Asstt. Commissioner of Income Tax, Kanpur V. M/s. Vikrant Chemico Industries (P) Ltd., Kanpur

ITA 72/LKW/2013

• Counselvise Citation: 7223714 RSA 2013
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 16-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 11-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Keywords: Search and seizure; Loose papers; Rule of consistency; Reason to believe; Reassessment proceedings
• Section: 143(3); 153A; 147; 148; 10; 15; 139

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.72/LKW/2013 ASSESSMENT YEAR:2005 2006 ACIT, CENTRAL CIRCLE - 2, KANPUR VS. M/S VIKRANT CHEMICO INDUSTRIES PVT. LTD., 49, GOVERNMENT INDUSTRIAL ESTATE, KANPUR 208012. PAN:AAACV 4467 H (APPELLANT) (RESPONDENT) C.O.NO.40/LKW/2013 (IN ITA NO. 72/LKW/2013 ) ASSESSMENT YEAR:2005 2006 ACIT, CENTRAL CIRCLE - 2, KANPUR VS M/S VIKRANT CHEMICO INDUSTRIES PVT. LTD., 49, GOVERNMENT INDUSTRIAL ESTATE, KANPUR 208012. PAN:AAACV4467H (RESPONDENT) (OBJECTOR) REVENUE BY SHRI O. P. MEENA, CIT DR ASSESSEE BY NONE DATE OF HEARING 22/07/2015 DATE OF PRONOUNCEMENT 1 8 /09/2015 O R D E R PER A. K. GARODIA, A.M. THIS APPEAL IS FILED BY THE REVENUE AND THE C.O. IS FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT (A) I KANPUR DATED 31.10.2012 FOR A.Y. 2005 2006. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: - 2 1. THE LD. CIT (A) I, KANPUR ERRED ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN CONSIDERING THE REASON BEHIND INITIATION OF PROCEEDING U/S 147 OF THE IT ACT, 1961. 2. THAT LD. CIT(A) - I, KANPUR HAS NOT CORRECTLY APPR ECIATING THE RATIO OF DECISION IN CIVIL MISC. WRIT PETITION NO.640 OF 2005, NO.700 OF 2006 AND NO.1687 OF 2004 IN THE CASE OF DR. SHARAD B. SAHAI & ANOTHER VS. CIT(CENTRAL) CITED FOR INITIATION OF PROCEEDINGS U/S 1478. 3. THAT CIT(A) HAS ERRED IN HOLDING A SSESSMENT INVALID EVEN THOUGH THE A.O. HAD RECORDED REASON ON THE BASIS OF INFORMATION RECEIVED IN THE COURSE OF SEARCH AND THEN ASSESSMENT FRAMED EARLIER U/S 153A HAD ALREADY BEEN ANNULLED AS HELD TO BE WITHOUT JURISDICTION BY HIMSELF. 4. THAT THE ORDER OF THE LD. CIT(A) - 1, KANPUR BEING ERRONEOUS IN LAW AND ON FACTS AND DESERVES TO BE VACATED AND THE ORDER OF THE AO BE RESTORED. 5. THAT THE APPELLANT CRAVES LEAVE TO AMEND OR ADD ADDITIONAL GROUNDS OF THE APPEAL WHEN REQUIRED. 3. GROUNDS AS PER THE C.O. O F THE ASSESSEE ARE AS UNDER: - 1. BECAUSE PROCEEDINGS UNDER SECTION 147 HAVE NEITHER BEEN VALIDLY INITIATED NOR CONCLUDED IN ACCORDANCE WITH THE PROVISIONS OF LAW AND THE ASSESSMENT ORDER DATED 30.12.2011 AS HAS BEEN IMPUGNED IN THIS APPEAL, IS VOID AB - IN ITIO. 2. BECAUSE ON A DUE CONSIDERATION OF THE ATTENDANT FACTS AND CIRCUMSTANCES OF THE CASE, PARTICULARLY THAT (A) ASSESSMENT WITH REFERENCE TO ''RETURN' FILED ON 31.01.2005 HAD BEEN TREATED TO HAVE ABATED IN CONSEQUENCE OF SEARCH AND SEIZURE UNDER SECTI ON 132(1) THAT HAD TAKEN PLACE ON 29.12.2005; AND (B) IN CONSEQUENCE OF (A) ABOVE, ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143(3) HAD DULY BEEN MADE ON 31.12.2007 NO ASSESSMENT RELATED PROCEEDINGS COULD HAVE BEEN VA L IDLY INITIATED AGAINST THE ASSESSEE/RESPONDENT, SIMPLY ON THE GROUND THAT EARLIER ASSESSMENT DATED 31.12.2007 PASSED UNDER SECTION 153A READ WITH SECTION 143(3) HAD NOT BEEN FOUND TO BE MAINTAINABLE IN LAW. 3 3. BECAUSE OTHERWISE ALSO, THE 'REASONS RECORDED' IN THE INSTANT CASE ARE N OT RELEVANT FOR ASSUMPTION OF JURISDICTION FOR MAKING REASSESSMENT UNDER SECTION 147 AND VERY INITIATION OF PROCEEDINGS UNDER SECTION 147 IS ILLEGAL. 4. BECAUSE INITIATION OF PROCEEDINGS UNDER SECTION 147 IS BARRED BY LIMITATION, AS THE SAME IS HIT BY THE PROVISO TO SECTION 147. 5. BECAUSE THE DY. CIT DID NOT GET JURISDICTION TO MAKE ASSESSMENT IN PURSUANCE OF NOTICE UNDER SECTION 148 (SAID TO HAVE BEEN ISSUED ON 31.03.2011) AS NO SUCH NOTICE (UNDER SECTION 148) WAS EVER SERVED ON THE ASSESSEE/RESPONDENT, IN ACCORDANCE WITH THE PROVISIONS OF LAW. 6. BECAUSE WITHOUT PREJUDICE TO THE CONTENTIONS RAISED IN THE FOREGOING GROUNDS, THE ASSESSMENT ORDER DATED 30.12.2011 IS WHOLLY ILLEGAL AS A) AFTER THE 'RETURN' HAD BEEN FILED ON 14.11.2011 IN THE PROCEEDINGS UNDER SECTION 147, NO NOTICE UNDER SECTION 143(2) WAS ISSUED BY THE DY. CIT; AND B) THE ASSESSEE/RESPONDENT HAD SPECIFICALLY OBJECTED TO THE VERY VALIDITY OF PROCEEDINGS UNDER SECTION 147, BUT T HE SAID OBJECTIONS FILED ON 14.12.2011 REMAINED UNADJUDICATED UPON BY THE DY. CIT. AND ACCORDINGLY THE ASSESSMENT ORDER DATED 30.12.2012 IS LIABLE TO BE DECLARED AS NULL AND VOID. 7. BECAUSE THE ASSESSEE/RESPONDENT DISPUTES THE ENTIRE VARIATION' OF RS.53, 51,337/ - , BETWEEN THE INCOME SHOWN IN THE 'RETURN' (FILED ON 29.11.2007 AT RS.16,57,990/ - IN COMPLIANCE WITH THE NOTICE UNDER SECTION 153A) AND THE INCOME ASSESSED AT RS.70,09,327/ - IN TERMS OF THE IMPUGNED ORDER DATED 30.12.2012, AS SUCH VARIATION IS BEYO ND THE SCOPE OF POWERS OF THE DY. CIT. 8. BECAUSE THE ASSESSEE/RESPONDENT DISPUTES THE ENTIRE VARIATION OF RS.53,51,337/ - , BETWEEN THE INCOME SHOWN IN THE 'RETURN' FILED ON 29.11.2007 AND INCOME ASSESSED IN TERMS OF THE ASSESSMENT ORDER DATED 30.12.2012) WHICH IS REPRESENTED BY 4 (RS.) A) ALLEGED DIFFERENCE IN VALUATION OF STOCK 19,75,621 B)PROFIT ON SALES AMOUNTING TO RS.6,98,199 ALLEGED TO HAVE BEEN SUPPRESSED, AND STATED TO HAVE BEEN TO M/S R.N. TRADING CO. 2,86,010 C)PROFIT ON UNDISCLOSED SALES AMOUNTING TO RS.22,55,706/ - ALLEGED TO HAVE BEEN REVEALED BY LOOSE PAPERS (AFTER ADJUSTMENT OF INCOME OF INCOME OF RS.6,68,533 SURRENDERED BY THE ASSESSEE/RESPONDENT) 2,57,434 D)ALLEGED DIFFERENCE IN NET PROFIT, TREATED AS UNDISCLOSED INCOME 11,51,015 E)LIABILITIES AS APPEARING IN THE BALANCE SHEET, SAID TO HAVE BEEN INFLATED, AFTER ADJUSTING THE ADDITION MADE ON ACCOUNT OF DIFFERENCE IN NET PROFIT 9,16,365 F)EXPENDITURE SAID TO HAVE BEEN INCURRED ON THE BASIS OF LP - 2, LP - 4, AND LP - 16 NOT VERIFIABLE FROM THE BOOKS OF ACCOUNT 10,359 G)UNDISCLOSED TRANSACTIONS IN THE NAME OF JAGDAMBA 56,563 H)OVERALL DIFFERENCE IN GP RATE (BALANCING FIGURE) 6,97,970 53,51,737 EVEN ON MERITS THEREOF 9. BECAUSE TO ASSAIL THE OVERALL COMPUTATION OF RS.70,09,327/ - (AFTER CONSIDERING THE INCOME SHOWN IN THE RETURN) THE ASSESSEE/RESPONDENT HAD PLACED ON RECORD VOLUMINOUS COMPILATION AND ON A DUE CONSIDERATION OF THE SAME, THE LD. CIT(A) SHOULD HAVE HELD THAT NO SUCH ADDITION WAS CALLED FOR, EITHER ON FACTS OR IN LAW. 5 4. THIS APPEAL AND C.O. WERE FIXED FOR HEARING ON SEVERAL OCCASIONS LASTLY ON 25.06.2015 AND 16.07.2015 AND ON ALL THESE DATES, THE HEARING WAS ADJOURNED ON THE REQUEST OF THE LEARNED AR OF THE ASSESSEE SHRI PRADEEP KUMAR KAPOOR, C.A. WITH LAST OPPORTUNITY AS THE APPEAL AND C.O. ARE VERY OLD HAVING BEING FILED IN 2013. ON 22.07.2015 ALSO, LEARNED AR OF THE ASSESSEE SHRI PRADEEP KUMAR KAPOOR, C.A. AGAIN REQUESTED FOR ADJOURNMENT WHICH WAS REJECTED AND THE APPEAL AND C.O. WERE HEARD. LEARNED AR OF THE ASSESSEE W AS GIVEN AN OPTION TO FILE WRITTEN SUBMISSIONS TILL 31.07.2015 BUT THE SAME WERE NOT FILED TILL DATE. LEARNED DR OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DR OF THE REVENUE AND GONE THROUGH THE ORDE RS OF THE LOWER AUTHORITIES. WE FIND THAT THE DECISION OF LEARNED CIT (A) IS THIS THAT THE A.O. IS DIRECTED TO FOLLOW THE ORDER OF SAME CIT (A) IN A.Y. 2004 05. THIS IS NOT SHOWN BY LEARNED DR OF THE REVENUE THAT THE ORDER OF CIT (A) IN A. Y. 2004 05 WAS CHALLENGED BY THE REVENUE BEFORE THE TRIBUNAL. WHEN THE REVENUE HAS ACCEPTED THE ORDER OF CIT (A) IN A. Y. 2004 - 05 AND CIT (A) IN THIS YEAR I.E. A.Y. 2005 06 IS FOLLOWING HIS OWN ORDER IN A.Y. 2004 05, WE ARE OF THE CONSIDERED OPINION THAT AS PER T HE PRINCIPLE OF CONSISTENCY ALONE, THE APPEAL OF THE REVENUE DESERVES TO BE DISMISSED. WE ORDER ACCORDINGLY. 6. REGARDING THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT RENDERED IN THE CASE OF DR. SHARAD B. SAHAI VS. CIT AS REPORTED IN 235 CTR 596 AND RELIE D UPON BY THE REVENUE IN GROUND NO. 2, WE FIND THAT THIS JUDGMENT IS NOT APPLICABLE BECAUSE THE FACTS AND THE DISPUTE ARE DIFFERENT. IN THAT CASE, THE ASSESSEE WAS ASSESSED AT ACIT, CENTRAL CIRCLE NOIDA AND A SEARCH WAS CARRIED OUT AND THEREAFTER, LEARNED CIT AS PER ORDER U/S 127 TRANSFERRED THE CASE TO ACIT, CENTRAL CIRCLE, MEERUT. SUBSEQUENTLY, THE SEARCH WARRANT WAS QUASHED BY HONBLE ALLAHABAD HIGH COURT AND FOR THIS REASON, THE ASSESSEE 6 CHALLENGED THE VALIDITY OF TRANSFER ORDER PASSED BY CIT U/S 127 AN D AS A CONSEQUENCE, CHALLENGED THE VALIDITY OF REASSESSMENT PROCEEDINGS INITIATED BY ACIT, CENTRAL CIRCLE, MEERUT. UNDER THESE FACTS, IT WAS HELD BY HONBLE ALLAHABAD HIGH COURT THAT REASSESSMENT PROCEEDINGS INITIATED BY ACIT, CENTRAL CIRCLE, MEERUT ARE VA LID AND THE SAME ARE NOT WITHOUT JURISDICTION. THE FACTS AND THE DISPUTE IN THE PRESENT CASE ARE ENTIRELY DIFFERENT AND THEREFORE, THIS JUDGMENT IS NOT RELEVANT IN THE PRESENT CASE. HENCE, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THE BASIS OF PRIN CIPLE OF CONSISTENCY BECAUSE THE REVENUE HAS ACCEPTED THE ORDER OF CIT(A) IN A.Y. 2004 05 AND NO DIFFERENCE IN FACTS ARE POINTED OUT BY THE LEARNED DR OF THE REVENUE IN THE PRESENT YEAR AND IN A.Y. 2004 05 AND IN THE ORDER OF CIT(A) FOR THE PRESENT YEA R, HE HAS SIMPLY FOLLOWED HIS OWN ORDER IN A.Y. 2004 - 05. 7. WE ALSO EXAMINE THE FACTS OF THE PRESENT CASE. THE SUBMISSIONS OF THE ASSESSEE BEFORE HIM ARE NOTED BY CIT (A) IN PARA 3.1 OF HIS ORDER AND NO MISTAKE IS POINTED OUT BY THE LEARNED DR OF THE REVE NUE IN THESE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE BEFORE CIT (A). THE FACTS ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 31.10.2005 DECLARING AN INCOME OF RS. 483,478/ - . THEREAFTER, THE SEARCH TOOK PLACE ON 29.12.2005 AS NOTED IN THE ASSESS MENT ORDER. THEREAFTER IN COMPLIANCE TO THE NOTICE ISSUED BY THE A.O. U/S 153A, THE ASSESSEE FILED RETURN OF INCOME ON 29.11.2007 SHOWING AN INCOME OF RS. 16,57,990/ - . IT MEANS THAT THE ASSESSEE DECLARED EXTRA INCOME OF RS. 11,74,512/ - . IN THE RETURN FILED U/S 153A PURSUANT TO SEARCH AND THE A.O. COMPLETED THE ASSESSMENT U/S 153A/144 ON 31.12.2007 AT RS. 138,41,815/ - . IT MEANS, THE SEARCH MATERIAL WERE FULLY CONSIDERED IN THE PROCEEDINGS U/S 153A BECAUSE FIRST THE ASSESSEE DECLARED EXTRA INCOME OF RS. 11,74 ,512/ - AND LATER, THE A.O. MADE ADDITION OF RS. 121,83,825/ - . THAT ASSESSMENT ORDER WAS SET ASIDE BY CIT (A) VIDE HIS ORDER DATED 28.02.2011 ON THIS BASIS THAT THE A.O. HAD NOT ISSUED NOTICE U/S 143 (2). 7 THEREAFTER, THE A.O. ISSUED NOTICE U/S 148 ON 31.03. 2011 AND THESE PROCEEDINGS ARE IN COURSE OF NOTICE U/S 148 ISSUED ON 31.03.2011. IN THE LIGHT OF THESE FACTS, THE MOOT QUESTION IS THIS THAT WHEN THE 153A ASSESSMENT ORDER IS SET ASIDE FOR THE REASON THAT THE A.O. DID NOT ISSUE NOTICE U/S 143 (2) OF THE AC T, THE FACT REMAIN THAT THE ASSESSMENT U/S 153A STANDS COMPLETED AS PER RETURN FILED BY THE ASSESSEE U/S 153A WHICH IN THE PRESENT CASE INCLUDES EXTRA INCOME OF RS. 11,74,512/ - DECLARED BY THE ASSESSEE PURSUANT TO SEARCH OVER AND ABOVE THE INCOME DECLARED BY THE ASSESSEE IN THE ORIGINAL RETURN FILED U/S 139 (1) ON 31.10.2005. THEN WHETHER ON THE BASIS OF THE SAME MATERIALS FOUND IN SEARCH WHICH STAND ALREADY CONSIDERED IN THE ASSESSMENT U/S 153A, WHETHER THE A.O. CAN START REASSESSMENT PROCEEDINGS U/S 147 T O CONSIDER THE SEARCH MATERIAL AGAIN ALTHOUGH THE SAME IS ALREADY CONSIDERED IN THE ASSESSMENT U/S 153A AND FOR THIS REASON ALONE THAT THE A.O. WANTED TO MAKE SOME ADDITIONS BUT THE SAME WERE SET ASIDE FOR THE REASON THAT THE A.O. DID NOT ISSUE NOTICE U/S 143 (2) IN SECTION 153A PROCEEDINGS. IN OUR CONSIDERED OPINION, THE SAME CANNOT BE PERMITTED BECAUSE IT WILL AMOUNT TO CONSIDERING SAME MATERIAL TWICE. MOREOVER, IF THIS IS PERMITTED THEN THE A.O. CAN INITIATE 147 PROCEEDINGS IN ALL THOSE CASES WHERE HE CO ULD NOT MAKE ASSESSMENT U/S 143 (3) BECAUSE OF HIS FAILURE TO ISSUE MANDATORY NOTICE U/S 143 (2) WITHOUT BRINGING ANY FRESH MATERIAL ON RECORD. HENCE, IN VIEW OF THIS DISCUSSION, WE FIND NO INFIRMITY IN THE ORDER OF CIT (A). 8. AT THIS JUNCTURE, WE FEEL IT RELEVANT TO TAKE NOTE OF THE JUDGMENT OF FULL BENCH OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT VS. KELVINATOR OF INDIA LIMITED, 256 ITR 1 (DEL). IN THIS CASE, IT WAS HELD BY HONBLE DELHI HIGH COURT THAT IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE A.O. TO REOPEN THE PROCEEDINGS WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING PREMIUM TO AN AUTHORITY EXERCISING QUASI JUDICIAL FUNCTION TO TAKE 8 BENEFI T OF ITS OWN WRONG. IN THE PRESENT CASE, THE A.O. FAILED TO ISSUE NOTICE U/S 143 (2) IN SECTION 153A PROCEEDINGS AND FOR THIS REASON, ASSESSMENT ORDER U/S 153A WAS QUASHED. THE A.O. HAD A TIME OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE SE ARCH TOOK PLACE. THIS IS PROVIDED IN SECTION 153B AND IN THE PRESENT CASE, THE SEARCH TOOK PLACE IN F.Y. 2005 06 AND THEREFORE, THE A.O. HAD TIME TO COMPLETE THE ASSESSMENT U/S 153A TILL 31.03.2008. IF IT IS HELD THAT MERELY BECAUSE THE A.O. DID NOT ISSU E NOTICE U/S 143 (2) IN PROCEEDINGS U/S 153A AND THE ASSESSMENT ORDER U/S 153A WAS SET ASIDE FOR THIS REASON ALONE WILL GIVE JURISDICTION TO THE A.O. TO ISSUE NOTICE U/S 148 WITHOUT ANY OTHER MATERIAL WITH THE A.O. NOT THE SEARCH MATERIAL, THE A.O. WILL GE T TIME TO ISSUE NOTICE U/S 148 TILL EXPIRY OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THEREAFTER, HE CAN COMPLETE THE ASSESSMENT COMPLETE THE ASSESSMENT WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH NOTICE U/S 148 WAS SERVE D ON THE ASSESSEE. HENCE, FOR THE PRESENT YEAR I.E. A.Y. 2005 06, THE A.O. CAN ISSUE AND SERVE NOTICE U/S 148 TILL 31.03.2012 AND THEN COMPLETE THE ASSESSMENT U/S 147 TILL 31.03.2013 AS AGAINST THE TIME LIMIT ALLOWED UP TO 31.03.2008 U/S 153B. IT AMOUNTS TO GIVING PREMIUM TO THE A.O. FOR HIS FAILURE TO ISSUE STATUTORY NOTICE U/S 143 (2) IN THE PROCEEDINGS U/S 153A. IN OUR CONSIDERED OPINION, THIS JUDGMENT OF FULL BENCH OF HONBLE DELHI HIGH COURT IS FULLY APPLICABLE IN THE FACTS OF THE PRESENT CASE AND TH EREFORE, THE REOPENING IS NOT VALID IN THE PRESENT CASE BECAUSE THERE IS NO OTHER MATERIAL WITH THE A.O. OTHER THAN SEARCH MATERIAL FOR WHICH HE HAD REASON TO BELIEVE THAT ANY INCOME HAS ESCAPED ASSESSMENT. 9. LET US EXAMINE THE WHOLE CONTROVERSY FROM A DI FFERENT ANGLE. AS PER SECTION 153A, NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 147 AND SEVERAL OTHER SECTIONS, THE A.O. HAS TO ASSESS OR REASSESS THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOU S YEAR IN WHICH SEARCH HAS TAKEN PLACE. AS PER SECTION 153B, THERE IS A TIME LIMIT TO COMPLETE THE ASSESSMENT UNDER SECTION 153A WITHIN A PERIOD 9 OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH SEARCH HAS TAKEN PLACE. IT IS NOT THE CHOICE OF THE A. O. TO EITHER ASSESS OR REASSESS THE INCOME FOR THESE SIX YEARS UNDER SECTION 153A OR SECTION 147 AT HIS CHOICE AND ENJOY THE TIME LIMIT OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR INSTEAD OF PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL Y EAR IN WHICH SEARCH HAS TAKEN PLACE. AT THIS JUNCTURE, WE ALSO OBSERVE THAT WE ARE AWARE OF VARIOUS JUDGMENTS AS PER WHICH, IF ANY ADVERSE MATERIAL IS FOUND BY THE REVENUE IN CASE OF AN ILLEGAL SEARCH, THE SAME CAN BE USED FOR INITIATING PROCEEDINGS UNDER SECTION 147 BUT IN OUR CONSIDERED OPINION, IN THE CASE OF AN ILLEGAL SEARCH, THE PROVISIONS OF SECTION 153A ARE NOT INVOCABLE AND THEREFORE, SUCH MATERIAL FOUND IN COURSE OF AN ILLEGAL SEARCH CAN BE USED ONLY FOR INITIATING PROCEEDING UNDER SECTION 147 BUT IT IS NOT ON THE CHOICE OF THE A.O. THAT ALTHOUGH AS PER THE SCHEME OF THE ACT, HE IS REQUIRED TO ISSUE NOTICE AND ASSESS THE INCOME U/S 153A BUT STILL, HE CAN RESORT TO SECTION 147 IN SPITE OF THIS FACT THAT THE PROVISIONS OF SECTION 153A HAVE OVERRIDING EFFECT OVER SECTION 147. HENCE, IN A CASE WHERE, THE PROCEEDINGS ARE VALIDLY INITIATED BY THE A.O. U/S 153A AS IN THE PRESENT CASE, AND RETURN U/S 153A WAS FILED BY THE ASSESSEE AND IT HAS BECOME FINAL BECAUSE OF THE FAILURE OF THE A.O. TO ISSUE NOTICE U/ S 143 (2) WITHIN THE PRESCRIBED TIME, THE A.O. DOES NOT HAVE AN OPTION TO MAKE UP HIS FAILURE BY ISSUING NOTICE U/S 147 ON THE BASIS OF THE SAME SEARCH MATERIAL, WHICH IS REQUIRED TO BE CONSIDERED IN ASSESSMENT U/S 153A BECAUSE THE PROVISIONS OF SECTION 15 3A HAVE OVERRIDING EFFECT OVER SECTION 147. IF THE A.O. BRINGS ON RECORD ANY NEW MATERIAL ON RECORD OTHER THAN THE SEARCH MATERIAL, IT IS ALWAYS OPEN TO ISSUE NOTICE U/S 147 AFTER RECORDING REASONS AND COMPLYING WITH THE REQUIREMENTS OF LAW IN THIS REGARD AND SUCH REOPENING HAS NO CONNECTION WITH SEARCH BUT THE MATERIAL FOUND IN COURSE OF A VALID SEARCH HAS TO USED IN COURSE OF ASSESSMENT U/S 153A AND NOT IN REGULAR ASSESSMENT BECAUSE THE SAME GET ABATED AFTER SEARCH AND ALSO NOT U/S 147 BECAUSE PROVISIONS OF SECTION 153A 10 HAVE OVERRIDING EFFECT OVER SECTION 147 AND WHEN THE STATUTE PROVIDES A PARTICULAR MANNER OF ASSESSMENT AFTER A VALID SEARCH, THE A.O. CANNOT BE PERMITTED TO ADOPT DIFFERENT MODE AT HIS CHOICE OR BECAUSE OF HIS FAILURE TO ADOPT THE PRESCRIB ED MODE OF ASSESSMENT U/S 153A AFTER A VALID SEARCH. HENCE, WE FIND THAT WHEN WE EXAMINE THE CONTROVERSY FROM THIS ANGLE ALSO, THE ACTION OF THE A.O. TO ISSUE NOTICE U/S 147 IN THE PRESENT CASE IS NOT FOUND VALID AND LEGAL AND THEREFORE, THERE IS NO INFIRM ITY IN THE ORDER OF CIT (A). 10. REGARDING THE C.O. OF THE ASSESSEE, WE FIND THAT WHEN THE ASSESSMENT ORDER PASSED BY THE A.O. HAS BEEN HELD BY CIT(A) AS INVALID AS STATED BY THE REVENUE IN ITS GROUND NO. 3, THE ISSUES RAISED BY THE ASSESSEE IN THE C.O. AR E OF ACADEMIC INTEREST ONLY AND HENCE, IN OUR CONSIDERED OPINION, NO ADJUDICATION IS CALLED FOR. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND CO OF THE ASSESSEE IS ALSO DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTI ONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 8 /09/2015 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR