Appeal Details
Counselvise Citation
[2022] 104 COUNSELVISE.COM (IT) 4200 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
3 year(s) 6 month(s) 17 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
25-05-2022
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Assessment Year
2012-2013
Appeal Filed On
07-11-2018
Judgement Text
आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years: 2010-11 to 2014-15 Deputy Commissioner of Income Tax, Central Circle-4(1), Kolkata Vs Shri Shanti Kumar Surana Century Tower Theatre Road 45, Shakespear Sarani Kolkata – 700 017 [PAN: ALFPS6437D] अपीलाथᱮ/ (Appellant) ᮧत् यथᱮ/ (Respondent) Assessee by : Shri N.S. Saini, A/R & Ms. Priyanka Salarpuria, A/R Revenue by : Shri Amol Kamat, CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 18/04/2022 घोषणा कᳱ तारीख /Date of Pronouncement : 26/05/2022 आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The present five appeals are directed at the instance of the revenue against the separate orders of the ld. Commissioner of Income Tax (Appeals), Kolkata - 21, [hereinafter the “ld. CIT(A)”], even dt. 03/08/2018, passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the Assessment Years 2010-11 to 2014-15. 2. The Registry has pointed out that appeals of the revenue are time barred by two days. The revenue has filed petition for condonation of delay. Considering the smallness of the delay, we condone the same and proceed to decide the appeal on merits. 3. A perusal of the record reveals that the revenue has taken identically worded grounds of appeal in each assessment years. Therefore, for the IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 2 facility of reference, we take note of the grounds of appeal from Assessment Year 2010-11, which reads as under:- “1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in allowing assessee’s appeal by observing that addition made by Assessing Officer in the assessment order passed u/s 153A/143(3) is not based on any incriminating documents/papers seized during the search operation. 2. That, the Revenue reserves its rights to substantiate, modify, delete, supplement and/or alter the grounds at the time of hearing.” 4. It is pertinent to observe that facts on all vital points are common in all these five Assessment Years. Therefore, for the facility of reference, we take the facts from Assessment Year 2010-11. It is also observed that even the finding of the ld. First Appellate Authority, is verbatim except variation in the dates and quantum. The brief facts are that, a search u/s 132(2) of the Act was conducted at the residential premises of the assessee in Surana Group on 02/03/2016. A notice u/s 153A of the Act dt. 05/08/2016 was served upon the assessee, inviting him to file the return of income for these assessment years. The return in response to the said notice was filed on 03/03/2017. Thereafter, the Assessing Officer had issued notices u/s 143(2) & 142(1) of the Act. He passed the assessment order u/s 143(3) r.w.s. 153A/153D on 30/12/2017. The Assessing Officer has determined the taxable income of the assessee in Assessment Year 2010-11 at Rs.15,11,62,030/-. Similarly, he made additions in other Assessment Years also. 5. Dissatisfied with the assessment orders, the assessee went in appeal before the ld. First Appellate Authority. The assessee has brought to the notice of the ld. First Appellate Authority about the details of filing return by him u/s 139(1) of the Act i.e., regular return and how the assessment order was passed u/s 143(1)/143(3) of the Act. Such details have been IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 3 noticed by the ld. First Appellate Authority in paragraph no. 4.1. of the impugned order. These details read as under:- Asstt. Year Submitted on Asst. completed on u/s 143(1)/143(3) 2010-11 25.09.2010 25.01.2012 2011-12 24.09.2011 21.02.2012 2012-13 28.09.2012 25.02.2012 2013-14 30.09.2013 17.12.2015 2014-15 30.09.2014 5.1. The ld. CIT(A) has gone through the submissions of the assessee as well as the position of law and thereafter held that since no material was seized during the course of search, therefore, no addition can be made in the hands of the assessee for these Assessment Years. The ld. CIT(A) has relied upon the orders of the ITAT passed in the assessee’s own case for earlier year because a search had taken place at the premises of the assessee in the year 2009 also. The finding of the ld. CIT(A) reads as under:- 1. I have considered the submissions of the Ld. AR of the appellant and perused the material placed on record. I have also perused the impugned order and gone through the copies of the seized documents & material furnished by the appellant. In the preliminary grounds the appellant has challenged the validity of the impugned assessment framed by the Ld. AO u/s 153A of the Act. The Ld. AR of the appellant submitted that the additions/disallowances made in the impugned order had no connection whatsoever with the material & documents seized in the course of search. Accordingly it was contended that since there was no incriminating material or document found in the course of search and the assessment for the relevant year had not abated, the impugned assessment framed u/s 153A/143(3) was ab inito void and invalid. In support thereof the Ld. AR of the appellant relied on the decision of the jurisdictional Hon’ble ITAT, Kolkata in appellant’s own case for AYs 2003- 04 to 2007-08 in ITA Nos. 12 to 16/Kol/2012 dated 22.06.2015. 2. On due consideration of the facts and the decision rendered by the Hon’ble ITAT, Kolkata in appellant’s own case, it is noted that the Investigation Wing of the Income Tax Department, Kolkata carried out search operations under Section 132 on the Surana Group on 02.03.2016. Notices u/s 153A was issued for AYs 2010-11 to 2015-16. The assessment for the relevant year was earlier completed u/s 153A/143(3) on 30.12.2017. Admittedly the assessment for the relevant year had not abated. In the decision rendered by the Hon’ble ITAT, Kolkata in appellant’s own case for AYs 2003-04 to 2007-08 on 22.06.2015, the Tribunal had in sum & substance held that in absence of any incriminating material or document found in the course of search, the Assessing Officer cannot make additions/disallowances in the assessments u/s 153A / 143(3) of the Act of the years for which assessments did not abate. In view of the ratio laid down by the Hon’ble Tribunal, it is now necessary to examine as to whether the same is applicable in the facts of the present appeal as well. 3. From the impugned order it is observed that in the course of search, various documents were seized and impounded by the Investigating Authorities. In the course of appellate proceedings the appellant had furnished copies of all the documents seized in the course of search. After going through the same it is noted that none of them were incriminating in nature. The appellant has also furnished copies of the notices issued u/s 142(1) and the requisitions raised by the Ld. AO from time to time in the course of assessment. On careful perusal of the said notices, I find that the queries raised and the final show cause notice as well did not refer to any incriminating material found or seized in the IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 4 course of search which would justify the additions/disallowances made in the impugned order. In fact even in the impugned order the Ld. AO has not referred to a single piece of incriminating document or material found or seized during the course of search, referring to which the additions/disallowances were made in the impugned assessment. Overall therefore, I find that there was no incriminating document found in the course of search which would justify the impugned assessment framed by the Ld. AO. 4. In view of the above, I therefore find that the decision rendered by the Hon’ble ITAT, Kolkata in appellant’s own case in ITA (SS) Nos. 12 to 16/Kol/2012 is squarely applicable on the facts of the present appeal as well, wherein it was held as follows: 11. We have heard rival contentions and gone through facts and circumstances of the case. We find that the assessee had borrowed funds and these borrowings are duly confirmed by the lenders by producing Loan confirmations. We find that the transactions of receipt of loan and re-payments thereof are all by account payee cheques. The assessee before us explained the source of the cash credits appearing in his books and has submitted confirmations in support of the same. Nowhere in the order of assessment made by the AO there is any reference to any paper/document seized by the search party in the curse of search u/s 132 in the case of the assessee as well as in the case of Shri Shambu Kumar More. Further, survey operations were conducted u/s 133A in the case of companies who had advanced loans to assessee. No incriminating paper/document was found in the course of such Survey. The AO has simply proceeded on the basis of a verbal statement of Shri Shambhu Kumar More which has no evidentiary value. Firstly because he himself admitted that he has no evidence in support of what he deposed u/s 132(4) and secondly, in fact important to note that searches and Surveys made by the revenue did not bring out any evidence indicating any falsehood of the transactions. But the AO has summed up the matter in holding that the assessee accepted accommodation entries for himself as well as for other group concerns in lieu of unaccounted cash due to reasons which have been mentioned by him in the remand report vide letter dated 23.09.2011 as under:- "Kindly refer to your letter dated 13/9/2011 on the above referred matter. Ld. A/R of the assessee company, M/s Surana Mercantile Pvt. Ltd. Has furnished certain details and documents in connection with the appeal proceedings before you. Copies of these details and documents have also been filed before me. These include the following:- 1. Balance sheet of companies under the control of Shri Shambhu Kumar More and from which the loans and share application money was received by the assessee. 2. Confirmations in respect of unsecured loans received from the said companies. 3. Bank statements of the assessee reflecting the credit of loans and share application money as above by cheque or by bank transfer. 4. Balance sheets of the assessee company for the various years and details of loans, share application money received and shares issued. In this regard, I would like to submit before your kindself that the details and documents mentioned above were available at the time of assessment proceedings also and these were considered while framing the assessments of the assessee. These were not any additional evidence as mentioned in Rule 46A(1) of the I.T. Rules, 1962. Hence, the question of examination of the same again at this end does not arise. As regards your query as to whether any incriminating document / evidence was found and gathered during the course of search or post search operations I would like to state that no such document or evidence was found. But Shri More was very categorical in his statements recorded u/s. 132(4) and 131(1) on various occasions about the modus operandi! Involved and clarifying that he had rerouted the said loans after taking these from the assessee in cash and transferring again to the assessee through various layers of banking transactions involving a number of concerns. The facts have been discussed in the assessment orders itself. As regards your query as to whether there was any material evidence to prove the chain of transactions leading to the destination of the said cash, I would like to state that, during the course of search, the Investigation Wing had made certain enquiries from the concerned Bank from which it was gathered that certain payments to the assessee had originated from cash deposits in various accounts. The facts related to this aspect were also discussed in the assessment order itself." We find from the above remand report of the AO that he has observed that the assessee has filed the documents, which include (a) Balance Sheet of companies from who loans were received by the assessee, (b) confirmations in respect of the unsecured loans received from the lending companies, (c) IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 5 Bank statements of the appellant reflecting the credit of loans received by cheque, (d) Balance Sheet of the loan creditors for various years. In the Remand Report, the AO has observed that details & documents mentioned above were available at the time of assessment proceedings also and the same were considered while framing assessments on the assessee. He further observed that these are not additional evidences as mentioned in 46A(1) of the Income Tax Rules, 1962 hence the question of examination of the same again does not arise. Further, we find that the AO summed up the matter by holding that the assessee accepted accommodation entries for himself as well as other group concerns in lieu of unaccounted cash due to the following reasons (the same report is reproduced in the order of CIT(A): "The appellant disclosed Rs.8 crores during the course of post search proceedings and that the appellant indirectly admitted of having entered into transactions through Sri More. Comment This matter has been explained by the appellant. He did not make any declaration of income of Rs.8 crores. The appellant specifically challenges the AO's observations that the appellant admitted of having entered into transactions with the companies through Sri Shambhu Kumar More. There is no evidence of admission of any transactions between the appellant and the loan creditors as false or merely accommodation entries. All these transactions of loans are duly supported by evidences. It is totally a perverse observation made by the AO. The AO states that during the post search proceedings DDIT (Inv.) conducted a selective enquires from ABN Amro Bank. The AO states that he also conducted similar enquiries from the said Bank. Thereafter, in subsequent three paras the AO has given certain names & amounts." We find that the assessee was never confronted this report as argued by Ld. counsel for assessee before us now and even before CIT(A). 12. From the above facts we find that the assessee has obtained loans/share money/premium in all the assessment years which are under appeal. It is a fact that the loan confirmations are on record along with bank statements in support of the fact that the transactions of loan were by cheques. The assessee has collected statement of audited accounts of those limited companies, from where the assessee has obtained loans, the same are with ROC. It is also a fact that the statements of account proved that those loan creditors that all of them have funds and they have invested in shares and loans of the assessee in the year under assessments. But now it is to be seen from the correspondence between the CIT-in-charge of the assessment and CIT, DR that revenue could not produce the incriminating material found during the course of search despite number of opportunities provided to revenue as is evident from the order sheet entries reproduced above. In such circumstances whether in the absence of any incriminating material found during the course of search the assessments framed u/s. 153A of the Act relating to the assessment years under appeal and where original assessments have not been abated because no proceedings are pending in those assessments, the assessments framed are valid or not. For this, now we have to go through the second proviso to section 153A(1) of the Act, which reads as under: "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." 13. In view of the second provision of section 153 of the Act, it is clear that assessment or reassessment relating to any assessment year falling within the period of six assessment years pending on the date of initiation of search u/s. 132 of the Act shall abate. It means if on the date of initiation of search u/s. 132 of the Act, any assessment proceedings is initiated relating to any assessment year falling within the period of six assessment years it shall stand abated and revenue cannot proceeding with such proceedings pending assessment after initiation of search. But in case the assessment proceedings are not pending at the time of initiation of search u/s. 132 of the Act, the assessment proceedings will not abate. Hon'ble Allahabad High Court in the case of CIT Vs. Smt. Shaila Agarwal (2012) 346 ITR 130 (All) has held as under: "12. A plain reading of Section 153A would show that where notice under this Section is issued as result of any search under Section 132, assessment or reassessment if any relating to any assessment year falling within the period of six assessment years referred to under Section 153, pending on the date of initiation of search under Section 132 or requisition under Section 132A shall abate. The words, pending on the date of initiation of search under Section 132, or making of requisition under Section 132A, as the case may be, has to be assigned simple and plain meaning. Where the assessment or reassessment is finalised, there are no pending proceedings to be abated, and restored to IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 6 the file of the assessing officer. To abate means to diminish or to take away. The word 'abatement' has been defined in the Concise Law Dictionary (P. Ramanatha Aiyer) as follows:- "Abatement. "Abatement" means, in respect of any chargeable accounting period, ending on or before the 31st day of March, 1947 a sum which bears to a sum equal to- (a) in the case of a company, not being a company deemed for the purposes of Section 9 to be a firm, six per cent of the capital of the company on the first day of the said period computed in accordance with Schedule II, or one lakh of rupees, whichever is greater, or (b) in the case of a firm having- (i) nor more than two working partners, one lakh of rupees, or (ii) three working partners, one and a half of rupees, or (iii) four or more working partners, two lakh of rupees, or (c) in the case of a Hindu undivided family, two lakhs of rupees, or (d) in any other case, one lakh of rupees,- The same proportion as the said period bears to the period of one year and, in respect of any chargeable accounting period beginning after the 31st day of March, 1947, such sum as may be fixed by the annual Finance Act. [Business Profits Tax Act (21 of 1947), S.2 (1)] Removal or destruction, (as) of a nuisance; failure; premature end, suspension or diminution, (as) of an action or of a legacy. The action of abating; being abated. {O.XXII, R.1, CPC (5 of 1908)]; decrease [S.12 (3)(b) (i), Specific Relief Act (47 of 1963)]. Of An Action Or Suit: In civil law an abatement of a suit is a complete termination of it. Abatement of a matter or cause is caused by the same becoming defective on account of the death of the parties materially interested. (Ency. of the Laws of England) A suspension or termination of proceedings for want of proper parties or due to some technical defect. The abatement of the main action abates proceedings ancillary or collateral to it. In Criminal Law: Abatement of proceedings connotes their termination without any decision on merits and without the assent of the prosecutor. (Ency. of the Laws of England) In Revenue Law: Abatement is a deduction from or refunding of duties on goods damaged during importation or in store." 13. The word 'abatement' is referable to something, which is pending alive, or is subject to deduction. The abatement refers to suspension or termination of the proceedings either of the main action, or the proceedings ancillary or collateral to it. The word is commonly used in the legislations, which provide for abatement of action/ suit; abatement of legacies; abatement of nuisance; and all actions for such nature, which have the pendency or continuance. The proceedings, which have already terminated are not liable for abatement unless statute expressly provides for such consequence thereof. 14. The word 'pending' occurring in the second proviso to Section 153A of the Act, is also significant. It is qualified by the words 'on the date of initiation of the search', and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate. 15. The pendency of an appeal in the Tribunal against the order of assessment against which an appeal has been decided by CIT (A) is not a continuation of the proceedings of assessment. An appeal under the Income Tax Act lies to the Appellate Tribunal on a question of law. Even if it is pending on the date of search, no such intention has indicated by the Tribunal arises out of the provisions of second proviso to Section 153A, to abate the proceedings, which have been completed, or concluded, and to restore assessment to the file of the Assessing Officer. 16. We do not find force in the submission of ShriAshishBansal that where a notice under Section 153A has been given after the search operations under Section 132, for filing assessment for the block period of 6 years, and if such period includes any of the assessment year, the abatement of assessment and re-assessment proceedings, to give way to reassessment considering the additions in the assessment under Section 153A, will also include the assessment or re-assessment, which has been completed. If as a result of search, some undisclosed income is found to have escaped assessment, the Assessing Officer, may initiate steps for reassessment after sanction of competent authority, within the prescribed period of limitation. 17. A Circular No.7 of 2003 dated 5.9.2003 issued by the Commissioner of Income Tax has clarified the position in para 65.5 as follows:- "The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 7 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year." 18. In State of Rajasthan &Ors. v. Khandaka Jain Jewellers, (2007) 14 SCC 339 the Supreme Court reiterating the principles of interpretation of taxing statutes held in para 24 as follows:- "A taxing statute has to be construed as it is all these contingencies that the matter was under litigation and the value of the property by that time shot up cannot be taken into account for interpreting the provisions of a taxing statute. As already mentioned above a taxing statute has to be construed strictly and if it is construed strictly then the plea that the incumbent took a long time to get a decree for execution against the vendor that consideration cannot weigh with the Court for interpreting the provisions of the taxing statutes." 19. The second proviso to Section 153A of the Act, refers to abatement of the pending assessment or re-assessment proceedings. The word 'pending' does not operate any such interpretation, that wherever the appeal against such assessment or reassessment is pending, the same along with assessment or reassessment proceedings is liable to be abated. The principles of interpretation of taxing statutes do not permit the Court to interpret the Second Proviso to Section 153A in a manner that where the assessment or reassessment proceedings are complete, and the matter is pending in appeal in the Tribunal, the entire proceedings will abate. 20. There is another aspect to the matter, namely that the abatement of any proceedings has serious causes and effect in as much as the abatement of the proceedings, takes away all the consequences that arise thereafter. In the present case after deducting bogus gifts in the regular assessment proceedings, the proceedings for penalty were drawn under Section 271(1) (c) of the Act. The material found 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 consequence, which has arisen out of the regular assessment or reassessment resulting into the demand or proceedings of penalty." 14. In a recent judgment Hon'ble Bombay High Court, on the very issue, in the case of CIT Vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. in ITA No. 523 of 2013 dated 21.04.2015 also considering the judgment of the Special Bench of the Mumbai Tribunal in the case of All Cargo Global Logistics 137 ITD 287(SB) (Mum) considered the issue that, whether scope of assessment u/s. 153A of the Act in respect to completed assessment is limited only to undisclosed income and undisclosed assets found during the course of search or not. Hon'ble High Court held that on a plain reading of section 153 of the Act it becomes clear that on initiation of the proceedings u/s. 153A of the Act, it is only the assessment/reassessment proceedings that are pending on the date of conducting search u/s. 132 of the Act stand abated and not the assessments/ reassessments already finalised for those assessment years covered u/s. 153A of the Act. Hon'ble High Court also discussed the CBDT Circular No. 8 of 2003 dated 18.09.2003 reported in 263 ITR (st.) 61 at page 107 wherein CBDT has clarified that on initiation of proceedings u/s. 153A of the Act the proceedings pending in appeal, revision or rectification proceedings against finalised assessment shall not abate. It is only because the finalised assessments do not abate the appeal, revision or rectification pending against finalised assessments would not abate. Therefore, Hon'ble High Court rejected the arguments of the revenue that on initiation of proceedings u/s. 153A of the Act, the reassessment finalised for assessment years covered u/s. 153A of the Act stands abated. Only the pending assessments get revived u/s. 153A of the Act. Hon'ble High Court further held that once assessment has attained finality, then the AO while passing independent assessment order u/s. 153A/143(3) of the Act could not disturb the assessment order which has attained finality unless the material gathered in the course of search u/s. 132/153A of the Act established that the finality attained in the assessment were contrary to the facts unearthed during the course of search. The relevant portion of the judgment reads as under: "27. However, the Revenue's argument was that once proceedings under section 153A of the Act are initiated, then, the original assessment / reassessment order already passed in the assessment years covered under section 153A stand abated and the Assessing Officer is obliged to pass fresh assessment / reassessment orders and determine the total income afresh for those assessment years. Thus, earlier assessment orders abate as the proceedings in which they are passed have no legal consequence was the argument. Once the notice under section 153A was issued and an assessment order passed pursuant thereto, it is that order which was erroneous and prejudicial to the interest of the Revenue. 28. In dealing with those arguments, the Division Bench outlined the ambit and scope of the powers conferred by section 153A and observed thus : IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 8 "8) We find it difficult to accept the above contention raised on behalf of the revenue. The object of inserting Sections 153A, 153B and 153C by Finance Act, 2003 by discarding the existing provisions relating to search cases contained in Chapter XIV B of the Income-tax Act, as stated in the Memorandum explaining the provisions in the Finance Bill 2003 (see 260 ITR (St) 191 at 219) was that under the existing provisions relating to search cases, often disputes were raised on the question, as to whether a particular income could be treated as `undisclosed income' or whether a particular income could be said to be relatable to the material found during the course of search, etc. which led to prolonged litigation. To overcome that difficulty, the legislature by Finance Act 2003, decided to discard Chapter XIV B provisions and introduce Sections 153A, 153B and 153C in the IT Act. 9) What Section 153A contemplates is that, notwithstanding the regular provisions for assessment/reassessment contained in the IT Act, where search is conducted under Section 132 or requisition is made under Section 132A on or after 31/5/2003 in the case of any person, the Assessing Officer shall issue notice to such person requiring him to furnish return of income within the time stipulated therein, in respect of six assessment years immediately preceding the & CO Nos. 13 to 17/K/2012 & IT(SS)A Nos. 140 & 141/K/2011 Shanti Kumar Surana AYs 2003-04 to 2007-08 & IT(SS)A Nos. 17to19/K/2012 & CO Nos. 18to20/K/2012 Surana Mercantiles (P) Ltd., AYs. 2004-05 to 2006-07 assessment year relevant to the previous year in which the search is conducted or requisition is made and thereafter assess or reassess the total income for those assessment years. The second proviso to Section 153A provides for abatement of assessment/reassessment proceedings which are pending on the date of search/requisition. Section 153A (2) provides that when the assessment made under Section 153(A)(1)is annulled, the assessment or reassessment that stood abated shall stand revived. 10) Thus on a plain reading of Section 153A of the Income-tax Act, it becomes clear that on initiation of the proceedings under Section 153A, it is only the reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalised for those assessment years covered under Section 153A of the Act. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending against finalised assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under Section 153A, the assessments/reassessments finalised for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Similarly on annulment of assessment made under Section 153A (1) what stands revived is the pending assessment / reassessment proceedings which stood abated as per section 153A(1). 11) In the present case, as contended by Shri Mani, learned counsel for the assessee, the assessment for assessment year 1998-99 was finalised on the 29- 12- 2000 and search was conducted thereafter on 3-12- 2003. Therefore, in the facts of the present case, initiation of proceedings under Section 153Awould not affect the assessment finalised on 29-12-2000. 12) Once it is held that the assessment finalised on 29.12.2000 has attained finality, then the deduction allowed under section 80 HHC of the Income-tax Act as well as the loss computed under the assessment dated 29-12-2000 would attain finality. In such a case, the A.O. while passing the independent assessment order under Section 153A read with Section 143 (3) of the I.T. Act could not have disturbed the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/ reassessment were contrary to the facts unearthed during the course of 153 A proceedings. 13) In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80 HHC was erroneous. In such a case, the A.O. while passing order under Section 153A read with Section 143(3)could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act." 29. We are not in agreement with Mr. Pinto that these observations are made in passing or that they are not binding on us because the essential controversy before the Bench was somewhat different. He urges that was only in relation to the legality and validity of the order of the Commissioner under section 263 of the IT Act. Had that been the case, the Division Bench was not required to trace IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 9 out the history of section 153A of the IT Act and the power that is conferred thereunder. When the Revenue argued before the Division Bench that the power under section 153A can be invoked and exercised even in cases where the second proviso to sub-section (1) is not applicable that the Division Bench was required to express a specific opinion. The provision deals with those cases where assessment or reassessment, if any, relating to the assessment years falling within the period of six assessment years referred to in sub-section (1) of section 153A were pending. If they were pending on the date of the initiation of the search under section 132 or making of requisition under section 132A, as the case may be, they abate. It is only pending proceedings that would abate and not where there are orders made of assessment or reassessment and which are in force on the date of initiation of the search or making of the requisition. As that specific argument was canvassed and dealt with by the Division Bench and that is how it was called upon to interpret section 153A of the IT Act, then, each of the above conclusions rendered by the Division Bench would bind us. 30. Even otherwise, we agree with the Division Bench when it observes as above with regard to the ambit and scope of the powers conferred under section 153A of the Act. Since we are not required to trace out the history and we can do nothing better than to reproduce the observations and conclusions as above that we are not repeating the same. Even if the exercise of power under section 153A is permissible still the provision cannot be read in the manner suggested by Mr. Pinto. Not only the finalised assessment cannot be touched by resorting to those provisions, but even while exercising the power can be exercised where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31st March, 2003. There is a mandate to issue notices under section 153(1)(a) and assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, the crucial words "search" and "requisition" appear in the substantive provision and the provisos. That would throw light on the issue of applicability of the provision. It being enacted to a search or requisition that its construction would have to be accordingly. That is the conclusion reached by the Division Bench in Murli Agro (supra) with which we respectfully agree. These are the conclusions which can be reached and upon reading of the legal provisions in question. 31. We, therefore, hold that the Special Bench's understanding of the legal provision is not perverse nor does it suffer from any error of law apparent on the face of the record. The Special Bench in that regard held as under : "48. The provision under section 153A is applicable where a search or requisition is initiated after 31.5.2003. In such a case the AO is obliged to issue notice u/s 153A in respect of 6 preceding years, preceding the year in which search etc. has been initiated. Thereafter he has to assess or reassess the total income of these six years. It is obligatory on the part of the AO to assess or reassess total income of the six years as provided in section 153A(1)(b) and reiterated in the 1st proviso to this section. The second proviso states that the assessment or reassessment pending on the date of initiation of the search or requisition shall abate. We find that there is no divergence of views in so far as the provision contained in section 153A till the 1st proviso. The divergence starts from the second proviso which states that pending assessment or reassessment on the date of initiation of search shall abate. This means that an assessment or reassessment pending on the date of initiation of search shall cease to exist and no further action shall be taken thereon. The assessment shall now be made u/s 153A. The case of Ld. Counsel for the assessee is that necessary corollary to this provision is that completed assessment shall not abate. These assessments become final except in so far and to the extent as undisclosed income is found in the course of search. On the other hand, it has been argued by the Ld. Standing Counsel that abatement of pending assessment is only for the purpose of avoiding two assessments for the same year, one being regular assessment and the other being assessment u/s 153A. In other words these two assessments coalesce into one assessment. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A (i)(b) and the first proviso clearly provide for assessment or reassessment of all six years. It may cause hardship to some assesses where one or more of such assessments has or have been completed before the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and against the very rule in this behalf that it should be supplied for the purpose of achieving legislative intent. The submissions of the Ld. Counsels are manifold, the foremost being that the provision u/s 153A should be read in conjunction with the provision contained in section 132(1), the reason being that the latter deals with search and seizure and the former deals with assessment in case of search etc, thus, the two are inextricably linked with each other. IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 10 49. Before proceeding further, we may now examine the provision contained in sub-section (2) of section 153, which has been dealt with by Ld. Counsel. It provides that if any assessment made under subsection (1) is annulled in appeal etc., then the abated assessment revives. However, if such annulment is further nullified, the assessment again abates. The case of the Ld. Counsel is that this provision further shows that completed assessments stand on a different footing from the pending assessments because appeals etc. proceedings continue to remain in force in case of completed assessments and their fate depends upon subsequent orders in appeal. On consideration of the provision and the submissions, we find that this provision also makes it clear that the abatement of pending proceedings is not of such permanent nature that they cease to exist for all times to come. The interpretation of the Ld. Counsel, though not specifically stated, would be that on annulment of the assessment made u/s 153(1), the AO gets the jurisdiction to assess the total income which was vested in him independent of the search and which came to an end due to initiation of the search. 50. The provision contained in section 132 (1) empowers the officer to issue a warrant of search of the premises of a person where any one or more of conditions mentioned therein is or are satisfied, i.e. - a) summons or notice has been issued to produce books of account or other documents but such books of account or documents have not been produced, b) summons or notice has been or might be issued, he will not produce the books of account or other documents mentioned therein, or c) he is in possession of any money or bullion etc. which represents wholly or partly the income or property which has not been and which would not be disclosed for the purpose of assessment, called as undisclosed income or property. We find that the provision in section 132 (1) does not use the word "incriminating document". Clauses (a) and (b) of section 132(1) employ the words "books of account or other documents". For harmonious interpretation of this provision with provision contained in section 153A, all the three conditions on satisfaction of which a warrant of search can be issued will have to be taken into account. 51. Having held so, an assessment or reassessment u/s 153A arises only when a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be authorised on satisfaction of one of the three conditions enumerated earlier. Therefore, while interpreting the provision contained in section 153A, all these conditions will have to be taken into account. With this, we proceed to literally interpret to provision in 153A as it exists and read it alongside the provision contained in section 132(1). 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 requiring him to furnish the return 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 income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to assess or reassess the total income of these six years. The pending proceedings shall abate. 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. In 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 proviso. It also means that only one assessment will be made under the aforesaid provisions as the two proceedings i.e. assessment or reassessment proceedings and proceedings under this provision merge into one. If assessment made under sub-section (1) is annulled in appeal or other legal proceedings, 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 assessment or reassessment of total income u/s 153A (1) (b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). 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 search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results:- a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment 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 AO, IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 11 (b) in respect of non-abated assessments, the assessment 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 undisclosed income or undisclosed property discovered in the course of search." 54. It may be mentioned here that Ld. Counsel for All Cargo Global Logistics Ltd. was questioned about the scope of pending assessments as it was his contention that all six assessments are to be made, if necessary, on the basis of undisclosed income discovered in the course of search. He was specifically questioned about the jurisdiction of the AO to make original assessment along with assessment u/s 153A, merging into one. However he took an evasive view submitting that this question need not be decided in his case although the question of jurisdiction u/s 153A was vehemently pressed on account of which ground No.1 in the appeal for assessment year 2004-05 was admitted as additional ground. He also wanted the additional ground to be retained in case of any future contingency." 32. We would be failing in our duty if we do not note the reliance placed by Mr. Pinto on the judgments rendered by the High Court of Delhi at New Delhi and the High Court of Karnataka. Mr. Pinto would submit that the above observations and conclusions of the Special Bench and reproduced by us are specifically disapproved in Commissioner of Income Tax vs. Anil Kumar Bhatia by the Delhi High Court. We do not find this argument to be accurate. In Anil Kumar Bhatia as well the assessment involved the years 2000-01, 2002-03 and 2005-06. One of the questions and which was termed as substantial question of law was the correctness of the Tribunal's order holding that the Assessing Officer wrongly invoked section 153A of the IT Act. The facts as noted were that in the case of an individual assessee and who was carrying on business in the name and style of M/s. A.K. Traders, there was a search of his residence and business premises on 13th December, 2005 under section 132of the Act. Pursuant to the search, the Assessing Officer issued notice under section 153A of the IT Act and called upon the assessee to file the return of income for the six years as envisaged in that section. Notices under section 142(1) and 143(2) alongwith a detailed questionnaire were issued in response to which the assessee submitted an explanation. After consideration thereof, the Assessing Officer made additions to the income returned in respect of the assessment years under consideration which included an amount of Rs.1,50,000/- given by the assessee as a loan to Smt. Mohini Sharma on 10th December, 2003. This information was made available but the loan was not reflected in the return of income filed by the assessee for the assessment year 2003-04. The Assessing Officer, therefore, concluded that this loan was given out of unaccounted income of the assessee. Accordingly, the same was added in the income of the assessee for the assessment year 2003-04 and an order was made to that effect. Against this addition, the appeal was preferred before the Commissioner of Income Tax contending, inter alia, that the seized paper on the basis of which the addition was made did not contain the signature of the assessee; that no loan was given to Mohini Sharma. There was no admission of the statement of Mohini Sharma to that effect and there was only a proposal. The Commissioner of Income Tax confirmed this addition in the Assessing Officer's order. In respect of assessment years 2004-05 and 2005-06 there were appeals before the Commissioner of Income Tax (Appeals) questioning the additions made in the assessment orders for those years. While disposing of these appeals, the Commissioner of Income Tax directed the Assessing Officer to assess the notional interest on the loan given to Mohini Sharma which addition he confirmed in his appellate order. These two orders of the Commissioner were carried in appeal to the Tribunal and thereafter the Delhi High Court noted the Tribunal's conclusions. It noted the arguments before the Tribunal and thereupon the Tribunal having deleted these additions and the notional interest, the matter was taken in appeal to the High Court of Delhi under section 260A of the IT Act by the Revenue. 33. The arguments, therefore, have been noted and from paragraphs 16, section 153A was analysed. 34. Mr. Pinto heavily relied on paragraphs 18, 19 and 20 of the judgment of the Hon'ble High Court of Delhi. He also relied on paragraph 21 to contend that the Special Bench decision has not been approved by the High Court of Delhi. 35. The Delhi High Court's judgment must be seen in the context of the essential controversy before it. Pertinently, that controversy arose because of a search being conducted at the residence and business premises of the assessee. Foundation of the action under section 153A being the search that the High Court of Delhi was required to consider the ambit and scope of the powers. Further, pertinently the Delhi High Court did not ignore any of the provisions. Those are correctly understood by the Delhi High Court. We do not see how and where the Delhi High Court disapproves the view taken by the Tribunal that its observations can be read torn from the context. Once these observations and noted by us from the paragraphs cited by Mr. Pinto are read as a whole and in entirety, it is not possible to agree with Mr. Pinto that the High Court of Delhi reached a conclusion different than the view taken by our Division Bench. IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 12 36. Similar is the case with the Division Bench judgment of the High Court of Karnataka at Bangalore. There as well a real estate firm was the assessee. A return of income was filed and when an order under section 143(3) of the Act came to be passed on 31st December, 2010, for assessment year 2008-09 that a search took place in the premises of the assessee on 12th April, 2011. In the course of search, incriminating material leading to undisclosed income was seized. Therefore, the proceedings under section 153A of the Act calling upon the assessee to file return of income under section 153A(1)(a)came to be initiated by a notice dated 13th January, 2012. Return of was filed pursuant to receipt of such notice and for six years as required by the provision. When this return was under consideration on 14th March, 2013, the Commissioner of Income Tax initiated proceedings under section 263 of the Act on the ground that the order dated 31st December, 2010 in relation to the return of income for assessment year 2008-09 and holding that the same is erroneous and prejudicial to the interest of the Revenue came to be passed. The assessee filed his objection but the Commissioner maintained his action under section 263. That is how the aggrieved assessee carried the matter in appeal to the Tribunal and before the Tribunal it was contended that once section 263 of the Act has been invoked during the pendency of proceedings under section 153A of the Act, then, that was impermissible. That was impermissible for the assessments including for the assessment year 2008-09 stand reopened. Once they are reopened, then, there is no order of assessment in force and in regard to which any action under section 263 of the IT Act can be initiated. It is in dealing with this argument and which was negatived by the Tribunal that all the observations of the High Court of Karnataka have been made. In paragraphs 5 and 6, the arguments have been noted and thereafter the provision has been reproduced. In paragraph 9, extensive reference has been made to the judgment in Anil Kumar Bhatia of the High Court of Delhi (supra) and then the following observations in paragraphs 10 and 11 are made: "10. Section 153A of the Acts start with a non obstante clause. The fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have 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 made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time- limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. Therefore, it is clear even if an assessment order is passed under Section 143(1) or 143(3) of the Act, the Assessing Officer is empowered to reopen those proceedings and reassess the total income taking note of the undisclosed income, if any, unearthed during the search. After such reopening of the assessment, the Assessing Officer is empowered to assess or reassess the total income of the aforesaid years. The condition precedent for application of Section 153A is there should be a search under Section 132. Initiation of proceedings under Section 153A is not dependent on any undisclosed income being unearthed during such search. The proviso to the aforesaid section makes it clear the assessing officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. If any assessment proceedings are pending within the period of six assessment years referred to in the aforesaid sub-section on the date of initiation of the search under Section 132, the said proceeding shall abate. If such proceedings are already concluded by the assessing officer by initiation of proceedings under Section 153A, the legal effect is the assessment gets reopened. 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 Assessing Officer has been given the power to assess or reassess the "total income" of the six assessment years in question in separate assessment orders. The Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. He has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. When once the proceedings are initiated under Section 153A of the Act, the legal effect is even in case where the assessment order is passed it stands reopened. In the eye of law there is no order of assessment. Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the "total income" of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 13 263 is any order passed under the Act by the Assessing Officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing Officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction." 11. The Tribunal has proceeded on the assumption by virtue of the judgment of the special bench of the Mumbai, the scope of enquiry under Section 153A is to be confined only to the undisclosed income unearthed during search and if there is any other income which is not the subject matter of search, the same cannot be taken into consideration. Therefore, the revisional authority can exercise the power under Section 263. In the entire scheme of 153A of the Act, there is no prohibition for the assessing authority to take note of such income. On the contrary, it is expressly provided under Section 153A of the Act the Assessing Officer shall assess or reassess the "total income" of six assessment years which means the said total income includes income which was returned in the earlier return, the income which was unearthed during search and income which is not the subject matter of aforesaid two income. If the commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the said material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of said proceedings. In that view of the matter the reasoning given by the Tribunal is not justified. The Commissioner did not have jurisdiction to initiate any proceedings under Section 263 of the Act." 37. We do not see as to how while allowing the appeal of the assessee and setting aside the order of the Commissioner under section 263 could the judgment be said to be laying down a proposition and as canvassed by Mr. Pinto. True it is that the assessment which has to be made in pursuance of the notice is in relation to the six years. An order will have to be made in that regard. While making the order the income or the return of income filed for all these assessment years is to be taken into account. A reference will have to be made to the income disclosed therein. However, the scope of enquiry, though not confined as held by the High Court of Karnataka, it essentially revolves around the search or the requisition under section 132A as the case may be. We do not find anything in these observations and reproduced above which would enable us to conclude that the Division Bench judgment of this Court in the case of Murli Agro requires reconsideration or does not lay down a correct principle of law. We cannot, therefore, accede to the submissions of Mr. Pinto and revisit any of the conclusions rendered by the Division Bench of this Court." 15. In view of the facts in entirety and the legal principles enunciated by Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (NhavaSheva) Ltd., supra, of Hon'ble Allahabad High Court in the case of ShailaAgarwal, supra and Mumbai Special Bench decision in the case of All Cargo Global Logistics, supra, we are of the view that there is no incriminating material found during the course of search in the present case for these assessment years, except the statement of one ShriSambhu Kr More, as admitted by the AO in his remand report dated 23.09.2011 and despite number of opportunities revenue could not produce any incriminating material before the Bench and the assessments are already completed for these assessment years originally, the assessments framed u/s. 153A of the Act is in valid and hence, quashed.” 5. Respectfully following the decision of the Hon’ble ITAT, Kolkata in appellant’s case (supra), I find that since no incriminating material whatsoever was found or seized from the appellant’s premises or the Surana Group in the course of search operations which would have any bearing or relation to the income-tax assessment for the relevant assessment year, the assessment of the appellant for the relevant year is held to be bad in law and is accordingly quashed.” 6. Before us, the ld. CIT D/R relied upon the orders of the Assessing Officer in each year. He was unable to controvert the finding of fact recorded by the ld. CIT(A). On the other hand, the ld. Counsel for the assessee relied upon the orders of the ld. CIT(A) and submitted that the ld. IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 14 First Appellate Authority has relied upon the order of the ITAT passed in IT(SS)A Nos. 12 to 16/Kol/2012, which is in the case of the assessee himself. 7. With the assistance of the ld. Representatives, we have gone through the record carefully. The Tribunal in the assessee’s own case has discussed the position of law in the Assessment Years 2003-04 to 2007-08 and such finding has been reproduced by the ld. First Appellate Authority in the impugned order. In addition to the above finding, before embarking upon an enquiry on the facts considered by the ld. First Appellate Authority, we deem it proper to keep in mind the position of law where addition can be made in an assessment passed u/s 153A/C in respect of any seized material. 8. Before adverting to the facts of the present appeals, we deem it appropriate to bear in mind the position of law propounded in various authoritative judgments expounding scope of section 153A of the Act. We are of the view that in this regard, there were large numbers of decisions. First we refer to the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla, 380 ITR 573 (Del). Hon'ble Delhi High Court after detailed analysis has summarized the following legal position: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i)Once a search takes place under Section 132 of the Act, notice under Section 153 A(l) will have to be mandatorily issued to the person searched requiring him to fde returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. (ii)Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. (iii) The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 15 which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". (iv)Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." (v)In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi)Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vii)Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." ITAT Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153 A of the Act has to be specifically made IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 16 on the basis of seized material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. ITAT Delhi Bench has specifically held that material recovered from the premises of other person cannot be used in the hands of the searched person. For that purpose an assessment under section 153C or 147 is to be made. At this stage, in order to fortify ourselves, we would like to make reference to the following paragraphs of the ITAT Delhi Bench's order. It reads as under: “15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." Order of the ITAT Delhi Bench in other cases viz. Asha Rani Lakhotia vs. ACIT and Subhag Khattar Vs. ACIT are on the same line. Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law? " IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 17 After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: "6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the IT AT. The IT AT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so- called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not wider Section 153A. This goes to the root of the matter." 9. Hon'ble Court has specifically observed for the purpose of section 153A that only seized material is required. However, if there is any other incriminating material belong to the assessee found at the premises of the some other person, then the assessment has to be made under other provisions and not under section 153 A of the Act. 10. Hon'ble Gujarat High Court has also considered the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra). Hon'ble Gujarat High Court framed the following question of law in the case of Pr.CIT Vs. Saumya Construction (supra): "[A] Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 18 [B] Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search? " 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 19 requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.l 1,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 20 computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 11. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon’ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 21 were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon’ble Delhi Court as completion of assessments and this acceptance of return, according to the Hon’ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. 12. The position of law in other decisions referred by the assessee is identical; particularly we have considered the judgment of Hon’ble High Court in the case of PCIT vs. Salasar Stock Broking Pvt. Ltd. (supra). 13. For buttressing our above conclusion, we further fortify ourselves with the following judgments:- Sl. No. Particulars 1. PCIT –vs.- Kurele Paper Mills (P) Ltd. [2017] 81 taxmann.com 82 (Delhi) 2. PCIT –vs.- Rashmi Infrastructure Pvt. Ltd. ITAT 99 of 2019, GA No. 1211 of 2019 (Calcutta HC) 3. CIT –vs.- Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta) 4. PCIT –vs.- Salasar Stock Broking Ltd. ITAT No. 264 of 2016, GA No. 1929 of 2016 (Calcutta HC) 5. M/s. Mani Square Ltd. –vs.- ACIT [IT(SS)A Nos. 58/KOL/2019 & others 6. ACIT –vs.- Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kolkata Trib.) 7. PCIT –vs.- Anand Kumar Jain & Others[ITA 23/2021 & others (Delhi High Court) 8. DCIT –vs.- Bhavya Merchandise (P) Ltd. [2020] 121 taxmann.com 112 (Kolkata Trib.) 9. Sarva Priya Holdings Pvt. Ltd. –vs.- DCIT [IT(SS)A Nos. 97 & 98/KOL/2014 10. Purulia Metal Casting –vs.- DCIT [ITA No. 1217/KOL/2019) 11. DCIT –vs.- Shri Ram Realcon Pvt. Ltd. [IT(SS)A No. 14 & 15/KOL/2017 12. Vikram Financial Services Ltd. –vs.- DCIT [IT(SS)A No. 81/KOL/2010 IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 22 13. DCIT –vs.- M/s. Bohra G. & NN Brothers Pvt. Ltd. [IT(SS)A No. 89/KOL/2017 14. In light of the above, we call upon to examine whether any seized material has been used by the Assessing Officer or it is available on record. We have extracted the finding of the ld. CIT(A) from paragraph no. 5. The ld. First Appellate Authority has recorded a candid finding that, no material was found during the course of search which has been used. Apart from the above we deem it proper to take note of the submissions made by the assessee before the ld. First Appellate Authority and how he has explained the position qua the additions made by the Assessing Officer. There is no dispute that search had taken place at the premises of the assessee on 02/03/2016. The assessee has submitted that during the course of search, the following materials were found and seized by the Department. Date Place Remarks 02.03.2016 1, Ho Chi Minh Sarani, Kolkata – 71 No seizure 02.03.2016 6, Queens Park, Kolkata – 19 Annexure-A, Bunch of loose sheets IDMark SKS/1 to SKS/11 Annexure- 2,Cash–Rs.5,84,700/- Not seized Annexure-3 – Foreign Currency – Not seized Annexure-4 – Passports not seized Annexure-5 – Details of Cars Annezure-6 – Inventory of jewellery & ornaments – partly seized Annexure-7 – Silver Utensils Annexure-8 - Television sets and wall clocks Annexure-9 – Paintings Annexure-10 – Inventory of watches 17/18.03.2016 6, Queens Park, Kolkata – 19 Annexure regarding valuation of furniture, paintings, artwork etc. 15. The assessee has been assessed regularly by the Department for Assessment Year 2010-11. He has filed his return of income u/s 139(1) of the Act on 25/09/2010. This return was first processed u/s 143(1) of the Act on 25/01/2012 but later on it was selected for scrutiny assessment and a notice u/s 143(2) of the Act was issued and served upon the assessee. Ultimately, the Assessing Officer has passed an assessment order u/s 143(2) of the Act on 26/12/2012 and determined the taxable income of the assessee at IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 23 Rs.3,47,33,930/-. The assessee has explained that the Assessing Officer has made an addition of Rs.10,85,00,000/-. How this addition has been made and how it is not sustainable in an assessment framed u/s 153A of the Act, has been highlighted by the assessee in his submissions reproduced by the ld. First Appellate Authority, which reads as under:- “Vide Ground No.7 the appellant without prejudice to legality of assessment has challenged the addition of Rs.10,85,00,000/- made by the A.O. as the income of the appellant under the head unexplained cash credit. This issue has been discussed by the A.O. in the order of assessment at Page No.7 under the head ‘unsecured loans’. Altogether there is mention of twelve persons whose name appears in the table and amounts pertaining to them is also noted with dates and the amount of interest. These total to Rs.10,85,00,000/- being the principal amount and interest element relevant thereto is appearing at Rs.53,21,374/-. Now so far as these additions are concerned, it is submitted that a reference to Annexure – C of the audited accounts would show details pertaining to various persons in a tabular form stating the name & address of the lenders, PAN, opening balance, amounts received, amounts paid and closing balance. Element of interest is included in the column loan/interest provided. All the twelve persons whose names have been recorded by the A.O. are duly appearing and noted in this Annexure-C forming part of the audited accounts. The A.O. has recorded about the fact relating to those creditors having filed return, statements of accounts, copies of Bank accounts showing the transactions with the appellant. There are some observations which have been made by the A.O. which are more of general nature than having any specific adverse comment in relation to the source and the nature of the amount of cash credits. In the tables which is mentioned above there is a column under the head ‘Remarks’ and it is written ‘the assessee did not turn up for examination’. There are two remarks. One is that confirmations of loans have been deposited in the receiving section and the other remark is that the assessee did not turn up for examination. It is not possible to make out any meaning of the A.O.’s observation that the assessee did not turn up for examination. Does he mean to say that he had required appearance of loan creditors u/s 131 and opportunity was given to the appellant to attend and cross examine and that the appellant did not attend. If that be the case it is necessary to see the letter relating to opportunity given to the appellant. The appellant does possess correspondence on this issue which may please be referred to so that a clear cut picture would emerge despite the fact that the appellant has already challenged the legality of the proceedings initiated u/s 153A and has also shown that all these loan creditors are part of the details of total of the loan creditors duly reflected in the audited statement of accounts of the appellant. The appellant submits copies of all relevant communications that took place in the course of assessment proceedings. Therefore, it is the submission of the appellant that the A.O. was totally wrong in concluding and adding the amount of Rs.10,85,00,000/-. Provision contained in Sec.153A are to determine income which is emanating from seized papers/documents u/s 132 which do not form part of regular accounts and assessment. The A.O. has not referred to any seized document of imagining nature that would establish the cash credits as bogus. In view of the fact that these loan creditors and amounts do form part of regular accounts IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 24 and duly displayed on record its treatment as undisclosed income u/s 153A is totally wrong and uncalled for.” 16. This submission was cross verified by the ld. First Appellate Authority. A perusal of these submissions would reveal that the alleged loan transactions which has been considered by the Assessing Officer as unexplained cash credit is part of the regular return. It has been reflected in the audited accounts. Therefore, this aspect was examined by the Assessing Officer in the scrutiny assessment. Hence the question of the same being undisclosed income unearthed during the course of search, does not arise. Due to these reasons, the ld. First Appellate Authority, has deleted the addition. Under similar circumstances, the ld. CIT(A) has observed that the Assessing Officer has not made any addition referring to the seized material. During the course of hearing the revenue was unable to pin point any material on the basis of which, the additions have been made. Therefore, considering the well reasoned finding of the ld. CIT(A) which is based on the position of law explained by the Tribunal in the assessee’s own case in the earlier Assessment Years after reappreciating all the material available before us, we do not find any error in the finding of the ld. CIT(A). 17. As far as the other Assessment Years i.e., Assessment Year 2011-12 to 2014-15 in ITA Nos. 128 to 131/Kol/2018 are concerned, the facts are identical except variation in the quantum and dates. These are unabated Assessment Years. Either the assessments have been passed u/s 143(3)/143(1) of the Act. The time limit to issue notice u/s 143(2) of the Act has also expired in the year in which 143(3) of the Act was not passed. According to the decision of the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla (supra) unless any incriminating material was unearthed during the course of search, the assessment orders that have attained finality u/s 143(3)/143(1) of the Act could not be tinkered with. As observed earlier, the Assessing Officer has not used any seized material in these IT(SS)A Nos. 127 to 131/Kol/2018 Assessment Years : 2010-11 to 2014-15 Shri Shanti Kumar Surana 25 assessment years also. At the time of hearing nothing was brought to our notice by the ld. CIT D/R. The finding of the ld. CIT(A) in all these orders is verbatim except variation in the quantum and dates. Therefore, we are of the view that there is no error in the finding of the ld. CIT(A) in other appeals also. Accordingly, we dismiss these appeals of the revenue. 17. In the result, appeals of the revenue are dismissed. Order pronounced in the Court on 26 th May, 2022 at Kolkata. Sd/- Sd/- (RAJESH KUMAR) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 26/05/2022 *SC SrPs आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent. 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण,Kolkata/DR,ITAT, Kolkata 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata
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