ALLCARGO GLOBAL LOGISTICS LTD, MUMBAI V. DCIT CEN CIR 44, MUMBAI

ITA 5018/MUM/2010

• Counselvise Citation: 501819914 RSA 2010
• Duration Of Justice: 2 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 21-11-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 17-06-2010
• Court: TRIBUNAL
• Keywords: Difference of opinion; Documents seized; Change of opinion; Reassessment proceedings
• Section: 147; 143(3); 92; 153A; 80IB

Judgement Text

G.E. VEERABHADRAPPA, SHRI ITA NOS. 5018 TO 5022 & 5059/M/2010 2 ITA NOS. 5018 TO 5022 & 5059/M/2010 3 ITA NOS. 5018 TO 5022 & 5059/M/2010 4 ITA NOS. 5018 TO 5022 & 5059/M/2010 5 ITA NOS. 5018 TO 5022 & 5059/M/2010 6 ITA NOS. 5018 TO 5022 & 5059/M/2010 7 ITA NOS. 5018 TO 5022 & 5059/M/2010 8 9. THE L ITA NOS. 5018 TO 5022 & 5059/M/2010 9 ITA NOS. 5018 TO 5022 & 5059/M/2010 10 ITA NOS. 5018 TO 5022 & 5059/M/2010 11 ITA NOS. 5018 TO 5022 & 5059/M/2010 12 ITA NOS. 5018 TO 5022 & 5059/M/2010 13 ITA NOS. 5018 TO 5022 & 5059/M/2010 14 ITA NOS. 5018 TO 5022 & 5059/M/2010 15 ITA NOS. 5018 TO 5022 & 5059/M/2010 16 ITA NOS. 5018 TO 5022 & 5059/M/2010 17 ITA NOS. 5018 TO 5022 & 5059/M/2010 18 ITA NOS. 5018 TO 5022 & 5059/M/2010 19 ITA NOS. 5018 TO 5022 & 5059/M/2010 20 ITA NOS. 5018 TO 5022 & 5059/M/2010 21 17. ITA NOS. 5018 TO 5022 & 5059/M/2010 22 ITA NOS. 5018 TO 5022 & 5059/M/2010 23 ITA NOS. 5018 TO 5022 & 5059/M/2010 24 ITA NOS. 5018 TO 5022 & 5059/M/2010 25 ITA NOS. 5018 TO 5022 & 5059/M/2010 26 ITA NOS. 5018 TO 5022 & 5059/M/2010 27 ITA NOS. 5018 TO 5022 & 5059/M/2010 28 ITA NOS. 5018 TO 5022 & 5059/M/2010 29 ITA NOS. 5018 TO 5022 & 5059/M/2010 30 27. ITA NOS. 5018 TO 5022 & 5059/M/2010 31 ITA NOS. 5018 TO 5022 & 5059/M/2010 32 ITA NOS. 5018 TO 5022 & 5059/M/2010 33 ITA NOS. 5018 TO 5022 & 5059/M/2010 34 ITA NOS. 5018 TO 5022 & 5059/M/2010 35 ITA NOS. 5018 TO 5022 & 5059/M/2010 36 ITA NOS. 5018 TO 5022 & 5059/M/2010 37 ITA NOS. 5018 TO 5022 & 5059/M/2010 38 ITA NOS. 5018 TO 5022 & 5059/M/2010 39 2.1 IT IS SUBMITTED THAT THE ISSUE ARISING FOR DET ERMINATION BY THE HONBLE SPECIAL BENCH IS NOT RES-INTEGRA. THE ISSUE FIRST CAME UP BEFORE THE HONBLE ITAT CALCUTTA BENCH-E IN THE CASE OF LMJ INTERNATIO NAL LTD., V. DCIT WHICH IS REPORTED IN 2008 (119 TTJ) PAGE 214. FOR DETAILED REASONS, THE HONBLE ITAT BENCH-E, HELD THAT NO ADDITION CAN BE MADE IN AN AS SESSMENT FRAMED U/S. 153A/153C OF THE ACT WHICH IS NOT BASED ON THE SEIZ ED MATERIAL. A SIMILAR VIEW WAS TAKEN BY HONBLE ITAT BENCH-A, AHMEDABAD I N THE CASE OF MEGHMANI ORGANICS LTD., V. DCIT IN ITA NO. 2909-291 3/AHD-2008. HOWEVER, A DIFFERENT VIEW WAS TAKEN BY ITAT, DELHI BENCH IN THE CASE OF SHIVNATH RAI HARNARAIN (INDIA) LTD., V. DCIT REPORTED IN (2008) 304 ITR (AT) 271 (DELHI) AND ITA NOS. 5018 TO 5022 & 5059/M/2010 40 IN THE CASE OF MS. SHYAM LATA KAUSHIK V. ACIT REPOR TED IN (2008) 114 ITD 305 (DELHI). IT IS SUBMITTED THAT IN NONE OF THESE TWO CASES, THE DECISIONS IN THE CASE OF LMJ INTERNATIONAL LTD., AND MEGHMANI ORGANI CS LTD. WERE NOTICED. SUBSEQUENTLY, THE ISSUE CAME UP FOR CONSIDERATION B EFORE ITAT DELHI BENCH-B IN THE CASE OF ANIL KUMAR BHATIA V. ACIT IN ITA NO. 2660-2665/DEL-2009. HONBLE ITAT BENCH-B RENDERED THEIR DECISION ON 01. 01.2010 HOLDING THAT NO ADDITION CAN BE MADE IN AN ASSESSMENT U/S. 153A OF THE ACT WHICH IS NOT BASED ON THE SEIZED MATERIAL AFTER NOTICING THE EAR LIER DECISIONS IN THE CASE OF LMJ INTERNATIONAL LTD. AND MEGHMANI ORGANICS LTD., AND AFTER DISTINGUISHING THE DECISION OF ITAT DELHI IN THE CASE OF MS. SHYAM LATA KAUSHIK V. ACIT REPORTED IN (2008) 114 ITD 305 (DELHI) AND SHIVNATH RAI HARNARAIN (INDIA) LTD V. DCIT REPORTED IN (2008) 304 ITR (AT) 271 (DELHI) . IT IS RESPECTFULLY SUBMITTED THAT IT IS EVIDENT THAT THE DECISION OF S HIVNATH RAI HARNARAIN (INDIA) LTD V. DCIT WAS RENDERED BY ITAT DELHI PER INCURIAM IN AS MUCH AS THEY WERE RENDERED WITHOUT NOTICING THE EARLIER DECISIONS REN DERED BY ITAT CALCUTTA AND ITAT AHMEDABAD. 2.2.1 IT IS NEXT SUBMITTED THAT THE PROVISIONS OF S ECTION 153A/153C OF THE ACT WERE INSERTED BY THE FINANCE ACT, 2003 W.E.F. 01.06 .2003. THESE PROVISIONS HAVE BEEN EXPLAINED IN THE MEMORANDUM EXPLAINING TH E PROVISIONS IN THE FINANCE BILL, 2003 AT PAGES 219-221 OF 260 ITR(ST). A PERUSAL OF THE ABOVE WOULD INDICATE THAT THE PROBLEM WITH THE OLD PROCED URE WAS NOT ONLY THAT IT POSTULATED TWO ASSESSMENTS FOR THE SAME YEAR, BUT A LSO INVOLVED A CONCEPT OF NORMAL INCOME AND UNDISCLOSED INCOME. DESPITE THE CONCEPT OF NORMAL INCOME ON ONE HAND AND UNDISCLOSED INCOME ON THE OTHER HAND, THE PROVISIONS OF SECTION 153A/153C OF THE ACT HAVE NOT CLARIFIED THAT NORMAL INCOME AS CONTRADISTINGUISHED FROM UNDISCLOSED IN COME CAN BE BROUGHT TO TAX IN AN ASSESSMENT FRAMED U/S. 153A/153C OF THE A CT. 2.2.2 IT IS FURTHER SUBMITTED THAT A SOMEWHAT SIMIL AR PROBLEM AROSE IN THE CONTEXT OF SECTION 147 OF THE ACT. ONE VIEW HELD B Y SEVERAL HIGH COURTS WAS THAT WHERE AN ASSESSMENT WAS OPENED UNDER THE PROVI SIONS OF SECTION 147 IN RESPECT OF AN INCOME WHICH HAS ESCAPED ASSESSMENT S AY X, IN AN ASSESSMENT FRAMED U/S. 147, IT WAS OPEN TO THE AO NOT ONLY TO ADD X BUT ALSO OTHER ITEMS DETECTED UNDER THE REASSESSMENT PROCEEDINGS. HOWEV ER, SOME OTHER HIGH COURTS HAD TAKEN THE OPPOSITE VIEW THAT THIS CANNOT BE DONE AND IN AN ITA NOS. 5018 TO 5022 & 5059/M/2010 41 ASSESSMENT OPENED U/S. 147 OF THE ACT, THE AO CAN P ROCEED TO TAX ONLY X BUT NOT ANY OTHER INCOME. TO RESOLVE THIS CONTROVERSY, THE LEGISLATURE STEPPED IN AND ADDED EXPLANATION 3 TO SECTION 147 BY FINANCE B ILL NO.2 OF 2009 W.R.E.F. 01.04.1989. AS SUBMITTED EARLIER, BY 2009. THE PR OBLEM UNDER THE CONSIDERATION OF THE SPECIAL BENCH HAD ARISEN NAMEL Y, WHETHER AN ASSESSMENT FRAMED U/S. 153A/153C, AND ADDITION CAN BE MADE WHICH IS NOT BASED ON THE SEIZED MATERIAL. HOWEVER, NO AMENDMEN T WAS CARRIED OUT UNDER THE PROVISIONS OF SECTION 153A/153C IN 2009. THIS CLEARLY SHOWS THAT IT WAS NOT THE INTENTION OF THE LEGISLATURE TO BRING TO TA X ANY INCOME NOT RELATABLE TO THE DOCUMENTS SEIZED. 2.2.3 IT IS AN ESTABLISHED LAW IN SELECTING OUT OF DIFFERENT INTERPRETATIONS THE COURT WILL ADOPT THAT WHICH IS JUST REASONABLE AND SENSIBLE RATHER THAN THAT WHICH IS NONE OF THOSE THINGS AS IT MAY BE PRESUME D THAT THE LEGISLATURE SHOULD HAVE USED THE WORD IN THAT INTERPRETATION WH ICH LEAST OFFENDS OUR SENSE OF JUSTICE. IN THIS CONNECTION, REFERENCE I S KINDLY INVITED TO PAGE NO. 132 OF THE 12 TH EDITION 2010 OF PRINCIPLES OF STATUTORY INTERPRE TATION BY JUSTICE G.P. SINGH. NOW, IN THE CASE OF M/S. NATIO NAL INDUSTRIAL CORPORATION LTD., FOR ASSESSMENT YEAR 2003-2004, THE ORIGINAL A SSESSMENT U/S. 143(3) WAS FRAMED ON 20.03.2006 BY DISALLOWING A SUM OF RS .18,72,920/- CLAIMED AS DEDUCTION UNDER THE PROVISIONS OF SECTION 801B O F THE ACT. (PAPER BOOK PAGES 1-3 REFERS). BEING AGGRIEVED, THE APPELLANT FILED AN APPEAL BEFORE CIT(A)-XVI, NEW DELHI, WHO HAS ALLOWED FULL RELIEF UNDER SECTION 80IB OF THE ACT AS PER HIS ORDER DATED 15.11.2006, A COPY OF WH ICH IS PLACED IN THE PAPER BOOK AT PAGES 4-12. HOWEVER, THE LEARNED AO HAS, I NTER ALIA, AGAIN DISALLOWED A SUM OF RS.18,72,920/- IN ASSESSMENT OR DER DATED 28.12.2007 FRAMED U/S. 153C READ WITH SECTION 153A OF THE ACT BY RELYING ON THE INTERPRETATION THAT IN AN ASSESSMENT FRAMED U/S. 15 3A/153C OF THE ACT, HE IS FREE TO MAKE ADDITIONS WHICH ARE NOT BASED ON THE S EIZED MATERIAL. THIS INTERPRETATION HAS THUS LED TO THE ABSURDITY OF AN AO MAKING AN ADDITION WHICH HAS ALREADY BEEN DELETED BY CIT(A). THE INTE RPRETATION PLACED BY THE AO THUS CLEARLY FLOUTS THE ELEMENTARY PRINCIPLES OF JUDICIAL DISCIPLINE WHERE ANY AUTHORITY HAS TO FOLLOW THE ORDERS OF HIGHER AP PELLATE AUTHORITY. ITA NOS. 5018 TO 5022 & 5059/M/2010 42 2.2.4 IN THIS CONNECTION, IT IS ALSO SUBMITTED THAT THE 3 RD & 4 TH PROVISIONS TO SECTION 153B(1) WERE INSERTED BY FINANCE ACT, 2007 W.E.F. 01.06.2007 TO PROVIDE FOR EXTRA LIMITATION WHERE A REFERENCE IS T O BE MADE U/S. 92CA OF THE ACT. 2.2.4.1 IN THIS CONTEXT, LET IT BE ASSUMED II) THAT THE ORIGINAL ASSESSMENT PROCEEDINGS FOR A. Y. 2006-2007 REQUIRED A REFERENCE TO TPO U/S. 92 CA AND WERE COMPLETED BY A .O. IN CONFORMITY WITH TPOS ORDER DATED 25.09.2007 U/S. 143(3); III) THAT THE APPEAL FILED BY THE A.O. WAS DISPOSED OFF BY CIT(A) ON 03.03.2008; IV) THAT THE SECOND APPEALS WERE DISPOSED OFF BY IT AT ON 30.06.2009; V) THAT A SEARCH TOOK PLACE TO-DAY ON 08.09.2011 ON ASSESSEE. VI) A.O. ISSUED A NOTICE U/S. 153(1)(A), INTER-ALIA , FOR A.Y. 2006-2007. 2.2.4.2 THE REVENUES CONTENTION IS THAT IN THIS RE ASSESSMENT PROCEEDING, IT IS ENTITLED TO MAKE ADDITIONS WHICH ARE NOT RELATABLE TO SEIZED RECORDS. IF THIS CONTENTION IS CORRECT, A.O. WILL AGAIN HAVE TO MAKE A REFERENCE TO TPO UNDER SECTION 92 CA. NOW, THE TPO CAN I) EITHER FOLLOW HIS PREDECESSORS ORDER FLOUTING THE ORDER OF ITAT, MAY BE BY RELYING ON SUBSEQUENT CASE LAW WHICH REALLY MAY OR MAY NOT BE APPLICABLE. THIS WOULD BE A BLATANT CASE OF JUDICI AL INDISCIPLINE OR II) FOLLOW ITATS ORDER WITHOUT TAKING INTO ACCOUNT SUB SEQUENT CASE LAW MAKING THE REFERENCE ACADEMIC. 2.2.4.3 THE SAME PROBLEM WILL BE FACED BY DRP WHEN CONSIDERING ASSESSEES OBJECTIONS AGAINST THE DRAFT ORDER OF A.O. THE SAM E PROBLEM WILL FINALLY BE FACED BY ITAT IN DISPOSING OFF THE APPEAL FILED UND ER SECTION 253(1)(D). 2.2.4.4 SURELY, THE LAW CANNOT POSTULATE SUCH AN AB SURD, ANOMALOUS & INCONVENIENT SITUATION. 3. IT IS LASTLY SUBMITTED THAT IT IS SETTLED LAW TH AT WHERE TWO INTERPRETATIONS ARE POSSIBLE, COURTS SHOULD GIVE AN INTERPRETATION WHICH IS IN ITA NOS. 5018 TO 5022 & 5059/M/2010 43 FAVOUR OF THE APPELLANT. ACCORDINGLY, THE HONBLE SPECIAL BENCH MAY KINDLY HOLD THAT IN AN ASSESSMENT FRAMED U/S. 153A/153C OF THE ACT, NO ADDITION CAN BE MADE UNLESS IT IS BASED ON THE SEIZED MATERI AL. ITA NOS. 5018 TO 5022 & 5059/M/2010 44 ITA NOS. 5018 TO 5022 & 5059/M/2010 45 ITA NOS. 5018 TO 5022 & 5059/M/2010 46 (IV) SCENARIO SCOPE FOR SECTION 153A REMARKS/ DECISIONS I NO RETURN OF INCOME IS FILED BY THE ASSESSEE (WHETHER OR NOT TIME LIMIT TO FILE RETURN OF INCOME HAS EXPIRED) SINCE NO RETURN HAS BEEN FILED, THE ENTIRE INCOME SHALL BE REGARDED AS UNDISCLOSED INCOME. CONSEQUENTLY, AO WOULD HAVE THE AUTHORITY/JURISDICTION TO ASSESS THE ENTIRE INCOME, SIMILAR TO JURISDICTION IN REGULAR ASSESSMENT UNDER SECTION 143(3). NO REQUIREMENT TO RESTRICT TO DOCUMENTS FOUND DURING THE COURSE OF SEARCH. ITA NOS. 5018 TO 5022 & 5059/M/2010 47 II RETURN OF INCOME FILED BY THE ASSESSEE RETURN YET TO BE PROCESSED UNDER SECTION 143(1) SINCE RETURN FILED IS EVEN PENDING TO BE PROCESSED, THE RETURN WOULD BE TREATED AS PENDING BEFORE THE ASSESSING OFFICER. CONSEQUENTLY, AO WOULD HAVE THE AUTHORITY/JURISDICTION TO ASSESS THE ENTIRE INCOME, SIMILAR TO JURISDICTION IN REGULAR ASSESSMENT UNDER SECTION 143(3). III RETURN OF INCOME FILED BY THE ASSESSEE RETURN PROCESSED AND INTIMATION ISSUED UNDER SECTION 143(1) TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) NOT EXPIRED. SINCE INTIMATION IS NOT AKIN TO ASSESSMENT AND TIME LIMIT FOR NOTICE U/S. 143(2) HAS NOT EXPIRED, EVEN THOUGH RETURN HAS BEEN PROCESSED, IT WILL BE CASE WHERE RETURN HAS NOT ATTAINED FINALITY. CONSEQUENTLY, AO WOULD HAVE THE AUTHORITY/JURISDICTION TO ASSESS THE ENTIRE INCOME, SIMILAR TO JURISDICTION IN REGULAR ASSESSMENT UNDER SECTION 143(3). IV RETURN OF INCOME FILED BY THE ASSESSEE INTIMATION PASSED OR NOT PASSED UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAS EXPIRED RETURN OF INCOME OF THE ASSESSEE SHALL BE TREATED AS HAVING BEEN ACCEPTED AND ATTAINED FINALITY. AO LOSES JURISDICTION TO VERIFY THE RETURN OF INCOME. SINCE, NO ASSESSMENT WOULD BE PENDING THERE REFER: -VIPAN KHANNA V. CIT: 255 ITR 220 (P&H) -KAILASH AUTO FINANCE LTD., V. CIT: (2009) 32 SOT 80 (LUCK.):- ITA NOS. 5018 TO 5022 & 5059/M/2010 48 WOULD BE NO ABATEMENT OF ANY PROCEEDINGS. ACCORDINGLY, THE SCOPE OF ASSESSMENT UNDER SECTION 153A WOULD BE RESTRICTED TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HELD THAT BY PROCESSING THE RETURN AND BY ISSUING ACKNOWLEDGMENT AS TOKEN OF ACCEPTING THE RETURN, THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE TERMINATED AND NO PROCEEDINGS, THEREFORE, REMAIN PENDING. V NOTICE UNDER SECTION 143(2) ISSUED AND ASSESSMENT PENDING UNDER SECTION 143(3) PENDING REGULAR ASSESSMENT PROCEEDINGS WOULD ABATE AND WOULD CONVERGE/MERGE IN PROCEEDINGS UNDER SECTION 153A. ACCORDINGLY, THE SCOPE OF ASSESSMENT UNDER SECTION 153A WOULD COVER THE PENDING RETURN FILED AS WELL AND WOULD NOT BE RESTRICTED TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. VI ASSESSMENT UNDER SECTION 143(3) COMPLETED SINCE REGULAR ASSESSMENT PROCEEDINGS HAVE BEEN COMPLETED AND ARE NOT PENDING, THERE WOULD BE NO ABATEMENT OF PROCEEDINGS. AO LOSES JURISDICTION TO REVIEW THE COMPLETED ASSESSMENT. INTERPRETATION CANVASSED BY THE REVENUE WOULD RESULT IN DEFEATING THE SCHEME OF THE I.T. ACT AND WOULD WIPE OUT THE FINALITY ATTACHED TO THE COMPLETED ASSESSMENT. PROCEEDINGS UNDER SECTION 153A IS ITA NOS. 5018 TO 5022 & 5059/M/2010 49 ACCORDINGLY, THE SCOPE OF ASSESSMENT UNDER SECTION 153A WOULD BE RESTRICTED TO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. NOT INTENDED TO GIVE ANOTHER INNINGS TO THE ASSESSING OFFICER TO MAKE ASSESSMENT UNDER SECTION 143(3). VII PROCEEDINGS UNDER SECTION 147 PENDING WHERE:- (A) ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 143(3); OR (B) NO ASSESSMENT EARLIER COMPLETED UNDER SECTION 143(3) PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS UNDER SECTION 147 WOULD ABATE AND WOULD CONVERGE/MERGE IN PROCEEDINGS UNDER SECTION 153A. ACCORDINGLY, THE POWERS OF THE ASSESSING OFFICER, IN BOTH THE CASES, SHALL EXTENT TO: (A) ASSESS INCOME THAT COULD VALIDLY BE ASSESSED IN THE PENDING PROCEEDINGS UNDER SECTION 147, AND (B) INCOME TO BE ASSESSED ON THE BASIS OF INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH. INTERPRETATION CANVASSED BY THE REVENUE WOULD COMPLETELY EFFACE THE FETTERS PLACED ON THE POWERS OF THE ASSESSING OFFICER, LIKE: (A) JURISDICTIONAL CONDITIONS OF FORMING REASONABLE BELIEF; (B) ASSESSMENT U/S. 147 BEING RESTRICTED TO ESCAPED INCOMES; (C) NO AUTHORITY TO ASSESS BASED ON CHANGE OF OPINION; (D) REOPENING BEYOND 4 YEARS, ETC. ITA NOS. 5018 TO 5022 & 5059/M/2010 50 ITA NOS. 5018 TO 5022 & 5059/M/2010 51 ITA NOS. 5018 TO 5022 & 5059/M/2010 52 ITA NOS. 5018 TO 5022 & 5059/M/2010 53 ITA NOS. 5018 TO 5022 & 5059/M/2010 54 47. ITA NOS. 5018 TO 5022 & 5059/M/2010 55 ITA NOS. 5018 TO 5022 & 5059/M/2010 56 ITA NOS. 5018 TO 5022 & 5059/M/2010 57 ITA NOS. 5018 TO 5022 & 5059/M/2010 58 ITA NOS. 5018 TO 5022 & 5059/M/2010 59 ITA NOS. 5018 TO 5022 & 5059/M/2010 60 ITA NOS. 5018 TO 5022 & 5059/M/2010 61 ITA NOS. 5018 TO 5022 & 5059/M/2010 62 ITA NOS. 5018 TO 5022 & 5059/M/2010 63 ITA NOS. 5018 TO 5022 & 5059/M/2010 64 ITA NOS. 5018 TO 5022 & 5059/M/2010 65 ITA NOS. 5018 TO 5022 & 5059/M/2010 66 ITA NOS. 5018 TO 5022 & 5059/M/2010 67 ITA NOS. 5018 TO 5022 & 5059/M/2010 68 ITA NOS. 5018 TO 5022 & 5059/M/2010 69 ITA NOS. 5018 TO 5022 & 5059/M/2010 70 (B) IN THE CASE OF L.R. GUPTA VS UNION OF INDIA AND OT HERS, (1992) 194 ITR 32, THE WRIT PETITION WAS FILED TO CHALLENGE TH E AUTHORIZATION OF SEARCH. THE COURT CONCLUDED THAT THE SATISFACTION N OTE RECORDED BY THE DIT (INVESTIGATION) DOES NOT SHOW THAT THERE IS ANY INFORMATION IN HIS POSSESSION WHICH LEADS TO FORMATION OF OPINI ON THAT ANY MONEY, VALUABLES ETC. ARE IN POSSESSION OF THE SEAR CHED PERSON WHICH REPRESENT INCOME WHICH HE HAS NOT BEEN DISCLO SED OR WOULD NOT HAVE DISCLOSED. THEREFORE, IT HAS BEEN HELD THA T NO REASONABLE PERSON COULD HAVE COME TO THE CONCLUSION THAT ACTIO N U/S 132(I) WAS CALLED FOR. ITA NOS. 5018 TO 5022 & 5059/M/2010 71 (D) IN BOARD CIRCULAR NO. 7 OF 2003 DATED 5.9.2003, THE AOS HAVE BEEN INFORMED THAT THEY SHALL MAKE ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME OF 6 YEARS, AND T HE PENDING ASSESSMENTS ON THE DATE OF INITIATION OF SEARCH SH ALL ABATE. IN THIS CONNECTION, IT IS CLARIFIED THAT THE APPEALS , REVIEW OR RECTIFICATION PROCEEDINGS PENDING ON THE DATE OF IN ITIATION OF SEARCH OR REQUISITION SHALL NOT ABATE. THIS ONLY ME ANS THAT THE ISSUES WHICH STAND CONCLUDED IN ASSESSMENTS MADE EA RLIER SHALL CONTINUE TO REMAIN INTACT SUBJECT TO AFORESAI D JURISDICTIONS. THE OTHER CONCLUSION MAY BE THAT IN RESPECT OF MATT ERS DEBATED AND DISCUSSED IN THE ASSESSMENTS ALREADY MADE, NO F URTHER ACTION IS REQUIRED IN RE-ASSESSMENTS U/S 153A. (E) IN THE CASE OF SHAILA AGGARWAL DECIDED BY THE H ONBLE ALLAHABAD HIGH COURT, IT HAS BEEN HELD THAT ONLY SU CH ASSESSMENTS OR REASSESSMENTS WHICH ARE PENDING ON T HE DATE OF INITIATION OF SEARCH STAND ABATED. HOWEVER, AN A PPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LD. CIT(A) IN RES PECT OF ASSESSMENT IS NOT A CONTINUATION OF PROCEEDINGS OF ASSESSMENT. SUCH PROCEEDINGS DO NOT ABATE, AND IF THE APPEAL HA S BEEN DISPOSED OFF BY THE TRIBUNAL BEFORE THE DATE OF INI TIATION OF SEARCH, THE ORDER SHALL HOLD. ABATEMENT OF ANY PROC EEDINGS HAS SERIOUS EFFECTS IN AS MUCH AS THE ABATEMENT TAKES A WAY ALL THE CONSEQUENCES THAT ARISE THEREAFTER. THUS, REGULAR A SSESSMENT PROCEEDINGS, WHICH HAVE BECOME FINAL, CANNOT BE ABA TED CAN NOT BE SET AT NAUGHT BY THE TRIBUNAL FOR MAKING FRE SH ASSESSMENT U/S 153A. THE CONSEQUENCES OF THIS DECIS ION HAS BEEN TAKEN INTO ACCOUNT IN OUR FINDING WHILE DECIDI NG THE MATTER REGARDING SCOPE OF RE-ASSESSMENTS U/S 153A. (F) IN THE CASE OF PARASHURAM POTTERY WORKS CO. LT D. VS. ITO, IT HAS BEEN MENTIONED IN THE LAST PARAGRAPH OF THE JUDGMEN T THAT THE COURT HAS TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, TH AT STALE ISSUES ITA NOS. 5018 TO 5022 & 5059/M/2010 72 SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SP HERES OF HUMAN ACTIVITY. OUR DECISION IS IN CONSONANCE WITH THIS O BSERVATION. (G) IN THE CASE OF K.M.SHARMA VS. ITO (2002) 254 IT R 773, IT HAS BEEN MENTIONED ON PAGE 777 OF THE REPORT AT PLACITU M D THAT PROCEEDINGS WHICH HAVE ATTAINED FINALITY UNDER THE EXISTING LAW DUE TO BAR OF LIMITATION CANNOT BE HELD TO BE OPEN FOR REVIVAL UNLESS THE AMENDED PROVISION IS CLEARLY GIVEN RETRO SPECTIVE OPERATION SO AS TO ALLOW UPSETTING OF PROCEEDINGS, WHICH HAVE ALREADY BEEN CONCLUDED AND ATTAINED FINALITY. THE O BSERVATIONS WERE MADE WHILE DECIDING AN ISSUE REGARDING AMENDME NT TO SECTION 150(1), AS TO WHETHER THIS AMENDMENT IS PRO SPECTIVE OR RETROSPECTIVE IN NATURE. THE QUESTION WAS RAISED IN AN ALTOGETHER DIFFERENT CONTEXT AND THE DECISION IS THAT A PROVIS ION REGARDING LIMITATION IS GENERALLY PROSPECTIVE IN NATURE. IN THE INSTANT CASE THE QUESTION OF LIMITATION IS NOT INVOLVED, RATHER THE QUESTION IS AS TO WHETHER RESTRICTIVE OR EXPANSIVE MEANING SHOU LD BE PLACED ON THE PROVISIONS CONTAINED IN SECTION 153A (1) (A) AND THE FIRST PROVISO. (H) IN THE CASE OF KANHAYAMMED AND OTHERS VS. STAT E OF KERALA, (2000) 245 ITR 360 (SC), IT IS MENTIONED ON PAGE NU MBER 379 OF THE REPORT THAT THIS COURT HELD THAT THE CRUCIAL DATE FOR DETERMINATION WHETHER OR NOT THE TERMS OF ORDER XLV II RULE 1(1) CODE OF CIVIL PROCEDURE, 1908, ARE SATISFIED IS THE DATE WHEN APPLICATION FOR THE REVIEW IS FILED. IT IS PERTINEN T FOR THE COURT HEARING THE PETITION TO DISPOSE OFF THAT APPLICATIO N ON MERITS NOTWITHSTANDING PENDENCY OF APPEAL, SUBJECT ONLY TO THIS, THAT IF BEFORE THE APPLICATION FOR REVIEW IS FINALLY DECIDE D THE APPEAL HAS BEEN DISPOSED OFF, THE JURISDICTION OF THE COUR T HEARING THE REVIEW PETITION WOULD COME TO AN END. THIS MEANS TH AT REVIEW APPLICATION ABATES IF APPEAL AGAINST THE ORDER TO B E REVIEWED HAS ITA NOS. 5018 TO 5022 & 5059/M/2010 73 BEEN FINALIZED. THIS FINDING MAY HAVE ONLY A LIMITE D APPLICATION ON THE FACTS OF OUR CASE, I.E. THE ISSUES WHICH HAV E ALREADY BEEN DEBATED AND IN RESPECT OF WHICH THE APPEAL HAS BEEN DECIDED, SUCH ISSUES MAY NOT BE TAKEN UP FOR MAKING ADDITION AGAIN IN RE- ASSESSMENT U/S 153A UNLESS FURTHER MATERIAL IS FOUN D IN THE COURSE OF SEARCH. HOWEVER, IT MAY BE NOTED THAT REV IEW IS DIFFERENT FROM RE-ASSESSMENT. (I) IN THE CASE OF MANISH MEHESHWARI VS. ASSTT. COM MISSIONER OF INCOME TAX, (2007) 289 ITR 341 (SC), THE VIEW TAKEN BY GUJARAT HIGH COURT IN THE CASE OF N. KHANDUBHAI VA SANJI DESAI VS. DCIT (1999) 236 ITR 73, HAS BEEN REFERRED TO , IN WHICH IT WAS HELD THAT WHERE A SEARCH OR REQUISITION HAS BEE N MADE, ASSESSMENT HAS TO BE MADE UNDER CHAPTER XIV B. IF THE AO COMES TO A CONCLUSION THAT ANY UNDISCLOSED INCOME B ELONGS TO PERSON OTHER THAN THE PERSON WHO HAS BEEN SEARCHED ETC. A NOTE HAS TO BE RECORDED TO THIS EFFECT TO BE FORWAR DED TO THE JURISDICTIONAL AO ALONG WITH RELEVANT MATERIAL SO T HAT JURISDICTIONAL OFFICER MAY PROCEED AGAINST THAT PER SON U/S 158BC. IT APPEARS THAT LD. COUNSEL WANTS TO STRESS THE WOR DS UNDISCLOSED INCOME USED IN THIS DECISION. AS A MA TTER OF FACT THIS TERM HAS BEEN DEFINED UNDER SECTION 158B(B), B UT IT CANNOT IMPORTED IN TO SECTION 153A FOR SUPPLYING CASUS OMMISUS. ITA NOS. 5018 TO 5022 & 5059/M/2010 74 ITA NOS. 5018 TO 5022 & 5059/M/2010 75 ITA NOS. 5018 TO 5022 & 5059/M/2010 76 ITA NOS. 5018 TO 5022 & 5059/M/2010 77 ITA NOS. 5018 TO 5022 & 5059/M/2010 78 ITA NOS. 5018 TO 5022 & 5059/M/2010 79 ITA NOS. 5018 TO 5022 & 5059/M/2010 80 ITA NOS. 5018 TO 5022 & 5059/M/2010 81 ITA NOS. 5018 TO 5022 & 5059/M/2010 82