THE ACIT CEN CIR-40, MUMBAI V. M/S. SAF YEAST CO. PVT. LTD, MUMBAI

ITA 5182/MUM/2007

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8503 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-09-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 31-07-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: DURGESH NADKARNI
• Keywords: Gift; Depreciation; Search and seizure; Period of limitation; Question of law; Block assessment; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 80IB; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI DINESH KUMAR AGARWAL (J.M.) AND SHRI N.K. BILLAIYA (A.M.) ITA NO. 1074/PN/2007 ASSESSMENT YEAR : 2004-05 SAF YEAST CO. PVT. LTD., 419, SWASTIK CHAMBERS, CHEMBUR, MUMBAI 400 071. PAN AADCS 9080J VS. ACIT, RATNAGIRI CIRCLE, RATNAGIRI. (APPELLANT) (RESPONDENT) ITA NO. 5182/MUM /2007 ASSESSMENT YEAR : 2004-05 ACIT, CENT. CIR. 40, ROOM NO. 653, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI. 20 VS. SAF YEAST CO. PVT. LTD. , 419, SWASTIK CHAMBERS, CHEMBUR, MUMBAI 400 071. PAN AADCS 9080J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH AND SHRI DURGESH NADKARNI DEPARTMENT BY : SHRI GIRIJA DAYAL DATE OF HEARING 13-9-2012 DATE OF PRONOUNCEMENT 03-10-2012 O R D E R PER DINESH KUMAR AGARWAL, J.M. THESE CROSS APPEALS BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE ORDER DTD. 15-5-2007 PASSED BY THE LD. CIT(A), KOLHAPUR FOR THE A.Y. 2004-05. BOTH THESE APPEALS ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 2 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE COMPANY IS ENGAGED IN THE MANUFACTURING OF BAKERS YEAST AND C ARRIES ON TRADING ACTIVITY OF BAKERY RELATED INGREDIENTS. THE RETURN OF INCOME WAS FILED DECLARING TOTAL INCOME OF RS. 1,62,08,636/- ALONG W ITH TAX AUDIT REPORT, OTHER AUDIT REPORTS, P&L ACCOUNT AND BALANCE SHEET. THE A.O. AFTER PROCESSING THE RETURN U/S 143(1) OF THE INCOME TAX ACT, 1961 (THE ACT) ON THE SAME INCOME AS DISCLOSED, SELECTED THE CASE FOR SCRUTINY AND ACCORDINGLY ISSUED NOTICES U/S 143(2) AND 142(1) OF THE ACT. THE A.O. ALSO ISSUED A DETAIL QUESTIONNAIRE CALLING FOR SPEC IFIC INFORMATION ON VARIOUS ISSUES CONCERNING THE ASSESSMENT. IN RESPON SE, THE ASSESSEE ATTENDED FROM TIME TO TIME. HOWEVER, THE ASSESSEE HAS NOT FURNISHED FULL INFORMATION AS CALLED FOR. SINCE THE ASSESSMENT WA S GETTING BARRED BY LIMITATION, THE A.O., IN THE ABSENCE OF ANY OTHER A LTERNATIVE, COMPLETED THE ASSESSMENT ON THE BASIS OF INFORMATION AVAILABL E ON RECORD. THE A.O. AFTER MAKING THE DISALLOWANCE OF DEPRECIATION OF RS . 95,094/-, OUT OF DISTRIBUTION EXPENSES RS. 93,38,903/-, OUT OF PROFE SSIONAL CHARGES RS. 45,73,390/-, FOREIGN TRAVEL EXPENSES RS. 55,83,927/ - AND DISALLOWANCE OF DEDUCTION U/S 80IA & 80IB OF THE ACT COMPLETED THE ASSESSMENT AT AN INCOME OF RS. 14,46,84,040/- VIDE ASSESSMENT ORDER DTD, 27-12-2006 PASSED U/S 143(3) OF THE ACT. ON APPEAL, THE LD. CI T(A) WHILE CONFIRMING THE DISALLOWANCE OF DEPRECIATION AND DEDUCTION U/S 80IA, DELETED THE DISALLOWANCE OF PROFESSIONAL CHARGES, PARTLY DELETE D THE DISALLOWANCE OF ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 3 DISTRIBUTION EXPENSES, FOREIGN TRAVEL EXPENSES AND DEDUCTION U/S 80IB OF THE ACT. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE AND THE REVENUE BOTH ARE IN APPEAL BEFORE US. 4. THE ASSESSEE IS AGGRIEVED BY THE SUSTENANCE OF D ISALLOWANCE OF DEPRECIATION, DEDUCTION U/S 80IA & 80IB, DISTRIBUTI ON EXPENSES AND FOREIGN TRAVELLING EXPENSES WHEREAS THE REVENUE HAS CHALLENGED THE RELIEF ALLOWED BY THE LD. CIT(A) OUT OF DISTRIBUTION EXPEN SES, PROFESSIONAL CHARGES, FOREIGN TRAVEL EXPENSES AND DEDUCTION U/S 80IA AND 80IB OF THE ACT. 5. THE ASSESSEE VIDE PETITION DTD. 12-9-2012 MADE A REQUEST FOR ADMISSION OF ADDITIONAL GROUND OF APPEAL WHICH READ S AS UNDER:- THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE INCOME TAX ACT PASSED ON 27-12-2006 WITHOUT CONSIDERING THE FACT THAT A SEAR CH AND SEIZURE ACTION ON THE APPELLANT UNDER SECTION 132(1) OF THE ACT WA S CARRIED OUT ON 30- 11-2006, THE PENDING ASSESSMENT HAD ALREADY ABATED ON THE DATE OF THE SEARCH UNDER THE SECOND PROVISO TO SECTION 153A OF THE ACT WHICH THEREFORE HAD TO BE QUASHED. 6. IN THE SAID PETITION IT WAS SUBMITTED BY THE ASS ESSEE THAT A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT TOOK PLACE ON THE ASSESSEE ON 30-11-2006 AND ON THE DATE OF THE SEARCH THE ASSESS MENT FOR THE A.Y. 2004-05 WAS PENDING. HOWEVER, THE A.O. PASSED THE A SSESSMENT ORDER U/S. 143(3) ON 27.12.2006 WHICH HAD ALREADY ABATED AS PER THE SECOND PROVISO TO SECTION 153A OF THE ACT. IT WAS FURTHER SUBMITTED THAT AFTER THE ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 4 SEARCH, THE A.O. ISSUED NOTICES UNDER SECTION 153A FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE AND AC CORDINGLY THE A.O. PASSED THE ORDER U/S. 153A READ WITH SECTION 143(3) FOR ALL THESE SIX ASSESSMENT YEARS ON 27.11.2008 INCLUDING THE YEAR O F THE SEARCH AND SEIZURE I.E. ASSESSMENT YEAR 2007-08. IT WAS FURTHE R SUBMITTED THAT THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER U/S.153A READ WITH SECTION 143(3) BEFORE THE C.I.T. (APPEALS) WHICH IS PENDING . IT WAS FURTHER SUBMITTED THAT SINCE THE ASSESSMENT ORDER FOR THE A .Y. 2004-05 HAS BEEN PASSED AFTER THE SEARCH OPERATION ON 30.11.2006 IN PURSUANCE TO THE PENDING ASSESSMENT ON THAT DATE, THE SAME WILL NOT HAVE ANY LEGAL VALIDITY AND IT IS TO BE QUASHED. THE RELIANCE WAS ALSO PLACED IN ABHAY KUMAR SHROFF VS CIT AND ORS REPORTED IN (2007) 210 CTR (JHARKHAND) 602 : (2007) 290 ITR 114 (JHARKHAND). IN THE LIGHT OF THE ABOVE, IT WAS SUBMITTED THAT THOUGH THE AFORESAID ADDITIONAL GROU ND WAS NOT RAISED BEFORE THE ID. C.I.T.(APPEALS) AND IS NOW BEING RAI SED BEFORE THE TRIBUNAL FOR THE FIRST TIME, IT IS A PURE QUESTION OF LAW AR ISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS, THEREF ORE, THE ADDITIONAL GROUND MAY BE ADMITTED. FOR THIS PURPOSE, THE RELI ANCE WAS ALSO PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS CIT (1998) 229 ITR 383 (S C) WHEREIN IT HAS BEEN HELD THAT UNDOUBTEDLY, THE TRIBUNAL HAS THE D ISCRETION TO ALLOW OR NOT TO ALLOW A NEW GROUND TO BE RAISED. BUT WHERE T HE TRIBUNAL IS ONLY ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 5 REQUIRED TO CONSIDER THE QUESTION OF LAW ARISING FR OM FACTS WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS, THERE IS NO R EASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. THE RELIANCE WAS ALSO PLACED IN THE CASE OF ITO VS M.M. TEXTILES REPORTED IN (2010) 122 I.T.D 435 (MUM) WHE REIN IT WAS HELD THAT WHEN ADDITIONAL LEGAL GROUNDS ARE RAISED, BEFORE TH E TRIBUNAL AFTER OBTAINING LEAVE FROM THE TRIBUNAL, SUCH LEGAL GROUN DS SHOULD BE ACCEPTED BY THE TRIBUNAL PROVIDED FACTS ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS. IT WAS, THEREFORE PRAYED THAT SUCH ADDITIONAL GROUN D BE ADMITTED. 7. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED IN TH E PETITION DTD. 12-9-2012 FURTHER SUBMITS THAT IN VIEW OF THE DECIS ION CITED IN THE SAID PETITION, THE ADDITIONAL GROUND RAISED BY THE ASSES SEE BE ADMITTED. HE ALSO PLACED ON RECORD A COPY OF THE ASSESSMENT ORDE R FOR THE SAME A.Y. I.E. A.Y. 2004-05 PASSED AFTER THE SEARCH U/S 153A R.W.S. 143(3) OF THE ACT DTD. 27-11-2008. 8. ON MERIT OF THE ADDITIONAL GROUND OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THERE IS NO DISPUTE THAT AS O N THE DATE OF SEARCH I.E. ON 30-11-2006 THE ASSESSMENT FOR THE A.Y. 2004 -05 WAS PENDING. IN OTHER WORDS AS ON THE DATE OF SEARCH, THE PENDING A SSESSMENT HAD ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 6 ALREADY ABATED UNDER THE SECOND PROVISO TO SECTION 153A OF THE ACT AND, THEREFORE, THE A.O. HAS GROSSLY ERRED IN PASSING TH E IMPUGNED ASSESSMENT U/S 143(3) OF THE ACT DTD. 27-12-2006 WH ICH IS LIABLE TO BE QUASHED AND FOR THIS PROPOSITION, THE RELIANCE WAS ALSO PLACED ON THE FOLLOWING CBDT CIRCULAR AND DECISIONS:- (I) PARA NO. 65.2 TO 62.5 OF CBDT CIRCULAR NO. 7 OF 2003 DTD. 5.9.2003, (II) ABHAY KUMAR SHROFF VS. CIT (2007) 210 CTR (JHA RKHAND) 602 : (2007) 290 ITR 114 (JHARKHAND) : (2007) 162 T AXMAN 429 (JHARKHAND) [PARA 12 TO 16). (III) ALL CARGO GLOBAL LOGISTICS LTD. & ORS. VS. DC IT (2012) 147 TTJ (MUMBAI)(SB) 513 : (2012) 137 ITD 287 (MUM) (SB ) [PARA 52 AND 53] (IV) CIT VS. ANIL KUMAR BHATIA (2012) 24 TAXMANN.CO M 98(DELHI) [PARA 21] (V) CIT (CENTRAL) KANPUR VS. SMT. SHAILA AGARWAL (2 011) 16 TAXMANN.COM 232 (ALL.) : (2012) 346 ITR 130 (ALL.) IN THE LIGHT OF THE ABOVE, HE SUBMITS THAT THE IMPU GNED REGULAR ASSESSMENT PASSED BY THE A.O. IS A NULLITY AND, HEN CE, THE SAME MAY BE QUASHED. 9. ON THE OTHER HAND, THE LD. D.R. WHILE AGREEING T HAT THE FACTS ARE AVAILABLE ON RECORD, DID NOT OBJECT TO THE ADMISSIO N OF LEGAL GROUND OF APPEAL. HE FURTHER SUBMITS THAT IN THE SUBSEQUENT ASSESSMENT ORDER PASSED BY THE A.O. U/S 153A R.W.S. 143(3) OF THE AC T, DTD. 27-11-2008, THE A.O. HAS MADE SIMILAR DISALLOWANCE U/S 80IA, 80 IB, DISTRIBUTION ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 7 EXPENSES, FOREIGN TRAVELLING EXPENSE TO THE EXTENT AS CONFIRMED BY THE LD. CIT(A) AND DISALLOWANCE OF STAFF WELFARE EXPENSE AS PER ASSESSMENT ORDER DTD. 27-11-2008 (SUPRA), THEREFORE, IN THE INTEREST OF JUSTICE, THE SAID DISALLOWANCE MADE BY THE A.O. MAY REMAIN TO BE CONS IDERED AS MADE IN THE ASSESSMENT ORDER U/S 153A R.W.S. 143(3) OF THE ACT. 10. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FI ND THAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS IT IS ALSO NOT IN DISPUT E THAT IN THIS CASE A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT WAS TAKEN PLACE ON THE ASSESSEE ON 30-11-2006 AND ON THE DATE OF SEARCH TH E ASSESSMENT FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2004-05 WAS PENDING AND THE SAME ASSESSMENT ORDER WAS PASSED BY THE A.O. U/S 14 3(3) OF THE ACT ON 27-12-2006 I.E. AFTER THE DATE OF SEARCH. 11. THE ASSESSEE IN THE ADDITIONAL GROUND HAS CHALL ENGED THE VALIDITY OF THE IMPUGNED ASSESSMENT ORDER ON THE GROUND THAT AS ON THE DATE OF SEARCH I.E. ON 30-11-2006, THE PENDING ASSESSMENT H AD ALREADY ABATED UNDER THE SECOND PROVISO TO SECTION 153A OF THE ACT AND IN SUPPORT HE PLACED ON RECORD THE COPY OF THE ASSESSMENT ORDER D TD. 27-11-2008 PASSED U/S 153A R.W.S. 143(3) OF THE ACT AND ALSO R ELIED ON CBDT CIRCULAR AND VARIOUS DECISIONS (SUPRA). 12. A LARGER BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. V. CIT [1998] 229 I TR 383 (SC) ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 8 OBSERVED THAT THE QUESTION OF LAW WHICH AROSE FROM THE FACT AS FOUND BY THE INCOME-TAX AUTHORITY ANY LEGAL ISSUE CAN BE RAI SED AT ANY STAGE. THE HONBLE SUPREME COURT OBSERVED THAT (PAGE 387) : WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS WHICH ARE ON RECORD IN THE ASSESSMEN T PROCEEDINGS WE FAIL TO SEE WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSIDER THAT QUESTION IN ORDER TO COR RECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. 13. SIMILARLY IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD. [2008] 206 ITR 42 (DELHI) IT WAS OBSERVED THAT (HEADNOTE) : .THAT THERE WAS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENTERTAIN AN ADDITIONAL GROUND WHICH ACCORDING TO T HE TRIBUNAL AROSE IN THE MATTER AND FOR THE JUST DECISION OF THE CASE. T HERE WAS NO INFIRMITY IN THE ORDER OF THE TRIBUNAL. 14. IT IS ALSO PERTINENT TO MENTION THAT IN THE CAS E OF JUTE CORPORATION OF INDIA LTD. V. CIT [1991] 187 ITR 688 (SC) IT WAS OBSERVED THAT : AN APPELLATE AUTHORITY HAS ALL THE POWERS WHICH TH E ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PR OVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION, THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. THERE IS NO GOOD REASON TO JUSTIFY CURTAILMENT OF T HE POWER OF THE APPELLATE ASSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASSESSEE IN SEEKING MODIFICATION OF T HE ORDER OF ASSESSMENT PASSED BY THE INCOME-TAX OFFICER. THERE MAY BE SEVE RAL FACTORS JUSTIFYING THE RAISING OF SUCH A NEW PLEA IN AN APPEAL, AND EA CH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE APPELLATE ASSISTAN T COMMISSIONER MUST BE SATISFIED THAT THE GROUND RAISED WAS BONAFIDE AN D THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. APPE LLATE ASSISTANT COMMISSIONER SHOULD EXERCISE HIS DISCRETION IN PERM ITTING OR NOT PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROU ND IN ACCORDANCE WITH LAW AND REASON. THE SAME OBSERVATIONS WOULD APPLY TO APPEALS BEFORE THE TRIBUNAL ALSO. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 9 15. IN THE ABSENCE OF ANY CONTRARY MATERIAL PLACED ON RECORD BY THE REVENUE, KEEPING IN VIEW THAT ALL THE MATERIAL FACT S ARE AVAILABLE ON RECORD AND THE LEGAL GROUND TAKEN BY THE ASSESSEE G OES TO THE ROOT OF THE MATTER, WE RESPECTFULLY FOLLOWING THE RATIO OF THE ABOVE DECISIONS, ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. 16. ON MERIT, IN ORDER TO APPRECIATE THE SUBMISSION S OF THE PARTIES AND THE RELEVANT PROVISIONS OF THE ACT, WE FIND THAT RE CENTLY THE SIMILAR ISSUE CAME UP BEFORE THE HONBLE DELHI HIGH COURT IN ANIL KUMAR BHATIA (SUPRA) WHEREIN THEIR LORDSHIPS AFTER CONSIDERING T HE RELEVANT PROVISIONS SECTION OF 153A OF THE ACT AND CBDT CIRCULAR (SUPRA ) HAVE OBSERVED AND HELD AS UNDER:- 16. WE NOW PROCEED TO DISCUSS THE CORRECTNESS OF T HE CONCLUSION OF THE TRIBUNAL THAT THE ASSESSING OFFICER HAD WRONGLY INV OKED SECTION 153A OF THE ACT. THIS SECTION WAS INTRODUCED INTO THE ACT B Y THE FINANCE ACT, 2003 W.E.F. 1.6.2003 ALONG WITH SECTIONS 153B AND 1 53C. SECTION 153A PROVIDES FOR ASSESSMENT IN CASE OF SEARCH OR REQUI SITION. IT RUNS AS FOLLOWS: 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASS ETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETU RN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SH ALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 10 (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS. PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. [(2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF AS SESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITH STANDING ANYTHING CONTAINED IN SUB-SECTION(1) OR SECTION 153 , THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHI CH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SECTION (1), SHALL STAND REVISED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUC H ANNULMENT BY THE COMMISSIONER. PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT, IF SU CH ORDER OF ANNULMENT IS SET ASIDE.] EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT- (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL B E CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 17. THE THREE SECTIONS INTRODUCED W.E.F. 1.6.2003 R EPLACED THE POST SEARCH BLOCK ASSESSMENT SCHEME IN RESPECT OF ANY S EARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A MADE AFTER 31.5.2003. IN CIRCULAR NO.7 OF 2003 DATED 5.9.2003 REPORTED IN (2003) 263 ITR (ST)62, THE NEW SCHEME WAS EXPLAINED BY THE CBDT IN THE FOL LOWING MANNER: 65. THE SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES UNDER CHAPTER XIV-B BE ABOLISHED : 65.1 THE EXISTING PROVISIONS OF THE CHAPTER XIV-B P ROVIDE FOR A SINGLE ASSESSMENT OF UNDISCLOSED INCOME OF A BLOCK PERIOD, WHICH MEANS THE PERIOD COMPRISING PREVIOUS YEARS RELEVANT TO SIX ASSESSMENT YEARS PRECEDING THE PREVIOUS YEAR IN WHI CH THE SEARCH ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 11 WAS CONDUCTED AND ALSO INCLUDES THE PERIOD UP TO TH E DATE OF THE COMMENCEMENT OF SUCH SEARCH, AND LAY DOWN THE MANNE R IN WHICH SUCH INCOME IS TO BE COMPUTED. 65.2 THE FINANCE ACT, 2003, HAS PROVIDED THAT THE P ROVISIONS OF THIS CHAPTER SHALL NOT APPLY WHERE A SEARCH IS INIT IATED UNDER SECTION 132, OR BOOKS OF ACCOUNT, OTHER DOCUMENTS O R ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER MAY 31, 2003 , BY INSERTING A NEW SECTION 158BI IN THE INCOME-TAX ACT. 65.3 FURTHER THREE NEW SECTIONS 153A, 153B AND 153C HAVE BEEN INSERTED IN THE INCOME-TAX ACT TO PROVIDE FOR ASSES SMENT IN CASE OF SEARCH OR MAKING REQUISITION. 65.4 THE NEW SECTION 153A PROVIDES THE PROCEDURE FO R COMPLETION OF ASSESSMENT WHERE A SEARCH IS INITIATED UNDER SECTIO N 132 OR BOOKS OF ACCOUNT, OR OTHER DOCUMENTS OR ANY ASSETS ARE RE QUISITIONED UNDER SECTION 132A AFTER MAY 31, 2003. IN SUCH CASE S, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH, WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE, RETURN OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS IMMEDI ATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE SEARCH WAS CONDUCTED UNDER SECTION 132 OR REQUISITI ON WAS MADE UNDER SECTION 132A. 65.5 THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSES SMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YE AR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING ON THE D ATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDE R SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. IT IS CLARIFIED TH AT THE APPEAL, REVISION OR RECTIFICATION PROCEEDINGS PENDING ON TH E DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION SHALL NO T ABATE. SAVE AS OTHERWISE PROVIDED IN THE PROPOSED SECTION 153A, SE CTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT OR REASSESSMENT MADE UNDER SECTION 153A. IT IS ALSO CLARIFIED THAT ASSESSMENT OR REASSESSMENT MADE UNDE R SECTION 153A SHALL BE SUBJECT TO INTEREST, PENALTY AND PROS ECUTION, IF APPLICABLE. IN THE ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHAL L BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSME NT YEAR. 65.6 THE NEW SECTION 153B PROVIDES FOR THE TIME LIM IT FOR COMPLETION OF SEARCH ASSESSMENTS. IT PROVIDES THAT THE ASSESSI NG OFFICER SHALL MAKE AN ORDER OF ASSESSMENT OR REASSESSMENT IN RESP ECT OF EACH ASSESSMENT YEAR, FALLING WITHIN SIX ASSESSMENT YEAR S UNDER SECTION 153A WITHIN A PERIOD OF TWO YEARS FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 12 65.7 THIS SECTION ALSO PROVIDES THAT ASSESSMENT IN RESPECT OF THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MA DE UNDER SECTION 132A SHALL BE COMPLETED WITHIN A PERIOD OF TWO YEAR S FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTH ORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER S ECTION 132A, AS THE CASE MAY BE, WAS EXECUTED.' 65.8 IT ALSO PROVIDES THAT IN COMPUTING THE PERIOD OF LIMITATION FOR COMPLETION OF SUCH ASSESSMENT OR REASSESSMENT, THE PERIOD DURING WHICH THE ASSESSMENT PROCEEDING IS STAYED BY AN ORD ER OR INJUNCTION OF ANY COURT ; OR THE PERIOD COMMENCING FROM THE DAY ON WHICH THE ASSESSING OFFICER DIRECTS THE ASSESSEE TO GET HIS ACCOUNTS AUDITED UNDER SUB-SECTION (2A) OF SECTION 142 AND E NDING ON THE DAY ON WHICH THE ASSESSEE IS REQUIRED TO FURNISH A REPORT OF SUCH AUDIT UNDER THAT SUB-SECTION, OR THE TIME TAKEN IN REOPENING THE WHOLE OR ANY PART OF THE PROCEEDING OR GIVING AN OP PORTUNITY TO THE ASSESSEE OF BEING RE-HEARD UNDER THE PROVISO TO SEC TION 129, OR IN A CASE WHERE AN APPLICATION MADE BEFORE THE SETTLEMEN T COMMISSION UNDER SECTION 245C IS REJECTED BY IT OR IS NOT ALLO WED TO BE PROCEEDED WITH BY IT, THE PERIOD COMMENCING ON THE DATE ON WHICH SUCH APPLICATION IS MADE AND ENDING WITH THE DATE O N WHICH THE ORDER UNDER SUB-SECTION (1) OF SECTION 245D IS RECE IVED BY THE COMMISSIONER UNDER SUB-SECTION (2) OF THAT SECTION, SHALL BE EXCLUDED. IF, AFTER THE EXCLUSION OF THE AFORESAID PERIOD, THE PERIOD OF LIMITATION AVAILABLE TO THE ASSESSING OFFICER FOR M AKING AN ORDER OF ASSESSMENT OR REASSESSMENT, AS THE CASE MAY BE, IS LESS THAN SIXTY DAYS, SUCH REMAINING PERIOD SHALL BE EXTENDED TO SI XTY DAYS AND THE PERIOD OF LIMITATION SHALL BE DEEMED TO BE EXTE NDED ACCORDINGLY. 65.9 THE NEW SECTION 153C PROVIDES THAT WHERE AN AS SESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONG OR BELONGS TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCO UNT, OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED O VER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST SUCH O THER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSE SS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. 65.10 AN APPEAL AGAINST THE ORDER OF ASSESSMENT OR REASSESSMENT UNDER SECTION 153A SHALL LIE WITH THE COMMISSIONER OF INCOME-TAX (APPEALS). 65.11 CONSEQUENTIAL AMENDMENTS HAVE ALSO BEEN MADE IN SECTIONS 132, 132B, 140A, 234A, 234B, 246A AND 276CC TO GIVE REFERENCE TO SECTION 153A IN THESE SECTIONS. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 13 65.12 THESE AMENDMENTS WILL TAKE EFFECT FROM JUNE 1 , 2003. 18. A PERUSAL OF SECTION 153A SHOWS THAT IT STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCEDURE WHIC H 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, ASSESSMENT AND REASSES SMENT PROVISIONS. PRIOR TO, THE INTRODUCTION OF THESE THREE SECTIONS, THERE WAS CHAPTER XIV- B OF THE ACT WHICH TOOK CARE OF THE ASSESSMENT TO B E MADE IN CASES OF SEARCH AND SEIZURE. SUCH AN ASSESSMENT WAS POPULARL Y KNOWN AS BLOCK ASSESSMENT BECAUSE THE CHAPTER PROVIDED FOR A SINGLE ASSESSME NT TO BE MADE IN RESPECT OF A PERIOD OF A BLOCK OF TEN ASSES SMENT YEARS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH WAS MADE. I N ADDITION TO THESE TEN ASSESSMENT YEARS, THE BROKEN PERIOD UP TO THE D ATE 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 DIFFER ENT 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 ASSESSMENT PROCEEDINGS AS CLARIFIED B Y THE EXPLANATION BELOW SECTION 158BA(2). AFTER THE INTRODUCTION OF T HE GROUP OF SECTIONS NAMELY, 153A TO 153C, THE SINGLE BLOCK ASSESSMENT C ONCEPT WAS GIVEN A GO-BY. UNDER THE NEW SECTION 153A, IN A CASE WHERE A SEARCH 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 THE SEARCH ED PERSON TO FURNISH RETURNS FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PR ECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH WAS CONDUCTED OR REQUISITION WAS MADE. THE OTHER DIFFER ENCE IS THAT THERE IS NO BROKEN PERIOD FROM THE FIRST DAY OF APRIL OF THE FINANCIAL YEAR IN WHICH THE SEARCH TOOK PLACE OR THE REQUISITION WAS MADE A ND 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 NOTICE TO T HE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISITION WAS MADE. ANOTHE R SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EM POWERED TO ASSESS OR REASSESS THE TOTAL INCOME OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSES SING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE TOT AL INCOME OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER IN RESP ECT OF EACH OF THE SIX ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 14 ASSESSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND T HE 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 IN RESP ECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 14 3(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN E XISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF TH E SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDIS CLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO AS SUME JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148, H AVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MA DE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTIC E TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMP LETION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL TH E STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153 A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME O F AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REA SSESSMENTS WITHOUT ANY FETTERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PE NDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB SECTION (1) OF SECT ION 153A SAYS THAT SUCH PROCEEDINGS SHALL ABATE. THE REASON IS NOT F AR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSM ENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERAT ION. THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY T HE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE TOTAL INCOME OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIAT ED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YE AR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE TH IS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE S EARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME, IT H AS BEEN PROVIDED IN THE SECOND PROVISO OF SUB SECTION (1) OF SECTION 153A T HAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHIC H ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISIT ION SHALL ABATE. ONCE THOSE PROCEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEA RS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BO TH THE INCOME ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 15 DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE A SSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH OR REQUISITION. 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 ASSESSEE IN WH ICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASES WHERE T HE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETE D AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEA RCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINC E NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OF FICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED U NDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSE SSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND AS SESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO Q UESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PEN DING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT OR DERS WHEN THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE. 17. SIMILAR ISSUE CAME UP IN ABHAY KUMAR SHROFF (SU PRA) WHEREIN THER LORDSHIPS AFTER CONSIDERING THE RELEVANT PROVI SIONS OF THE ACT (SUPRA) AND CBDT CIRCULAR (SUPRA) HAVE OBSERVED AND HELD VIDE PARA 12 TO 16 AS UNDER:- 12. FROM A BARE READING OF THE PROVISIONS OF SECTI ONS 153A, 153B AND 153C OF THE ACT AND THE DEPARTMENTAL CIRCULAR DATE D SEPTEMBER 5, 2003 (SEE [2003] 263 ITR (ST.) 62), IT IS MANIFESTLY CL EAR THAT AFTER MAY 31, 2003, THE EARLIER PROVISION OF BLOCK ASSESSMENT IN THE CASE OF SEARCH INITIATED AGAINST THE ASSESSEE, SHALL NOT APPLY. I NSTEAD, THE PROVISION THAT THERE SHALL BE SINGLE ASSESSMENT ON UNDISCLOSE D INCOME COMPRISING PREVIOUS YEARS RELATING TO SIX ASSESSMENT YEARS PR ECEDING IN WHICH THE SEARCH WAS CONDUCTED, SHALL APPLY. IT FURTHER PROV IDES THAT THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRIN G HIM TO FURNISH RETURN OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS IMMED IATELY PRECEDING THE ASSESSMENT YEAR RELATING TO THE PREVIOUS YEAR IN W HICH THE SEARCH WAS CONDUCTED UNDER SECTION 132 OR REQUISITION WAS MAD E UNDER SECTION 132A OF THE ACT. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 16 13. THE SECOND PROVISO TO SECTION 153A MAKES IT CLE AR THAT ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSM ENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQU ISITION UNDER SECTION 132A SHALL ABATE. IN OTHER WORDS, IF ON THE DATE O F INITIATION OF SEARCH OR REQUISITION UNDER SECTION 132 OR SECTION 132A ANY A SSESSMENT OR REASSESSMENT PROCEEDING IS INITIATED RELATING TO A NY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS, IT SHALL STAND ABATED AND THE ASSESSING AUTHORITY CANNOT AND SHALL NOT PR OCEED WITH SUCH PENDING ASSESSMENT AFTER INITIATION OF SEARCH OR RE QUISITION AS CONTEMPLATED HEREINABOVE. 14. THE WORD ABATE OR ABATEMENT HAS NOT BEEN DE FINED IN THE ACT OR IN THE CIRCULAR. ACCORDING TO CHAMBERS DICTIONA RY THE WORD ABATE MEANS DEMOLITION OR TO PUT AN END TO. THE LAW LEXICON DEFINES THE WORD ABATE, WHICH MEA NS TO THROW DOWN, DESTROY OR QUASH OR TO NULLIFY. ACCORDING TO BLACK S LAW DICTIONARY THE WORD ABATEMENT MEANS THE ACT OF ELIMINATING OR NU LLIFYING OR SUSPENSION OR DEFEAT OF A PENDING ACTION. ACCORDING TO ADVANCED LAW LEXICON BY P. RAMANATHAN AIYAR THE WORD ABATE MEANS DIMINISH OR TAKE AWAY OR TO PUT END T O OR TO COME TO A NAUGHT. THE TERM IS USED IN THE U. S. A. TO DESCRIB E THE CANCELLATION IN WHOLE OR IN PART OF A GOVERNMENT LEVY (BUSINESS TER M AND INTERNATIONAL ACCOUNTING). 15. COMING BACK TO THE INSTANT CASE, AS NOTICED ABO VE, THE SEARCH AND SEIZURE WAS INITIATED BY THE RESPONDENTS ON AUGUST 24, 2006, WHICH WAS CARRIED OUT BY VARIOUS AUTHORISED OFFICIALS. THEREA FTER, AS ADMITTED BY THE RESPONDENTS IN THEIR COUNTER AFFIDAVIT, NO NOTICE A S REQUIRED UNDER SECTION 153A WAS ISSUED TO THE PETITIONER FOR THE SIX ASSESSMENT YEARS, I.E., FROM 2001-02 TO 2006-07. IT HAS NOT BEEN DIS PUTED BY THE RESPONDENTS THAT THE DATE ON WHICH THE SEARCH WAS INITIATED THE ASSESSMENT PROCEEDING WAS PENDING ON THE BASIS OF THE RETURN FURNISHED BY THE PETITIONER. CONSEQUENTLY, THEREFORE, THE PEN DING ASSESSMENT PROCEEDING STOOD ABATED BY VIRTUE OF THE SECOND PRO VISO TO SECTION 153A OF THE SAID ACT. INSTEAD OF COMPLYING WITH THE REQU IREMENTS OF SECTION 153A OF THE ACT, THE RESPONDENTS PROCEEDED WITH TH E PENDING ASSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR 2004 -05 AND PASSED AN ASSESSMENT ORDER DURING THE PENDENCY OF THE INSTAN T WRIT APPLICATION. THE SAID IMPUGNED ORDER HAS ALSO BEEN CHALLENGED BY THE PETITIONER BY FILING AMENDMENT PETITION. 16. IN THE AFORESAID FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE DEFINITE OPINION THAT THE ENTIRE ACTION OF THE RES PONDENTS IN PROCEEDING ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 17 WITH THE ASSESSMENT AFTER SEARCH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 153A IS VITIATED IN LAW. CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER DATED DECEMBER 28, 2006, PURPORTEDLY PASSED UNDER SECTION 143(3) OF THE ACT IN A PENDING ASSESSMENT PROCEEDI NG WHICH STOOD ABATED IS A NULLITY. AS DISCUSSED ABOVE, CONTINUATI ON OF THE IMPUGNED ASSESSMENT PROCEEDING AFTER THE INITIATION OF SEAR CH WITHOUT GIVING ANY NOTICE UNDER SECTION 153A OF THE ACT AND PASSING T HE IMPUGNED FINAL ORDER OF ASSESSMENT IS ILLEGAL, ARBITRARY AND WHOL LY WITHOUT JURISDICTION. 18. RECENTLY THEIR LORDSHIPS OF HONBLE ALLAHABAD H IGH COURT IN CASE OF SMT. SHAILA AGARWAL (SUPRA) WHILE CONSIDERING TH E PROVISIONS OF SECTION 153A OF THE ACT AND THE MEANING OF WORDS ABATE AN D PENDING REFERRED IN THE ABOVE PROVISION HAVE OBSERVED AND HELD AS UN DER (HEADNOTE) :- SECTION 153A OF THE INCOME TAX ACT, 1961, PROVIDES THAT WHERE NOTICE UNDER THIS SECTION IS ISSUED AS A RESULT OF ANY SEA RCH UNDER SECTION 132, ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS R EFERRED TO UNDER SECTION 153, PENDING ON THE DATE OF INITIATION OF SEARCH UN DER SECTION 132 OR REQUISITION UNDER SECTION 132A SHALL ABATE. THE WOR DS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR M AKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, HAVE TO BE ASSIGNED THEIR SIMPLE AND PLAIN MEANING. WHERE THE ASSESSMENT OR R EASSESSMENT IS FINALISED, THERE ARE NO PENDING PROCEEDINGS TO ABAT E AND BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. THE WORD ABATEM ENT IS REFERABLE TO SOMETHING WHICH IS PENDING, ALIVE, OR IS SUBJECT TO DEDUCTION. ABATEMENT REFERS TO SUSPENSION OR TERMINATION OF PROCEEDINGS EITHER OF THE MAIN ACTION, OR PROCEEDINGS ANCILLARY OR COLLATERAL TO I T. PROCEEDINGS WHICH HAVE ALREADY TERMINATED ARE NOT LIABLE FOR ABATEMENT UNL ESS THE STATUTE EXPRESSLY PROVIDES FOR IT. THE WORD PENDING OCCUR RING IN THE SECOND PROVISO TO SECTION 153A OF THE ACT IS QUALIFIED BY THE WORDS ON THE DATE OF INITIATION OF THE SEARCH, AND MAKES IT ABUNDANT LY CLEAR THAT ONLY SUCH ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE LIABLE T O ABATE. THE PENDENCY OF AN APPEAL IN THE TRIBUNAL AGAINST THE O RDER OF ASSESSMENT AGAINST WHICH AN APPEAL HAS BEEN DECIDED BY THE COM MISSIONER (APPEALS) IS NOT A CONTINUATION OF THE PROCEEDINGS OF ASSESSMENT. AN APPEAL UNDER THE INCOME-TAX ACT LIES TO THE APPELLA TE TRIBUNAL ON A QUESTION OF LAW. EVEN F IT IS PENDING ON THE DATE O F SEARCH THE REASSESSMENT PROCEEDINGS WILL NOT ABATE. THE ABATEM ENT OF ANY PROCEEDINGS HAS SERIOUS EFFECT INASMUCH AS IT TAKES AWAY ALL THE ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 18 CONSEQUENCES THAT ARISE THEREAFTER. THE MATERIAL FO UND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMINATE ALL THE CONSEQUE NCES, WHICH ARISE OUT OF THE REGULAR ASSESSMENT OR REASSESSMENT RESULTING IN A DEMAND OR PROCEEDINGS FOR PENALTY. THE ASSESSEE FILED A RETURN FOR THE ASSESSMENT YEAR 2002-03. SHE WAS REQUIRED TO PRODUCE EVIDENCE REGARDING GIFTS. HE WA S UNABLE TO DO SO AND HENCE AN ADDITION WAS MADE TO HER INCOME. THE COMMI SSIONER (APPEALS) CONFIRMED THE ADDITION. AFTER THE DECISION OF THE C OMMISSIONER (APPEALS) SEARCH PROCEEDINGS WERE INITIATED AGAINST THE ASSES SEE. A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE AS A RESULT OF SEARCH AND SEIZURE, CALLING UPON THE ASSESSEE TO FILE RETURNS FOR SIX ASSESSMENT YEARS INCLUDING THE ASSESSMENT YEAR 2002-03. THE TRIBUNAL HELD THAT ONCE A NOTICE UNDER SECTION 153A HAD BEEN ISSUED AFTER SEA RCH AND SEIZURE OPERATIONS, ACCORDING TO THE PROVISIONS OF SECTION 153A, ALL THE ASSESSMENTS OF THE SIX PRECEDING ASSESSMENT YEARS P RIOR TO THE SEARCH ABATED. ON APPEAL TO THE HIGH COURT: HELD, THAT THE ASSESSMENT PROCEEDINGS DID NOT ABATE . 19. SIMILAR ISSUE CAME UP BEFORE THE SPECIAL BENCH OF THIS TRIBUNAL (IN WHICH, ONE OF US WAS A PARTY) AND THE SPECIAL BENCH HAD AN OCCASION TO DEAL WITH THE SCOPE OF INTERPRETATION OF SECTION 15 3A OF THE ACT IN THE CASE OF IN ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA) . THE SPECIAL BENCH OF THE TRIBUNAL AFTER CONSIDERING THE VARIOUS DECISION S AND CBDT CIRCULARS INCLUDING THE CIRCULAR NO. 7 OF 2003 DTD. 5-9-2003 AND THE DECISION OF THE HONBLE JHARKHAND HIGH COURT IN ABHAY KUMAR SHR OFF (SUPRA) [MENTIONED IN THE LIST OF CASES/CIRCULARS] HAS 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 IMMEDIATELY PRECE DING THE YEAR OF SEARCH. THE WORD USED IS SHALL AND, THUS, THERE I S NO OPTION BUT TO ISSUE SUCH A NOTICE. THEREAFTER HE HAS TO ASSESS OR REASSESS TOTAL INCOME OF THESE SIX YEARS. IN THIS RESPECT ALSO, THE WORD USED IS SHALL AND, ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 19 THEREFORE, THE AO HAS NO OPTION BUT TO ASSES OR REA SSESS THE TOTAL INCOME OF THESE SIX YEARS. THE PENDING PROCEEDINGS SHALL A BATE. THIS MEANS THAT OUT OF SIX YEARS, IF ANY ASSESSMENT OR REASSESSMENT IS PENDING ON THE DATE OF INITIATION OF THE SEARCH, IT SHALL ABATE. I N OTHER WORDS PENDING PROCEEDINGS WILL NOT BE PROCEEDED WITH THEREAFTER. THE ASSESSMENT HAS NOW TO BE MADE U/S 153A (1)(B) AND THE FIRST PROVIS O. IT ALSO MEANS THAT ONLY ONE ASSESSMENT WILL BE MADE UNDER THE AFORESAI D PROVISIONS AS THE TWO PROCEEDINGS I.E. ASSESSMENT OR REASSESSMENT PRO CEEDINGS AND PROCEEDINGS UNDER THIS PROVISION MERGED INTO ONE. IF ASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR OTHE R LEGAL PROCEEDINGS, THEN THE ABATED ASSESSMENT OR REASSESSMENT SHALL RE VIVE. THIS MEANS THAT THE ASSESSMENT OR REASSESSMENT, WHICH HAD ABAT ED, SHALL BE MADE, FOR WHICH EXTENSION OF TIME HAS BEEN PROVIDED UNDER SECTION 153B. 53. THE QUESTION NOW IS - WHAT IS THE SCOPE OF ASS ESSMENT 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, G UIDANCE 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 FOUND IN THE COURSE OF SEAR CH IN OUR HUMBLE OPINION SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HA VE TO BE TAKEN INTO ACCOUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME UNDER THE AFORESAID PROVISION. SIMILAR POSITION WILL OBTA IN IN A CASE WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS I NTERPRETATION 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 ME RGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR 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 ASSESS MENT WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNT OR OTHER DOCU MENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN T HE COURSE OF SEARCH, AND UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISC OVERED IN THE COURSE OF SEARCH. .. 58. THUS, QUESTION NO.1 BEFORE US IS ANSWERED A) AS 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 ; B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT H AS ALREADY BEEN ASSESED, THE ASESMENT U/S 153A WIL BE MADE ON THE B ASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF REL EVANT PROVISIONS MEANS ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 20 (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN T HE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASESSMEN T, AND (I) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH. 59. HAVING COME TO THIS CONCLUSION WE NEED NOT GO I NTO VARIOUS ORDERS OF THE `TRIBUNAL CITED BY THE RIVAL PARTIES. THE DECIS IONS INCONSISTENT WITH THE AFORESAID VIEW/CONCLUSION STAND DISAPPROVED AND THE DECISIONS CONSISTENT WITH THIS VIEW/CONCLUSION ARE APPROVED. 20. APPLYING THE RATIO OF THE ABOVE DECISIONS TO TH E FACTS OF THE PRESENT CASE, WE FIND THAT THE SEARCH AND SEIZURE WAS INITI ATED BY THE DEPARTMENT IN ASSESSEES CASE ON 30-11-2006 ON WHIC H DATE THE ASSESSMENT FOR A.Y. 2004-05 WAS PENDING WHICH WAS C OMPLETED ON 27- 12-2006 U/S 143(3) OF THE ACT. WE FURTHER FIND THAT THERE IS NO DISPUTE THAT THE ASSESSEE IS COVERED UNDER THE SEARCH ACTIO N U/S 132(1) OF THE ACT DTD. 30-11-2006. CONSEQUENTLY NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 12-10-2007 AND IN RESPONS E, THE ASSESSEE FILED ITS RETURN OF INCOME ON 15-11-2007 DECLARING TOTAL INCOME OF RS. 1,64,50,999/- AS AGAINST THE INCOME ORIGINALLY SHOW N AT RS. 1,62,08,636/- IN THE RETURN FILED U/S 139(1) OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT AS ON THE DATE OF SEARCH, THE ASSESSME NT PROCEEDING FOR THE A.Y. 2004-05 WAS PENDING AND THE REGULAR ASSESSMENT WAS COMPLETED ON 27-12-2006 VIDE ORDER PASSED U/S 143(3) OF THE ACT. THE POSITION THUS EMERGING IS THAT WHERE ASSESSMENT PROCEEDINGS ARE P ENDING COMPLETION WHEN THE SEARCH IS INITIATED, THE PENDING ASSESSMEN T PROCEEDING STOOD ABATED BY VIRTUE OF THE SECOND PROVISO TO SECTION 1 53A OF THE ACT. INSTEAD OF COMPLYING WITH THE REQUIREMENTS OF SECTI ON 153A OF THE ACT, THE A.O. PROCEEDED WITH THE PENDING ASSESSMENT PROC EEDING FOR THE A.Y. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 21 2004-05 AND PASSED THE IMPUGNED ASSESSMENT ORDER DU RING THE PENDENCY OF THE ASSESSMENT U/S 153A OF THE ACT WHIC H IS A NULLITY AND AS SUCH THE ASSESSMENT ORDER DTD. 27-12-2006 PASSED U/S 143(3) OF THE ACT IS ILLEGAL, ARBITRARY, WHOLLY WITHOUT JURISDICT ION AND, HENCE, THE SAME IS QUASHED. 21. AS REGARDS THE PLEA OF THE LD. D.R. THAT IN THE ASSESSMENT ORDER PASSED U/S 153A OF THE ACT, THE A.O. HAS MADE THE ADDITIONS/DISALLOWANCES ON THE BASIS OF THE IMPUGNE D ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT, THEREFORE, ON EQUITAB LE GROUND, THE SAID ADDITIONS MAY REMAIN TO BE CONSIDERED AS MADE IN TH E ASSESSMENT ORDER PASSED U/S 153A OF THE ACT, WE FIND THAT IT IS A SE TTLED LAW THAT WHERE THERE IS NO AMBIGUITY AND THE INTENTION OF THE LEGI SLATURE IS CLEARLY CONVEYED, THERE IS NO SCOPE FOR THE COURT TO UNDERT AKE ANY EXERCISE TO READ SOMETHING INTO THE PROVISIONS WHICH THE LEGISL ATURE IN ITS WISDOM CONCISELY OMITTED. SUCH AN EXERCISE IS UNDERTAKEN BY THE COURT MAY AMOUNT TO AMENDING OR ALTERING STATUTORY PROVISIONS . THE COURTS HAVE TO DECIDE WHAT THE LAW IS AND NOT WHAT IT SHOULD BE. FOR THIS PROPOSITION, RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS: - (1) IN UNION OF INDIA VS. DEOKI NANDAN AGGARWAL (19 92) SUPP. 1 SCC 323, A THREE JUDGE BENCH OF HONBLE SUPREME COURT H ELD THAT IT IS NOT THE DUTY OF THE COURT EITHER TO ENLARGE THE SCOPE O F LEGISLATION OR THE INTENTION OF THE LEGISLATURE, WHEN THE LANGUAGE OF THE PROVISION IS PLAIN. THE COURT CANNOT REWRITE THE LEGISLATION FOR THE RE ASON THAT IT HAD NO ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 22 POWER TO LEGISLATE. THE POWER TO LEGISLATE HAS NOT BEEN CONFERRED ON THE COURTS. THE COURT CANNOT ADD WORDS TO A STATUTE O R READ WORDS INTO IT WHICH ARE NOT THERE. (2) IN STATE OF KERALA VS. MATHAI VERGHESE (1986) 4 SCC 746, THE HONBLE SUPREME COURT HAS REITERATED THE WELL-SETTL ED POSITION THAT THE COURT CAN MERELY INTERPRET THE SECTION; IT CANNOT R EWRITE, RECAST OR REDESIGN THE SECTION. IN INTERPRETING THE PROVISIO N THE EXERCISE UNDERTAKEN BY THE COURT IS TO MAKE EXPLICIT THE INT ENTION OF THE LEGISLATURE WHICH ENACTED THE LEGISLATION. IT IS N OT FOR THE COURT TO REFRAME THE LEGISLATION FOR THE VERY GOOD REASON TH AT THE POWERS TO LEGISLATE HAVE NOT BEEN CONFERRED ON THE COURT. (3) IN GWALIOR RAYONS SILK MFG. (WVG.) CO. LTD. VS. CUSTODIAN OF VESTED FORESTS (1990) (SUPP) SCC 785 THE HONBLE SU PREME COURT OBSERVED THAT IN SEEKING LEGISLATIVE INTENTION JUDG ES NOT ONLY LISTEN TO THE VOICE OF THE LEGISLATURE BUT ALSO LISTEN ATTENTIVEL Y TO WHAT THE LEGISLATURE DOES NOT SAY. 4. THE HONBLE SUPREME COURT IN THE CASE OF FEDERAT ION OF ANDHRA PRADESH CHAMBERS OF COMMERCE AND INDUSTRY V. STATE OF ANDHRA PRADESH REPORTED IN [2001] 247 ITR 36 (SC) REITERAT ED THE BASIC PRINCIPLE THAT (PAGE 39):- IT IS TRITE LAW THAT A TAXING STATUTE HAS TO BE ST RICTLY CONSTRUED AND NOTHING CAN BE READ INTO IT.. IN A TAXING ACT ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY SAID. THERE IS NO ROOM F OR ANY INTENDMENT. THERE IS NO EQUITY ABOUT A TAX. THERE IS NO PRESUMPTION AS TO A TAX. NOTHING IS TO BE READ IN, NOTHING IS TO BE IMPLIED. ONE CAN LOOK FAIRLY AT THE LANGUAGE USED. THE HONBLE SUPREME COURT FURTHER WENT ON TO HOLD THAT (PAGE 39 ) THE COURTS IN INTERPRETING A TAXING STATUTE WILL NOT BE JUSTIF IED IN ADDING WORDS THERETO SO AS TO MAKE OUT SOME PRESUMED OBJEC T OF THE LEGISLATURE IF THE LEGISLATURE HAS FAILED TO CLAR IFY ITS MEANING BY THE USE OF THE APPROPRIATE LANGUAGE, THE BENEFIT THEREOF MUST GO TO THE TAXPAYER. IT IS SETTLED LAW THAT IN CASE OF DOUBT, THAT INTERPRETATION OF A TAXING STATUTE WHICH IS BENEFIC IAL TO THE TAXPAYER MUST BE ADOPTED. ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 23 (5) IN CIT VS. TARA AGENCIES (2007) 292 ITR 444 (SC ) IT HAS BEEN HELD BY THEIR LORDSHIPS AT PAGE 464 AS UNDER:- THEREFORE, THE LEGAL POSITION SEEMS TO BE CLEAR AN D CONSISTENT THAT IT IS THE BOUNDEN DUTY AND OBLIGATION OF THE COURT TO INTERPRET THE STATUTE AS IT IS. IT IS CONTRARY TO ALL RULES OF C ONSTRUCTION TO READ WORDS INTO A STATUTE WHICH THE LEGISLATURE IN ITS W ISDOM HAS DELIBERATELY NOT INCORPORATED. 22. RESPECTFULLY FOLLOWING THE ABOVE SETTLED POSITI ON OF LAW, THE PLEA TAKEN BY THE LD. D.R. IS DEVOID OF ANY MERIT AND, H ENCE, REJECTED. 23. SINCE WE HAVE QUASHED THE IMPUGNED ASSESSMENT O RDER ON THE LEGAL GROUND RAISED BY THE ASSESSEE, THEREFORE, WE DO NOT CONSIDER IT NECESSARY TO DISCUSS THE GROUNDS RAISED BY THE ASSE SSEE AND REVENUE ON MERITS OF THE ADDITIONS SUSTAINED/RELIEF ALLOWED. A CCORDINGLY THE OTHER GROUNDS TAKEN BY THE ASSESSEE AND REVENUE ARE REJEC TED. 24. IN THE RESULT, THE ASSESSEES APPEAL STANDS PAR TLY ALLOWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED ON 3-10-2012 SD/- (N.K. BILLAIYA) ACCOUNTANT MEMBER SD/- (DINESH KUMAR AGARWAL) JUDICIAL MEMBER MUMBAI, DATED : 3-10-2012. RK ITA NO. 1074/PN/2007 & ITA N O. 5182/MUM/2007 24 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , KOLHAPU R 4. COMMISSIONER OF INCOME TAX I/II, KOLHAPUR 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI