SHYAM SAROVER BUILDCON PVT. LTD., Jaipur V. DCIT, Jaipur

ITA 710/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1979 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2009-2010
• Appeal Filed On: 15-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA CIT DHK
• Assessee Lawyers: S L PODDAR
• Keywords: Search and seizure; Validity of assessment; Reassessment proceedings
• Section: 40A(3); 143(3); 153A; 147; 148; 132

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 HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 710/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. M/S. SHYAM SAROVER BUILDCON PVT. LTD., 69, SUKH SAGAR, DHULESHWAR GARDEN, SARDAR PATEL MARG, C-SCHEME, JAIPUR. CUKE VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAMCS 0218 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 711/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2009-10. M/S. SHIVSAGAR BUILDCON PVT. LTD., 69, SUKH SAGAR, DHULESHWAR GARDEN, SARDAR PATEL MARG, C-SCHEME, JAIPUR. CUKE VS. THE DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAMCS 0217 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.07.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/07/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THESE TWO APPEALS ARE FILED BY THE DIFFERENT ASSESS ES AGAINST THE ORDERS OF LD. CIT (A)-4, JAIPUR DATED 29.06.2016 IN RESPECT OF AS SESSMENT YEAR 2009-10. THESE TWO APPEALS ARISE OUT OF THE SEARCH CONDUCTED ON NU WAL GROUP ON 18.07.2012. IDENTICAL GROUNDS HAVE BEEN RAISED IN THESE APPEALS , THEREFORE, BOTH THE APPEALS ARE 2 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. TAKEN UP TOGETHER FOR HEARING AND ARE BEING DISPOSE D OFF BY WAY OF A CONSOLIDATED ORDER. FIRST, WE TAKE UP APPEAL IN ITA NO. 710/JP/ 2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED A SSESSING OFFICER IN PASSING THE ORDER U/S 153A R.W.S. 143(3) OF THE IT ACT WHICH IS VOID AB-INITIO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 10,00,0 00/- U/S 40A(3) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF PURCHASE OF LAND IN CASH. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 10,00,0 00/- U/S 40A(3) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF PURCHASE OF LAND IN CASH WHEREAS THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN COMPUTATION OF INCOME. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND O R ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING. 2. BRIEFLY STATED THE FACTS ARE THAT A SEARCH UNDER SECTION 132 WAS CONDUCTED ON 18.07.2012 IN THE CASE OF NUWAL GROUP, JAIPUR TO WH ICH THE ASSESSEE BELONGS. IN THIS CASE THE ASSESSEE HAD ORIGINALLY FILED RETURN OF INCOME ON 09.09.2009 FOR THE YEAR UNDER APPEAL. SUBSEQUENT TO THE SEARCH, A NOTI CE WAS ISSUED TO THE ASSESSEE. IN COMPLIANCE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE FILED A RETURN DECLARING INCOME AT NIL. THE AO FRAMED THE ASSESSMENT VIDE OR DER DATED 25.02.2015 UNDER SECTION 143(3) READ WITH SECTION 153A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) COMPUTING THE TOTAL INCOME AT RS. 10,00,000/-. WHILE FRAMING THE ASSESSMENT, THE AO MADE AN ADDITION OF RS. 10,0 0,000/- ON ACCOUNT OF 3 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. DISALLOWANCE U/S 40A(3) OF THE ACT IN RESPECT OF PA YMENT MADE FOR PURCHASE OF LAND. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFO RE LD. CIT (A), WHO HAS CONFIRMED THE ACTION OF THE AO BY SUSTAINING THE AD DITION. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. GROUND NO. 1 IS AGAINST THE LEGALITY OF THE ORDE R PASSED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT. THE LD. COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. TH E WRITTEN SUBMISSIONS OF THE ASSESSEE ARE REPRODUCED AS UNDER :- IT IS SUBMITTED THAT IN THIS CASE DURING THE COURSE OF SEARCH NO INCRIMINATING DOCUMENT OR MATERIAL WAS FOUND. AS SU CH THE PROVISIONS OF SECTION 153A/153C WERE NOT ATTRACTED. IT IS SETTLED POSITIO N OF LAW BY VARIOUS PRONOUNCEMENTS OF THE COURTS THAT SECTION 153A/153C IS TRIGGERED ONLY ON EXISTENCE OF INCRIMINATING MATERIAL FOUND DURING SEARCH. THE PROVISIONS OF SECTION 153A/153C COME INTO PLAY ONLY WHEN IN SEARCH U/S 132 SOME SE IZURE OF INCRIMINATING MATERIAL IS MADE. IN THIS CASE THE ADDITION HAS BEEN MADE ONLY ON A TECHNICAL GROUND FOR PAYMENT MADE IN CASH DISALLOWED U/S 40A(3) AND NOTH ING ELSE. IN THE ENTIRE ASSESSMENT ORDER THERE IS NO REFERENCE TO ANY SEIZE D MATERIAL ON THE BASIS OF WHICH ADDITIONS HAVE BEEN MADE. IN OTHER WORDS NO INCRIMI NATING MATERIAL WAS FOUND NOR THE SAME HAS BEEN REFERRED TO IN THE ASSESSMENT ORD ER. IN FACT THE LEARNED ASSESSING OFFICER HAS TAKEN ACTION U/S 153A ON THE GROUND THA T SOME DOCUMENTS WERE SEIZED IN THE COURSE OF SEARCH IN THE CASE OF NOWAL GROUP TO WHICH THE ASSESSEE BELONGS. HOWEVER THE ASSESSMENT ORDER NOWHERE DISCLOSES THAT ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE WAS SEIZED. ACTI ON IN THE HANDS OF THE ASSESSEE WAS CALLED FOR U/S 153A ONLY IN CASE THERE WAS SEIZ URE OF INCRIMINATING MATERIAL IN THE HANDS OF THE ASSESSEE. THE SAME BEING ABSENT THE PR OVISIONS OF SECTION 153A DID NOT TRIGGER. THE ENTIRE PROCEEDINGS ARE VITIATED AND TH EREFORE DESERVE TO BE QUASHED. IT IS FURTHER SUBMITTED THAT THE ONLY ADDITION MADE BY THE LEARNED ASSESSING OFFICER IS BASED ON THE BASIS OF PERUSAL OF THE PUR CHASE DEED PERTAINING TO PURCHASE OF A PLOT BY THE ASSESSEE WHICH IS FULLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNTS BUT PAYMENT HAS BEEN MADE IN CASH BEING IN VIOLATION OF SECTION 40A(3). IN VIEW OF THE AFORE FACTS IT IS SUBMITTED WHEN THE RE WAS NO MATERIAL FOUND DURING SEARCH WARRANTING ACTION U/S 153A, THE LEARN ED ASSESSING OFFICER ERRED IN TAKING SUCH ACTION. AS SUCH THE ASSESSMENT PROCEEDI NGS SO COMPLETED U/S 153A 4 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. DESERVE TO BE QUASHED. THE ISSUE HAS NOW BEEN DECIDED BY THE JURISDICTIONA L HIGH COURT OF RAJASTHAN IN THE CASE OF JAI STEEL INDIA V S. ACIT 88 DTR 1. THE HON'BLE HIGH COURT HAS HELD AS UNDER 'SECTION 153A CANNOT BE READ IN ISOLATION, IN AS MU CH AS, THE SAME IS TRIGGERED ONLY ON ACCOUNT OF ANY SEARCH/REQUISITION U/S 132 OR 132A. IF ANY BOOKS OF ACCOUNTS OR OTHER DOCUMENTS RELEVANT T O THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURT OF ORIGINAL ASSE SSMENT AND FOUND IN THE COURSE OF SEARCH, SUCH BOOKS OF ACCOUNTS OR OTHER DOCUMENTS HAVE TO BE TAKEN INTO CONSIDERATION WHILE ASSESSING OR REASSESSING THE TOTAL INCOME UNDER THE PROVISIONS OF S. 153A. EVEN IN A CASE WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE T AKEN INTO CONSIDERATION. THE REQUIREMENT OF ASSESSMENT OR REA SSESSMENT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF S . 132 OR S. 132A, IN AS MUCH AS IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT O F SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSES SMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE.' THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COU RT HAS HELD THAT PROCEEDINGS U/S 153A ARE WARRANTED ONLY ON EXISTENC E OF INCRIMINATING MATERIAL WHICH IN THIS CASE WAS ABSENT. BESIDES THE AFORESAID DECISION OF THE JURISDICTIONA L HIGH COURT OF RAJASTHAN THE HON'BLE BENCH IS ALSO TAKING CONSISTENT VIEW FO LLOWING THE DECISION OF KABUL CHAWLA OF DELHI HIGH COURT IN ITA NO. 707/2014 DATE D 22.08.2015. THE OTHER SUPPORTING DECISIONS ARE AS UNDER: - (A) SINGHAD TECHNICAL EDUCATION SOCIETY VS. ACIT (2011) 57 DTR 241 SEARCH AND SEIZURE ASSESSMENT U/S 153C ABSENCE OF INCRIMINATING MATERIAL WHERE NO ASSESSMENT YEAR SPECIFIC INCRIMINATING MAT ERIAL OR DOCUMENT IS FOUND, ASSESSMENT OF SUCH ASSESSMENT YEAR CANNOT BE DISTUR BED BY INVOKING THE PROVISIONS OF SECTION 153C. (B) LMJ INTERNATIONAL LTD. VS. DCIT (2008) 14 DTR 540 (K OL TRIB) WHERE NOTHING INCRIMINATING IS FOUND IN THE COURSE OF SEARCH RELATING TO ANY ASSESSMENT YEAR, THE ASSESSMENT OF SUCH YEARS CANNO T BE DISTURBED. ITEMS OF REGULAR ASSESSMENT CANNOT BE ADDED BACK IN THE PROC EEDING U/S 153C WHEN NO INCRIMINATING DOCUMENTS WERE FOUND IN RESPECT OF TH E DISALLOWED AMOUNT IN THE SEARCH PROCEEDINGS. 5 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. (C) ACIT VS. GAMBHIR SILK MILLS (2010) 6 ITR 376 (AHM. TRIB) IN THE PRESENT CASE, IT IS SEEN THAT WHEN THE SEARC H WAS CONDUCTED AT THE PREMISES OF SHRI SUBHASH GAMBHIR, NO AMOUNT OF MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED BELONGED TO THE PRESENT ASSESSEE. NOTHING IS HANDED OVER TO THE AO HAVING J URISDICTION OVER THE PRESENT ASSESSEE. NO SUCH VALUABLE ARTICLE OR THING OR ANY BOOKS OF ACCOUNT OR DOCUMENTS HAVE BEEN REFERRED EVEN IN THE ASSESSMENT ORDER FOR FRAMING ASSESSMENT UNDER S. 153C OF THE IT ACT, 1961. SINCE FOR ALL THESE YEARS , THE RETURNS WERE ORIGINALLY FILED AND PROCESSED AND SINCE NO ADDITIONAL MATERIAL IS FOUND PERTAINING TO THE ASSESSEE, WHICH IS HELD TO BE BELONGING TO THE ASSESSEE THE A O DOES NOT ASSUME JURISDICTION FOR FRAMING ASSESSMENT UNDER S. 153C R.W.S. 153A OF THE IT ACT, 1961. WE THEREFORE, CANCEL ALL THE ASSESSMENTS MADE FOR ALL THESE YEARS. SINCE WE HAVE CANCELLED THE ASSESSMENTS, WE DO NOT PROPOSE TO DEA L WITH GROUNDS RAISED BY THE REVENUE IN APPEALS AND GROUND RAISED BY THE ASSESSE E IN CROSS-OBJECTIONS ON THE MERITS. (D) UTTRA S. SHOREWAL 48 SOT 6 THE INTENTION OF SECTION 153A IS NOT TO DISTURB MAT TERS THAT HAVE REACHED FINALITY BETWEEN THE PARTIES. IT IS TRUE THAT THE PROVISIONS OF SECTION APPLY NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 147 AND SECTION 148. BUT THAT ONLY CONVEYS THE LIMITED IDEA THAT ONCE A SEARCH TAKES PLACE, IT IS OPEN TO THE ASSESSING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS I MMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH WAS CONDUCTED AND IN EXERCISING SUCH POWER, THE ASSESSING OFFICER WAS NO T BOUND TO TAKE RECOURSE TO SECTION 147 OR SECTION 148. BUT THIS IS ONLY FOR TH E PURPOSE OF INITIATING PROCEEDINGS FOR ASSESSMENT UNDER SECTION 153A IT DOES NOT MEAN THAT MATTERS THAT HAVE ALREADY BEEN DECIDED BETWEEN THE PARTIES AND HAD REACHED FI NALITY CAN BE DISTURBED AND BROUGHT BACK TO ASSESSMENT. IF SUCH A POWER IS GIVEN TO THE ASSESSING OFFICER, HE COULD EVEN NULLIFY DECISIONS OF THE HIGH COURTS AND SUPREME COURT, A POWER WHICH WOULD BE WHOLLY INCONSISTENT WITH THE LAW OF THE LA ND. SECTION 153A CANNOT BE CONSTRUED IN SUCH A MANNER. (E) ALL CARGO GLOBAL LOGISTIC LTD. VS. DCIT 137 ITD 287 THE SPECIAL BENCH OF THE TRIBUNAL 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 A O IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE R ETURN OF INCOME OF SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE WORD USED IS 'SHALL' AND, THUS, THERE IS NO OPTION BUT TO ISSUE SUCH A NOTICE. THEREAFTER HE HAS TO ASSESS OR REASSESS TOTAL 6 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. INCOME OF THESE SIX YEARS. IN THIS RESPECT ALSO, TH E WORD USED IS 'SHALL' AND, THEREFORE, THE AO HAS NO OPTION BUT TO ASSES OR REA SSESS THE TOTAL INCOME OF THESE SIX YEARS. THE PENDING PROCEEDINGS SHALL ABATE. THIS ME ANS 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 HAS NOW TO BE MADE UNDER SECTION 153 A(1)(B) AND THE FIRST PROVISO. IT ALSO MEANS THAT ONLY ONE ASSESSMENT WILL BE MADE UNDER THE AFORESAID PROVISIONS AS THE TWO PROCEEDINGS I.E. ASSESSMENT OR REASSESSM ENT PROCEEDINGS AND PROCEEDINGS UNDER THIS PROVISION MERGED INTO ONE. I F ASSESSMENT MADE UNDER SUB- SECTION (1) IS ANNULLED IN APPEAL OR OTHER LEGAL PR OCEEDINGS, THEN THE ABATED ASSESSMENT OR REASSESSMENT SHALL REVIVE. THIS MEANS THAT THE ASSESSMENT OR REASSESSMENT, 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 ASSES SMENT OR REASSESSMENT OF TOTAL INCOME UNDER SECTION 153A(1)(B) AND THE FIRST PROVI SO? WE ARE OF THE VIEW THAT FOR ANSWERING THIS QUESTION, GUIDANCE WILL HAVE TO BE S OUGHT 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 OF ACCOUNT OR OTHER D OCUMENTS HAVE TO BE TAKEN INTO ACCOUNT WHILE MAKING ASSESSMENT OR REASSESSMENT OF TOTAL INCOME UNDER THE AFORESAID PROVISION. SIMILAR POSITION WILL OBTAIN I N A CASE WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQU ENCE OF SEARCH. IN OTHER WORDS, HARMONIOUS INTERPRETATION WILL PRODUCE THE FOLLOWIN G RESULTS:- A) IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE ORIGINAL ASSESSMENT AND ASSESSMENT UNDER SECTION 153A MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE S EPARATELY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING 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 DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH, AND U NDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SE ARCH. ' 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 HIM 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 HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDER SECTION 153A WILL BE MADE ON T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIO NS MEANS 7 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (I) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH.' IN THE AFORESAID CASE THE HON'BLE TRIBUNAL CLEARLY HELD THAT EXCLUDING THE CASES WHICH ARE PENDING FOR ASSESSMENT AND WHICH STAND ABATED O N ACCOUNT OF THE SEARCH OPERATION, IN THE REMAINING CASES ASSESSMENT SHALL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. IN THE CASE OF THE ASSESSEE THE ASSESSMENT ORDER IS DEVOID OF ANY INCRIMINATING MATERIAL AND HENCE THE ADDITION W AS UNFOUNDED AND UNWARRANTED. THE RATIO OF THIS CASE IS SQUARELY APPLICABLE TO TH E FACTS OF THE CASE. (F) ANIL KUMAR BHATIA VS. ASSISTANT COMMISSIONER OF INC OME TAX (2012) 80 DTR 169 (DEL) 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 DETER MINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASES WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALR EADY BEEN COMPLETED 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 SINCE NO PROC EEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER 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 O RDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY R EASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT 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 PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE. ( PARA NO. 21) IF IT IS NOT IN DISPUTE THAT THE DOCUMENT WAS FOUND IN THE COURSE OF THE SEARCH OF THE ASSESSEE, THEN SECTION 153A IS TRIGGERED. ONCE THE SECTION IS TRIGGERED , IT APPEARS MANDATORY FOR THE ASSESSING OFFICER TO ISSU E NOTICES UNDER SECTION 153A CALLING UPON THE ASSESSEE TO FILE RETURNS FOR THE S IX ASSESSMENT YEARS PRIOR TO THE YEAR IN WHICH THE SEARCH TOOK PLACE. (PARA NO. 22)' THE AFORESAID PARA 21 CLEARLY INDICATES THAT IN THE IR DECISION THE HON'BLE HIGH COURT HAS OBSERVED THAT THE ASSESSMENT IN CASES WHICH DO NOT ABATE WILL BE OF INCOME AS DETERMINED EARLIER AND THE ESCAPED INCOME. THE ASSE SSMENT SHALL BE SIMILAR TO ORDERS PASSED IN ANY RE-ASSESSMENT. IT IS SUBMITTED THAT THE RE-ASSESSMENTS ARE 8 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. MADE ONLY WHEN SOME INCOME IS FOUND TO HAVE ESCAPED . IN OTHER WORDS IF THERE IS NO ESCAPE INCOME THERE WOULD BE NO RE-ASSESSMENT. THUS IN THE CASE OF THE ASSESSEE THERE WAS NO ESCAPED INCOME AND HENCE NO RE-ASSESSM ENT WAS REQUIRED. THE COURT HAS FURTHER HELD IN PARA 22 THAT SECTION 153A IS TRIGGERED ONLY WHEN SOME INCRIMINATING DOCUMENTS ARE FOUND. THE COURT HAS RE FERRED TO SOME DOCUMENT SHOWING UNDISCLOSED INCOME IN THE CASE OF ANIL KUMA R BHATIA. SO FAR AS THE CASE OF THE ASSESSEE UNDER CONSIDERATION IS CONCERNED NO DO CUMENT WAS FOUND. ALTHOUGH THE LEARNED CIT(A) HAS ALSO CITED THIS CASE IN THE DEFENSE OF THE REVENUE BUT VIRTUALLY THE DECISION IN THE FAVOUR OF THE ASSESSEE. IN VIEW OF THIS THERE WAS NO JUSTIFICATION FOR APPLYING THE PROVISIONS OF SECTION 153A IN THE CASE OF THE ASSESSEE. (G) ASSISTANT COMMISSIONER OF INCOME TAX VS. PRATIBHA I NDUSTRIES LTD (2013) 23 ITR (TRIB) 766 (MUMBAI) '47. WHEN WE LOOK INTO CLAUSE (B) OF SUB SECTION (1 ) OF SECTION 153A, THE LEGISLATURE HAS GRANTED AN AUTHORITY ON THE AO TO ASSESS OR REA SSESS THE TOTAL INCOME. THIS CLAUSE HAS TO BE READ ALONG WITH 2ND PROVISO, WHERE THE LAW HAS LAID RESTRICTION OVER THE AO AS TO WHICH ASSESSMENT WOULD BECOME ELIGIBLE FOR BEING ASSESSED OR REASSESSED. 2ND PROVISO SPECIFIES THAT THE AO CAN O NLY ASSESS OR REASSESS THE ASSESSMENT YEARS WHICH ARE STILL PENDING BEFORE HIM , AS THE LEGISLATURE HAS ONLY MENTIONED THE WORDS ASSESSEE OR REASSESS, WHICH POW ER IS ONLY VESTED WITH THE AO, THEREFORE, NO OTHER PROCEEDING CAN GET ABATED, WHIC H INCLUDES APPEAL, REVISION OR RECTIFICATION (AS PER CIRCULAR NO. 7 (SUPRA)). 48. NOW WE HAVE TO TREAD INTO A SITUATION WHERE ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION OF BOOKS, NO PROCE EDING(S) IS PENDING, BUT IN THE SEARCH, MATERIAL IS FOUND INDICATING INCRIMINATING MATERIAL. IN THIS SITUATION, THE AO EMBARKS ON A JURISDICTION, WHEREIN HE HAS TO CLUB T HE TWO SETS OF INCOMES, I.E. RETURNED INCOME AND THE UNEARTHED INCOME AND ARRIVE AT THE TOTAL INCOME. 49. THERE IS ANOTHER CIRCUMSTANCE, WHEREIN, IN THE SEARCH OPERATION, NO INCRIMINATING MATERIAL IS FOUND AND THERE ARE NO PR OCEEDINGS PENDING BEFORE THE AO. IN THIS SCENARIO, AS PER THE PROVISIONS OF SECTION 153A(1), THE AO HAS TO ISSUE NOTICES UNDER SECTION 153A, ASKING THE SEARCHED PERSON TO F ILE ITS RETURNS . SINCE THERE ARE NO PROCEEDINGS WHICH ARE PENDING BEFORE HIM, 2ND PROVI SO STOPS THE AO TO PROCEED FURTHER, BECAUSE PROCEEDINGS CANNOT BE ABATED AND S INCE THERE IS NO MATERIAL, NO FURTHER JURISDICTION IS EMBARKED ON HIM.' IN THE AFORESAID DECISION THE HON'BLE TRIBUNAL HAS ANALYZED AT LENGTH THE DECISIONS OF - (I) THE HON'BLE HIGH COURT DELHI IN THE CASE OF ANIL KUM AR BHATIA (II) ALL CARGO GLOBAL LOGISTIC LTD. VS. DCIT 137 ITD 287 9 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. (III) UTTRA S SHOREWAL (IV) SINGHAD TECHNICAL EDUCATION SOCIETY VS. ACIT (2011) 57 DTR 241 AND HAS HELD THAT ASSESSING OFFICER CANNOT PROCEED U/S 153A IN A CASE WHERE NO PROCEEDINGS ARE PENDING AND NO MATERIAL WAS FOUND D URING THE COURSE OF SEARCH. FURTHER THE ASSESSMENT WAS FRAMED BY INVOKING THE P ROVISIONS OF SECTION 40A(3) OF THE INCOME TAX ACT, 1961 AND NOT ON THE B ASIS OF ANY INFORMATION OR DOCUMENT FOUND DURING THE COURSE OF SEARCH. IN THE RECENT JUDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA ITA NO.70 7, 709 AND 713/2014 DATED 28.08.2015 (DELHI HIGH COURT) IT WAS HELD THAT NO CO NCLUDED ASSESSMENT CAN BE DISTURBED WITHOUT ANY MATERIAL FOUND DURING THE COU RSE OF SEARCH AND IN RECENT JUDGMENT OF DAMODAR DAS MODI AND NIRMAL KUMAR AGARWAL AND ANOTHER CASE OF ANIL KUMAR GOYAL IN ITA NO. 719/JP/2015 AND 720/JP/ 2015 DATED 21.04.2015 THE HONBLE ITAT JAIPUR BENCH IS CONSISTENTLY FOLLOWING THE SAME PREPOSITION. IN VIEW OF THE AFORESAID CASES IT IS SUBMITTED THAT ADDITION MADE BY THE LEARNED ASSESSING OFFICER BY RESORTING TO SECTION 1 53A DESERVES TO BE KNOCKED DOWN. THE BASIC ISSUE IS THAT SECTION 153A IS TRIGG ERED ONLY WHEN SOME INCRIMINATING MATERIAL IS FOUND DURING SEARCH. IN T HE CASE OF THE ASSESSEE NEITHER SUCH INCRIMINATING MATERIAL WAS FOUND FURTHER NO SU CH INCRIMINATING DOCUMENT HAS BEEN MARSHALED IN THE ASSESSMENT ORDER. FURTHER NO ADDITIONS HAVE BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL. THE ASSESS MENT FRAMED THEREFORE WITHOUT JURISDICTION AND DESERVES TO BE QUASHED. 4. ON THE CONTRARY, THE LD. D/R SUPPORTED THE ORDER S OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE LD. COUNSEL FOR THE ASSESSEE PLACING RELIANCE ON THE DECISION O F HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA IN ITA NO. 707, 709 AND 713/2014 DATED 28.08.2015 SUBMITTED THAT NO CONCLUDED ASSESSMENT C AN BE DISTURBED WITHOUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE JAIPUR BENCH OF THE TRIBUNAL IN VARIOUS CASES HAS BEEN CONSISTENTLY FOL LOWING THE SAME 10 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. PROPOSITION. WE FIND THAT THE COORDINATE BENCH OF T HE TRIBUNAL IN ITA NO. 303 & 304/JP/2014 PERTAINING TO ASSESSMENT YEARS 2008-0 9 AND 09-10 UNDER THE IDENTICAL FACTS HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER :- 2.18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. APROPOS THE VALIDITY OF ASSESSMENTS WE FIND THAT ORIGINAL NOTICE WAS ISSUED U/S 153A AN D THERE IS NEITHER ANY WARRANT OR SEARCH ON ASSESSEE. SIMILARL Y WHILE ISSUING NOTICE U/S 153C NO SATISFACTION IN THIS BEHALF IN T HE CASE OF MODI GROUP NOR THERE WAS ANY ASSESSMENT IN THE CASE OF S HRI GOVIND DEV AS THE 153A PROCEEDINGS WERE DROPPED IN THAT CA SE. THE SATISFACTION RECORDED BY AO INITIATING 153C IS SILE NT REGARDING THE PENDING PROCEEDING INITIATED U/S 153A BY NOTICE DTD . 29.12.2009 IN THE CASE OF THE ASSESSEE. THE PROCEEDINGS THOUGH PURPORTED TO BE INITIATED U/S 153C THE ASSESSMENTS ARE COMPLETED U/S 153A RWS 143(3) AS EVIDENCED BY THE RESPECTIVE ORDERS OF LD. AO AND CIT (A). THIS LEADS TO A LEGAL SITUATION WHERE DURI NG THE PENDENCY OF 153A PROCEEDINGS NOTICE U/S 153C IS ISSUED. TO F URTHER CONFOUND THE SITUATION THE PROCEEDINGS ARE PURPORTE D TO BE CONTINUED U/S 153C BUT THE ASSESSMENTS ARE COMPLETE D U/S 153A DESPITE CONSCIOUSLY DROPPING THE NOTICE U/S 153A. WE FIND MERIT IN THE ARGUMENT OF LD. COUNSEL THAT ASSESSMENTS U/S 153A AND 153C ARE INDEPENDENT AND MUTUALLY EXCLUSIVE, AN ASS ESSMENT CANNOT BE FRAMED IN CONTINUATION OF BOTH NOTICES AN D SIMILARLY CANNOT BE CONCLUDED U/S 153A IF PROCEEDINGS ARE UND ERTAKEN U/S 153C. IN VIEW OF THE FACTS, CIRCUMSTANCES AND JUDIC IAL PRECEDENTS CITED ABOVE, WE HOLD THAT IMPUGNED ASSESSMENTS ARE UNTENABLE AND BAD IN LAW. OUR VIEW IS FORTIFIED BY JINDAL ST AINLESS STEEL LTD. AND SHITAL PRASAD KHARAG PRASAD (SUPRA). THE REVENUE HAS NOT BROUGHT ANY CONTRARY MATERIAL I N SUPPORT OF ITS CASE. IN THE LIGHT OF ABOVE, WE ARE OF THE VIEW THAT THE ASS ESSMENT MADE UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT WI THOUT HAVING ANY 11 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. INCRIMINATING DOCUMENT, IS UNTENABLE AND BAD IN LAW . THEREFORE, TAKING A CONSISTENT VIEW IN THE MATTER, AND FOLLOWING THE DE CISION OF THE COORDINATE BENCH (SUPRA), GROUND NO. 1 OF THE ASSESSEE IS ALLO WED. 6. GROUND NO. 2 AND 3 RELATES TO THE ADDITION OF RS . 10,00,000/- ON ACCOUNT OF PURCHASE OF LAND IN CASH AND NOT CLAIMING ANY DEDUC TION IN COMPUTATION OF INCOME. 7. SINCE WE HAVE DECIDED GROUND NO. 1 IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE ASSESSMENT MADE UNDER SECTION 153A READ WITH SE CTION 143(3) OF THE ACT, WITHOUT HAVING ANY INCRIMINATING MATERIAL, IS UNTEN ABLE AND BAD IN LAW, THE GROUND NOS. 2 AND 3 HAVE BECOME ACADEMIC IN NATURE AND REQ UIRE NO ADJUDICATION. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, T HE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 711/JP/2016 : 8. NOW WE TAKE UP THE ASSESSEES APPEAL IN ITA NO. 711/JP/2016. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED A SSESSING OFFICER IN PASSING THE ORDER U/S 153A R.W.S. 143(3) OF THE IT ACT WHICH IS VOID AB-INITIO DESERVES TO BE QUASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 10,00,0 00/- U/S 40A(3) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF PURCHASE OF LAND IN CASH. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 10,00,0 00/- U/S 40A(3) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF PURCHASE OF LAND IN CASH WHEREAS THE ASSESSEE HAS NOT CLAIMED ANY DEDUCTION IN COMPUTATION OF INCOME. 12 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR. 4. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEND O R ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEAR ING. 9. WE HAVE ALREADY ADJUDICATED THE IDENTICAL GROUND S MENTIONED ABOVE IN THE CASE OF M/S. SHYAM SAROVER BUILDCON PVT. LTD. IN IT A NO. 710/JP/2016 HEREINABOVE THEREBY ALLOWING THE APPEAL OF THE ASSESSEE. THEREF ORE, FOLLOWING THE DECISION ARRIVED THEREIN, WE ALLOW THE APPEAL OF THE ASSESSE E IN THIS CASE ALSO. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE S ARE ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 27.07.2 017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27/07/2017. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. SHYAM SAROVAR BUILDCON P. L TD., JAIPUR AND M/S. SHIV SAGAR BUILDCON PVT. LTD., JAIPUR. 2. THE RESPONDENT THE DCIT, CENTRAL CIRCLE-3, JAIP UR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 710 & 711/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 13 ITA NOS. 710 & 711/JP/2016 M/S. SHYAM SAROVAR BUILDCON PVT LTD. & M/S. SHIV SAGAR BUILDCON PVT. LT D., JAIPUR.