DCIT, Central Circle - 4(1) , Kolkata V. M/s. Surana Mercantiles Pvt. Ltd., , Kolkata

ITSSA 135/KOL/2018

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 2257 (ITAT-KOLKATA)
• Duration Of Justice: 5 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-05-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-02-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 07-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Search and seizure; Loose papers; Document seized; Reasonable cause; Accommodation entries; Block assessment; Bogus loan; Condonation of delay; Documents seized; Reassessment proceedings; Set aside
• Section: 68; 143(3); 142(1); 153A; 250; 143(2); 139(1); 113; 153; 22

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER & SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER I.T.(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 Dy. Commissioner of Income Tax, Central Circle – 4(1), Kolkata Vs M/s. Surana Mercantiles Pvt. Ltd. Century Tower, Theatre Road 45, Shakespeare Sarani Kolkata - 700017 [PAN : AABCB4120A] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : Shri N.S. Saini, A/R Revenue by : Shri Abhijit Kundu, CIT D/R सुनवाई कᳱ तारीख/Date of Hearing : 26/02/2024 घोषणा कᳱ तारीख /Date of Pronouncement: 21/05/2024 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The present appeals are directed at the instance of the revenue against the separate but identical orders of the learned Commissioner of Income Tax (Appeals) - 21, Kolkata (hereinafter the “ld. CIT(A)”) dt. 03/08/2018, passed u/s 250 of the Income Tax Act, 1961 (“the Act”) for the Assessment Years 2010-11 to 2014-15. 2. The Registry has pointed out that there is a delay of 2 days in filing of these appeals. There is a petition for condonation of delay stating therein, the reasons for the delay. On perusal of the petition, we are convinced that the revenue was prevented for reasonable cause from filing this appeal in prescribed time limit. Accordingly, we condone the delay and admit all the captioned appeals for hearing on merits. 2 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 3. As the issues raised in these appeals are identical, they were heard together and are being disposed off by way of this common order. 4. The grounds of appeal are verbatim identical for all the Assessment Years, hence for the sake of brevity, the grounds of appeal for only Assessment Year 2010-11 are extracted for ready reference:- “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 right to substantiate, modify, delete, supplement and/or alter the grounds at the time of hearing.” 5. Brief facts of the case as culled out from the records for Assessment Year 2010-11 are that, assessee is a private limited company. Regular return of income for Assessment Year 2010-11 filed u/s 139(1) of the Act on 25/09/2010. Subsequently case selected for scrutiny followed by serving of notice u/s 143(2) & 142(1) of the Act. Assessment u/s. 143(3) of the Act completed on 02/01/2012. Thereafter, search u/s 132 of the Act was conducted at the residential and business premises of the Surana Group (of which assessee is a part) on 02/03/2016. During the course of search, various papers, documents, were seized and impounded and details of all such seized material is mentioned by the ld. Assessing Officer in all the assessment order in question before us. So far as Assessment Year 2010-11 is concerned. Following is the list of the impounded material referred by ld. Assessing Officer at page 2 of the assessment order:- “I. Paper / document bunched in MHPL/1 & MHPL/HD/1, seized from 10, Middleton Street, Kolkata 70071. 3 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. II. Paper / document bunched in SMP/1 to SMP/14 & SMPHD/L seized from Century Towers, Room No.505, 45, Shakespeare Sarani , Kolkata 700017. III. Paper / document bunched in SAIPL/1 to SAIPL/9 and SAIPL/PD/1 seized from the office premises of Southern Avenue, Kolkata 700029. IV. Paper / document bunched in PKS/PD/1 from Metro Tower Flat No. 7A, 1, Ho Chi Min Sarani, Kolkata -71. V. Paper / document bunched in SKS/1 to SKS /11 from 6, Queens Park Kolkata 700019. VI. Paper document impounded from the office premises of Cocrete Credit Limited, 1, Crooked Lane , Room No 226, Kolkata 700069.” 5.1. Notice u/s 153A of the Act issued to which necessary compliance made and return was furnished on 03/11/2016 wherein no additional income offered and thereafter valid notice u/s 143(2) & 142(1) of the Act were served upon the assessee and assessment proceedings carried out. The ld. Assessing Officer referring to the seized material no. SMP/HD/1 and also taking into consideration other seized material, including digital information, statement of the directors of employees of the assessee company came to the conclusion that the assessee company has taken/arranged unsecured loan/share capital/investment from various accommodation entry provider companies for routing unaccounted money. He also observed that Surana Group is having association with Deepak Patwari, who is a well- known entry operator of Kolkata. The ld. Assessing Officer observed that the assessee has resorted to colorable transactions intended for ploughing back the unaccounted cash in the books of the assessee company. Further, the ld. Assessing Officer taking support of the details of various companies through whom assessee has received unsecured loans/received funds from sale of investments come to the conclusion 4 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. that these all are accommodation entry providers/shell companies/paper companies and completed the assessment making the following additions. Income assessed at Rs.10,77,21,108/-. The details of addition for Assessment Year 2010-11 are as under:- A.Y. Particulars of Additions Amount (Rs.) 2010-11 Fictitious claim of interest on bogus loan 46,00,787/- Short term Capital Gain 8,74,923/- Unexplained cash credit in the form of bogus loan 9,00,12,506/- Sale of investment in shell co. 50,00,000/- 5.1.2. On similar analogy, the following additions were made for the remaining Assessment Years, as follows:- A.Y. Particulars of Additions Amount (Rs.) 2011-12 Security transaction tax on share investment 11,45,836/- Share investment expenses 3,43,457/- Interest on bogus loan 23,42,445/- Unexplained cash credit 24,20,00,000/- A.Y. Particulars of Additions Amount (Rs.) 2012-13 Trading profit in share sale treated as unexplained cash credit 2,50,83,763/- Commission on sale 2,42,862/- A.Y. Particulars of Additions Amount (Rs.) 2013-14 Share investment expenses 4,703/- Security transaction tax 10,575/- Interest on bogus loan 1,29,53,410/- Unexplained cash credit 10,37,00,000/- A.Y. Particulars of Additions Amount (Rs.) 2014-15 Interest on bogus loan 91,03,538/- Unexplained cash credit 1,70,00,000/- 5.2. Aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) and one of the ground raised by the assessee was that during the course of search, no incriminating material was found and that ld. Assessing Officer did not refer to any incriminating material for making the impugned additions and in absence of any incriminating material no addition can be made for the unabated/completed assessment years. Even though assessee had raised various grounds on merits but ld. CIT(A) decided the appeal only on this legal ground. The ld. CIT(A) also 5 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. took note of the decisions of this Tribunal in IT(SS)A Nos. 12 to 16/Kol/2012, order dt. 22/06/2015. The observation of the ld. CIT(A), as to whether the impugned additions have been made on the basis of incriminating material or not is stated in para 3 of the impugned order. Thereafter the ld. CIT(A) has reproduced the finding of this Tribunal in assessee’s own case in IT(SS)A Nos. 12 to 16/Kol/2012 (supra) and allowed the legal ground observing that since no incriminating material was found and seized during the course of search in the case of Surana Group which would have any bearing or relation to the income tax assessment for the relevant Assessment Year which fell under the category of completed and unabated Assessment Years and, therefore, the assessment order is bad in law and quashed the same. 6. Aggrieved, now the revenue is appeal before this Tribunal. 7. Before adverting to the submissions of both the sides, we take note of the fact that in the past i.e., on 05/07/2023, this Tribunal observed in the order sheet that “there are certain material referred to by the ld. Assessing Officer which according to the ld. Assessing Officer/revenue is incriminating material leading to the impugned additions. The ld. Counsel for the assessee, however, contended that the said material was already part of the assessment records and even otherwise, does not constitute incriminating material. Both the parties were directed to refer to each of the material/documents/evidence and demonstrate as to whether the same can be treated as incriminating material or not. Written submissions along with copy of each of the documents/evidence be filed. To come up on 22/08/2023. Copy of this order be supplied. 7.1. Pursuant to this direction of the Tribunal, the ld. D/R filed details paper book on 03/08/2023 containing details of seized material and 6 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. statements of various persons taken during the course of search, whatsapp chat history found in the mobile phone of employee. Thereafter, the case came up for hearing on multiple occasions but finally it was heard on 26/02/2024. 7.2. Before us, the ld. D/R firstly strongly opposed the finding of the ld. CIT(A) and stated that various incriminating material were found and the same have been referred to by the ld. Assessing Officer and after corroborating the same with the statement recorded on oath u/s 132(4) of the Act, financial transactions for the year under consideration were examined and since the assessee failed to explain the nature and source of the alleged sum and other details called for by the ld. Assessing Officer, the impugned additions were made. The ld. D/R referred to the written submissions filed on 05/02/2020 on the issue of Section 153A, and stated that the expression “incriminating material” is not found in the provisions of the Act but if any documents/loose papers/digital information is found and seized during the course of search, which have bearing on the assessment of the assessee, then it should be treated as incriminating material at least for the purpose of examination of such documents. He further statement that it is not the case that no incriminating material was found since the ld. Assessing Officer has referred to such material in the assessment order itself. Further, the ld. D/R referred to the statements given on 12/03/2024 where the year- wise additions have been discussed and the seized documents on which the additions have been made have been referred in the relevant pages of the assessment order. Like for Assessment Year 2010-11, the basis of impugned additions is seized documents marked SMP/HD/1 and 7 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. similarly details for other years have been mentioned. The ld. D/R also referred to the detailed paper book furnished on 03/08/2023 and for the sake of convenience, we are only reproducing below, the synopsis of issues referred the department’s paper book dt. 03/08/2023:- 8 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 9 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 8. On the other hand, the ld. Counsel for the assessee filed various written submissions and the crux of the arguments are summarised as follows:- (i) That since no incriminating material has been referred to by the ld. Assessing Officer for making the impugned additions and the assessment years in question are completed and non-abated assessment, the case of the assessee is squarely covered by the judgment of the Hon’ble Supreme Court in the case of Pr. C.I.T. V/s. Abhisar Buildwell (P) Ltd. (2023) 454 ITR 212 (S.C.), wherein the Hon’ble Court has duly considered judgments of various Hon’ble Courts including that of Hon’ble Delhi High Court in the case Commissioner of Income Tax, Central-III v. Kabul Chawla, (2015) 61 10 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. taxmann.com 412 (Delhi) dated 28.08.2015, and, therefore, the finding of the ld. CIT(A) deserves to be upheld. (ii) Secondly, it has been contended that one of the assessee was part of the same search, namely, Shri Shanti Kumar Surana, was also subjected to various additions and when the matter travelled before this Hon’ble Tribunal in IT(SS)A Nos. 127 to 131/Kol/2018, vide order dt. 26/05/2022, this Tribunal dismissed the revenue’s appeal finding it to be squarely covered by the judgment of the Hon’ble Delhi High Court in the case of Kabul Chawla (supra). (iii) That some of the seized documents are in the nature of whatsapp chat which were found in the mobile phone of the employee of assessee company but the same cannot be made a basis to make the additions unless opportunity of cross examination is granted. He further added that statements of various other persons have been taken at the back of the assessee for which also no opportunity for cross-examination was granted and not providing such opportunity renders the assessment order bad in law in the light of the judgment of the Hon’ble Apex Court in the case of CCE vs. Andaman Timber Industries Ltd. [2005] 12 SCC 151 (SC). (iv) Lastly, it was submitted that when under similar circumstances, this Hon’ble Tribunal has decided in the case of another assessee of the same group in favour of the assessee, then the matter should be referred to a larger Bench of more than two members to decide the issue. 11 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 9. We have heard rival contentions, perused the material available on record and gone through the decisions referred and relied upon by both the sides in the detailed written submission filed on various dates, during the course of hearing. The revenue’s sole grievance is that the ld. CIT(A) erred in allowing the assessee’s appeal by observing that additions made by the ld. Assessing Officer in the assessment framed u/s 143(3)/153A/153D of the Act is not based on any incriminating material/documents/evidence seized during the course of search operation. We observe that the search was carried out at the business and residential premises of Surana Group on 02/03/2016. Various documents, papers, hard disks, digital information were found and seized. So far as the case of the assessee is concerned, the ld. Assessing Officer has referred to certain seized material and based on the same, examined the financial documents for the year under consideration and made certain additions. Admittedly, the returns for Assessment Year 2010-11 to 2014-15 were filed regularly u/s 139(1) of the Act on 25/09/2010, 26/09/2011, 28/09/2012, 28/09/2013 and 30/09/2014. It is also an admitted fact that as on the date of search, the assessment u/s 143(3) of the Act for Assessment Year 2010-11 to 2013-14 stood completed and so far as Assessment Year 2014-15 is concerned, the return was not selected for scrutiny as no notice u/s 143(2) of the Act was issued up to 30/09/2015. Now, for such completed Assessment Years, additions can be made only if any incriminating material is found during the course of search and additions, if any, made has a nexus with such incriminating material. In the past, this issue as come up before various Hon’ble High Courts but finally the matter was listed before the 12 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. Hon’ble Supreme Court in the case of Abhisar Buildwell (P) Ltd. (supra), wherein the Hon’ble Apex Court, held as follows:- “5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under section 132 or requisition under section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under section 132 or requisition under section 132A, the assessment has to be done under section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the 'total income' taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. CIT v. Mehndipur Balaji 2022 SCC Online All 444/[2023] 147 taxmann.com 201/ [2022] 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. 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 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. 13 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 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 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." 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: "15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year 14 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. falling within six assessment years immediately preceding the' assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of, the Act is annulled in appeal or any other proceeding. 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) v. Asst. CIT (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 15 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or 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." 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under section 158BA of the Act, 1961. The erstwhile scheme of block assessment under section 158BA envisaged assessment of 'undisclosed income' for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the 'undisclosed income' and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the 'undisclosed income' was chargeable to tax at a special rate of 60% under section 113 whereas income other than 'undisclosed income' was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under section 153A are triggered by conducting of a valid search under section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: "153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under section 132 or 16 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. books of account, other documents or any assets are requisitioned under section 132- A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; b) 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: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, section 153-B and section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an 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." 11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, 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 making of requisition under section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total 17 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub-section (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; 18 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.” 10. The ld. Counsel for the assessee has heavily relied upon the judgment of the Hon’ble Apex Court in the case of Abhisar Buildwell (P) Ltd. (supra) and even in the past when other group cases of the assessee came up for adjudication, on the similar issues, judgment of Hon’ble Delhi High Court in the case of Kabul Chawla (supra) has been referred to and relied upon and the view taken therein has subsequently been confirmed by the Hon’ble Apex Court in the case of Abhisar Buildwell (P) Ltd. (supra). 11. Now, considering the ratio laid down by the Hon’ble Supreme Court and the contentions made by both the sides, the factual part which needs adjudication is whether any incriminating material was found during the course of search and whether the addition made by the Assessing Officer is having nexus with the impugned additions. For this, we would like to first refer to the observation of the ld. Assessing 19 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. Officer given in assessment order for Assessment Year 2010-11 and the same is extracted below:- 20 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 21 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 22 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 23 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 24 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 12. Now going through the above, we observe that the ld. Assessing Officer has referred to various incriminating material and corroborated the same with the statements of key person and employees of assessee company recorded u/s 132(4) of the Act. We also take into consideration that before commencing the assessment proceedings u/s 143(3)/153A/153D of the Act all the seized material are in possession of the ld. Assessing Officer. In some seized material, specific dates are mentioned and such transactions have to be examined for the year for 25 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. which they are referred to. There are certain documents which are in the shape of audited financial statements and other company records which are already forming part of the audited financial statements and income tax returns. Further there are certain material in the form of digital information found in the mobile phones. In the past, when mobile phones were not in much use, chances of finding loose sheets were much more. Subsequent to digitalization and use of computers and mobiles, now the information can be easily recorded in the mobile phones and computers. At the time of search, all such information available in the digital form in the mobile phones of various persons found at the searched premises are also seized and form part of the seized documents. In the assessee’s case, we note that the ld. D/R filed copies of such digital information in the form of whatsapp chat which were found in the mobile phone of the accountant of the assessee company, namely, Suman Kumar Das. It is an uncontroverted fact that Suman Kumar Das was very much available at the premises on 02/03/2016 and these statements were recorded on the very same date and Suman Kumar Das was an employee of the assessee for past many years. He has explained the modus operandi of the business run by Shanti Kumar Surana and the companies controlled by him. We take note of the replies given to question no. 21 to 22 which are mentioned below:- “Q.20 Please state, whether you are in full conscience of mind and sound state of health to continue recording of your statement. Ans. Yes Sir. I am now in full conscience of mind and sound state of health after taking my lunch and proper rest thereafter. Q.21 Please state the detailed modus operandi of handling of cash made by Shri Shanti Kumar Surana and his earnings thereof. Ans. Sir, it is a fact that the unaccounted cash transactions made by Shri Shanti Kumar Surana are being handled through me and Shri Sujit Saha and Satyajit Khara. Since a service 26 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. of unaccounted cash handling has been provided by me and two other persons as stated earlier on the instructions of Shri Shanti Kumar Surana, so unaccounted income must have been generated by Shri Shanti Kumar Surana. As far as the quantification of income is concerned, I am unaware of the fact that how much percentage is getting for all these illegal services provided. Sir, I want to add here that we work on the instructions of Shri Shanti Kumar Surana only, we, as individual employees of this group are not at all involved in generation of unaccounted cash. Q.22 As you have stated that you have joined in this group during the year 2007-2008, i.e. you are associated with this group since long 8 years. It is also found during the course of search & seizure operation that all the cash transactions were made by this group through you only. In that case, you are supposed to be a close person of Shri Shanti Kumar Surana. Please state the modus operandi of the cash transactions done by this group. Ans. Sir, it is true that Shri Shanti Kumar Surana does put faith on me for the unaccounted cash transactions. But the modus operandi of unaccounted cash transactions is known to Shri Shanti Kumar Surana only. All the unaccounted cash which has to be given to any party, brought by Shri Shanti Kumar Surana personally in this office. I just receive them by taking the bag containing the cash from his car and keep them at office. Shri Surana sends a message to my mobile mentioning specific number of one Note usually of Rs. 10/-Thereafter, I deliver the said cash to the person who comes with the specific note, bearing the same number as given to me through mobile message by Shri Surana. For collecting cash from any party, Shri Surana directs me to send one staff from our office to some specific address with a specific Note. I depute one staff, in most of the cases Shri Sujit Saha, to collect the said unaccounted cash from the specific address in exchange of one specific rupee note. When the staff comes to office with the said cash, I keep them at this office and Shri Surana personally comes and collects the said unaccounted cash from me on the same date. As such I have no knowledge about the purpose or modus operandi for these unaccounted cash transactions.” 13. We further note that in the statements recorded on oath u/s 132(4) of the Act to Sumar Kumar Das was asked to explain the details appearing in page 1 to 11 of annexure-1 which were found in the whatsapp chat of his mobile phone. For reference, the list of such information found is mentioned below:- This space has been left blank intentionally 27 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 28 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 29 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 30 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 31 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 32 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 33 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 34 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 35 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. 15. We further note that the fact that the statement of Shri Shanti Kumar Surana was also recorded on the very same date and he made no request to the search team for cross-examination is the employees statement at that point of time. We presume that when the statement of the employee was taken, the employee/key person should have been available at the search premises and at no point of time he has controverted such statement of his employee. Even at a later stage 36 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. Shanti Kumar Surana has not controverted the statement of his employee. Further we take note that the statement of Mr. Kamal Kothari, whose name was also appearing in the whatsapp chat list and was recorded few days after the search on 05/05/2016, wherein he stated that Shanti Kumar Surana is a known finance broker. He wanted to get some transactions done with my help for which the mode of exchange of cash was also suggested by him. Thereafter he stated that Shanti Kumar Surana used to make cash transfers using currency notes as token. The ld. Assessing Officer took note of the statement of the employee u/s 132(4) of the Act wheren he stated that ‘KG’ mentioned in the whatsapp chats denotes Lakhs. In reply to question no. 17, it was mentioned that 90T649261 denotes notes of Rs.10/- and 35KG denotes Rs.35 Lakhs/-. 15.1. Now, on going through the details of whatsapp chat, seized material referred by the ld. Assessing Officer in the assessment order, the statement on oath recorded u/s 132(4) of the Act of the key persons of the assessee company as well as employees clearly indicates the modus operandi of the nature of business of the assessee and the use of accommodation entry providers/entry operators for converting unaccounted cash/income/investments into the books of accounts. Now, so far as the term “incriminating material” is concerned, though it is not defined in the Income-tax Act but the general meaning is that the incriminating material, need not necessarily be some tangible material and it not only includes some documents/assets/entries in the books of accounts etc., but also any information stored in digital form or any confession of any person relevant to escapement of income. It has 37 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. been judicially settled time and again that merely recording statement on oath, cannot be the basis to make an addition until and unless some corroborative evidence is found during the course of search. In the instant case, seized material includes the documents, assets, entries in the books of accounts, information stored in digital form and the statement u/s 132(4) of the Act. It is also evident that though certain information indicate the dates but they hint the nature of business activities and the transactions carried out in the regular course. All these evidence collectively, which are incriminating in nature, were in the possession of the ld. Assessing Officer. 15.1.1. Now, question before us is that when the ld. Assessing Officer is having all these seized material in front of him and statements have been recorded under oath u/s 132(4) of the Act, it clearly indicates that assessee is engaged in taking accommodation entries for routing of unaccounted cash/income etc. For the year under appeal we note that the ld. Assessing Officer has specifically dealt with the seized material by referring the relevant seized documents and has also discussed the modus operandi of the assessee company’s business and thereafter has analyzed the financial transactions entered during the year. Now, for making addition in the completed Assessment Years, the only thing which is required by the ld. Assessing Officer is that there should be some incriminating material found during the course of search. As discussed above, there is incriminating material found in the form of hard disks, digital information and necessary corroboration of all these data with the statement of the key persons of the assessee company on the date of search itself. It is not a case of post search enquiry or that the 38 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. additions having been made only on the basis of audited financial statements wherein the ld. Assessing Officer again examines the unsecured loans/share capital/shares, information for which were already disclosed in the regular return of income. What we are dealing herewith are the seized material found during the course of search which in our considered opinion are purely incriminating in nature which has given the powers to the ld. Assessing Officer to make the addition in completed/unabated Assessment Year u/s 153A of the Act. Therefore, so far as the judgment of the Hon’ble Apex Curt in the case of Abhisar Buildwell (P) Ltd. (supra), the same is not applicable on the facts of the assessee because there is an incriminating material and the same has been referred and inferred by the ld. Assessing Officer for making the impugned addition. Certainly, once the jurisdiction is assumed and assessment proceedings are carried out, merely finding incriminating material is not a gateway to make the impugned addition and the assessee has sufficient opportunity to explain the genuineness of such seized material and to explain that no undisclosed/unaccounted income has been earned. But in the given case there is no rebuttal on the merits of the case i.e., about the additions made including addition u/s 68 of the Act and as the assessee has not filed any cross-objection against the order of the ld. CIT(A). The assessee’s only plea is that in absence of incriminating material, the ld. Assessing Officer was not justified in making additions. 15.2. So far as the decision of this Tribunal in IT(SS)A No. 127 to 131/Kol/2018 vide order dt.26/05/2022 is concerned, we on perusal of the same find that the seized material as discussed by us above, was not 39 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. provided for adjudication before this Tribunal and since the copies of such seized material was not available on record, this Tribunal had no occasion to examine the seized material so as to come to the conclusion that whether the material was incriminating in nature or not. Since there is a clear differentiation of facts, the decision of the Tribunal vide order dt. 26/05/2022 in the case of Shanti Kumar Surana (supra) cannot be applied on the instant appeals and, therefore, there is no need to refer the matter to a Larger Bench because the facts are not identical. 16. As far as the contention of the ld. Counsel for the assessee that no opportunity of cross-examination was awarded, we find that the statements referred by the ld. Assessing Officer as well as all the incriminating material referred (supra) were available at the time of search itself and the key person of the assessee company was at full liberty to rebut such transactions or to request the search team to cross- examine his employee who has given the statements. Further no such proof has been placed before us which can show that the assessee company has requested for cross-examination before the ld. Assessing Officer. It thus clearly shows that it is merely an afterthought and an alternate plea which has no foundation to contest for. 17. We, therefore, under the given facts and circumstances are of the considered view that though the Assessment Year 2010-11 to 2014-15 falls in the category of completed and unabated Assessment Years but because various incriminating material were found during the course of search at the assessee’s business and residential premises and the same were having a direct bearing on the financial transactions carried out by the assessee company and the modus operandi of the nature of business 40 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. activities, for the years in dispute before us and that the ld. Assessing Officer has examined such incriminating material, referred the same in the assessment order and further taking note of the other statements and seized material available with him as part of the search documents, has concluded the assessment proceedings making various additions. Therefore, for Assessment Year 2010-11 to 2014-15, the ld. Assessing Officer was well within its jurisdiction to carry out the assessment proceedings u/s 143(3)/153A/153D of the Act and has rightly made the impugned additions and further since the assessee has not challenged the impugned additions by filing any cross-objections before us, we reverse the findings of the ld. CIT(A) and confirm the additions made by the Assessing Officer for the impugned Assessment Years. 18. In the result, appeals of the revenue in I.T.(SS)A. No. 132 to 136/Kol/2018 for Assessment Years 2010-11 to 2014-15 are hereby allowed. Order pronounced in the Court on 21 st May, 2024 at Kolkata. Sd/- Sd/- (SONJOY SARMA) (DR. MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 21/05/2024 *SC SrPs 41 I.T(SS)A. No. 132 to 136/Kol/2018 Assessment Year: 2010-11 to 2014-15 M/s. Surana Mercantiles Pvt. Ltd. आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Assessee 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata