBY HOLDING WITHOUT ANY CORROBORATIVE EVIDENCE THAT SOME OF THESE NOTINGS P ERTAIN TO ASSESSEE. (J) WRONGLY HOLDING WITHOUT EVIDENCE THAT ASSESSEE MADE UNDISCLOSED INVESTMENT IN CASH IN PURCHASING 80% SH ARE IN LAND TO THE EXTENT OF RS. 15,87,19,309/- WHILE ACTU ALLY ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 4 ASSESSEE PURCHASED 80% SHARES OF M/S SHRI KALYAN BUILDMART PVT. LTD. FOR RS. 8,00,000/- ONLY WHO ACT UALLY PURCHASED THE SAID LAND AS PER REGISTERED DOCUMENT AND FURTHER WRONGLY HOLDING THAT UNDISCLOSED INVESTMENT IN CASH AMOUNTING TO RS. 85,00,000/- WAS MADE BY ASSESSEE I N PURCHASE OF LAND AT BHANKROTA WHILE THE SAID LAND W AS PURCHASED BY M/S KESHRIMAL GHISILAL KOTHARI(HUF). 4. THE ASSESSEE CRAVES PERMISSION TO ADD TO OR AMEND T O ANY OF GROUNDS OF APPEAL OR TO WITHDRAW ANY OF THEM. 2. GROUND NOS. 1 & 2 ARE REGARDING VALIDITY OF REO PENING OF ASSESSMENT U/S 147/148 OF THE ACT. THE BRIEF FACTS RELEVANT TO THIS ISSUE AS RECORDED BY THE AUTHORITIES BELOW ARE AS UNDER:- THE ASSESSEE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 26.09. 2008 DECLARING TOTAL INCOME OF RS. 24,00,546/-. SUBSEQUENTLY A SEARCH AN D SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF T HE ASSESSEE AND CONSEQUENTLY ASSESSMENT U/S 143(3) R.W.S. 153A WAS COMPLETED AT THE TOTAL INCOME OF RS. 24,38,074/- ON 31.03.2013. THER EAFTER, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN CASE OF SHRI RAJENDRA JAIN GROUP AND HIS ASSOCIATES GROUP MEMBERS ON 23.05.201 3. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION INTER ALIA A DIARY WAS SEIZED FROM THE POSSESSION OF SHRI MADAN MOHAN GUPTA WHO WAS PA RT OF RAJENDRA JAIN GROUP. THIS DIARY ALLEGEDLY CONTAINED TRANSACT IONS OF CASH DEALING IN RESPECT OF LAND SITUATED AT VILLAGE CHAINPURA, T EHSIL SANGANER, JAIPUR, ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 5 RAJASTHAN. THE STATEMENTS OF SHRI MADAN MOHAN GUPTA WERE RECORDED DURING THE SEARCH AND POST SEARCH ENQUIRY WHEREIN H E STATED THAT THE LAND IN QUESTION WAS PURCHASED BY SHRI RAJENDRA KUM AR JAIN THROUGH HIM. THE DEAL WAS STATED TO BE FINALIZED AT RS. 12, 43,27,000/- OUT OF WHICH DISCOUNT OF 1% WAS ALLOWED FOR REGISTRATION O F LAND. THEREFORE, RS. 12,30,84,000/- WAS NET PAYABLE AMOUNT TO THE S ELLER. LATER ON THIS LAND WAS SOLD TO SHRI K.G. KOTHARI THE ASSESSEE IN THIS CASE. IT WAS ALSO STATED BY SHRI MADAN MOHAN GUPTA THAT THE LAND WAS PURCHASED IN THE NAME OF M/S KALYAN BUILDMART PVT. LTD. (SKBPL) IN W HICH HE WAS A DIRECTOR ALONG WITH HIS WIFE SMT. SHASHI KALA GUPTA . WE THINK IT PROPER TO CLARIFY HEAR THAT IN FACT THE TRANSACTION OF PUR CHASE OF LAND IN QUESTION WAS BETWEEN THE M/S KALYAN BUILDMART PVT. LTD. AND THE LAND OWNER AS PER THE REGISTERED SALE DEED. IT IS ONLY I N THE STATEMENT RECORDED DURING SEARCH AND POST SEARCH INVESTIGATIO N SHRI MADAN MOHAN GUPTA STATED THAT HE PURCHASED THE LAND ON BEHALF O F SHRI RAJENDRA JAIN. SUBSEQUENTLY THE LAND WAS STATED TO HAVE BEEN SOLD TO SHRI NAVRATTAN KOTHARI (ASSESSEE), SHRI VIMAL CHAND SURA NA HUF AND KUSHAL CHAND SURANA BY WAY OF SALE/TRANSFER OF SHARES OF M /S M/S KALYAN BUILDMART PVT. LTD..THEREFORE, IT WAS A TRANSACTION OF THE TRANSFER OF SHARES OF THE COMPANY OWNED BY MR. MANDAN MOHAN GUP TA AND HIS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 6 WIFE SMT. SHASHI KALA GUPTA AND NOT A DIRECT SALE O F LAND. ON THE BASIS OF THESE FACTS AS GATHERED FROM THE DOCUMENTS SEIZE D AND STATEMENT OF MR. MANDAN MOHAN GUPTA, THE ASSESSING OFFICER PROPO SED TO REOPEN THE ASSESSMENT BY ISSUING A NOTICE U/S 148 ON 25.03.201 4 ON THE REASONS THAT THE TRANSACTION AS FOUND IN THE SEIZED MATERIA L OF RS. 14,24,12,650/- WERE NOT SATISFACTORILY EXPLAINED BY THE ASSESSEE AND TO THE EXTENT OF THE SAID AMOUNT THE INCOME HAS ESC APED ASSESSMENT. THE AO COMPLETED THE REASSESSMENT U/S 143(3) R.W.S. 147 ON 27.03.2015 WHEREBY AN ADDITION OF RS. 14,24,12,650/ - WAS MADE IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS BECAUSE THE SUBSTANTIVE ADDITION WAS MADE IN THE HANDS OF SHRI MAHAN MOHAN GUPTA. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND ALSO RAISED THE OBJECTIONS AGAINST THE VALIDITY OF REOPE NING OF ASSESSMENT. THE LD. CIT(A) UPHELD THE VALIDITY OF REOPENING OF ASSESSMENT AND ALSO ENHANCED THE ASSESSMENT BY MAKING THE SAID ADDITION IN THE HANDS OF THE ASSESSEE ON SUBSTANTIVE BASIS INSTEAD OF PROTEC TIVE BASIS MADE BY THE AO. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT IN THIS CASE THE ASSESSING OFFICER REOPEN THE ASSESSMENT ON THE BASIS OF CERTAIN INCRIMINATING DOCUMENTS FOUND DURING THE CO URSE OF SEARCH IN ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 7 CASE OF RAJENDRA JAIN GROUP. HE HAS REFERRED TO THE REASONS RECORDED BY THE AO FOR REOPENING OF THE ASSESSMENT AND SUBM ITTED THAT THE AO FORMED THE BELIEVE THAT INCOME ESCAPED ASSESSMENT ON THE BASIS OF DIARY SEIZED DURING THE SEARCH AND STATEMENT OF S HRI MADAN MOHAN GUPTA RECORDED U/S 132(4) OF THE ACT. HOWEVER, THE REASSESSMENT PURSUANT TO THE MATERIAL FOUND IN THE SEARCH CAN BE DONE THROUGH RECOURSE OF SECTION 153C ONLY AND NOT BY INVOKING T HE PROVISIONS OF SECTION 147/148 OF THE ACT. THE PROVISIONS OF SECTI ON 153C ARE OVERRIDING IN NATURE AND CONTEND NON OBSTANTE CLAUS E FOR SECTIONS 139, 147, 148, 149, 151 AND 153 OF THE ACT. THE LD. AR H AS FURTHER SUBMITTED THAT THE LD. CIT(A) WHILE REJECTING THE OBJECTIONS OF THE ASSESSEE HAS HELD THAT THE PRESUMPTION U/S 292C R.W.S. 132(4A) O F THE ACT IS THAT THE DOCUMENTS BELONG TO THE PERSONS I.E. THE ASSESSEE, SHRI VIMAL CHAND SURANA HUF AND KUSHAL CHAND SURANA. THE LD. CIT(A) ALSO HELD THAT THE SEIZED DOCUMENTS ARE NOT THIRD PARTY DOCUMENTS AS S RI MADAN MOHAN GUPTA BEING DEED WRITER OF THEM HAS BEEN ACCEPTED B Y THE ASSESSEE AND OTHER PERSONS IN THE STATEMENT RECORDED ON OATH . THEREFORE, THE AUTHORITIES BELOW HAVE PROCEEDED TO REASSESS THE IN COME AND MADE THE ADDITION ONLY ON THE BASIS OF THE SEIZED MATERIAL F OUND DURING THE SEARCH. THAT BEING THE CASE THE REASSESSMENT COULD BE DONE U/S 153C ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 8 R.W.S. 153A AND RECOURSE OF SECTION 147/148 IS CON TRARY TO THE SPECIFIC PROVISIONS OF LAW AND THEREFORE, THE REASSESSMENT O RDER IS VOID ABINITIO AND LIABLE TO BE QUASHED. THE LD. AR HAS FORCEFULLY CONTENDED THAT SECTIONS 147 AND 153C ARE NOT INTER CHANGEABLE BUT ARE MUTUALLY EXCLUSIVE SECTIONS. IT IS NOT THE CHOICE OF THE AO TO INVOKE EITHER OF TWO SECTIONS AT ITS WHIMS. THE SCOPE OF TWO SECTIONS HA VE BEEN LEGISLATED DIFFERENTLY WITH A DEFINITE PURPOSE. THE LD. AR HAS RELIED UPON THE DECISION OF AMRITSAR BENCH OF THIS TRIBUNAL IN CASE OF ITO VS. ARUM KUMAR KAPOOR 140 TTJ 249 AND SUBMITTED THAT THE TRI BUNAL HAS HELD THAT THE REASSESSMENT PROCEEDINGS INITIATED U/S 148 WERE ILLEGAL AND VOID ABINITIO AS THE ASSESSING OFFICER SHOULD HAVE ISSUED NOTICE U/S 153C AND SHOULD HAVE FRAMED U/S 153C R.W.S. 153A. T HE ASSESSING OFFICER HAS NOT FOLLOWED THE PROCEDURE LAID DOWN U/ S 153C AND THEREFORE, THE NOTICE ISSUED U/S 148 AND REASSESSME NT PROCEEDINGS BECOME ILLEGAL AND VOID ABINITIO. HE HAS THEN RELIE D UPON THE DECISION OF VISAKHAPATNAM BENCHES OF THIS TRIBUNAL IN CASE OF G . KOTESWARA RAO V/S DCIT 64 TAXMANN.COM 159 AND SUBMITTED THAT THE TRIBUNAL HAS HELD THAT THE AO HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 TO REOPEN THE ASSESSMENT ON THE BASIS OF SEIZED MATERIAL FOUND DU RING THE SEARCH SO FAR AS THE ASSESSMENT FALLS WITHIN 6 ASSESSMENT YEA RS IMMEDIATELY ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 9 PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CO NDUCTED OR REQUISITION IS MADE. THE PERIOD UNDER CONSIDERATION FALLS WITHIN THE EXCLUSIVE DOMAIN OF SECTION 153A. SINCE THE ASSESSM ENT IS MADE CONSEQUENT TO SEARCH IN ANOTHER CASE, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE U/S 153C AND THEREAFTER TO PROCEED TO ASSESS OR REASSESS TOTAL INCOME UNDER SECTION 153A OF THE ACT. THE LD. AR HAS THEN RELIED UPON THE DECISION OF DELHI BENCHES OF THE TRIBUNAL DATED 20.05.2016 IN CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT IN ITA NO. 2403/DEL/2015 AND SUBMITTED THAT THE TRIBUNAL HAS TAKEN A CONSISTENT VIEW AS TAKEN BY THE AMTRISAR AND VISAKHAPATNAM BENCHES. THE LD. AR HAS THEN RELIED UPON THE DECISION OF HONBLE JURISDICTION HIGH COURT IN CASE OF ASHOK KUMAR BATWANI TALWANDI DATED 10.01.2017 IN ITA NO. 204/20 04 AND SUBMITTED THAT THE ASSESSING OFFICER NOT FOLLOWING THE PROCED URES AS PER THE PROVISIONS OF THE INCOME TAX ACT WHILE FRAMING THE ASSESSMENT RENDERS THE ASSESSMENT INVALID. THE HONBLE HIGH COURT HAS HELD THAT THE AUTHORITY WHO IS ISSUING THE NOTICE MUST BE AWARE O F THE ACT AND MUST CONSTRUE THE PROVISIONS STRICTLY. HENCE, THE LD. AR OF THE ASSESSEE HAS PLEADED THAT THE NOTICE ISSUED U/S 148 AND CONSEQUE NTIAL REASSESSMENT ARE ILLEGAL VOID ABINITO. ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 10 4. THE SECOND LEG OF CONTENTION OF THE LD. AR IS TH AT EVEN OTHERWISE THE REOPENING OF THE ASSESSMENT AFTER 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT IN THE CASE OF THE ASSESSEE IS NOT PERMISSIBLE AS THE AO WAS NOT HAVING THE JURISDICTION TO ISSUE NOT ICE U/S 148 WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) AND TH E ASSESSING OFFICER HAS NOT ALLEGED IN THE REASONS RECORDED THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THUS, THE LD AR HAS S UBMITTED THAT WHEN THE ASSESSING OFFICER HAS NOT MENTIONED IN THE REAS ONS RECORDED THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT WHICH HAS RESULTED INT O ESCAPEMENT OF INCOME, THE REOPENING AFTER 4 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR IS BAD IN LAW. IN SUPPORT OF HIS CO NTENTION HE HAS RELIED UPON THE FOLLOWING DECISIONS:- CIT VS. ARVIND REMEDIES LTD. 378 ITR 547 (MADRAS). SITARA DIAMOND (P.O LTD. 345 ITR 91 (BOMBAY). GUJARA LEASE FINANCING LTD. 219 TAXMAN 70 (GUJARA T H.C.) ACCORDINGLY, THE LD. AR OF THE ASSESSEE HAS SUBMITT ED THAT WHEN THE ASSESSING OFFICER HAS NOT ALLEGED ANY FAILURE ON TH E PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE FACTS NECESSAR Y FOR THE ASSESSMENT ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 11 THEN THE REOPENING OF THE ASSESSMENT AFTER 4 YEARS IS NOT VALID LIABLE TO BE QUASHED. 5. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT THE RE IS NO BAR ON THE POWERS OF THE AO TO ISSUE NOTICE U/S 148 INSTE AD OF SECTION 153C OF THE ACT. THE AO HAS DULLY RECORDED THE REASONS FOR REOPENING OF THE ASSESSMENT AND IT WAS OPEN TO THE AO TO INITIATE TH E PROCEEDINGS WHICH ARE APPROPRIATE IN HIS VIEW. HE HAS FURTHER CONTEND ED THAT SINCE THE INITIAL ASSESSMENT WAS COMPLETED SECTION 153A, THER EFORE THE TIME LIMITATION OF 4 YEARS PROVIDED UNDER THE PROVISO TO SECTION 147 IS NOT APPLICABLE IN THE CASE AS IT WAS A CLEAR CASE OF FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE FACTS NECESSARY FOR THE ASSESSMENT. THE LD. DR HAS FURTHER CONTENDED THAT P RIOR TO THE ISSUE NOTICE U/S 148 THE AO HAS CONFRONTED THE SEIZED MAT ERIAL AND THE STATEMENT OF SHRI MADAN MOHAN GUPTA TO THE ASSESSEE , HOWEVER, THE ASSESSEE FAILED TO GIVE A SATISFACTORY EXPLANATION. THEREFORE, THE REOPENING IS NOT SOLELY BASED ON THE SEIZED MATERIA L BUT THE STATEMENT OF THE ASSESSEE RECORDED U/S 131 WAS ALSO CONSIDERE D BY THE AO. THE ASSESSEE DID NOT DISCLOSE THE LAND DEAL IN THE RETU RN OF INCOME AND THEREFORE, IT IS A CLEAR CASE OF FAILURE PART OF TH E ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE FACTS NECESSARY FOR THE ASS ESSMENT. THE AO ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 12 REOPEN THE ASSESSMENT AFTER APPROVAL OF THE REASONS BY THE DY. CIT.. THE ASSESSING OFFICER WAS HAVING IN HIS POSSESSION MATERIAL EVIDENCE PERTAINING TO UNDISCLOSED INCOME OF THE ASSESSEE TO FORM THE REASONS TO BELIEVE THAT INCOME ASSESSABLE TO TAX HAS ESCAPED A SSESSMENT. AFTER DULY RECORDING THE SATISFACTION TO BELIEVE AND FOLL OWING DUE PROCEDURE OF INITIATION OF PROCEEDINGS U/S 147 OF THE ACT THE AO ISSUED NOTICE U/S 148 OF THE ACT. HE HAS RELIED UPON THE ORDERS OF THE AU THORITIES BELOW AND SUBMITTED THAT THERE IS NO ERROR OR ILLEGALITY IN T HE INITIATION OF PROCEEDINGS U/S 148 AND CONSEQUENT REASSESSMENT FRA MED BY THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE MATTER REVOLVES AROUND THE TRANSACTION OF PURCHASE AND SALE OF LAND SITUATED AT VILLAGE CHAIN PURA, TEHSIL SANGANER (BEHIND OF ENTERTAINMENT PARADISE) JAIPUR. THE SAID LAND WAS PURCHASED BY M/S SHRI KALYAN BUILDMART PVT. LTD. ON 24.08.20 06. THEREAFTER THE ASSESSEE PURCHASED 8,000 SHARES M/S SHRI KALYAN BUI LDMART PVT. LTD. FROM SHRI MADAN MOHAN GUPTA AND HIS WIFE SMT. SHASH I KALA GUPTA. THERE IS NO DISPUTE THAT THIS TRANSFER OF PURCHASE OF SHARES OF M/S SHRI KALYAN BUILDMART PVT. LTD. WAS DULLY REFLECTED IN T HE BOOKS OF ACCOUNTS AS ON 31.03.2008 AND ALSO BROUGHT BEFORE THE ASSESS ING OFFICER IN THE ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 13 COURSE OF INITIATION ASSESSMENT COMPLETED U/S 143(3 ) R.W.S. 153A ON 31.03.2013. THEREAFTER THE AO PROPOSED TO REOPEN TH E ASSESSMENT TO ASSESS THE CONSIDERATION PAID BY THE ASSESSEE FOR A LLEGED PURCHASE OF LAND BY ISSUING NOTICE U/S 148 ON 25.03.2014. THE A O RECORDED THE REASONS FOR REOPENING OF THE ASSESSMENT AS REPRODUC E AT PAGE 4 OF THE ASSESSMENT ORDER ARE AS UNDER:- DURING THE COURSE SEARCH AND SEIZURE OPERATION IN THE CASE OF RAJENDRA JAIN GROUP DOS 23-05-2013 AND SURVEY PROCE EDINGS AT THE BUSINESS PREMISES OF SHRI MADAN MOHAN GUPTA, CE RTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED WHICH WERE INVENTORIES AS EXHIBIT 1 TO 5 OF ANNEXURE-AS AND EX HIBIT 1 TO 8 OF ANNEXURE- A. THE DOCUMENTS FOUND AND SEIZED FROM TH E RESIDENCE AND BUSINESS PREMISE OF SHRI MADAN MOHAN GUPTA DURING THE COURSE OF SEARCH PROCEEDINGS REVEALED TH AT ON VARIOUS PAGE OF EXHIBIT- 1,2 & 5 OF ANNEXURE-A AS WELL AS E XHIBIT-1 OF ANNEXURE-AS, SOME DATE WISE AMOUNTS HAVE BEEN WRITT EN IN THE NAME OF KGK. THESE TRANSACTIONS NOTED ON PAGE NO. 28,43,69 AND 73 OF EXHIBIT-1 OF ANNEXURE-A TOTAL UP TO RS. 1 4,24,12,650/-. THE ASSESSEE HAS FAILED TO SATISFACTORILY EXPLAIN T HE TRANSACTIONS RECORDED ON THIS PAGE. I HAVE THUS REASON TO BELIEV E THAT INCOME TO THE EXTENT OF RS. 14,24,12,650/- HAS ESCAPED ASS ESSMENT WITHIN THE MEANING OF SECTION 147OF THE I.T. ACT, 1 961. THUS, IT IS CLEAR THAT THE BASIS OF REOPENING OF TH E ASSESSMENT IS THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH A ND SEIZURE OPERATION IN THE CASE OF RAJENDRA JAIN GROUP AND THE STATEMEN T OF SHRI MADAN MOHAN GUPTA RECORDED U/S 132(4) AND 131 OF THE ACT. THE ASSESSING ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 14 OFFICER ANALYZED THE STATEMENT AND THE SEIZED MATER IAL FOR HIS SATISFACTION AS RECORDED IN PARAS 4 AND 5 OF THE AS SESSMENT ORDER AS UNDER:- 4. IN HIS STATEMENTS, RECORDED DURING THE COURSE O F SEARCH/POST SEARCH PROCEEDINGS, SHRI MADAN MOHAN GU PTA SUBMITTED THAT THE FOLLOWING PAGERS OF VARIOUS EXHI BITS ARE RELATED TO LAND TRANSACTIONS AT CHAINPURA BEHIND EN TERTAIN PARADISE, JAIPUR. SR. ANNEXURE NO. & EXHIBIT NO. PAGE NO. FOUND/SEIZED FROM 1 ANNEXURE A EXHIBIT-1 15 TO 24,27,38,43,44, AND 69 TO 74 RESIDENTIAL PREMISES 2 ANNEXURE A EXHIBIT-2 47 AND BACK SIDE OF 48, 50 TO 54 RESIDENTIAL PREMISES 3 ANNEXURE A EXHIBIT-5 1 TO 77 RESIDENTIAL PREMISES 4 ANNEXURE AS EXHIBIT-1 1 TO 3,7,9,10 OFFICE PREMISES 5. FURTHER IN THE STATEMENTS OF SHRI MADAN MOHAN GU PTA, HE SUBMITTED THAT ON THE ABOVE PAGE, DETAILS W.R.T. A LAND TRANSACTIONS AT VILLAGE CHAINPURA BEHIND ENTERTAINM ENT PARADISE, JAIPUR HAS BEEN RECORDED WHICH WAS PURCHASE BY SHRI RAJENDRA KUMAR JAIN RESIDENT OF D-25, LAL BAHADUR NAGAR, JA IPUR, THROUGH HIM I.E. SHRI MADAN MOHAN GUPTA. THE DEAL WAS FINAL IZED AT RS. 12,43,27,000/- OUT OF WHICH DISCOUNT OF RS. 1% WAS ALLOWED FOR REGISTRATION OF LAND. THEREFORE, RS. 13,30,84,000/- WERE NET PAYABLE TO THE SELLER AND THE DETAILS OF THE SAME H AVE BEEN RECORDED ON PAGE NO. 15-18 OF EXHIBIT-1 OF ANNEXURE -A, FOUND AND SEIZED FROM HIS RESIDENCE. LATER ON THIS LAND W AS SOLD TO SHRI ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 15 K.G. KOTHARI. SHRI MADAN MOHAN GUPTA FURTHER SUBMIT TED THAT THIS LAND WAS PURCHASED IN THE NAME OF M/S KALYAN BUILDM ART PVT. LTD. IN WHICH HE WAS A DIRECTOR ALONG WITH HISWIFE SMT. SHASHIKALA GUPTA. THIS LAND WAS PURCHASED DURING THE YEAR 2006 -07 AND SOLD TO K G. KOTHARI, PRITHVIRAJ ROAD, C-SCHEME, JAIPUR AND SHIR VIMAL CHAND SURANA IN THE MONTH OF MARCH, 2007 AND THE DE TAILS OF THE SAME HAVE BEEN RECORDED ON PAGE NOS. 27 & 28 OF EXH IBIT OF ANNEXURE-A. DURING THE COURSE OF STATEMENT, SHRI MA DAN MOHAN GUPTA ADMITTED THAT THE AMOUNTS MENTIONED AGAINST D ATES HAVE BEEN RECORDED IN CODED FORM SUCH AS RS. 1.00 CRORE HAVE BEEN WRITTEN AS 1=00 AND RS. 50.00 LACS HAVE BEEN WRITTE N AS .50. THIS SALE TRANSACTIONS WERE FINALIZED FOR RS. 20,83,39,2 32/- AND THE PAYMENTS TO THE SELLERS WERE MADE THROUGH SHRI RAME SHWAR PRASAD SHARMA RESIDENT OF BARKAT NAGAR, TONK PHATAK , JAIPUR. SHRI MADAN MOHAN GUPTA FURTHER ADMITTED THAT HE GOT RS. 8.00 LACS AS HIS REIMBURSEMENT FROM THIS LAND TRANSACTIO N. THUS IT REVEALS FROM THE ASSESSMENT ORDER THAT AFTE R THE INITIAL ASSESSMENT U/S 143(3) R.W.S. 153A THE AO GOT THE AL LEGED INCRIMINATING MATERIAL IN THE SHAPE OF DIARY AND TRANSACTIONS REC ORDED THEREIN FOUND AND SEIZED IN THE SEARCH AND SEIZURE OPERATION IN C ASE OF RAJENDRA JAIN GROUP. ACCORDINGLY, THE AO PROCEEDED TO REASSESS TH E INCOME OF THE ASSESSEE U/S 147 OF THE ACT. THE ENTIRE DECISIONS O F THE AO TO REASSESS THE INCOME OF THE ASSESSEE IS BASED ON THE SEIZED M ATERIAL AND STATEMENT OF SHRI MADAN MOHAN GUPTA RECORDED U/S 1 32(4) OF THE ACT FOR WHICH THE SPECIFIC REMEDY IS PROVIDED U/S 153 C OF THE ACT. FOR READY REFERENCE WE QUOTE SECTION 153C AS UNDER:- ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 16 153C. 79 [(1)] 80 [NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT, ( A ) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING, SEIZED OR REQUISITIONED, 81 BELONGS TO; OR ( B ) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISIT IONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A , THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHA LL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] 82 [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND IS SUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 153A , IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETER MINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON 82A [ FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ] FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A ] :] 83 [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 84 [SUB-SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DO CUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON :] 85 [ PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES 86 MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY THE CLAS S OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER S HALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOM E FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE 86A [ AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS AS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A ] EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED.] 87 [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN REC EIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER TH E DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE P REVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR ( A ) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UN DER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 17 ( B ) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB - SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE U NDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR ( C ) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND A SSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MA NNER PROVIDED IN SECTION 153A . THIS SECTION BEGINS WITH NON-OBSTANTE CLAUSE AND TH EREFORE, HAS AN OVERRIDING EFFECT ON THE SECTIONS 147&148 OF THE AC T. AS PER THE SCHEME AND OBJECT OF SECTION 153C R.W.S 153A THE AO HAS NO DISCRETION OR CHOICE TO INVOKE THE PROVISIONS OF SECTION 147/1 48 INSTEAD OF SECTION 153C R.W.S. 153A OF THE ACT. ONCE THE CASE OF REASS ESSMENT IS MADE OUT BY THE AO WHICH FALLS IN THE PREVIEW OF SPECIFI C PROVISIONS OF SECTION 153C OF THE ACT, THE AO CANNOT RESORT TO INVOKE THE PROVISIONS OF SECTION 147/148 OF THE ACT TO ASSESSEE OR REASSESS INCOME OF THE ASSESSEE. THE ACTION OF THE AO TO INITIATE THE PROC EEDINGS UNDER SECTION 147/148 OF THE ACT VITIATES THE ENTIRE REASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER. ONCE, THE AO IS SATISFIED THAT TH E DOCUMENTS SEIZED BELONG TO THE PERSONS OTHER THAN THE SEARCHED PERSO N, THE ASSESSING OFFICER SHALL PROCEED AGAINST SUCH OTHER PERSONS AN D ISSUED NOTICE U/S 153C AND ASSESSEE OR REASSESS INCOME OF SUCH OTHER PERSONS IN ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 18 ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF T HE ACT. THEREFORE, IT IS MANDATORY FOR THE AO TO PROCEED U/S 153C IF HE I S SATISFIED THAT THE SEIZED MATERIAL REVEALS THE INCOME OF SUCH OTHER PE RSONS TO BE ASSESSED OR REASSESSED. THE AMRITSAR BENCH OF THIS TRIBUNAL IN CASE OF ITO VS. ARUM KUMAR KAPOOR (SUPRA) WHILE DECIDING AN IDENTIC AL ISSUE OF VALIDITY OF INITIATION OF PROCEEDINGS U/S 147/148 ON THE BAS IS OF SEIZED MATERIAL HAS HELD IN PARAS 7.2 AND 8 AS UNDER:- 7.2 . THE UNDISPUTED FACTS ARE THAT A SEARCH WAS CONDUC TED UNDER S. 132 OF THE ACT IN THE CASE OF M/S. TODAY HOMES & INFRAS TRUCTURE (P.) LTD. ON 28TH MARCH, 2006, DURING THE COURSE OF WHICH CERTAI N INCRIMINATING DOCUMENTS WERE ALLEGEDLY SEIZED. IT IS ALSO A MATTE R OF RECORD THAT THE DY. CIT, CENTRAL CIRCLE-22, NEW DELHI INTIMATED THE AO OF THE ASSESSEE ABOUT SEIZURE OF CERTAIN DOCUMENTS PERTAINING TO TH E ASSESSEE DURING SEARCH AND ENCLOSED COPY OF THOSE DOCUMENTS REQUEST ING HIM TO TAKE APPROPRIATE ACTION UNDER S. 153C/148 OF THE ACT. IT IS AFTER THAT THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE T HE CIT(A) THE ASSESSEE TOOK AN ADDITIONAL GROUND OF APPEAL TO THE EFFECT THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO UNDER S. 148 ARE ILLEGAL AND VOID AB INITIO. IN THE INSTANT CASE, THE LEARNED CI T(A) HAS CORRECTLY OBSERVED THAT THE AO SHOULD HAVE ISSUED NOTICE UNDE R S. 153C OF THE ACT AND SHOULD HAVE FRAMED THE ASSESSMENT UNDER S. 153C R/W S. 153A OF THE ACT. SEC. 153C OF THE ACT READS AS UNDER : '153C. NOTWITHSTANDING ANYTHING CONTAINED IN S. 139 , S. 147, S. 148, S. 149, S. 151 AND S. 153, WHERE THE AO IS SATISFIED T HAT ANY MONEY, BULLION OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCO UNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHE R THAN THE PERSON REFERRED TO IN S. 153A, THEN THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT AO SHALL PROCEED AG AINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 19 INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF S. 153A.' 8. ON A PERUSAL OF THE ABOVE PROVISIONS, IT WOULD BE CLEAR THAT THE PROVISIONS OF S. 153C OF THE ACT WERE APPLICABLE, W HICH SUPERSEDES THE APPLICABILITY OF PROVISIONS OF SS. 147 AND 148 OF T HE ACT. AS WE HAVE ALREADY NOTED HEREINABOVE THAT THE DOCUMENTS WERE S EIZED DURING THE SEARCH UNDER S. 132 OF THE ACT AND THE SAME WERE SE NT TO THE ASSESSEE'S AO AT AMRITSAR BY THE OFFICER AT DELHI IN OUR VIEW, THE LEARNED CIT(A) HAS CORRECTLY OBSERVED THAT ONLY THE PROVISION IN WHICH ANY ASSESSMENT COULD BE MADE AGAINST THE ASSESSEE IN THE IT ACT WAS S. 1 53C R/W S. 153A OF THE ACT. IT IS ALSO APPARENT FROM THE RECORD THAT T HE OFFICER AT DELHI HAS MENTIONED IN HIS LETTER THAT THE NECESSARY ACTION M AY BE TAKEN AS PER LAW UNDER S. 153C/148 OF THE ACT. HENCE, NOTICE ISSUED UNDER S. 148 OF THE ACT AND PROCEEDINGS UNDER S. 147 OF THE ACT BY THE AO ARE ILLEGAL AND VOID AB INITIO. IN VIEW OF THE PROVISIONS OF S. 153 C OF THE ACT, S. 147/148 STANDS OUSTED. IN THE INSTANT CASE, THE PROCEDURE L AID DOWN UNDER S. 153C HAS NOT BEEN FOLLOWED BY THE AO AND, THEREFORE , ASSESSMENT HAS BECOME INVALID. WE ALSO OBSERVE THAT THE CIT(A) WAS JUSTIFIED IN FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI V. ASSTT. CIT [2007] 289 ITR 341 / 159 TAXMAN 258 WHEREIN IT HAS BEEN HELD THAT IF THE PROCEDURE LAID DOWN IN S. 158BD IS NOT FOLLOWED, BLOCK ASSESSMENT PROCEEDINGS WOULD BE ILLEGAL. THE CIT(A) HAS CORRECTLY OBSERVED THAT THE PROVISIONS OF S. 153C ARE EXACTLY SIMILAR TO THE PROVISIONS OF S. 158BD OF THE ACT IN BLOCK ASSESSME NT PROCEEDINGS. THUS, CONSIDERING THE ENTIRE FACTS AND THE CIRCUMSTANCES OF THE PRESENT CASE, WE HOLD THAT THE CIT(A) WAS FULLY JUSTIFIED IN QUAS HING THE REASSESSMENT ORDER. WE ALSO DO NOT FIND ANY MERIT IN THE SUBMISS IONS OF THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT DURING THE COURSE OF SEARCH, IT WAS FOUND AT PREMISES OF M/S. TODAY HOMES & INFRASTRUCT URE (P.) LTD. PERTAINING TO M/S. P.R. INFRASTRUCTURE LTD. AND NOT THE ASSESSEE. IN THIS REGARD, WE MAY POINT OUT THAT THE CONTENTION RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS FACTUALLY INCORRECT AND CONTRARY TO THE AVAILABLE RECORDS OF SEIZED DOCUMENTS SPECIFICALLY MENTIONED IN THE ASSESSMENT ORDER DT. 30TH DEC, 2008. IN VIEW OF THE ABOVE FACTUAL DISCUSSION, WE DO NOT FIND ANY MERIT AND SUBSTANCE IN THE CONTENTION OF THE LEARNED DEPARTMENTAL REPRESENTATIVE. THEREFORE, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE GROUND NOS. 1 TO 4 OF THE APPEAL. ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 20 A SIMILAR VIEW WAS TAKEN BY THE VISAKHAPATNAM BENCH OF THIS TRIBUNAL IN CASE OF G. KOTESWARA RAO VS. DCIT (SUPRA) IN PAR A 11 TO 17 AS UNDER:- 11. A CAREFUL STUDY OF SECTION 153A TO 153C AND ALSO T HE CIRCULAR ISSUED BY THE CBDT EXPLAINING THE PROCEDURE OF ASSE SSMENT IN SEARCH CASES, IT SHOWS THAT THESE ARE SEPARATE PROV ISIONS INDEPENDENT OF OTHER PROVISIONS RELATING TO REASSES SMENT, BECAUSE OF THE NON ABSTANTE CLAUSE BEGINS WITH THE SAID SECTIONS. THE LANGUAGE USED IN THESE SECTIONS, I.E. 'NOTWITHS TANDING ANYTHING CONTAINED' IN SECTION 139, SECTION 147, SE CTION 148, SECTION 149, SECTION 151 AND SECTION 153 MADE IT CL EAR THAT PROVISIONS OF THESE SECTIONS ARE NOT MADE APPLICABL E TO THE ASSESSMENTS COVERED BY THE PROVISIONS OF SECTION 15 3A. PRIOR TO THE INTRODUCTION OF THESE THREE SECTIONS, THERE WAS A SEPARATE CHAPTER XIV -B OF THE ACT, BY SECTION 158BC TO 158B E WHICH GOVERNS THE SEARCH ASSESSMENTS WHICH IS POPULARLY K NOWN AS BLOCK ASSESSMENT. THE EARLIER PROVISIONS PROVIDES F OR SINGLE ASSESSMENT TO BE MADE IN RESPECT OF UNDISCLOSED INC OME OF BLOCK PERIOD CONSISTING OF 10 ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH TOOK PLACE AND THE BROKEN PERIOD OF UP TO THE DATE OF SEARCH WAS ALSO INCLUDE D IN THE BLOCK PERIOD. AFTER THE INTRODUCTION OF NEW SECTIONS, I.E . SECTION 153A TO 153C, THE SINGLE BLOCK ASSESSMENT CONCEPT WAS DONE WAY WITH THE NEW SCHEME OF ASSESSMENT OF SEARCH CASES WHERE THE ASSESSING OFFICER IS TO ASSESS OR REASSESS THE TOTA L INCOME OF EACH OF THE ASSESSMENT YEARS FALLING WITHIN THE PERIOD O F SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR IN WHICH THE SEARCH IS CONDUCTED. THEREFORE, UNDER THE NEW SCHEME, THE ASSESSING OFFICER IS REQUIRED TO EXERCI SE THE NORMAL ASSESSMENT POWERS IN RESPECT OF THE PREVIOUS YEAR I N WHICH THE SEARCH TOOK PLACE. FROM THESE FACTS, ONE THING IS C LEARLY EMERGED THAT BOTH I.E. EARLIER CONCEPT OF BLOCK ASSESSMENT AND THE NEW ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 21 SCHEME OF ASSESSMENT IS SEPARATE PROVISIONS CREATED FOR ASSESSMENT OF SEARCH CASES WHERE THE SEARCH IS COND UCTED U/S 132 OR REQUISITION WAS MADE U/S 132A OF THE ACT. 12. UNDER THE PROVISIONS OF SECTION 147, THE ASSESSING OFFICER IS HAVING POWER TO RE-OPEN THE ASSESSMENT, IF HE IS OF THE OPINION THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT. BEFORE DOING SO, THE ASSESSING OFFICER SHOULD SATIS FY HIMSELF THAT, THERE IS MATERIAL WHICH SUGGESTS THAT THERE IS AN E SCAPEMENT OF INCOME. THE AO CAN EXERCISE THESE POWERS WITH A REA SONABLE BELIEF COUPLED WITH SOME MATERIAL WHICH SUGGEST THE ESCAPEMENT OF INCOME. ONCE THE CONDITIONS PRECEDENT FOR ASSUMP TION OF JURISDICTION TO COMMENCE THE REASSESSMENT PROCEEDIN GS, HE HAS TO CROSS THE HURDLES ATTACHED WITH REASSESSMENT BY WAY REASONS FOR REOPENING OF ASSESSMENT, TIME LIMIT FOR ISSUE O F NOTICE AND PROVISION FOR OBTAINING SANCTION OF HIGHER AUTHORIT Y IN CERTAIN CIRCUMSTANCES. UNDER THE PROVISIONS OF SECTION 153A TO 153C THESE HURDLES ARE CLEARED BY USING THE NON ABSTANTE CLAUSE IN THE SAID SECTION. IN OTHER WORDS, UNDER THE NEW PROVISI ONS OF SECTION 153A, THE AO IS NOT REQUIRED TO SATISFY THESE CONDI TIONS BEFORE ISSUE OF NOTICE. THE ONLY REQUIREMENT IS THAT THERE SHOULD BE A SEARCH ACTION U/S 132 OR BOOKS OF ACCOUNT, OTHER DO CUMENTS OR ANY OTHER ASSET ARE REQUISITIONED UNDER SECTION 132 A. THEREFORE, WE ARE OF THE OPINION THAT THOUGH, THE ASSESSING OF FICER FROM BOTH SECTIONS EMPOWERED TO TAX THE INCOME ESCAPED F ROM TAX, BOTH ARE WORKS IN A DIFFERENT SITUATIONS, I.E. SECT ION 147 COMES IN TO OPERATION WHERE THERE IS AN ESCAPEMENT OF INCOME CHARGEABLE TO TAX AND SECTION 153A COMES IN TO OPERATION WHERE THERE IS SEARCH U/S 132. 13. UNDER THE PROVISIONS OF SECTION 153A, THE ASSESSIN G OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH TH E RETURNS OF INCOME FOR EACH ASSESSMENT YEARS FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR IN WHICH SEARCH OR REQUISITION IS MADE. ANOTHER SIGNIF ICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOW ERED TO ASSESS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 22 OR REASSESS THE TOTAL INCOME OF THE AFORESAID PERIO D WHICH INCLUDES DISCLOSED AND UNDISCLOSED INCOME. THEREFOR E, THE NEW PROVISIONS HAS GIVEN WIDE POWERS TO THE ASSESSING O FFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS FALLING WITHIN THE PERIOD OF THOSE SIX ASSESSMENT Y EARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. UNDER THE NEW PROVISIONS OF SECTION 153A , THE STATUTE IS PROVIDES WIDE POWERS TO THE ASSESSING OFFICER IN RESPECT OF ASSESSMENTS ALREADY COMPLETED U/S 143(1) OR 143(3). IF SUCH ORDERS IS ALREADY IN EXISTENCE PRIOR TO THE INITIAT ION OF SEARCH, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROC EEDINGS AND REASSESS THE TOTAL INCOME TAKING NOTE OF THE UNDISC LOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH. FOR THIS PURPOSE, THE RESTRICTIONS IMPOSED ON THE ASSESSING OFFICER BY WA Y OF SECTIONS 148 TO 153 TO REOPEN THE ASSESSMENT U/S 147 HAS BEE N REMOVED BY THE NON ABSTANTE CLAUSE USED IN SECTION 153A. 14. IN THE PRESENT CASE ON HAND, ADMITTEDLY, THE ASSES SING OFFICER HAS REOPENED THE ASSESSMENT BASED ON A SEAR CH CONDUCTED IN A THIRD PARTY CASE. THE AO FORMED THE OPINION BASED ON THE STATEMENT RECORDED FROM THE ASSESSEE, CONSEQ UENT TO POST SEARCH PROCEEDINGS TAKEN UP BY THE DDIT(INV), WHICH SHOWS UNDISCLOSED INCOME WHICH IS THE VERY BASIS OF REOPE NING THE ASSESSMENT. THE SEARCH IS CONDUCTED ON 22-8-2008 WH ICH COMES UNDER THE ASSESSMENT YEAR 2009-10. THE ASSESSING OF FICER REOPENED THE ASSESSMENT YEAR 2008-09, WHICH IS FALL ING WITHIN THOSE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING TH E ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. THE A SSESSEE CASE FALLS WITHIN THE PROVISIONS OF SECTION 153C, AS THE INCRIMINATING DOCUMENT SEIZED IN THE CASE OF SEARCH IN ANOTHER CA SE. THE ASSESSING OFFICER, ON SATISFYING THE ABOVE CONDITIO N IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS TOOK PLACE. THEREAFTER, THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE TOTAL INCOME ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 23 OF THOSE SIX ASSESSMENT YEARS. THE WORD 'SHALL' USE D IN SECTION 153A MADE IT CLEAR THAT THE ASSESSING OFFICER HAS N O OPTION, BUT TO ISSUE NOTICE AND PROCEED THEREAFTER TO ASSESS OR REASSESS THE TOTAL INCOME. IN THE INSTANT CASE, THE ASSESSING OF FICER ISSUED NOTICE U/S 148 TO REOPEN THE ASSESSMENT. THEREFORE, IN VIEW OF THE NON-ABSTANTE CLAUSE BEGIN WITH SECTION 153A, TH E ASSESSING OFFICER HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 REOPEN THE ASSESSMENT OF THOSE SIX ASSESSMENT YEAR WHICH FALLS WITHIN THE EXCLUSIVE JURISDICTION OF SECTION 153A. THOUGH, BOT H PROVISIONS OF THE ACT EMPOWERS THE ASSESSING OFFICER TO ASSESS OR REASSESS THE INCOME ESCAPED FROM ASSESSMENT, BOTH SECTIONS ARE D EALING WITH DIFFERENT SITUATIONS. SECTION 147 COMES INTO OPERAT ION WHEN, THE ASSESSING OFFICER BELIEVES THAT THERE IS AN ESCAPEM ENT OF INCOME CHARGEABLE TO TAX, EITHER FROM THE RETURN ALREADY F ILED OR THROUGH SOME EXTERNAL MATERIAL EVIDENCE CAME TO HIS KNOWLED GE, WHICH SHOWS THE ESCAPEMENT OF INCOME. WHEREAS, SECTION 15 3A COMES INTO OPERATION WHEN THERE IS SEARCH U/S 132 OR BOOK S OF ACCOUNTS, OR ANY OTHER ASSET OR OTHER DOCUMENTS REQUISITIONED U/S 132A. IF ASSESSING OFFICER JUSTIFIED IN PROCEEDING WITH SECT ION 147 TO REOPEN THE ASSESSMENT, THEN THERE WOULD BE NO RELEV ANCE TO SECTION 153A, WHICH WAS INSERTED IN TO THE ACT TO D EAL EXCLUSIVELY WITH SEARCH CASES. THE LEGISLATORS IN THEIR WISDOM CLEARLY SPELT OUT THE PROVISIONS OF LAW APPLICABLE TO SEARCH CASES BY USING THE WORD SHALL TO BEGIN WITH SECTION 153A, MADE IT MANDATORY THAT THE ASSESSING OFFICER BOUND TO ISSUE NOTICE U/S 153A OR 153C, THEREAFTER PROCEED TO ASSESS OR REASSESS THE TOTAL INCOME, WHERE SEARCH IS CONDUCTED U/S 132 OR REQUISITION IS MADE U/S 132A. THEREFORE, IN OUR OPINION, THE AO IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT U/S 147 AND HIS ORDER IS ILLEGAL AND ARB ITRARY. 15. A SIMILAR ISSUE CAME UP FOR CONSIDERATION BEFORE T HE SPECIAL BENCH OF THIS TRIBUNAL AND THE SPECIAL BENCH HAD AN OCCASION TO DEAL WITH THE INTERPRETATION OF SECTION 153A OF THE ACT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. V. DY. CIT [2012] 137 ITD 287/23 ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 24 TAXMANN.COM 103 (MUM) (SB) . THE SPECIAL BENCH AFTER CONSIDERING THE PROVISIONS OF SECTION 153A AND CBDT CIRCULAR HA S HELD AS UNDER: '52. THE PROVISION COMES INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. ON SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQU IRING HIM TO FURNISH THE RETURN OF INCOME OF SIX YEARS IMMEDIATE LY PRECEDING THE YEAR OF SEARCH. THE WORD USED IS 'SHALL' AND, THUS, THERE IS NO OPTION BUT TO ISSUE SUCH A NOTICE. THEREAFTER HE HA S TO ASSESS OR REASSESS TOTAL INCOME OF THESE SIX YEARS. IN THIS R ESPECT ALSO, THE WORD USED IS 'SHALL' AND, THEREFORE, THE AO HAS NO OPTION BUT TO ASSES OR REASSESS THE TOTAL INCOME OF THESE SIX YEA RS. THE PENDING PROCEEDINGS SHALL ABATE. THIS MEANS THAT OUT OF SIX YEARS, IF ANY ASSESSMENT OR REASSESSMENT IS PENDING ON THE DATE O F INITIATION OF THE SEARCH, IT SHALL ABATE. IN OTHER WORDS PENDING PROCEEDINGS WILL NOT BE PROCEEDED WITH THEREAFTER. THE ASSESSMENT HA S NOW TO BE MADE U/S 153A (1)(B) AND THE FIRST PROVISO. IT ALSO MEANS THAT ONLY ONE ASSESSMENT WILL BE MADE UNDER THE AFORESAID PRO VISIONS AS THE TWO PROCEEDINGS I.E. ASSESSMENT OR REASSESSMENT PRO CEEDINGS AND PROCEEDINGS UNDER THIS PROVISION MERGED INTO ONE. I F ASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR OTHER LEGAL PROCEEDINGS, THEN THE ABATED ASSESSMENT OR REASSESS MENT SHALL REVIVE. THIS MEANS THAT THE ASSESSMENT OR REASSESSM ENT, WHICH HAD ABATED, SHALL BE MADE, FOR WHICH EXTENSION OF TIME HAS BEEN PROVIDED UNDER SECTION 153B. 53. THE QUESTION NOW IS - WHAT IS THE SCOPE OF ASSE SSMENT OR REASSESSMENT OF TOTAL INCOME U/S 153A (1) (B) AND T HE FIRST PROVISO? WE ARE OF THE VIEW THAT FOR ANSWERING THIS QUESTION , GUIDANCE WILL HAVE TO BE SOUGHT FROM SECTION 132(1). IF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND F OUND IN THE COURSE OF SEARCH IN OUR HUMBLE OPINION SUCH BOOKS O F ACCOUNT OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO ACCOUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME UNDER TH E AFORESAID PROVISION. SIMILAR POSITION WILL OBTAIN IN A CASE W HERE UNDISCLOSED ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 25 INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS INTERPRETATIO N WILL PRODUCE THE FOLLOWING RESULTS :- (A) IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE ORIGINAL ASSESSMENT AND ASSESSMENT U/S 153A MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEA R SHALL BE MADE SEPARATELY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A.O. (B) IN RESPECT OF NON-ABATED ASSESSMENTS, THE ASSES SMENT WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNT OR OTHER DOCU MENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT F OUND IN THE COURSE OF SEARCH, AND UNDISCLOSED INCOME OR UNDISCL OSED PROPERTY DISCOVERED IN THE COURSE OF SEARCH.' 58. THUS, QUESTION NO. 1 BEFORE US IS ANSWERED A) A S UNDER (A) IN ASSESSMENTS THAT ARE ABATED, THE A.O. RETAIN S THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM UNDER S. 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY ;' 16. IN YET ANOTHER CASE, THE ITAT MUMBAI BENCH, IN THE CASE OF STATE BANK OF INDIA V. DY CIT [2013] 22 ITR (TRI B.) 609, HAD CONSIDERED THE ISSUE. THE MUMBAI BENCH AFTER CONSID ERING THE RELEVANT SECTIONS AND CBDT CIRCULAR HAS HELD AS UND ER: '18. A PERUSAL OF SECTION 153A SHOWS THAT IT STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCE DURE WHICH IS COVERED BY SECTIONS 139, 147, 148, 149, 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER 31.5.2003. THESE SECTIONS, THE APPLICABILITY OF WHICH HAS BEEN EXCLUDED, RELATE TO RETURNS, ASSESSM ENT AND REASSESSMENT PROVISIONS. PRIOR TO, THE INTRODUCTION OF THESE THREE SECTIONS, THERE WAS CHAPTER XIV- B OF THE ACT WHICH TOOK CARE OF THE ASSESSMENT TO BE MADE IN CASES OF SEARCH AND SE IZURE. SUCH AN ASSESSMENT WAS POPULARLY KNOWN AS BLOCK ASSESSMENT BECAUSE THE CHAPTER PROVIDED FOR A SINGLE ASSESSMENT TO BE MADE IN RESPECT OF A ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 26 PERIOD OF A BLOCK OF TEN ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH WAS MADE. IN ADDITION TO T HESE TEN ASSESSMENT YEARS, THE BROKEN PERIOD UP TO THE DATE ON WHICH THE SEARCH WAS CONDUCTED WAS ALSO INCLUDED IN WHAT WAS KNOWN AS BLOCK PERIOD. THOUGH A SINGLE ASSESSMENT ORDER WAS TO BE PASSED, THE UNDISCLOSED INCOME WAS TO BE ASSESSED IN THE DI FFERENT ASSESSMENT YEARS TO WHICH IT RELATED. BUT ALL THIS HAD TO BE MADE IN A SINGLE ASSESSMENT ORDER. THE BLOCK ASSESSMENT SO MADE WAS INDEPENDENT OF AND IN ADDITION TO THE NORMAL ASSESS MENT PROCEEDINGS AS CLARIFIED BY THE EXPLANATION BELOW S ECTION 158BA(2). AFTER THE INTRODUCTION OF THE GROUP OF SECTIONS NAM ELY, 153A TO 153C, THE SINGLE BLOCK ASSESSMENT CONCEPT WAS GIVEN A GO-BY. UNDER THE NEW SECTION 153A, IN A CASE WHERE A SEARC H IS INITIATED UNDER SECTION 132 OR REQUISITION OF BOOKS OF ACCOUN T, DOCUMENTS OR ASSETS IS MADE UNDER SECTION 132A AFTER 31.5.2003, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICES CALLING UPON TH E SEARCHED PERSON TO FURNISH RETURNS FOR THE SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH THE SEARCH WAS CONDUCTED OR REQUISITION WAS M ADE. THE OTHER DIFFERENCE IS THAT THERE IS NO BROKEN PERIOD FROM T HE FIRST DAY OF APRIL OF THE FINANCIAL YEAR IN WHICH THE SEARCH TOO K PLACE OR THE REQUISITION WAS MADE AND ENDING WITH THE DATE OF SEARCH/REQUISITION. UNDER SECTION 153A AND THE NEW SCHEME PROVIDED FOR, THE AO IS REQUIRED TO EXERCISE THE NO RMAL ASSESSMENT POWERS IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE. 19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HAV E 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 ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 27 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 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 OF 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. ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 28 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 RO OM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE 'SIX ASS ESSMENT 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 CASE 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 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 WHERE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE PENDING COMPLETION WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESS EE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN C ASES WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEE S TOTAL INCOME AND SUCH ORDERS ARE SUB SISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, TH ERE IS NO ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 29 QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL R EOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING W ITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERM INE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE O RDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS P ASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESS MENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDIN GS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE. 20. APPLYING THE RATIO OF THE ABOVE DECISIONS TO TH E FACTS OF THE PRESENT CASE, WE FIND THAT THERE IS NO DISPUTE THAT THE ORIGINAL ASSESSMENT FOR THE A.Y. 2001-02 WAS COMPLETED U/S 1 43(3) ON 13- 2-2004 DETERMINING THE TOTAL INCOME AT RS. 26354942 360/-. THEREAFTER, A SEARCH AND SEIZURE ACTION WAS INITIAT ED IN ASSESSEE'S CASE BY THE DEPARTMENT ON 2-7-2005 ON WHICH DATE TH E ASSESSMENT FOR THE A.Y. 2001-02 WAS NOT PENDING. THEREFORE, IN VIEW OF THE NON- OBSTINATE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS, THE A.O. HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT IN RESPECT OF THOSE SIX ASSESSMENT YEARS WHICH FALL S WITHIN THE EXCLUSIVE JURISDICTION OF SECTION 153A OF THE ACT A ND ACCORDINGLY THE A.O. WAS NOT JUSTIFIED IN ISSUING NOTICE U/S 148 ON 28-8-2006 AND IN COMPLETING THE IMPUGNED ASSESSMENT U/S 143(3) R.W.S . 147 OF THE ACT ON 31-10-2006. THE A.O. INSTEAD OF COMPLYING WI TH THE REQUIREMENT OF SECTION 153A PROCEEDED WITH THE PROV ISIONS OF SECTION 147/148 WHICH ARE NOT APPLICABLE IN THE ASS ESSMENT U/S 153 A OF THE ACT, THEREFORE, THE IMPUGNED ASSESSMENT CO MPLETED U/S 143(3) R.W.S. 147 OF THE ACT IS A NULLITY AND AS SU CH THE ASSESSMENT ORDER DTD. 31-10-2006 PASSED U/S 143(3) R.W.S. 147 OF THE ACT IS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 30 ILLEGAL, ARBITRARY, WHOLLY WITHOUT JURISDICTION AND , HENCE, THE SAME IS QUASHED.' 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CAS E AND ALSO APPLYING THE RATIOS OF THE ABOVE MENTIONED DECISION S, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER, HAS NO JURISDICTION TO ISSUE NOTICE U/S 148 OF THE ACT TO REOPEN THE ASSES SMENTS IN RESPECT OF THOSE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED OR REQ UISITION IS MADE. THE PERIOD UNDER CONSIDERATION FALLS WITHIN T HE EXCLUSIVE DOMAIN OF SECTION 153A. IN THE INSTANT CASE, SINCE THE ASSESSMENT IS MADE CONSEQUENT TO SEARCH IN ANOTHER CASE, THE ASSE SSING OFFICER IS BOUND TO ISSUE NOTICE U/S 153C AND THEREAFTER PROCE ED TO ASSESS OR REASSESS TOTAL INCOME UNDER SECTION 153A OF THE ACT . THE ASSESSING OFFICER, INSTEAD OF COMPLYING WITH THE PROVISIONS O F SECTION 153C, PROCEEDED WITH THE REASSESSMENT UNDER SECTION 147/1 48 WHICH IS NOT APPLICABLE TO SEARCH CASES. THEREFORE, THE IMPU GNED ASSESSMENT ORDER PASSED U/S 143(3), R.W.S. 147 OF T HE INCOME TAX ACT, 1961 IS ILLEGAL, ARBITRARY AND WITHOUT ANY JUR ISDICTION. HENCE, THE ASSESSMENT ORDER DATED 31-12-2010 PASSED U/S 14 3(3) R.W.S. 147 IS QUASHED. THUS, IT IS CLEAR THAT THE TRIBUNAL HAS TAKEN A CON SISTENT VIEW ON THIS ISSUE AND FURTHER THE DELHI BENCHES OF THIS TRIBUNA L IN CASE OF RAJAT SHUBRA CHATTERJI VS. ACIT (SUPRA) HAS HELD IN PAR A 7 AS UNDER:- 7. ON HAVING GONE THROUGH THE DECISIONS CITED ABOVE ESPECIALLY THE DECISION OF AMRITSAR BENCH IN THE CASE OF ITO V S. ARUN KUMAR KAPOOR (SUPRA), WE FIND THAT IN THAT CASE AS IN THE PRESENT CASE BEFORE US, REASSESSMENT WAS INITIATED ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN SEARCH OF THIRD PAR TY AND THE VALIDITY OF THE SAME WAS CHALLENGED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS) AND THE LEARNED CIT(APPEALS) V ITIATED THE PROCEEDINGS. THE SAME WAS QUESTIONED BY THE REVENUE BEFORE THE ITAT AND THE ITAT AFTER DISCUSSING THE CASES OF THE PARTIES ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 31 AND THE RELEVANT PROVISIONS IN DETAILS HAS COME TO THE CONCLUSION THAT IN THE ABOVE SITUATION, PROVISIONS OF SEC. 153 C WERE APPLICABLE WHICH EXCLUDES THE APPLICATION OF SECTIO NS 147 AND 148 OF THE ACT. THE ITAT HELD THE NOTICE ISSUED UNDER S EC. 148 AND PROCEEDINGS UNDER SEC. 147 AS ILLEGAL AND VOID AB 8 INITIO. IT WAS HELD THAT ASSESSING OFFICER HAVING NOT FOLLOWED PRO CEDURE UNDER SEC. 153C, REASSESSMENT ORDER WAS RIGHTLY QUASHED B Y THE LEARNED CIT(APPEALS). IN THE PRESENT CASE BEFORE US , IT IS AN ADMITTED FACT, AS ALSO EVIDENT FROM THE REASONS REC ORDED AND THE ASSESSMENT ORDER THAT THE INITIATION OF REOPENING P ROCEEDINGS WAS MADE BY THE ASSESSING OFFICER ON THE BASIS OF INFOR MATION RECEIVED FROM THE DIRECTORATE OF INCOME-TAX (INV.) ON THE BASIS OF SEARCH & SEIZURE OPERATION CONDUCTED AT THE PREMISE S OF ROCK LAND GROUP OF CASES AND THE DOCUMENTS RELATED TO TH E ASSESSEE FOUND DURING THE COURSE OF SEARCH WERE MADE AVAILAB LE TO THE ASSESSING OFFICER OF THE PRESENT ASSESSEE. WE THUS RESPECTFULLY FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE ITAT IN THE CASE OF ACIT VS. ARUN KAPUR 140 TTJ 249 (AMRITSAR ) HOLD THAT PROVISIONS OF SEC. 153C OF THE ACT WERE APPLICABLE IN THE PRESENT CASE FOR FRAMING THE ASSESSMENT, IF ANY, WHICH EXCL UDES THE APPLICATION OF SEC. 147 OF THE ACT, HENCE, NOTICE I SSUED UNDER SEC. 148 OF THE ACT AND ASSESSMENT FRAMED IN FURTHERANCE THERETO UNDER SEC. 147 READ WITH SECTION 143(3) OF THE ACT ARE VOID AB INITIO. THE REASSESSMENT IN QUESTION IS ACCORDINGLY QUASHED. THE GROUND NO.1 IS ACCORDINGLY ALLOWED. THEREFORE, IN CONJOINT READING OF PROVISIONS OF SEC TION 153A, 153C AND 147/148 OF THE ACT AS WELL AS A CONSISTENT VIEW TAK EN BY THIS TRIBUNAL IN A SERIES OF DECISION CITED (SUPRA) WE HOLD THAT THE ASSESSMENT OR REASSESSMENT OF INCOME OF THE PERSON OTHER THAN SEA RCH PERSONS BASED ON SEIZED MATERIAL CAN BE ONLY BE MADE U/S 153C R.W .S. 153A AND THE ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 32 PROVISIONS OF SECTION 147/148 OF THE ACT ARE NOT AP PLICABLE IN SUCH CASES. NO CONTRARY DECISION HAS BEEN BROUGHT TO OUR NOTICE. ACCORDINGLY, WE HOLD THAT INITIATION OF PROCEEDINGS U/S 147/148 BY THE AO TO REASSESS THE INCOME IS ILLEGAL BEING WITHOUT JURISDICTION AND CONSEQUENTLY THE REASSESSMENT ORDER PASSED U/S 147 R.W.S. 143(3) IS ALSO ILLEGAL AND VOID ABINITIO AND IS LIABLE TO BE QUASHED. 7. AS REGARDS THE SECOND OBJECTION OF THE ASSESSEE AGAINST THE REOPENING OF THE ASSESSMENT U/S 148 WE FIND THAT UN DISPUTEDLY THE NOTICE U/S 148 ISSUED ON 25.03.2014 IS AFTER THE EX PIRY OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER CONSIDERATION. THE INITIAL ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 153A AND THEREFORE, THE PROVISO TO SECTION 147 COMES TO PLAY AND THE ASSESSING OFFICER CANNOT REOPEN THE ASSESSMENT EXCE PT WHEN THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL THE FACTS NECESSARY FOR THE ASSESSMENT. THE REASONS RECORDED BY THE AO HAS BEEN REPRODUCED BY US IN THE FOREGOING PART OF THIS ORDER AND IT IS CLEAR THAT THE AO HAS NOT STATED IN THE REASONS THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL THE FACTS NECESSARY FOR THE ASSESSMENT. THE AO WHILE COMPLETING THE INITIAL ASSESSMENT ON 31.03 .2013 UNDER SECTION 143(3) R.W.S. 153A ACCEPTED THE TRANSACTION OF PURC HASE OF 8000 SHARES ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 33 OF M/S KALYAN BUILDMART PVT. LTD. FROM SHRI MADAN M OHAN GUPTA AND HIS WIFE SMT. SHASHI KALA GUPTA. WHEN THE TRANSACTION O F PURCHASE OF SHARES WAS DISCLOSED BY THE ASSESSEE AND ACCEPTED B Y THE AO IN THE POST SEARCH ASSESSMENT FRAMED U/S 153A THEN EVEN IF THE PURCHASE CONSIDERATION IS SUBSEQUENTLY FOUND TO BE INCORRECT OR UNDER STATED IT DOES NOT GIVE JURISDICTION TO AO TO RESORT TO THE P ROVISIONS OF SECTION 147/148 OF THE ACT AFTER EXPIRY OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR. FURTHER, REASSESSMENT PROCEEDINGS WERE INITIATED BY THE AO ON THE PREMISE THAT THE ASSESSEE HAS NOT DIS CLOSED THE PURCHASE CONSIDER OF THE ALLEGED LAND, HOWEVER, IT IS PERTIN ENT TO NOTE THAT THE ASSESSEE DID NOT PURCHASE ANY LAND AS IT REMAINED W ITH M/S SHRI KALYAN BUILDMART PVT. LTD. AND THERE IS NO CHANGE OF THE O WNERSHIP OF THE SAID LAND AS BELONG TO M/S KALYAN BUILDMART PVT. LTD. WE FIND THAT THERE IS NO TRANSACTION OF SALE AND PURCHASE OF LAND IN QUES TION BETWEEN THE ASSESSEE AND SHRI MADAN MOHAN GUPTA. WHAT WAS TRANS FERRED BY SHRI MADAN MOHAN GUPTA AND HIS WIFE SMT. SHASHI KALA GUP TA WERE THE SHARES OF M/S KALYAN BUILDMART PVT. LTD. WHICH OWNE D THE LAND IN QUESTION. THERE MAY BE A CASE OF UNDER VALUATION OF SHARES AND UNDERSTATEMENT OF CONSIDERATION PAID BY THE ASSESSE E HOWEVER, IT IS NOT A CASE OF PURCHASE OF LAND. THE PURCHASE CONSIDERAT ION OF SHARES WAS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 34 ACCEPTED BY THE AO WHILE COMPLETING THE ASSESSMENT U/S 143(3) R.W.S. 153A AND THEREFORE, THE AO IS PRECLUDED TO REASSESS THE INCOME ON THE BASIS OF NON EXISTING TRANSACTION OF PURCHASE OF LA ND. FURTHER, THE AO HIMSELF WAS NOT SURE ABOUT THE ESCAPEMENT OF INCOME AND ASSESS THE INCOME IN THE HANDS OF THE ASSESSEE ONLY ON PROTECT IVE BASIS. THE VERY BASIS OF INVOKING THE PROVISIONS OF SECTION 147/148 IS CONTRARY TO THE FACTS AND RECORD THAT IT WAS A TRANSACTION OF PURCH ASE OF SHARES OF M/S KALYAN BUILDMART PVT. LTD. AND NOT PURCHASE OF LAN D OWNED BY THE SAID COMPANY. EVEN IF THE PURCHASE CONSIDERATION OF SHAR E IS UNDER STATED THE REASONS FOR REOPENING DO NOT STATE SO AND THERE FORE, THE REOPENING ON THE BASIS OF NON EXISTING TRANSACTION IS NOT PER MITTED. ONCE, THE TRANSACTION OF PURCHASE OF SHARES WAS REVEALED DURI NG THE ASSESSMENT U/S 143(3) R.W.S. 153A AND THE SAME WAS CONSIDERED AND ACCEPTED BY THE AO THEN THE AO IS NOT PERMITTED TO REOPEN THE A SSESSMENT TO REVIEW ITS ORDER AS IT WOULD AMOUNT TO CHANGE OF OP INION. THE HONBLE MADRAS HIGH COURT IN CASE OF CIT VS. REMEDIES LTD. (SUPRA) HAS HELD IN PARAS 10 TO 12 AS UNDER:- 10. WE FIND FROM THE ORDER OF THE TRIBUNAL AND ALSO ON THE FACTS AS HAS BEEN CULLED OUT FROM THE ASSESSMENT ORDER IN QUESTION THAT THERE IS NO ELEMENT OF FAILURE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THEREFORE, THERE WAS NO ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 35 JUSTIFICATION FOR THE DEPARTMENT FOR INVOCATION OF PROCEEDING UNDER SECTION 147 R/W 148 OF THE INCOME TAX ACT. 11. OUR STAND IS FURTHER FORTIFIED BY THE DECISION OF THIS COURT IN TCA NO.217/2015 DATED 2.6.2015, WHEREIN IN A SIMILAR MA TTER, THIS COURT HAS HELD AS UNDER : '16. OUR VIEW IS FORTIFIED BY THE DECISION OF THE F ULL BENCH OF THE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INC OME- TAX V. KELVINATOR OF INDIA LTD. REPORTED IN [2002] 256 ITR 1 (DEL) , WHEREIN, THE DELHI HIGH COURT HELD AS FOLLOWS: 'WE ARE UNABLE TO AGREE WITH THE SUBMISSION OF MR. JOLLY TO THE EFFECT THAT THE IMPUGNED ORDER OF REASSESSMENT CANN OT BE FAULTED AS THE SAME WAS BASED ON INFORMATION DERIVED FROM T HE TAX AUDIT REPORT. THE TAX AUDIT REPORT HAD ALREADY BEEN SUBMI TTED BY THE ASSESSEE. IT IS ONE THING TO SAY THAT THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM AN AUDIT REPORT WHICH WAS NOT BEFORE THE INCOME-TAX OFFICER, BUT IT IS ANOTHER THING TO SAY THAT SUCH INFORMATION CAN BE DERIVED BY THE MATERIAL WHICH HA D BEEN SUPPLIED BY THE ASSESSEE HIMSELF. WE ALSO CANNOT ACCEPT THE SUBMISSION OF MR. JOLLY T O THE EFFECT THAT ONLY BECAUSE IN THE ASSESSMENT ORDER, DETAILED REAS ONS HAVE NOT BEEN RECORDED AN ANALYSIS OF THE MATERIALS ON THE R ECORD BY ITSELF MAY JUSTIFY THE ASSESSING OFFICER TO INITIATE A PRO CEEDING UNDER SECTION 147 OF THE ACT. THE SAID SUBMISSION IS FALL ACIOUS. AN ORDER OF ASSESSMENT CAN BE PASSED EITHER IN TERMS OF SUB-SEC TION (1) OF SECTION 143 OR SUB-SECTION (3) OF SECTION 143. WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF THE SAID SUB-SE CTION (3) OF SECTION 143 A PRESUMPTION CAN BE RAISED THAT SUCH A N ORDER HAS BEEN PASSED ON APPLICATION OF MIND. IT IS WELL KNOW N THAT A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT I N TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EVIDENCE ACT JUDIC IAL AND OFFICIAL ACTS HAVE BEEN REGULARLY PERFORMED. IF IT BE HELD T HAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATI ON OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 36 THE PROCEEDING WITH OUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUAS I-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG.' 17. THE ABOVE SAID DECISION OF THE FULL BENCH OF TH E DELHI HIGH COURT WAS UPHELD BY THE SUPREME COURT IN THE DECISI ON REPORTED INCOMMISSIONER OF INCOME-TAX V. KELVINATOR OF INDIA LTD [2010] 320 ITR 561 (SC) ., WHEREIN THE SUPREME COURT HELD THAT THE CONCEPT OF 'CHANGE OF OPINION' ON THE PART OF THE ASSESSING OF FICER TO REOPEN THE ASSESSMENT DID NOT STAND OBLITERATED AFTER THE SUBSTITUTION OF SECTION 147 OF THE INCOME TAX ACT. THE SUPREME COUR T ALSO HELD THAT THE ASSESSING OFFICER HAS POWER TO REOPEN THE ASSESSMENT, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO A CONCLUSION THAT THERE WAS AN ESCAPEMENT OF INCOME FROM ASSESSMENT. FOR BETTER APPRECIATION, THE RELEVANT PORTION OF THE SAID DECI SION READS AS FOLLOWS: '6. ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MAD E TO SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO THE DIRECT T AX LAWS (AMENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDE R THE ABOVE TWO CONDITIONS AND FULFILMENT OF THE SAID CONDITION S ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BAC K ASSESSMENT, BUT IN SECTION 147 OF THE ACT (WITH EFFECT FROM 1ST APRIL, 1989), THEY ARE GIVEN A GO-BY AND ONLY ONE CONDITION HAS REMAIN ED, VIZ., THAT WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE T HAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, POST-1ST APRIL, 1989, POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATI ON TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, S ECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO R EOPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION ', WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEE P IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND P OWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REV IEW ; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF 'CHA NGE OF OPINION' IS ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 37 REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFICER. HENC E, AFTER 1ST APRIL, 1989, THE ASSESSING OFFICER HAS POWER TO REO PEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUS ION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GET S SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED H EREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PA RLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSERTED THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT REINTRODUCED THE SA ID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT I T WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCULAR NO. 549 DATED OCTOBER 31, 1989 ([1990] 182 ITR (ST.) 1,29), WHICH READS AS FOLLOWS : '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R EINTRODUCE THE EXPRESSION 'REASON TO BELIEVE' IN SECTION 147. A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS 'REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBS TITUTION BY THE 'OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, 'REASON TO BELIEVE' HAD BEEN EXPLAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WE LL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITRARY POWE RS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MER E CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT, 19 89, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION ' HAS REASON TO BELIEVE' IN PLACE OF THE WORDS 'FOR REASONS TO BE R ECORDED BY HIM IN WRITING, IS OF THE OPINION'. OTHER PROVISIONS OF TH E NEW SECTION 147, HOWEVER, REMAIN THE SAME.' (EMPHASIS SUPPLIED) 18. SIMILAR VIEW HAS BEEN TAKEN BY THIS COURT IN TH E DECISION REPORTED IN COMMISSIONER OF INCOME-TAX V. CHOLAMAND ALAM ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 38 INVESTMENT AND FINANCE CO. LTD. [2009] 309 ITR 110 , WHEREIN IT WAS HELD AS FOLLOWS: 'IN THOSE CIRCUMSTANCES, IT COULD NOT BE REGARDED T HAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THE ASSESSMENT. AS THE FACTS REVEALED THAT THE ASSE SSING OFFICER WHO MADE THE ORIGINAL ASSESSMENT ORDER HAS CALLED F OR ALL THE DETAILS REGARDING THE CASE WHERE 100 PER CENT. DEPR ECIATION WERE CLAIMED AND THE ASSESSEE HAD FURNISHED THE INVOICES FOR PURCHASE OF ASSETS ON WHICH 100 PER CENT. DEPRECIATION WERE CLA IMED, THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE AND IF AT AL L THERE WAS ANY FAILURE, ACCORDING TO THE COMMISSIONER OF INCOME-TA X (APPEALS), IT WAS ON THE PART OF THE ASSESSING OFFICER, WHO MADE THE ORIGINAL ASSESSMENT WITHOUT GOING BEHIND THE NATURE OF THE T RANSACTIONS ACCEPTING THE DETAILS FURNISHED BY THE ASSESSEE. TH E TRIBUNAL ALSO EXTRACTED THAT PORTION OF THE ORDER AND FOUND ON TH E FACT THAT THERE WAS NO FAULT ON THE PART OF THE ASSESSEE SO AS TO E NABLE THE DEPARTMENT TO REOPEN THE ASSESSMENT AS THE PROVISO TO SECTION 147 OF THE INCOME-TAX ACT WOULD SQUARELY APPLY TO THE C ASE OF THE ASSESSEE. WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE TRIBUNAL. HENCE, THE APPEAL IS DISMISSED.' 19. IN AN IDENTICAL CIRCUMSTANCES, A LEARNED SINGLE JUDGE OF THIS COURT CONSIDERED THE ISSUE IN THE DECISION REPORTED IN FENNER (INDIA) LTD. V. DEPUTY COMMISSIONER OF INCOME-TAX [2000] 241 ITR 672 (MAD) , WHEREIN, IT WAS OBSERVED AS FOLLOWS: 'THE PRE-CONDITION FOR THE EXERCISE OF THE POWER UN DER SECTION 147 IN CASES WHERE POWER IS EXERCISED WITHIN A PERIOD O F FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IS THE BELI EF REASONABLY ENTERTAINED BY THE ASSESSING OFFICER THAT ANY INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THAT ASSESSMENT YEAR . HOWEVER,WHEN THE POWER IS INVOKED AFTER THE EXPIRY OF THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR, A FURTHER PRE- CONDITION FOR SUCH EXERCISE IS IMPOSED BY THE PROVI SO NAMELY, THAT THERE HAS BEEN A FAILURE ON THE PART OF THE ASSESSE E TO MAKE A ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 39 RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SECTION 142 OR SECTION 148 OR FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. UNLESS, THE CO NDITION IN THE PROVISO IS SATISFIED, THE ASSESSING OFFICER DOES NO T ACQUIRE JURISDICTION TO INITIATE ANY PROCEEDING UNDER SECTI ON 147 OF THE ACT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. THUS, IN CASES WHERE THE INITIATION OF THE PROCEEDI NGS IS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR, THE ASSESSING OFFICER MUST NECESSARILY RECORD NOT ONLY HIS REASONABLE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT BUT ALSO THE DEFAULT OR FAILURE COMMITTED BY THE ASSESSEE. FAILURE TO DO SO WOULD VITIATE THE NOTICE AND THE ENTIRE PROCEEDINGS. THE RELEVANT WOR DS IN THE PROVISO ARE, '. . . . UNLESS ANY INCOME CHARGEABLE TO TAX HAS ES CAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE O N THE PART OF THE ASSESSEE ... . .' MERE ESCAPE OF INCOME IS INSUFFICIENT TO JUSTIFY TH E INITIATION OF ACTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. SUCH ESCAPEMENT MUST BE BY REASON OF THE FAIL URE ON THE PART OF THE ASSESSEE EITHER TO FILE A RETURN REFERRED TO IN THE PROVISO OR TO TRULY AND FULLY DISCLOSE THE MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT. WHENEVER A NOTICE IS ISSUED BY THE ASSE SSING OFFICER BEYOND A PERIOD OF FOUR YEARS FROM THE END OF THE R ELEVANT ASSESSMENT YEAR, SUCH NOTICE BEING ISSUED WITHOUT R ECORDING THE REASONS FOR HIS BELIEF THAT INCOME ESCAPED ASSESSME NT, IT CANNOT BE PRESUMED IN LAW THAT THERE IS ALSO A FAILURE ON THE PART OF THE ASSESSEE TO FILE THE RETURNS REFERRED TO IN THE PRO VISO OR A FAILURE TO FULLY AND TRULY DISCLOSE THE MATERIAL FACTS. THE RE ASONS REFERRED TO IN THE MAIN PARAGRAPH OF SECTION 147 WOULD, IN CASES W HERE THE PROVISO IS ATTRACTED, INCLUDE REASONS REFERRED TO I N THE PROVISO AND IT IS NECESSARY FOR THE ASSESSING OFFICER TO RECORD TH AT ANY ONE OR ALL THE CIRCUMSTANCES REFERRED TO IN THE PROVISO EXISTE D BEFORE THE ISSUE OF NOTICE UNDER SECTION 147.... ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 40 . . . . . . . . . . . . . . . . . . . . THE DUTY OF AN ASSESSEE IS LIMITED TO FULLY AND TRU LY DISCLOSING ALL THE MATERIAL FACTS. THE ASSESSEE IS NOT REQUIRED THEREA FTER TO PREPARE A DRAFT ASSESSMENT ORDER. IF THE DETAILS PLACED BY TH E ASSESSEE BEFORE THE ASSESSING OFFICER WERE IN CONFORMITY WITH THE R EQUIREMENTS OF ALL APPLICABLE LAWS AND KNOWN ACCOUNTING PRINCIPLES , AND MATERIAL DETAILS HAD BEEN EXHIBITED BEFORE THE ASSESSING OFF ICER, IT IS FOR THE ASSESSING OFFICER TO REACH SUCH CONCLUSIONS AS HE C ONSIDERED WAS WARRANTED FROM SUCH DATA AND ANY FAILURE ON HIS PAR T TO DO SO CANNOT BE REGARDED AS THE ASSESSEE'S FAILURE TO FUR NISH THE MATERIAL FACTS TRULY AND FULLY. ANY LACK OF COMPREHENSION ON THE PART OF THE ASSESSING OFFICER IN UNDERSTANDING THE DETAILS PLAC ED BEFORE HIM CANNOT CONFER A JUSTIFICATION FOR REOPENING THE ASS ESSMENT, LONG AFTER THE PERIOD OF FOUR YEARS HAD EXPIRED. ON THE FACTS OF THIS CASE, IT IS CLEAR THAT THE ESCAPEMENT OF INCOME, IF ANY, ON THIS ACCOUNT IS NOT ON ACCOUNT OF ANY FAILURE ON THE ASSESSEE'S PAR T TO DISCLOSE THE MATERIAL FACTS FULLY AND TRULY. THE NOTICE ISSUED B Y THE ASSESSING OFFICER IN EXERCISE OF HIS POWER UNDER SECTION 147, THEREFORE, CANNOT BE SUSTAINED. AS THE ERROR HERE IS ONE OF JURISDICTION IT IS NOT NECESSARY FOR THE ASSESSEE TO HAVE RECOURSE TO THE REMEDIES BY WAY OF APPEAL, REVISION, ETC. IT IS WELL SETTLED THAT WHEN A JURIS DICTIONAL ERROR IS BROUGHT TO THE NOTICE OF THIS COURT SUCH ERRORS ARE CAPABLE OF BEING CORRECTED BY THIS COURT IN EXERCISE OF THE COURT'S POWERS UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. THE SUPRE ME COURT IN THE CASE OF CIT V. PROGRESSIVE ENGINEERING [1993] 200 ITR 231 (SIC), HELD THAT WHEN ALL THE RELEVANT FACTS WERE BEFORE T HE COURT AND THE LAW IS CLEAR ON THE SUBJECT, IT IS THE DUTY OF THE HIGH COURT TO INTERFERE. THAT WAS ALSO A CASE WHERE THE PROCEEDIN GS WERE SOUGHT TO BE INITIATED AGAINST THE ASSESSEE UNDER SECTION 147 OF THE ACT. 20. IN THE CASE OF ICICI SECURITIES LTD . V. ASSIST ANT COMMISSIONER OF INCOME TAX 3(2), MUMBAI, THE BOMBAY HIGH COURT V IDE ORDER ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 41 DATED 22.08.2006 IN W.P.NO.1919 OF 2006, WHILE DEAL ING WITH THE ISSUE ON THE REOPENING OF ASSESSMENT, HELD AS FOLLO WS: '7. IN THE FACTS OF THE PRESENT CASE, THERE IS NOTH ING NEW WHICH HAS COME TO THE NOTICE OF THE REVENUE. THE ACCOUNTS HAD BEEN FURNISHED BY THE PETITIONER WHEN CALLED UPON. THEREAFTER THE ASSESSMENT WAS COMPLETED UNDER SECTI ON 143(3) OF THE INCOME TAX ACT. NOW, ON A MERE RELOOK, THE OFFI CER HAS COME TO THE CONCLUSION THAT THE INCOME HAS ESCAPED ASSESSME NT AND HE IS OF COURSE JUSTIFIED IN HIS ANALYSIS. IN OUR VIEW, THIS IS NOT SOMETHING WHICH IS PERMISSIBLE UNDER THE PROVISO TO SECTION 1 47 OF THE INCOME TAX ACT WHICH SPEAKS ABOUT A FAILURE ON THE PART OF THE ASSESSEE TO MAKE A PROPER RETURN. IN THE PRESENT CASE, NO SUCH CASE IS MADE OUT ON THE RECORD. 8. IN THE CIRCUMSTANCES, WE ALLOW THIS PETITION IN TERMS OF PRAYER (A) AND QUASH AND SET ASIDE THE NOTICE DATED 27TH MARCH 2006 DIRECTING REOPENING OF THE ASSESSMENT FOR THE YEAR 1999-2000. 21. THE ABOVE-SAID VIEW OF THE BOMBAY HIGH COURT WA S AFFIRMED BY THE SUPREME COURT IN CIVIL APPEAL NO.5960 OF 2012.' 12. IN THE LIGHT OF THE ABOVE, WE HOLD THAT WHEN THE A SSESSING OFFICER HAD FAILED TO RECORD ANYWHERE HIS SATISFACT ION OR BELIEF THAT THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT ON ACCOUNT OF THE FAILURE OF THE ASSESSEE TO DISCLOSE TRULY AN D FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. ON THE CONTRARY, IT WAS THE ASSESSING OFFICER, WHO FAILED TO CONSIDER THE MATER IALS PLACED BEFORE HIM AT THE TIME OF REGULAR ASSESSMENT FOR WHICH THE ASSESSEE CANNOT BE FOUND FAULT WITH. THEREFORE, THE NOTICE I SSUED UNDER SECTION 147 OF THE INCOME TAX ACT BEYOND THE PERIOD OF FOUR YEARS WAS WHOLLY WITHOUT JURISDICTION AND CANNOT BE SUSTA INED. ACCORDINGLY, FOR THE REASONS STATED ABOVE, THE SUBS TANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE RESPONDENT/ASSE SSEE AND AGAINST THE APPELLANT/REVENUE. ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 42 THUS, WHEN THE AO HAS NOT RECORDED IN HIS SATISFACT ION OR BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT THEN THE NOTICE ISSUED U/S 148 BEYOND THE PERIOD OF 4 YEARS WAS WITHOUT JURISDICTION AND IS N OT SUSTAINABLE. HONBLE BOMBAY HIGH COURT IN CASE OF SITARA DIAMOND (P.) LTD. VS. DCIT (SUPRA) WHILE CONSIDERING THE VALIDITY OF NOTICE I SSUE U/S 148 AFTER 4 YEARS HAS HELD IN PARA 6 AS UNDER:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. BY THE I MPUGNED NOTICE DATED 20 JUNE 2011, THE ASSESSMENT FOR ASSES SMENT YEAR 2005-06 IS SOUGHT TO BE REOPENED BEYOND A PERIOD OF FOUR YEARS OF THE END OF THE RELEVANT ASSESSMENT YEAR. THE CON DITION PRECEDENT TO THE EXERCISE OF THE JURISDICTION TO RE OPEN AN ASSESSMENT BEYOND A PERIOD OF FOUR YEARS AS SPELT O UT IN THE PROVISO TO SECTION 147 IS THAT THERE OUGHT TO BE A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR. IN THE PRESENT CASE, THE SOLE BASIS ON WHICH THE ASSESSMEN T PROCEEDINGS WERE SOUGHT TO BE REOPENED IS THE ORDER WHICH HAS B EEN PASSED ON 5 JULY 2011 FOR ASSESSMENT YEAR 2007-08. IN THAT ORDER, ACCORDING TO THE REVENUE, IT HAS BEEN HELD THAT THE ASSESSEE ACTS AS A MERE FACILITATOR AND IS NOT A MANUFACTURER SO AS TO ENTITLE IT TO THE DEDUCTION UNDER SECTION 10A. THE ISSUE, HOWE VER, BEFORE THE COURT, IS AS TO WHETHER THAT CAN FORM THE BASIS OF THE REOPENING OF THE ASSESSMENT BEYOND A PERIOD OF FOUR YEARS. THE REASONS WHICH HAVE BEEN DISCLOSED BY THE ASSESSING OFFICER DO NOT SET OUT AS TO WHAT FACTS THE ASSESSEE HAD FAILE D TO FULLY AND TRULY DISCLOSE. EVEN A PRIMA FACIE REFERENCE TO THE BASIS ON WHICH IT IS SOUGHT TO BE INFERRED THAT THERE WAS A FAILUR E TO DISCLOSE ALL ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 43 MATERIAL FACTS HAS NOT BEEN SET OUT IN THE REASONS. IN THAT VIEW OF THE MATTER, WE ARE OF THE VIEW THAT THE PRIMARY JUR ISDICTIONAL REQUIREMENT FOR REOPENING THE ASSESSMENT BEYOND A P ERIOD OF FOUR YEARS HAS NOT BEEN FULFILLED IN THIS CASE. SIN CE THE ORDER PASSED BY THE CIT (APPEALS) FOR ASSESSMENT YEAR 200 7-08 HAS BEEN PASSED AFTER THE ASSESSMENT FOR ASSESSMENT YEA R 2005-06 HAS BEEN SOUGHT TO BE REOPENED BY THE NOTICE DATED 29 JUNE 2011, WE HAVE, FOR THE PURPOSES OF THIS DISCUSSION, KEPT THAT CIRCUMSTANCE OUT OF CONSIDERATION. WE HAVE COME TO THE CONCLUSION THAT THE ASSESSING OFFICER HAVING FAILED TO ESTABLISH THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSE E TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS FOR ASSESSMENT Y EAR 2005-06, THE REOPENING BEYOND A PERIOD OF FOUR YEARS IS CLEARLY NOT VALID. THERE WAS A FINDING OF FACT BY THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2005-06 THAT THE BUSINESS ACTIVITY OF THE ASSESSEE IS MANUFACTURING OF JEWELLERY IN A SPE CIAL ECONOMIC ZONE. THAT FINDING, AS THE ASSESSMENT ORDER NOTES, WAS BASED UPON A CONSIDERATION OF THE FACTS OF THE CASE AND U PON EXAMINING THE CONTENTIONS OF THE ASSESSEE. WHEN THE AO HAS FAILED TO SET OUT IN THE REASONS RE CORDED AS TO WHAT FACTS THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY THEN THE REOPENING AFTER 4 YEARS IS INVALID BEING WITHOUT JU RISDICTION. WE DO NOT WISH TO MULTIPLY THE PRECEDENT ON THIS ISSUE THOUGH RELIED UPON BY THE LD. AR OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS A ND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE VARIOUS DECISIONS AS ST ATED ABOVE WE HOLD THAT THE REOPENING AFTER 4 YEARS FROM THE END OF TH E ASSESSMENT YEAR IS BAD IN LAW BEING WITHOUT JURISDICTION AND CONSEQUEN TIAL ASSESSMENT IS INVALID, ACCORDINGLY, THE REASSESSMENT ORDER IS QUA SHED. SINCE, WE HAVE ITA NO. 425/JP/2017 SH. NAVRATTAN KOTHARI VS. ACIT, JAIPUR 44 QUASHED THE REASSESSMENT ORDER ITSELF, THEREFORE, W E DO NOT PROPOSE TO GO INTO THE OTHER GROUNDS RAISED BY THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 13/12/2017 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/12/2017. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI NAVRATTAN KOTHARI, B-1, B-2, KO THARI HOUSE, PRITHVIRAJ ROAD, C-SCHEME, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-2, 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. 425/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR