Shri Vikaskumar D. Agarwal, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(3), Ahmedabad

ITSSA 167/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1834 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-04-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 15-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AHD ASSESSMENT YEARS; PP G I T SS A NO S
• Keywords: Gift; Income from undisclosed sources; Salary income; Question of law; Validity of assessment; Reassessment proceedings
• Section: 143(3); 153A; 234B; 68; 148; 263; 132; 139

Judgement Text

IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 1 OF 23 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER AND SHRI S.S. GODARA , JUDICIAL MEMBER I T (SS) A NO S . 153, 154, 155 & 156 /AHD /201 2 ASSESSMENT YEAR S : 200 3 - 04, 2004 - 05, 2005 - 06 & 2006 - 07 VIJAYKUMAR D AGARWAL , VS. DY. COMMISSIONER OF INCOME TAX, 8, KAIRVI BUNGLOW, CENTRAL CIRCLE - 1(3), NEAR SARTHI HOTEL, AHMEDABAD . BODAKDEV, AHMEDABAD 380 054. [PAN ABNPA 2152 M ] I T (SS) A NO S . 160, 161, 162 & 163/AHD /201 2 ASSESSMENT YEARS: 2003 - 04, 2004 - 05, 2005 - 06 & 2006 - 07 VI SHAL V AG ARWAL, VS. DY. COMMISSIONER OF INCOME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMEDABAD. [PAN AEQPA 7393 L ] I T (SS) A NO S . 167, 168, 169 & 170/AHD /201 2 ASSESSMENT YEARS: 2003 - 04, 2004 - 05, 2005 - 06 & 2006 - 07 VIKASKUM AR D AGARWAL, VS. DY. COMMISSIONER OF INCOME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMEDABAD. [PAN ADGPA 1152 L ] I T (SS) A NO S . 174, 175 & 176/AHD /201 2 ASSESSMENT YEARS: 2004 - 05, 2005 - 06 & 2006 - 07 RUCHIRA V AGARWAL, VS. DY. COM MISSIONER OF INCOME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMEDABAD. [PAN ABYPP 2242 G ] I T (SS) A NO S . 180, 181, 182 & 183/AHD /201 2 ASSESSMENT YEARS: 2003 - 04, 2004 - 05, 2005 - 06 & 2006 - 07 SANTOSHDEVI V AGARWAL, VS. DY. COMMISSIONER OF INC OME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMEDABAD. [PAN AEUPA 7386 M ] I T (SS) A NO S . 1 87 , 1 88 , 1 89 & 1 90 /AHD /201 2 ASSESSMENT YEARS: 2003 - 04, 2004 - 05, 2005 - 06 & 2006 - 07 VANITA V AGARWAL, VS. DY. COMMISSIONER OF INCOME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMEDABAD. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 2 OF 23 [PAN ADGPA 1150 J ] I T (SS) A NO S . 1 94 & 1 95 /AHD /201 2 ASSESSMENT YEARS: 2003 - 04 & 200 4 - 05 ARUNA A RVINDKUMAR AGARWAL, VS. DY. COMMISSIONER OF INCOME TAX, AHMEDABAD. CENTRAL CIRCLE - 1(3), AHMED ABAD. [PAN ACKPA 1296 J ] (APPELLANT S ) (RESPONDENT) APPELLANT BY : SHRI S.N. SOPARKAR WITH SHRI P.M. MEHTA RESPONDENT BY : S HRI JAGDISH , CIT (D.R.) DATE OF HEARING : 2 7 .04 . 20 16 DATE OF PRONOUNCEMENT : 29 .04.2016 O R D E R PER BENCH ALL THESE APPEALS FILED BY THE DIFFERENT ASSESSES ARE AGAINST THE CONSOLIDATED ORDER OF LEARNED CIT(A) - III , AHMEDABAD DATED 25.01.2012 FOR THE ASSESSMENT YEARS 2003 - 04 TO 2006 - 07 . 2. B EFORE US , AT THE OUTSET , LEARNED AUTHORISED RE PRESENTATIVE SUBMITTED THAT THOUGH THE APPEALS PERTAIN TO DIFFERENT ASSESSEES, DIFFERENT ASSESSMENT YEARS, BUT ALL THESE APPEALS PERTAIN TO THE FAMILY MEMBERS OF THE ASSESSEE AND THE ISSUES ARE ALSO COMMON AND , THEREFORE , HE HAS COMMON SUBMISSIONS TO MAKE AND THEREFORE THE SUBMISSIONS MADE BY HIM IN THE CASE OF ONE APPEAL WOULD BE APPLICABLE TO ALL THE APPEALS. LEARNED DEPARTMENTAL REPRESEN TATIVE DID NOT OBJECT TO THE AFORESAID SUBMISSION OF THE LEARNED AUTHORISED REPRESENTATIVE . WE, THEREFORE, FOR THE SA KE OF CONVENIENCE , PROCEED TO DISPOSE OF ALL THESE APPEALS BY THIS COMMON ORDER AND IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 3 OF 23 PROCEED WITH THE FACTS IN ASSESSEE S APPEAL IT(SS) A NO.153/AHD/2012 FOR THE ASSESSMENT YEAR 2003 - 04 . 3 . THE ASSESSEE IS A N INDIVIDUAL WHO IS STATED TO BE DERIVING INCOME FROM SALARY, OTHER SOURCES AND CAPITAL GAINS. ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003 - 04 ON 30.09.2003 WHICH WAS INITIALLY PROCES SED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT ) . THEREAFTER, A N A CTION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF ASSESSEE ON 15.10.2008. DURING THE COURSE OF SEARCH , EVIDENCE REGARDING ACCEPTANCE OF GIFT FROM SEVERAL DONORS WERE FOUND . ACCORDINGLY , NOTICE UNDER SECTION 153A OF THE ACT WAS ISSUED ON 2 1.07.2009 AND SERVED UPON THE ASSESSEE AND IN RESPONSE TO WHICH ASSESSEE FILED HIS RETURN OF INCOME FOR AY 2003 - 04 ON 30.11.2009 DECLARING TOTAL INCOME OF RS.2,01,1 30 / - . THE CASE WAS TAKEN UP FOR SCRUTINY AND THERE AFTER THE ASSESSMENT WAS FRAMED UNDER SEC TION 143(3) R.W.S. 1 5 3A (1)(B) OF THE A CT AND VIDE ORDER DATED 29.12. 2010 , THE TOTAL INCOME WAS DETERMINED AT RS.9,51,130/ - INTE R ALIA BY MAKING ADDITION OF RS.7,50,000/ - ON ACCOUNT OF UNPROVED TRANSACTION S OF GIFT. AGGRIEVED BY THE ORDER OF ASSESSING OFFI CER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD . C IT(A) WHO BY HIS CONSOLIDATED ORDER DATED 25.1.2012 IN THE CASE OF THE ASSESSEE AS WELL AS OTHER MEMBERS OF THE GROUP ( IN APP E AL NO .CIT(A) - III/148 TO 154, 156 TO 162, 163 TO 169, 131 TO 135 & 176, 136 TO 141 & 155, 142 TO 147 & 177, 179, 180 & 181 & 178/CC - 1(3)/11 - 12 DECIDED THE APPEAL. AGGRIEVED B Y THE ORDER OF LEARNED C IT(A) , THE ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS: - IT(SS)A NO.153/AHD/2012 FOR A.Y. 2003 - 04 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT S CASE, THE LEARNED CIT ( A ) HAS GROSSLY ERRED IN REJECTING GROUNDS NO.1 AND 2 OF THE APPELLANT S APPEAL BEFORE HIM CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S. 153A READ WITH SECTION 14 3(3) OF THE INCOME TAX ACT, 1961. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 4 OF 23 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION IN RESPECT OF GIFTS RECEIVED B Y ASSESSEE FOR RS.7,50,000/ - BY CONSIDERING TH E SAME AS UNEXPLAINED GI FTS U/S . 68 OF THE ACT. THE SAME MAY KINDLY BE DELETED. 3. THE ASSESSING OFFICER HAS ERRED ON FACTS AND IN LAW CHARGING INTEREST U/S 234A, 234B AND 234C WHEN NO SUCH INTEREST IS LEVIABLE . THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST . IT(SS)A NO.15 4 /AHD/2012 FOR A.Y. 200 4 - 0 5 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT S CASE, THE LEARNED CIT ( A ) HAS GROSSLY ERRED IN REJECTING GROUNDS NO.1 AND 2 OF THE APPELLANT S APPEAL BEFORE HIM CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PA SSED U/S. 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION IN RESPECT OF GIFTS RECEIVED B Y ASSESSEE FOR RS. 14,00,000/ - BY CO NSIDERING TH E SAME AS UNEXPLAINED GIFTS U/S . 68 OF THE ACT. THE SAME MAY KINDLY BE DELETED. 3. THE ASSESSING OFFICER HAS ERRED ON FACTS AND IN LAW CHARGING INTEREST U/S 234A, 234B AND 234C WHEN NO SUCH INTEREST IS LEVIABLE. THE APPELLANT DENIES ITS LIABI LITY TO PAY INTEREST. IT(SS)A NO.15 5 /AHD/2012 FOR A.Y. 200 5 - 06 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT S CASE, THE LEARNED CIT ( A ) HAS GROSSLY ERRED IN REJECTING GROUNDS NO.1 AND 2 OF THE APPELLANT S APPEAL BEFORE HIM CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S. 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING ADDITION IN RESPECT OF GIFTS RECEIVED B Y ASSESSEE FOR RS. 28,50,000/ - BY CONSIDERING TH E SAME AS UNEXPLAINED GIFTS U/S . 68 OF THE ACT. THE SAME MAY KINDLY BE DELETED. 3. THE ASSESSING OFFICER HAS ERRED ON FACTS AND IN LAW CHARGING INTEREST U/S 234A, 234B AND 234C WHEN NO SUCH INTEREST IS LEVIA BLE. THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST. IT(SS)A NO.15 6 /AHD/2012 FOR A.Y. 200 6 - 07 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF TH E APPELLANT S CASE, THE LEARNED CIT ( A ) HAS GROSSLY ERRED IN REJECTING GROUNDS NO.1 AND 2 OF THE APPELLANT S APPEAL BEFORE HIM CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U/S. 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT, 1961. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE APPELLANT S CASE, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING AD DITION IN RESPECT OF GIFTS RECEIVED B Y IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 5 OF 23 ASSESSEE FOR RS. 21,000 / - BY CONSIDERING TH E SAME AS UNEXPLAINED GIFTS U/S . 68 OF THE ACT. THE SAME MAY KINDLY BE DELETED. 3. THE ASSESSING OFFICER HAS ERRED ON FACTS AND IN LAW CHARGING INTEREST U/S 234A, 234B AND 23 4C WHEN NO SUCH INTEREST IS LEVIABLE. THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST. 4 . BEFORE US , AT THE OUTSET , LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT APART FROM CHALLENGING THE ASSESSMENT FRAMED U/S 153A, THE ASSESSEE IS ALSO CHALLENGI NG THE ADDITIONS MADE ON MERITS. HE SUBMITTED THAT THE APPEAL CAN BE DISPOSED OF ON THE SHORT LEGAL GROUND, NAMELY THAT THE ASSESSMENTS FRAMED EARLIER CANNOT BE DISTURBED IN THE COURSE OF PROCEEDINGS UNDER SECTION 153A. HE SUBMITTED THAT IF THE AFORESAID P LEA O F THE ASSESSEE IS UPHELD, THEN ALL OTHER ISSUES RAISED IN THE APPEAL ON MERITS WOULD BE RENDERED ACADEMIC. HE THEREFORE URGED THAT THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A BE TAKEN UP FIRST. THE LEARNED DEPARTMENTAL REPRESENTATIV E DID NOT OBJECT TO THE AFORESAID PLEA OF THE LEARNED AUTHORISED REPRESENTATIVE. WE THEREFORE PROCEED TO DECIDE THIS LEGAL QUESTION OF VALIDITY OF SECTION 153A PROCEEDINGS ACCORDINGLY. 5. BEFORE US, LEARNED A UTHORISED R EPRESENTATIVE REITERATED THE SUBMISS IONS MADE BEFORE LD . CIT(A) AND FURTHER SUBMITTED T HAT T HE IMPUGNED ASSESSMENT FRAMED UNDER SECTION 153 A OF THE ACT IS NOT VALID IN VIEW OF THE FACT THAT NO INCRIMINATING MATERIAL INDICATING THE UNACCOUNTED INCOME WAS FOUND AT THE TIME OF SEARCH AND T HERE FORE , THE AS SESSING OFFICER WAS NOT JUSTIFIED IN ISSUING NOTICE UNDER SECTION 153 A OF THE ACT AND PASSING THE ORDER. HIS SECOND ARGUMENT WAS THAT AS PER THE MANDATE OF S.153A, THE COMPLETED ASSESSMENTS CAN BE INTERFERED ONLY ON THE BASIS OF SOME INCRIMIN ATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH ON IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 6 OF 23 UNDISCLOSED INCOME OR PROPERTY DISCLOSED IN THE COURSE OF SEARCH WHICH ARE NOT PRODUCED OR ALREADY NOT DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT AND THAT THE ASSESSMENT UNDER SECTIO N 153A CAN B E MADE ONLY ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF SEARCH AND IN THE ABSENCE O F ANY INCRIMINATING MATERIAL , THE COMPLETED ASSESSMENTS C OULD NOT BE INTERFERED. LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT IN THE PRESENT CASE, THE AS SESSEE HAD ALREADY ACCOUNTED THE GIFTS IN THE RESPECTIVE ASSESSMENT YEARS BY CREDITING THE CAPITAL ACCOUNT AND THE FACT OF THE AMOUNT BEING REFLECTED IN THE CAPITAL ACCOUNT IS ACKNOWLEDGED BY THE ASSESSING OFFICER IN PARA 5.3, PAGE 2 OF THE ORDER. HE SUBM ITTED THAT THE GIFT DEEDS AND THE COPIES OF ACKNOWLEDGMENT OF RETURNS OF INCOME OF THE DONORS FOUND AT THE TIME OF SEARCH RELATES TO THE GIFTS WHICH HAVE ALREADY BEEN ACCOUNTED AND NO NEW MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH AND THE COPY OF GIFT DEEDS AND COPIES OF RETURN OF INCOME OF THE DONORS CANNOT THEREFORE BE CONSIDERED AS INCRIMINATING MATERIAL WHICH WOULD AUTHORISE THE ASSESSING OFFICER TO PROCEED WITH THE FRAMING OF ASSESSMENT UNDER SECTION 153A OF THE ACT. H IS THIRD ARGUMENT WAS THA T IN ALL THE YEARS IN WHICH THE ASSESSEE HAD RECEIVED THE GIFTS, ASSESSEE HAD FILED THE RETURN OF INCOME AND THE RETURN OF INCOME FOR THE RESPECTIVE YEARS WERE PROCESSED U/S 143(1) OF THE ACT. ON THE DATE OF SEARCH, THE TIME LIMIT FOR ISSUING NOTICE UNDER SECTION 143(2) HAD ALREADY ELAPSED AND IN SUCH A SITUATION FOR THOSE ASSESSMENT YEARS, ON THE DATE OF SEARCH, THE ASSESSMENTS HAD ALREADY ATTAINED FINALITY. IN SUCH A SITUATION AND IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH, T HE COMPLETED ASSESSMENTS COULD NOT BE INTERFERED WITH FOR THE PURPOSE OF FRAMING ASSESSMENT UNDER SECTION 153A OF THE ACT. HE ALSO PLACED ON RECORD A CHART SHOWING THE DETAILS OF ASSESSMENT YEARS, THE DATE OF FILING IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 7 OF 23 OF RETURN AND THE LAST DATE OF ISSUANCE OF NOTICE UNDER SECTION 143(2) OF THE ACT. THE RELEVANT CHART IS REPRODUCED HEREUNDER: SL. NO. ITA NO. ASSESSMENT YEAR ROI FILED ON ASSESSED UNDER SECTION LAST DATE OF ISSUING NOTICE U/S 143(2) VIJAYKUMAR D AGRAWAL 1 153/AHD/2012 2003 - 04 30/09/2003 143( 1) 30/09/2004 2 154/AHD/2012 2004 - 05 31/07/2005 143(1) 31/07/2006 3 155/AHD/2012 2005 - 06 27/03/2006 143(1) 31/03/2007 4 156/AHD/2012 2006 - 07 30/03/2007 143(1) 31/03/2008 VISHAL V AGRAWAL 5 160/AHD/2012 2003 - 04 27/09/2003 143(1) 30/0 9/2004 6 161/AHD/2012 2004 - 05 01/11/2004 143(1) 30/11/2005 7 162/AHD/2012 2005 - 06 28/03/2006 143(1) 31/03/2007 8 163/AHD/2012 2006 - 07 27/03/2007 143(1) 31/03/2008 VIKASHKUMAR D AGRAWAL 9 1 67/AHD/20 12 2003 - 04 27/09/2003 143(1) 3 0/09/2004 1 0 168/AHD/2012 2004 - 05 01/11/2004 143(1) 30/11/2005 1 1 169/AHD/2012 2005 - 06 27/03/2006 143(1) 31/03/2007 1 2 170/AHD/2012 2006 - 07 31/03/2007 143(1) 31/03/2008 RUCHIRA V AGRAWAL 13 174/AHD/2012 2004 - 05 21/03/2005 143(1) 31/03/2005 14 175/AHD/2012 2005 - 06 28/03/2006 143(1) 31/03/2007 15 176/AHD/2012 2006 - 07 30/03/2007 143(1) 31/03/2008 SANTOSHDEVI V AGRAWAL 16 180/AHD/2012 2003 - 04 27/09/2003 143(1) 30/09/2004 17 181/AHD/2012 2004 - 05 01/11/2004 143( 1) 30/11/2004 18 182/AHD/2012 2005 - 06 27/03/2006 143(1) 31/03/2007 IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 8 OF 23 19 183/AHD/2012 2006 - 07 24/03/2007 143(1) 31/03/2008 V ANITA V AGRAWAL 20 187/AHD/2012 2003 - 04 27/09/2003 143(1) 30/09/2004 21 188/AHD/2012 2004 - 05 01/11/2004 143(1 ) 30/11/2005 22 189/AHD/2012 2005 - 06 27/03/2006 143(1) 31/03/2007 23 190/AHD/2012 2006 - 07 24/03/2006 143(1) 31/03/2007 ARUNA A AGRAWAL 24 194/AHD/2012 2003 - 04 24/11/2003 143(1) 30/11/2004 25 195/AHD/2012 2004 - 05 05/08/2004 143(1) 31/08/2004 6. ON THE BASIS OF THE ABOVE CHART, HE POINTED THAT IN ALL THE ABOVE CASES, SINCE THE TIME LIMIT OF ISSUANCE OF NOTICE UNDER SECTION 143(2) HAD ELAPSED ON THE DATE OF SEARCH AND SINCE THERE WAS NO INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH, THE ASSESSMENT FRAMED UNDER SECTION 153A WAS NOT VALID AND THEREFORE THE ASSESSMENTS FRAMED UNDER SECTION 153A NEEDS TO BE QUASHED. 7. ON THE ISSUE THAT SINCE THE TIME LIMIT OF ISSUING THE NOTICE UNDER 143(2) HAD ELAPSED, THE INTIMATION ISSUED UNDE R SECTION 143(1) SHOULD BE TREATED AS COMPLETED ASSESSMENT HE RELIED ON THE DECISION OF THE CO - ORDINATE BENCH OF THE T RIBUNAL IN THE CASE OF ACIT VS. PACL INDIA LIMITED - ITA NO. 2637/DEL/2010 ORDER DATED 20.06.2013 AND POINTED TO THE RELEVANT FINDING AT PA G E NO. 19 OF THE PAPER BOOK. HE ALSO PLACED RELIANCE O N ANOTHER DECISION OF IDEAL APPLIANCES C O . PVT. L IMITED VS. DCIT - ITA NO. 173/MUM/2015 AND OTHERS - ORDER DATED 31.12.2015. HE PLACED ON RECORD COPY OF THE AFOR ES AID SUBMISSION. HE , THEREFORE , SUBMITTE D THAT IN RESPECT OF THE YEARS FOR WHICH THE TIME LIMIT FOR ISSUANCE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED BEFORE THE DATE OF SEARCH IN THOSE ASSESSMENT YEA R S IT HAS TO BE CONSTRUED IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 9 OF 23 TO BE NON ABATED ASSESSMENT A N D THE ASSESSMENTS UNDER SECTION 153A OF THE ACT CAN ONLY BE MADE IN THE LIGHT OF INCRIM INATING MATERIAL SEIZED DURING THE SEARCH. HE ALSO PLACED RELIANCE ON THE DECISION OF THE CO - ORDINATE BENCH OF T RIBUNAL IN THE CASE OF S A UMYA CONSTRUCTION PVT. LTD. VS. ACIT (IT(SS) A NO.3/AHD/2014 ORDER DA T E D 21.08.2015 ) . IT IS STATED AT THE BAR THAT THE R EVENUE HAD PREFERRED APPEAL BEFORE THE HON BLE GUJARAT HIGH COURT AND THE SAME STANDS DISMISSED. 8 . LEARNED DEPARTMENTAL REPRESENTATIVE , ON THE OTHER HAND , SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND TH E LEARNED CI T(A) AND FURTHER SUBMITTED THAT DURING THE COURSE OF SEARCH , DOCUMENTS FOUND WERE OF INCRIMINATING NATURE AND IT WAS NOTICED THAT THE ASSESSEE AND HIS FAMILY MEMBERS HAD RECEIVED GIFTS FROM 289 PERSONS , T HE INDIVIDUAL GIFTS RECEIVED BY THE AS SESSEE AND HIS FAMILY MEMBERS ARE IN THE RANGE OF RS.75,000/ - TO RS.1,00,000/ - IN ALL CASES; AGGREGATE TO RS.2.66 CRORES DURING THE ASSESSMENT YEA R S 2004 - 05 TO 2008 - 09. HE FURTHER SUBMITTED THAT THE GIFT DEEDS COUPLED WITH POST SEARCH ENQUIRIES CONDUCTED BY ADIT(INV) REVEALED THAT AT THE GIVEN ADDRESS EITHER THE DONORS WERE NOT FOUND OR DONORS DID NOT CONFIRM HAVING GIVEN ANY GIFT TO THE ASSESSEE, THE ASSESSEE DID NOT PRODUCE THE DONORS FOR EXAMINATION BEFORE THE ADIT(I). HE FURTHER SUBMITTED THAT ON A COM BINED READING OF THE MATERIAL FOUND AT THE TIME OF SEARCH NAMELY THE GIFT DEEDS AND THE RETURN OF INCOME OF THE DONORS REVEALED THAT THE DONORS HAD GIVEN THE GIFT OF MORE THAN THE INCOME SHOWN IN THE RETURN OF INCOME. ON A SAMPLE BASIS HE POINTED TO PAGE N OS.3 & 4 OF THE PAPER BOOK AND POINTED OUT THAT SHRI MAHAVIR PRASAD AGRAWAL IS STATED TO HAVE GIVEN GIFT OF RS.1,00,000/ - WHEREAS HIS TOTAL INCOME AS PER COPY OF THE RETURN OF INCOME WAS RS.60,250/ - ONLY . HE THEREFORE SUBMITTED THAT ON THE BASIS OF THE MA TERIAL FOUND DURING THE COURSE OF SEARCH COUPLED WITH THE POST SEARCH INQUIRIES BY ADIT(I) INDEED REVEALED THAT THE DOCUMENT WERE INCRIMINATING AND THEREFORE THE IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 10 OF 23 ASSESSING OFFICER WAS FULLY JUSTIFIED IN FRAMING ASSESSMENT UNDER SECTION 153A OF THE ACT. HE FURTHER PLACED RELIANCE ON THE DECISION OF HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ K UMAR ARORA REPORTED IN ( 2014 ) 367 ITR 517 ( ALL ). 9. LEARNED AUTHORISED REPRE SENTATIVE , IN THE REJOINDER TO LEARNED DEPARTMENTAL REPRESENTATIVE S SUBMISSION , SUBMITTED THAT T HE DECISION RELIED UPON BY THE L EARNED AUTHORISED REPRESENTATIVE IN THE CASE OF RAJ K UMAR ARORA (SUPRA) IS ON DIFFERENT FACTS AS IT DEALS WITH THE SCOPE OF S. 153A ASSESSMENT AND NOT THAT OF ASSUMPTION OF JURISDICTION AND THAT THIS FACT H AS ALSO BEEN NOTED BY THE C O - ORDINATE B ENCH OF THE T RIBUNAL IN THE CASE OF I NTAS PHARMACEUTICAL S LIMITED IT ( SS ) A NOS. 807 TO 809 /AHD/2010 & 20/AHD/2011 ORDER DATED 14.08.2015. HE POINTED OUT THE RELEVANT PARA GRAPHS IN PAGE NO. 14 OF THE AFORESAID ORDER. ON THE SUBMISSION OF L EARNED DEPARTMENTAL REPRESENTATIVE ABOUT POST SEARCH ENQUIRY REVEALING UNDISCLOSED INCOME, LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT ASSUMPTION OF JURISDICTION UNDER SECTION 153 A OF THE ACT HAS TO BE DECIDED ON THE DATE OF ISSU E OF NOTICE UNDER SECTION 153A OF THE ACT AND IT DOES NOT DEPEND UPON THE POST SEARCH ENQUIRIES. HE FURTHER SUBMITTED GIFT DEEDS AND RETURN S OF INCOME OF THE DONORS FOUND ITSELF CANNOT BE CONSIDERED TO BE AN INCRIMINATING MATERIAL. HE ALSO PLACED RELIANCE ON THE DECISION OF H ON BLE DELHI HIGH COURT IN THE CASE OF CIT VS . ASHOK DUA REPORTED IN (2009) 177 TAXMAN 494 (DEL HI ) AND PLACED ON RECORD A COPY OF THE AFORESAID DECISION. HE , THEREFORE , REITERATED THAT IN THE ABSENCE O F ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH , NO ADDITION UNDER SECTION 153A OF THE ACT COULD BE MADE AND THE ASSESSMENT FRAMED UNDER SECTION 153A IS BAD IN LAW AND THEREFORE NEEDS TO BE SET ASIDE . 10 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD . THE ISSUE IN THE PRESENT CASE IS THE V ALIDITY OF THE ASSESSMENT FRAMED U/S 153A. ON THE IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 11 OF 23 ISSUE OF VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT , IT IS LD AR S CONTENTION THAT THE ASSESSMENT FRAMED U/S 153A IS BAD FOR THE REASONS NAMELY (I) N O INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH WHICH WOULD AUTHORISE THE AO TO PROCEED TO MAKE THE ADDITIONS WHILE FRAMING OF ASSESSMENT U/S 153A (II) THE MATERIAL THAT WAS FOUND DURING THE SEARCH (NAMELY THE GIFT DEEDS AND COPIES OF RETURN OF INCOME OF THE DONORS) WAS NOT IN THE NATURE OF INCRIMINATING MATERIAL (III) THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENTS HAVE BEEN FRAMED U/S 153A HAD ALREADY ATTAINED FINALITY AND THEREFORE COULD NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. 1 1 . IT IS AN UNDISPUTED FACT THAT IN THE PRESENT CASE SEARCH U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF ASSESSEE ON 15.10.2008 AND DURING THE COURSE OF SEARCH, MATERIAL IN THE FORM OF GIFT DEEDS AND THE COPY OF RETURN OF INCOME OF THE PERSONS GIV ING THE GIFT (I.E. DONORS) TO THE ASSESSEE WERE FOUND. IT IS ON THE BASIS OF THESE DOCUMENTS THAT WERE FOUND AT THE TIME OF SEARCH AND POST SEARCH INQUIRIES MADE BY ADIT (INV) WHICH LED TO THE DISCOVERY OF THE FACT THAT THE QUANTUM OF GIFTS, DONORS BEING N OT RELATED TO THE ASSESSEE, NO OCCASION NECESSITATING TRANSACTIONS OF GIFTS AND THEREFORE IT WAS CONCLUDED BY THE AO THAT THE GIFTS RECEIVED BY THE ASSESSEE AND HIS FAMILY MEMBERS WERE BOGUS GIFTS AND THEREFORE THE AO PROCEEDED TO MAKE ADDITIONS IN RESPECT OF THE GIFTS RECEIVED IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT. IT IS ALSO A FACT THAT IN THE ASSESSMENT ORDER THAT IS FRAMED UNDER 153A , AO IN RESPECT TO THE GIFTS THAT HAS BEEN RECEIVED BY THE ASSESSEE IN VARIOUS ASSESSMENT YEARS HAS AT PARA 5.2 PA GE 2 OF THE ORDER HAS NOTED THAT THE GIFTS WERE REFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE VARIOUS ASSESSMENT YEARS LISTED THEREIN. THE EXACT NOTING OF THE AO READS ON VERIFICATION OF THE CAPITAL ACCOUNTS, IT IS SEEN THAT THE ASSESSEE HAS REC EIVED SUBSTANTIAL GIFTS FROM VARIOUS PERSONS AS DETAILED IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 12 OF 23 HEREUNDER AND THEN HE PROCEEDS TO TABULATE THE DETAILS OF GIFTS RECEIVED BY THE ASSESSEE IN VARIOUS ASSESSMENT YEARS FROM AY 2003 - 04 TO AY 2009 - 10. BEFORE US, THEREFORE IT IS LD . AR S CONTENTION THA T THE RECEIPT OF THE GIFTS BY THE ASSESSEE HAS ALREADY BEEN ACCOUNTED FOR BY THE ASSESSEE IN THE RESPECTIVE ASSESSMENT YEARS AND HAS ALSO BEEN REFLECTED IN THE RETURN S OF INCOME OF THE RESPECTIVE YEARS. THE MATERIAL, NAMELY THE GIFT DEEDS AND THE COPIES OF THE RETURN OF INCOME OF THE DONORS, FOUND AT THE TIME OF SEARCH ARE ONLY SUPPORTING DOCUMENT OF THE GIFTS WHICH HAVE BEEN DECLARED BY THE ASSESSEE. IT IS ALSO LD AR S CONTENTION THAT THE RETURN OF INCOME OF THE ASSESSEES HAVE BEEN PROCESSED U/S 143(1) AND TILL THE DATE OF SEARCH, NO NOTICE U/S 143(2) HAS BEEN ISSUED WITH RESPECT TO THE RESPECTIVE ASSESSMENT YEARS MEANING THEREBY THAT THE TIME PERIOD FOR SELECTING THE RETURN OF INCOME FOR SCRUTINY HAS ELAPSED AND THEREBY THE ASSESSMENT FOR THOSE ASSESSMENT YEARS HAD ATTAINED FINALITY AND THEREFORE THE ASSESSMENT FOR THOSE YEARS COULD NOT BE CONSIDERED TO BE AS PENDING AND THEREFORE THERE WAS NO QUESTION OF ABATEMENT OF THE ASSESSMENTS AS PER THE PROVISIONS OF S. 153A OF THE ACT. THE LD . AR HAS PLACED A CHA RT GIVING THE ASSESSMENT YEARWISE DETAILS INDICATING THE DATE OF FILING THE RETURN OF INCOME AND THE LAST DATE OF ISSUANCE OF NOTICE U/S 143(2) OF THE ACT, ( THE CHART HAS BEEN REPRODUCED HERE INABOVE AT PARA NO.5 ) 1 2 . AT THIS MOMENT IT WILL BE RELEVANT TO R EFER TO THE PROVISIONS OF S. 153A, WHICH READS AS UNDER: 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , IN THE CASE OF A PERSON WH ERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME I N 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 IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 13 OF 23 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 ASS ESSMENT 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 YEA R 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 T HE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, SHALL ABATE : [ PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED UNDER THE SECOND PROVISO), SPECIFY THE CLASS OR CL ASSES OF CASES IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE.] [(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 [ PRINCIPAL COMMISSIONER OR ] 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 153B AND SECTION 153C , 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. 1 3 . READING OF SECTION 1 53A IT IS SEEN THAT WHAT S ECTION 153A CONTEMPLATES IS THAT, NOTWITHSTANDING THE REGULAR PROVISIONS FOR ASSESSMENT/REASSESSMENT CONTAINED IN THE I . T . ACT, WHERE SEARCH IS CONDUCTED UNDER SECTIO N 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 IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 14 OF 23 WITHIN THE TIME STIPULATED THEREIN, IN RESPECT OF SIX ASSESSM ENT YEARS IMMEDIATELY PRECEDING THE 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 PROV IDES 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. 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 ASSESSMENT / 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. 1 4 . H ON BLE DELHI H IGH COURT IN THE CASE OF KABUL CHAWLA ( 2016) 380 ITR 573 (DEL) AFTER CONSIDERING THE VARIOUS DECISIONS CITED THEREIN HAS SUMMARISED THE LEGAL POSITION W ITH RESPECT TO S. 153A AS UNDER: 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 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING H IM TO FILE 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 COMPU TED 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 AFOREMENT IONED 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 IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 15 OF 23 WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX . IV. ALTHOUG H SECTION 153A 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 T HAT 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 COMPLET ED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDIN GS. 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 SEAR CH 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 T HE 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. 1 5 . WHEN THE FACTS OF THE PRESENT CASE ARE SEE N IN THE LIGHT OF THE OBSERVATIONS MADE BY H ON BLE DELHI HIGH COURT, THE RETURNS OF INCOME FOR THE ASSESSMENT YEARS WHICH WERE PROCESSED U/S 143(1) AND THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) FOR THE RESPECTIVE ASSESSMENT YEARS HAS ELAPSED, THOSE ASSE SSMENTS HAVE TO BE CONSIDERED AS COMPLETED ASSESSMENTS AS ON THE DATE OF SEARCH AND IN TERMS OF THE PROVISIONS OF S. 153A, THE COMPLETED ASSESSMENTS COULD BE INTERFERED BY THE AO WHILE MAKING ASSESSMENT U/S 153A ONLY ON THE BASIS OF 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. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 16 OF 23 1 6 . IN THE PRESENT CASE, AS ALREADY NOTED ABOVE, THE AO HAD PROCEEDED ON THE BASIS OF GIFT DEEDS AND COPIES OF RETURN OF INCOME OF THE DONORS AND THE POST SEARCH INQUIRIES TO CONCLUDE THAT THE GIFTS RECEIVED BY THE ASSESSEE ARE BOGUS GIFTS. BEFORE US, REVENUE HAS NOT PLACED ANY MATERIAL ON RECORD TO DEMONSTRATE THAT THE GIFTS DEEDS AND COPIES OF RETURN OF INCOME OF THE DONORS FOUND AT THE TIME OF SEARCH WERE DIFFERENT DOCUMENTS FROM THOSE THAT WERE CONSIDERED BY THE ASSESSEE WHILE CLAIMING THE AMOUNTS TO BE THE GIFTS. 1 7 . W E FIND THAT IN THE CASE OF CIT VS . ASHOK DUA (2009) 177 TAXMAN 494 (DEL HI ), WHERE THE FACTS WERE THAT WHEN ASSESSEE HAD DISCLOSED GIFTS RECEIVED BY ASSESSEE AND MINOR SONS FROM NRI S AND DURING THE COURSE OF SEARCH GIFT DEEDS AND AFFIDAVITS OF THE DONORS W ERE FOUND AND ON THE BASIS OF THESE MATERIAL A O HELD THE GIFT TO BE BOGUS, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY TRIBUNAL. IN THE APPEAL OF R EVENUE AGAINST THE ORDER OF TRIBUNAL, THE ORDER OF TRIBUNAL WAS UPHELD BY THE H ON BLE HIGH COURT BY HO LDING AS UNDER: 6. AS REGARDS THE GIFTS, THE TRIBUNAL ICLT THAT IT WAS NOT NECESSARY TO GO INTO THE QUESTION AS IN WHETHER THE ALLEGED GIFTS WERE GENUINE OR REPRESENTED THE ASSESSEE'S OWN MONEY SOUGHT TO BE LAUNDERED BY WAY OF NRI GIFTS. THE TRIBUNAL NOTED THAT THE FACT OF THE MATTER WAS THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO INDICATE THAT THE A SSESSEE'S CLAIM OF GIFTS WAS NOT GENUINE. DURING THE COURSE OF SEARCH, ONLY AFFIDAVITS AND GIFT DEEDS WERE FOUND. THE TRIBUNAL OBSERVED THAT THE VERY DOCUMENTS ON WHICH T HE ASSESSEE RELIED TO BASE HIS CLAIM ON TH E SAID GIFTS WERE FOUND DURING T HE COURSE OF SEARCH AND THAT IT WAS NOT THE CASE O F THE DEPARTMENT THAT BUT FOR THE SEARCH, THE CLAIM OF THE GIFTS WOULD NOT HAVE BEEN RAI SED BY THE ASSESSEE. THE TRIBUNAL CONCLUDED THA T IT COULD NOT BE SAID THAT THE GIFTS HAVE BEEN UNEARTHED AS A RESULT OF A S EARCH UNDER SECTION 132 OF THE I NCOME - T AX ACT, 1961, ONLY. THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH WERE T HE RECORDS AVAILABLE WITH THE ASSESSEE WHICH COULD BE RELIED UPON B Y THE ASSESSEE BEFORE THE DEPARTMENT IN THE E V EN T HIS CLAIM O F HAVING RECEIVED THE NRI GIFTS WAS CALLED IN QUESTION. THE TRIBUNAL RE TURNED A FINDING THA T THERE WAS NO NEXUS BETWEE N THE ADDITION AMOUNTING TO RS . 6,50,000 MADE BY T HE ASSESSING OFFICER O N BEHALF O F SAID GIFTS AND SEARCH UNDER SECTION 132 OF THE INCOME - TAX ACT, 1961. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 17 OF 23 7. A T THIS JUNCTURE, IT MAY BE ALSO RELEVANT TO NOTICE ANOTHER DECISION OF THIS COURT IN THE CASE CIT VS. VISH AL AGGARWAL [2006L 283 ITR 326 WHEREIN THIS COUR T NOTED, WITH APPROVAL, THE OBSERVATIONS OF THE RAJASTHAN HIGH COUR T IN CIT VS. ELEGANT HOMES (P.) LTD. [2003] 259 ITR 232 THA T IN CHAPTER XIV - B OF THE ACT, SPECIAL PROVISIONS FO R ASSESSMENT IN SEARCH CASES HAVE BEEN GIVEN AND IF ANY AMOUNT OF INCOME HAS NOT BEEN TAXED AND DURING THE COURSE OF SEARCH, IF SOME UNDISCLOSED INCOME IS FOUND ON THE BASIS OF THE MATERIAL SEIZED, THAT SHOULD BE TREATED AS UNDISCLOSED INCOME . AS PER THE SCHEME OF SPECIAL ASSESSMENT UNDER CHAPTER XIV - B, TH E ASSESSMENT HAS TO BE BASED ON INCRIMINATING MATERIAL FOUND IN THE COURSE O F THE SEARCH. IN THE PRESENT CASE, ALL THA T WAS FOUND WERE THE GIFT DEEDS AND THE AFFIDAVITS AND THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH TO SUGGEST THAT T HE GIFTS WERE BOGUS. IN VISHAL AG ARWAL S CASE (SUPR A) THE TRIBUNAL IN A SIMILAR SI TUATION HAD RETURNED T HE FINDING THAT THERE WAS NOTHING IN THE ASSESSMENT ORDER TO SHOW THA T ANY EVIDENCE WAS F OUND DURING THE SEARCH TO SUGGEST THAT THE GIFTS WERE BOGUS. TH E GIFTS HAVING BEEN DECLARED IN THE RETURNS OF INCOME, FELL OUTSIDE THE PURVIEW OF CHAPTER XIV - B OF T HE INCOME - TAX ACT, 1961. IN SUCH A SIMILAR SITUATION, THIS COURT IN VIS HAL AGGARWAL S CASE (SUPR A ), DID NO T INTERFERE WITH T HE FINDINGS AND CONCLUSIONS RE TURNED BY THE TRIBUNAL AND WAS OF T HE VIEW THAT NO SUBSTANTIAL QUESTION OF LAW AROSE FOR T HE CONSIDERATION OF THIS COURT. 1 8 . AS FAR AS THE PROPOSITION THAT WHEN THE RETURN HAS BEEN PROCESSED U/S 143(1) AND THE TIME PERIOD OF ISSUANCE OF NOTICE U/S 143( 2) FOR SELECTING THE RETURN FOR SCRUTINY HAS ELAPSED AND WHEN NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH THEN IN SUCH CASES PROCEEDINGS DO NOT GET ABATED BY THE VIRTUE OF PROVISO TO S. 153A, WE FIND THAT THE CO - ORDINATE BENCH OF T RIBUNAL IN THE CASE OF ACIT VS PACL INDIA LTD . (ITA NO 2637/DEL/2010 ORDER DATED 20 TH JUNE 2013 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 7. AFTER HEARING BOTH THE SIDES ON THE ISSUE AND TAKING INTO CONSIDERATION, RECORDS AVAIL ABLE THE FOLLOWING FACTS EMERGES AS UNDISPUTED. THE REGULAR RETURN OF INCOME WAS FILED ON 2.12.2003 AND THE SAME WAS PROCESSED U/S 143(1)(A) OF THE ACT. THE TIME PERIOD FOR ISSUING NOTICE U/S 143(2) OF THE IT ACT FOR SELECTING CASE FOR SECURITY EXPIRED ON 31.12.2004. THE FIRST SEARCH WAS CONDUCTED ON THE PREMISES OF ASSESSEE ON 22.9.2005 AND THE 2 ND SEARCH WAS CONDUCTED ON 25.8.2006 AND IN BOTH THE SEARCHES, NO INCRIMINATING MATERIAL, DOCUMENT, UNACCOUNTED ASSETS AND BOGUS OF ACCOUNTS WERE FOUND AND SEIZED RELATING TO LAND DEVELOPMENT EXPENSES DEBITED IN PROFIT AND LOSS ACCOUNT FOR THE YEAR. THE BOTH SEARCHES ON ASSESSEE DID NOT YIELD ANY INCRIMINATING MATERIAL ON THE BASIS OF WHICH IT CAN BE SAID THAT ASSESSEE WAS INDULGENT IN DEBITING BOGUS LAND DEVELOPME NT EXPENSES IN ITS BOOKS OF IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 18 OF 23 ACCOUNT. THERE IS NO REFERENCE OF ANY MATERIAL FOUND IN THE SEARCH FOR MAKING ASSESSMENT U/S 153A OF THE ACT. THUS THE BASIC CONTROVERSY BEFORE US REMAINS ABOUT THE SCOPE OF ASSESSMENT U/S 153(A) WHEN THE RETURN HAS BEEN ACCEPT ED U/S 143(1)(A) AND TIME PERIOD FOR ISSUING NOTICE U/S 143(2) HAS ELAPSED. 8. IN OUR CONSIDERED VIEW, THERE IS NO DISPUTE WITH REGARD TO THE PROPOSITION THAT A.O HAS THE JURISDICTION U/S 153A OF THE ACT TO INITIATE ASSESSMENT/ REASSESSMENT PROCEEDIN GS FOR ALL THE SIX YEARS TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE INCLUDING THE UNDISCLOSED INCOME WHERE ACTION HAVE BEEN TAKEN AGAINST THE ASSESSEE U/S 132(1) OF THE IT ACT. HOWEVER, THE QUESTION REMAINS THAT WHEN RETURN HAS BEEN PROCESSED U/S 143(1) (A) AND THE TIME PERIOD FOR ISSUING NOTICE U/S 143(2) FOR SELECTING RETURN FOR SCRUTINY HAS ELAPSED THEN WHAT NATURE OF PROCEEDINGS COMMENCED AND CONCLUDED U/S 143(1) (A). HOW THESE ARE DIFFERENT FROM THE PROCEEDINGS COMMENCED AND CONCLUDED U/S 143(3) OF THE ACT. THERE IS NO DOUBT THAT ONCE THE PROCEEDINGS U/S 143(3) ARE COMPLETED AND CONCLUDED THEN THERE IS NOTHING WHICH WILL ABATE AS PER PROVISIONS OF SECTION 153A OF THE ACT. 9. IN OUR CONSIDERED OPINION, SECTION 153A REFERRED TO PENDING ASSESSMENT OR REASSESSMENT AND NOT ASSESSMENT ORDERS . THE ASSESSMENT MAY NOT BE PENDING EVEN THOUGH THERE IS NO FORMAL ORDER U/S 143(1)(A). THE MOMENT RETURN IS FILED AND ACKNOWLEDGEMENT OR INTIMATION ISSUED, THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE CLO SED, UNLESS THEY ARE AGAIN TRIGGERED BY ISSUING NOTICE U/S 143(2) OF THE IT ACT. IN THE CASE UNDER CONSIDERATION, THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THE PROCESS HAS ATTAINED THE FINALITY WHICH CAN ONLY BE ASSAILED U/S 148 OR 263 OF THE IT ACT. SUCH PROCEEDINGS CAN NEVER BE INITIATED U/S 143(2) WHEN THE TIME PERIOD FOR ISSUING NOTICE U/S 143(2) HAS EXPIRED. HON BLE ITAT, MUMBAI C BENCH IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIALIST LTD. REPORTED IN 23 ITR TRIBUNAL 766 MUMBAI HAS ALSO HELD AS UNDER : - ALTHOUGH BY PROCEEDINGS INITIATED UNDER SECTION 153A ALL SIX YEARS SHALL BECOME SUBJECT MATTER OF ASSESSMENT UNDER SECTION 153A THE ASSESSING OFFICER SHALL HAVE A FREE - HAND, THROUGH ABATEMENT, ONLY ON THE PROCEEDINGS THAT ARE PENDING, TO FRA ME THE ASSESSMENTS AFRESH. BUT IN A CASE WHERE THE PROCEEDINGS HAVE REACHED FINALITY, ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143(3) AND CERTAIN INCRIMINATING DOCUMENTS HAVE BEEN FOUND INDICATING UNDISCLOSED INCOME, THE ADDITION SHALL ONLY BE RESTR ICTED TO THOSE DOCUMENTS OR INCRIMINATING MATERIAL, AND CLUBBED ONLY TO THE ASSESSMENT FRAMED ORIGINALLY, AS THE LAW DOES NOT PERMIT THE ASSESSING OFFICER TO DISTURB ISSUES ALREADY CONCLUDED. WHERE ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR R EQUISITION OF BOOKS, NO PROCEEDING IS PENDING, BUT IN THE SEARCH, MATERIAL IS FOUND INDICATING INCRIMINATING MATERIAL, THE ASSESSING OFFICER EMBARKS ON A JURISDICTION, WHEREIN HE HAS TO CLUB THE TWO SETS OF INCOMES, THE RETURNED INCOME AND THE UNEARTHED IN COME AND ARRIVE AT THE TOTAL INCOME. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 19 OF 23 ALL CARGO GLOBAL LOGISTICS LTD. VS. DY. CIT [2012] 18 ITR (TRIB) 106 (MUMBAI) [SB] AND CIT VS. ANIL KUMAR BHATIA [2013] 352 ITR 493 (DELHI) FOLLOWED. WHERE IN THE SEARCH OPERATION, NO INCRIMINATING MATERIAL IS FOUND AN D THERE ARE NO PROCEEDINGS PENDING BEFORE THE ASSESSING OFFICER, THE ASSESSING OFFICER HAS TO ISSUE NOTICES UNDER SECTION 153A, ASKING THE SEARCHED PERSON TO FILE ITS RETURNS. BUT SINCE THERE ARE NO PROCEEDINGS PENDING BEFORE HIM, THE SECOND PROVISO STOPS THE ASSESSING OFFICER TO PROCEED FURTHER, BECAUSE PROCEEDINGS CANNOT ABATE AND SINCE THERE IS NO MATERIAL, NO FURTHER JURISDICTION IS EMBARKED ON HIM. WHERE NO PROCEEDINGS ARE PENDING AND NO INCRIMINATING MATERIAL HAS BEEN FOUND ON CLUBBING, WHAT REMAINS I S THE INCOME ORIGINALLY DETERMINED OR ASSESSED. 10. THE ITAT SMC BENCH, MUMBAI IN ITA NO. 786 AND 787 MUMBAI 2013 IN ITS ORDER DATED 8.5.2013 HAS HELD AS UNDER : - I HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER EXAMINING THE SUBMI SSIONS AND THE CASE LAWS, I FOUND THAT THE ASSESSEE DESERVES TO SUCCEED IN ITS APPEAL FOR BOTH OF THE YEARS. I NOTED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2002 - 03 WAS COMPLETED UNDER SECTION 143(3) AND FOR ASSESSMENT YEAR 2001 - 02, THE ASSESSMENT WAS COMP LETED UNDER SECTION 143(1). DURING THE ASSESSMENT PROCEEDING FOR ASSESSMENT YEAR 2002 - 03, ASSESSEE FILED DETAILS OF GIFT RECEIVED IN THE SHAPE OF GIFT DEEDS, BANK STATEMENTS, CONFIRMATIONS AND ACKNOWLEDGEMENT OF INCOME TAX RETURN FILED BY THE DONOR. THEREA FTER THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED AND NO ADDITION ON ACCOUNT OF GIFT RECEIVED BY THE ASSESSEE WAS MADE. IT CLEARLY SHOWS THAT THE AO WAS SATISFIED IN RESPECT TO GIFT RECEIVED BY THE ASSESSEE. SIMILARLY, FOR ASSESSMENT YEAR 2001 - 02, THE ASSESSEE HAS ENCLOSED ALL THE DETAILS OF THE GIFT ALONG WITH RETURN AND THE SAME WAS PROCESSED UNDER SECTION 143(1) AND THEREAFTER NO PROCEEDING WAS INITIATED EITHER BY ISSUING NOTICE UNDER SECTION 143(2) OR 148 WITHIN THE STIPULATED PERIOD OF TIME. NOW, DURING THE ASSESSMENT PROCEEDING UNDER SECTION 153A, THE ASSESSEE WAS REQUIRED TO PRODUCE THE DONOR ONCE AGAIN, IN MY CONSIDERED VIEW, IS NOT JUSTIFIED OR TENABLE IN THE EYES OF LAW. THIS VERY ISSUE HAS BEEN DECIDED BY THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA). THE SPECIAL BENCH OF THE TRIBUNAL HAS ANSWERED THE QUESTION IN THE FOLLOWING MANNER : - (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 20 OF 23 BASIS OF INCRIMINATING MATERIAL, WHICH I N THE CONTEXT OF RELEVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT. AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 12. FR OM THE FINDING OF THE SPECIAL BENCH, IT BECOMES CLEAR THAT IN CASE OF ASSESSMENT ALREADY COMPLETED, NO ADDITION CAN BE MADE FURTHER WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A, IF THERE IS NO INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISION, MEANS (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 13. IN THE PRESENT CASE, NEITHER ANY INCRIMINATING MATERIAL WAS FOUND NOR ANY OTHER MATERIAL OR DOCUMENT ALONG WITH BOOKS OF ACCOUNTS WERE FOUND, WHICH WERE NOT PRODUCED BEFORE THE AO WHILE COMPLETING THE ASSESSMENT ORIGINALLY. FOR ASSESSMENT YEAR 2001 - 02, NO INCRIMINATING MATERIAL WAS F OUND OR ANY OTHER DOCUMENTS WERE FOUND, WHICH SUGGESTS THAT THE ASSESSEE HAS CONCEALED PARTICULAR OF INCOME. THEREFORE, IN VIEW OF THE OBSERVATION MADE BY THE SPECIAL BENCH, NO ADDITION CAN BE MADE WHILE COMPLETING THE ASSESSMENT UNDER SECTION 153A, IF THE RE NO FRESH MATERIAL OR DOCUMENTS WAS FOUND DURING THE COURSE OF SEARCH. THE ISSUES ARISES FROM THOSE PROCESSED RETURN CAN BE RAISED ONLY WHEN SOME MATERIALS FOUND AGAINST THE ASSESSEE. THE HON BLE DELHI HIGH COURT IN THE CASE OF ANIL KR. BHATIA SITED IT SUPRA HELD THAT ASSESSMENT U/S 153(A) WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT HAS ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL IN COME. THE EXPIRY OF TIME FOR ISSUING NOTICE U/S 143(2) OF THE ACT TAKES AWAY THE JURISDICTION OF THE AO FOR ISSUING NOTICE U/S 143(2). IT IS JURISDICTIONAL POWER AVAILABLE WITH THE AO TO BE EXERCISED IN A GIVEN PERIOD. ONCE, IT IS EXERCISED THEN IT CAN BE COMPLETED ONLY BY MAKING ORDER U/S 143(3) OF THE ACT WITHIN THE TIME AVAILABLE U/S 153(1) OF THE ACT. ONCE SEARCH TAKES PLACE U/S 132(1) OF THE ACT AND COMPLETION OF PROCEEDING IS PENDING ON THAT DATE THEN SUCH PROCEEDINGS ABATE. THUS, THE SCOPE OF ASSES SMENT U/S 153A DEPENDS UPON WHETHER ANY ASSESSMENT OR REASSESSMENT PROCEEDINGS WERE PENDING OR COMPLETED ON THE DATE OF THE SEARCH. WHENEVER THE ABATED PROCEEDINGS ARE MERGED WITH THE PROCEEDINGS U/S 153A THEN SCOPE OF ASSESSMENT IS VIDE AND IT WILL COVER ALL ISSUES ARISING FROM THE ORIGINAL RETURN AND ISSUE ARISING ON THE BASIS OF INCRIMINATING DOCUMENTS, AND ASSETS FOUND AND SEIZED DURING THE SEARCH. WHEREVER THE PROCEEDINGS ARE COMPLETED PRIOR TO THE SEARCH THEN NOTHING MERGES WITH PROCEDING U/S 153A O F THE ACT AND NOTHING ABATES. IN SUCH A SITUATION, THE AO HAS TO RESPECT THE COMPLETENESS OF THE PROCEEDINGS. ADMITTEDLY, IN THE CASE OF ASSESSEE, NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE PROVISIONS OF SECTION 153A GIVE POWER TO ASSESSING OFF ICER TO ASSESS AND REASSESS THE INCOME. THE ASSESSING OFFICER IS EMPOWERED TO IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 21 OF 23 MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OR INCOME ESCAPED ASSESSMENT. IN THE CASE UNDER CONSIDERATION, THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH RELATING TO THE ASSESSMENT YEAR UNDER CONSIDERATION. THE TIME PERIOD FOR ISSUING NOTICE U/S 143(2) WAS ALREADY EXPIRED PRIOR TO THE DATE OF SEARCH. THEREFORE, THE PROCEEDINGS DO NOT GET ABATED BY VIRTUE OF PROVISO TO SECTION 153A. 10. THEREFORE, THE QUESTION ARISES WHETHER AO CAN MAKE ANY ADDITION IN THE REASSESSMENT PROCEEDINGS U/S 153(A) AFTER MAKING INQUIRIES WHICH ARE NOT SUGGESTED BY ANY DOCUMENT OR ASSET SEIZED DURING THE SEARCH. IT DEPENDS ON THE NATURE OF ADDITION. THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE CLEARLY SHOW THAT NO INCRIMINATING DOCUMENT FOUND RELATING TO THE LAND DEVELOPMENT EXPENSES DEBITED IN THE BOOKS OF ACCOUNTS. NO MATERIAL WAS ON THE RECORD ON THAT BASIS WHICH INCOME OF ASSESSEE COULD BE FURTHER ASSESSED BY ASSESSING OFFICE R. THEREFORE, THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE OR TO RESORT TO ROVING AND FISHING INQUIRIES TO FIND OUT WHETHER ANY INCOME HAS ESCAPED ASSESSMENT DURING THESE REASSESSMENT PROCEEDINGS. PARTICULARLY, WHEN THERE IS NO INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH U/S 132(1) OF THE ACT AND NOTHING IS AVAILABLE IN RECORD TO REASSESS THE INCOME OF ASSESSEE. IN VIEW OF THE ABOVE, THIS IS NOT A FIT CASE FOR MAKING THE ADDITION IN THE YEAR UNDER CONSIDERATION, THE SAME ARE DEL ETED. 1 9 . WE ALSO FIND THAT THE CO - ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CASE OF GURINDER SINGH BAVA VS DCIT (2012) 28 TAXMANN.COM 328 (MUM) HAS AFTER RELYING ON THE DECISION OF SPECIAL BENCH OF TRIBUNAL IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD . H AS HELD THAT WHEN THE ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH AND THEREFORE THERE WAS NO ASSESSMENT PENDING IN AND IN SUCH A CASE THER E WAS NO QUESTION OF ABATEMENT. 20 . IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESS MENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 22 OF 23 SEARCH. THE GIFT DEEDS AND THE COPIES OF RETURN OF INCOME OF THE DONORS THAT WERE FO UND AT THE TIME OF SEARCH COULD NOT BE CONSIDERED TO BE INCRIMINATING MATERIAL FOR THE PURPOSE OF ADDITION IN VIEW OF THE FACT THAT THESE VERY DOCUMENTS WERE THE BASIS OF THE GIFTS THAT WERE CONSIDERED BY THE ASSESSEE WHILE CREDITING THE CAPITAL ACCOUNT. 2 1 . IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT THE SE ASSESSMENT S FRAMED U/S . 153A NEED TO BE QUASHED. ORDERED ACCORDINGLY. S INCE THE LEGAL ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE OTHER GROUNDS RAISED ON THE MERITS OF ADDITION HAVE BEEN RENDERED ACADEMIC AND REQUIRES NO ADJUDICATION. 22 . THUS , THE APPEAL OF THE ASSESSEE IT(SS)A NO.153/AHD/2012 FOR THE ASSESSMENT YEAR 2003 - 04 IS ALLOWED. 23. AS REGARDS APPEAL S FOR THE ASSESSMENT YEARS 2004 - 05, 2005 - 06 & 2 006 - 07 IT IS AN AGREED POSITION THAT SINCE ALL THE RELEVANT MATERIAL FACTS ARE THE SAME IN THESE ASSESSMENT YEARS AS WELL , WHATEVER WE DECIDE FOR THE ASSESSMENT YEAR 2003 - 04 WILL APPLY MUTATIS MUTANDIS FOR THESE THREE ASSESSMENT YEARS ALSO . THEREFORE, F OL LOWING THE SAME VIEW AS TAKEN IN THE CASE OF THE ASSESSEE SHRI VIJAYKUMAR D AGARWAL FOR THE A.Y. 2003 - 04, APPEAL S FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2004 - 05, 2005 - 06 & 2006 - 07 I.E. IT(SS)A NOS.154, 155 & 156/AHD/2012 ARE ALSO ALLOWED. IT (SS) A NO S . 153 TO 156 / AHD/20 1 2 & OTHERS A.YS. 2003 - 04 TO 2006 - 07 PAGE 23 OF 23 24 . AS REGA RDS THE APPEALS FILED BY OTHER ASSESSEES, SINCE BOTH THE PARTIES HAVE ADMITTED BEFORE US THAT THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE CASE OF VIJAYKUMAR D AGARWAL , WE , THEREFORE , FOR THE REASONS GIVEN HEREINABOVE WHILE DECIDING THE APPEAL S IN TH E CASE OF VIJAYKUMAR D AGARWAL AND FOR SIMILAR REASONS , HOLD THAT IN ALL THESE CASES THE ASSESSMENT S FRAMED UNDER SECTION 153A OF THE ACT NEED TO BE SET ASIDE. THUS THE GROUNDS RAISED IN ALL THESE APPEALS ARE ALSO ALLOWED. 2 5 . I N THE RESULT, ALL THE APPEA LS OF THE ASSESSEE ARE ALLOWED. ( THIS ORDER P RONOUNCED IN THE OPEN COURT TODAY ON TH E 29 TH DAY OF APRIL, 2016. ) SD/ - SD/ - S.S. GODARA ANIL CHATURVEDI ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) AHMEDAB AD, THE 29 TH DAY OF APRIL , 2016 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLA TE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD