GOLD VIEW FINANCIAL SERVICES LTD, Kolkata V. ACIT, Kolkata

ITSSA 43/KOL/2023

AI Insights

Gold View Financial Services Limited appealed against the orders of the Commissioner of Income Tax (Appeals)-20, Kolkata, which had upheld the additions made by the Assistant Commissioner of Income Tax under section 68 of the Income Tax Act, 1961, concerning unexplained cash credits and expenditures for the assessment years 2009-2010 and 2010-2011. The primary legal issue was whether the assessments could be reopened under section 153A read with section 143(3) following a search operation. The Tribunal examined the legal framework surrounding section 153A, particularly in light of the Supreme Court's decision in PCIT vs. Abhisar Buildwell Pvt. Ltd., and found that the additions made were not based on any incriminating material found during the search, leading to the conclusion that the reassessment was unjustified.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 302885 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-08-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 14-03-2023
• Other Referred Cases: PCIT-Vs.- Abhisar Buildwell Pvt. Ltd., CIT V. Kabul Chawla, Saumya Construction
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained expenditure; Business income; Depreciation; Accommodation entries; Block assessment; Documents seized; Reassessment proceedings; TDS; Rule 8D
• Section: 147; 68; 148; 132; 139; 143(3); 142(1); 153A; 234B; 14A; 115JB; 143(1); 143(2); 139(1); 153; 153C

Judgement Text

IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President & Shri Girish Agrawal, Accountant Member I.T.(SS)A. Nos. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited,........Appellant 5, Sree Charan Sarani, Bally, Howrah-711201 [PAN: AABCG9762D] -Vs.- Assistant Commissioner of Income Tax,....Respondent Central Circle-2(1), Kolkata, 110, Shantipally, Aayakar Bhawan (Poorva), Kolkata-700107 Appearances by: Shri Soumitra Choudhury, Advocate, appeared on behalf of the assesseee Shri S. Datta, CIT, D.R., appeared on behalf of the Revenue Date of concluding the hearing : August 07, 10, 2023 Date of pronouncing the order : August 11, 2023 O R D E R Per Shri Rajpal Yadav, Vice-President (KZ):- The present two appeals are directed at the instance of assessee against the separate orders of ld. Commissioner of Income Tax (Appeals)-20, Kolkata dated IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 2 17 th January, 2023 passed for A.Y. 2009-10 & 2010-11 respectively. 2. The assessee has taken seven grounds of appeal in each year, which are verbatim same except quantum mentioned in those grounds. These grounds are not in consonance of Rule 8 of Income Tax Appellate Tribunal Rules and are descriptive and argumentative in nature. 3. In brief, grievance of the assessee in both the years is whether the assessments passed under section 153A read with section 143(3) could be reopened and additions of Rs.17,00,000/- and Rs.15,00,000/- could be made with the aid of section 68 on account of unexplained cash credits. In the next fold of grievance, the assessee has pleaded that ld. Assessing Officer has made additions of Rs.1,190/- and Rs.1,050/- respectively in both the years on account of unexplained expenditure. This fold is also inter-connected with the first fold of grievance enumerated by us. 4. Brief facts of the case are that the assessee- company has filed its return of income on 23.10.2009 and 04.10.2010 declaring total income of Rs.75,34,410/- and Rs.2,62,26,270/- respectively in A.Y. 2009-10 and 2010-11. The case of the assessee in both the years was selected for scrutiny assessment and assessment orders IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 3 were passed under section 143(3) on 28.11.2011 and 20.06.2012 for A.Y. 2009-10 and 2010-11 respectively. It is pertinent to note that an application for amalgamation of the Companies, namely Techmech Abasan Private Limited, Variety Dealcom Private Limited, Nandini Vinimay Private Limited and Goldview Financial Services Limited, i.e. the assessee was filed. The Hon’ble High Court vide its order dated 06.10.2010 amalgamated all these companies into one i.e. Goldview Financial Services Limited w.e.f. 1 st April, 2009. The scrutiny assessment in the case of the assessee was passed after the amalgamation. In other words, the Department was aware about the status of the assessee in which three more companies have merged. 5. Thereafter a search was conducted upon the premises of the assessee on 11 th October, 2012. In order to give effect to the search, a notice under section 153A was issued to the assessee in both the years and an assessment order was passed under section 143(3) read with section 153A on 30.03.2015 in both the years. For the purpose of the completeness of the facts, we deem it appropriate to take note of the complete assessment orders in both the years, which are very brief, which read as under:- INCOME TAX DEPARTMENT 1. Name of the Assessee M/s. Goldview Financial IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 4 Services Ltd. 2. Address 5, Sree Charan Sarani, Bally, Howrah-711201 3. PAN/GIR No. AABCG9762D 4. Ward/Circle/Range DCIT, Central Circle-2(1), Kolkata 5. Status Company 6. Assessment year 2009-10 7. Whether Resident/Resident but not Ordinarily Resident/Non-Resident Resident 8. Method of Accounting Mercantile 9. Previous year ending on 31.03.2009 10. Nature of Business (es) Financing of and/or investment in shares and securities 11. Date(s) of hearing On various dates as per records 12. Date of order 30.03.2015 13. Section and sub- section under which assessment is made Section 143(3) r.w.s. 153A of the Income Tax Act, 1961 ASSESSMENT ORDER The assessee is a Company who derived income from Financing of and/or Investment in Shares and Securities. Return of income disclosing total income of ₹75,34,410/- for the A.Y. 2009-10 was filed u/s 139 of the Income-tax Act, 1961 on 23.10.2009. 2.1. A search u/s 132 of the Income-tax Act, 1961 was conducted in the office premises of the assessee at 5, Middleton Street, Kolkata-700071 and 5, Sree Charan Sarani, Howrah-711201 on 11.10.2012 and on subsequent date(s), under the warrant of authorization issued by the Director of Income-tax (Investigation), Kolkata. Subsequently, searches were also conducted in the Bank Locker held in the name of persons including the assessee. Panchnamas were drawn in the name of persons including the assessee. The following valuables and documents were found/seized during the course of search: Address of the premises where search was conducted Cash Identification Mark of the documents seized Found (Rs.) Seized (Rs.) 5, Middleton Street, Kolkata-700071 48.770/- Nil KJM/1 to KJM/22, KJM/HD/1 & KJM/HD/2 5, Sree Charan Sarani, 26,23,100 Nil BJCL/1 to BJCL/14, BJCL/HD/1 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 5 Howrah-711201 /- 2.2. Accordingly, notice u/s 153A of the Income-tax Act, 1961 was issued on 29.11.2013. The assessee filed its return of income for the assessment year 2009-10 in response to notice u/s 153A of the Income- tax Act, 1961 on 02.01.2014 declaring a total income of ^82,03,740/-. Notice u/s 143(2) & 142(1) of the Income-tax Act, 1961 was issued on 04.06.2014. Shri Sanjay Kumar Agarwal, A/R of the assessee appeared in response to the said notices, furnished the documents called for and explained the return. 3.1. Considering the return of income filed, the documents and explanations filed during the course of hearing, total income of the assessee is computed as follows: Assessed income as per order u/s 143(3) dated 28,11,2011 Passed By, DCIT, Circle-1, Koi. Amount (₹) Amount (₹) Profit & Gain from Business or Profession Net Profit as per Profit & Loss account 29,07,434 Add: Depreciation as per Co. Act. 1,55,070 30,62,504 Less: Depreciation as per IT Act Dividend Exempt u/s 10(34) 1,11.279 6,58,874 22,92,351 Add: loss on sale of investment 52,42.056 75,34,407 Add: Expenditure not allowable u/s 14A 6.69,337 82,03,744 Total Income (Rounded off) 82,03,740 3.2. Book Profit u/s 115JB is computed as follows: Amount (₹) Amount (₹) Net Profit as per Profit & Loss account 29,07,434 Less: Dividend 6,58,874 22,48,560 Add: Expenditure related to exempt income 6,69,337 29,17,897 Book Profit u/s 115JB 29,17,897 4. Tax and interest is calculated as follows: Amount (₹) Amount (₹) Tax on Total Income 24,61,122 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 6 Add: Education Cess 73,834 25,34,956 Add: Interest u/s 234B Interest u/s 234C 71,552 849 26,07,357 Less: TDS 23,11,340 2,96,017 Net Payable 2,96,020 5. Assessed u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961 as above. Prior approval of the Additional CIT, Range-2 (Central), Kolkata has been obtained in compliance with section 153D of the Income-tax Act, 1961. 6. Copy of order is issued to the assessee, along with and the notice of demand u/s 156. Sd/- (Surendra Mohan) Deputy Commissioner of Income Tax, Central Circle-2(1), Kolkata INCOME TAX DEPARTMENT 1. Name of the Assessee M/s. Goldview Financial Services Ltd. 2. Address 5, Sree Charan Sarani, Bally, Howrah-711201 3. PAN/GIR No. AABCG9762D 4. Ward/Circle/Range DCIT, Central Circle-2(1), Kolkata 5. Status Company 6. Assessment year 2010-11 7. Whether Resident/Resident but not Ordinarily Resident/Non-Resident Resident 8. Method of Accounting Mercantile 9. Previous year ending on 31.03.2010 10. Nature of Business (es) Financing of and/or investment in shares and securities 11. Date(s) of hearing On various dates as per records 12. Date of order 30.03.2015 13. Section and sub- section under which assessment is made Section 143(3) r.w.s. 153A of the Income Tax Act, 1961 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 7 ASSESSMENT ORDER The assessee is a Company who derived income from Financing of and/or Investment in Shares and Securities. Return of income disclosing total income of Rs.2,62,26,270/- for the A.Y. 2010-11 was filed u/s 139 of the Income-tax Act, 1961 on 04.10.2010. 2.1. A search u/s 132 of the Income-tax Act, 1961 was conducted in the office premises of the assessee at 5, Middleton Street, Kolkata- 700071 and 5, Sree Charan Sarani, Howrah-711201 on 11.10.2012 and on subsequent date(s), under the warrant of authorization issued by the Director of Income-tax (Investigation), Kolkata. Subsequently, searches were also conducted in the Bank Locker held in the name of persons including the assessee. Panchnamas were drawn in the name of persons including the assessee. The following valuables and documents were found/seized during the course of search: Address of the premises where search was conducted Cash Identification Mark of the documents seized Found (Rs.) Seized (Rs) 5, Middleton Street, Kolkata-700071 48,770/- Nil KJM/1 to KJMZ22, KJM/HD/1 & KJM/HD/2 5, Sree Charan Sarani, Howrah- 711201 26,23,10 0/- Nil BJCL/1 to BJCL/14, BJCL/HD/1 2.2. Accordingly, notice u/s 153A of the Income-tax Act, 1961 was issued on 29.11.2013. The assessee filed its return of income for the assessment year 2010-11 in response to notice u/s 153A of the Income- tax Act, 1961 on 02.01.2014 declaring a total income of ₹2,63,90,950/-. Notice u/s 143(2) & 142(1) of the Income-tax Act, 1961 was issued on 04.06.2014. Shri Sanjay Kumar Agarwal, A/R of the assessee appeared in response to the said notices, furnished the documents called for and explained the return. 3.1. Considering the return of income filed, the documents and explanations filed during the course of hearing, total income of the assessee is computed as follows: Assessed income as per order u/s 143(3) dated 20.06.2012 Passed By, DCIT, Circle-1, Koi. Amount (₹) Amount (₹) Business Income ( as per Return) 2,62,26,270 Add: STT Payment (as discussed above) u/s 14A read with Rule 8D ( asdiscussed above) 51,123 11,15,015 2,73,92,408 Total Income (Rounded off) 2,73,92,410 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 8 3.2. Book Profit u/s 115 JB is computed as follows: Amount (₹) Amount (₹) Net Profit as per Profit & Loss account 2,58,68,547 Less: Dividend Share of Profit from investment in Trust Exempt u/s 10(38) 10,13,928 9,46,090 2,39,08,529 Add: Disallowance u/s 14A 11,15,015 2,50,23,544 Book Profit u/s 115JB 2,50,23,544 4. Tax and interest is calculated as follows: Amount (₹) Amount (₹) Tax on Total Income 53,37,033 Add: Surcharge Education Cess 5,37,703 1,76,122 60,50,858 Add: Interest u/s 234B 1,87,118 62,33,976 Less: TDS Advance Tax Self Assessment Tax 22,50,315 23,41,456 10,72,360 5,69,845 Balance Payable 5,69,845 Additional Income Tax and interest payable on distributed profits 20,329 5,90,170 Net Payable 5,90,170 5. Assessed u/s 143(3) r.w.s. 153A of the Income-tax Act, 1961 as above. Prior approval of the Additional CIT, Range-2, (Central), Kolkata has been obtained in compliance with section 153D of the Income-tax Act, 1961. 6. Copy of order is issued to the assessee, along with and the notice of demand u/s 156. Sd/- (Surendra Mohan) Deputy Commissioner of Income Tax, Central Circle-2(1), Kolkata”. 6. The ld. Assessing Officer sought to reopen these assessments by issuance of a notice under section 148 of the Income Tax Act. The stand of the ld. Assessing IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 9 Officer was that Investigation Wing of the Income Tax Department had carried out an investigation, wherein it recorded the statement of entry providers. In that enquiry, it revealed that M/s. Variety Dealcom Private Limited, a Company which amalgamated into the assessee had been beneficiary of accommodation entries. On the basis of this information, the assessments of the assessee in both these years have been reopened. Thereafter ld. Assessing Officer as per the flow-chart of the above information made the addition of Rs.17,00,000/- in A.Y. 2009-10 and Rs.15,00,000/- in A.Y. 2010-11. The ld. Assessing Officer has also added a sum of Rs.1,190/- and Rs.1,050/- on an estimation, on account of unexplained expenditure for making payments for arranging these accommodation entries. 7. Dissatisfied with the additions, the assessee carried the matter in appeals before the ld. CIT(Appeals). The ld. CIT(Appeals) concurred with the ld. Assessing Officer and rejected the appeals in both the years. 8. With the assistance of ld. Representatives, we have gone through the record carefully. It is pertinent to note that search was conducted on the premises of the assessee on 11 th October, 2012. The assessment orders, which are sought to be reopened by the ld. Assessing Officer, are dated 30.03.2015 passed under section 153A IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 10 read with section 143(3) of the Income Tax Act. The scope of assessment under section 153A has been explained by the Hon’ble High Courts on time to time and ultimately this controversy has been silenced finally by the Hon’ble Supreme Court in the case of PCIT-Vs.- Abhisar Buildwell Pvt. Ltd. (149 taxmann.com 399). In order to buttress our finding, we deem it appropriate to take note the decision of the Hon’ble Delhi High Court in the case of CIT V. Kabul Chawla (380 ITR 573) and decision of the Hon’ble Gujarat High Court in the case of Saumya Construction. These two decisions have been upheld by the Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Limited. Hon’ble Delhi High Court in the case of Kabul Chawla has propounded seven circumstances, which emerges out of interpretation of section 153A. We deem it appropriate to take note of the relevant discussions in these decisions. 9. First we refer to the decision of Hon’ble Delhi High Court in the case of CIT v-vs.- Kabul Chawla, 380 ITR 573 (Del.). Hon’ble Delhi High Court after detailed analysis has summarized the following legal position: On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i)Once a search takes place under Section 132 of the Act, notice under Section 153 A(l) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 11 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 A.Y.s will have to be computed by the AOs as afresh 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 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 12 on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vi) 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." 10. Now we take note of the relevant part of the Hon’ble High Court’s decision in the case of Saumya Construction. Hon'ble Gujrat High Court has also considered the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra). Hon'ble Gujarat High Court framed the following question of law in the case of Pr.CIT Vs. Saumya Construction (supra): "(a) Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? (b) Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? (c) Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 13 imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 11. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153 A 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 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 14 by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 15 the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.l 1,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 16 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 17 interference. The appeal, therefore, fails and is, accordingly, dismissed." 12. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon’ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon’ble Delhi Court as completion of assessments and as acceptance of return, according to the Hon’ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. 13. The Hon’ble Supreme Court in the case of PCIT –vs.- Abhisar Buildwell Pvt. Limited has concurred with both these decisions of the Hon’ble High Courts. The relevant part of the Hon’ble Supreme Court’s decision reads as under:- “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 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 18 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 subsection (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 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 fulfillment of the conditions mentioned in sections 147/148, as in such a IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 19 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. 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 subsection (2) of Section 153A would be redundant and/or re- IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 20 writing the said provisions, which is not permissible under the law. 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. 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; (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 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 21 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 fulfillment 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”. 14. Before we embark upon an enquiry on the facts of present appeals, we deem it appropriate to bear in mind basic scheme of the assessments provided in Chapter XIV of the Income Tax Act. We are taking note of broader issues without analysing the finer points of procedure provided in Chapter XIV of the Income Tax Act. These points can be divided in different compartments, namely- (a) If an assessee filed a regular return contemplated under section 139(1) and such return is selected for scrutiny assessment, then, a notice under section 143(2) would be IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 22 issued upon the assesee and assessment will be framed. (b) If an assssee failed to file the return and ld. Assessing Officer has issued a notice under section 142(1) requiring the assesese to furnish his return, assessee furnished such return, then, again assessment will be framed under section 143(3) as per the procedure contemplated therein. (c) If it came to the notice of the ld. Assessing Officer that income chargeable to tax in the case of an assessee as escaped assessment for any assessment year, then, subject to the provision of sections 148 to 153, the Assessing Officer would record reasons and issue notice under section 148 of the Income Tax Act. The ld. Assessing Officer can issue notice under section 148 also if the time limit to issue notice under section 143(2) has expired and assessee has got filed return of income under section 139(1) of the Income Tax Act. In both the situation, assessment will be framed under section 147 read with section 143(3) of the Income Tax Act. IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 23 (d) If a search has been conducted upon the assessee and incriminating material recovered during the search, then assessment for six assessment years prior to the date of search would be passed under section 153A of the Income Tax Act. However, with effect from 1 st April, 2017, 4 th proviso has been inserted in section 153A, which contemplates that during the course of search, an asset, money, bullion, jewellery or evidence exhibiting the escapement of income amounting to Rs.50,00,000/- or more in the relevant assessment year or in aggregate in the relevant assessment years recovered during the course of search beyond the period of seven years, then assessment could be made upto the ten years from the date of the search under section 153A of the Income Tax Act. (e) In case, a search is being conducted upon an assessee and the material exhibiting the escapement of income of a third person other than searched person discovered, then the ld. Assessing Officer of the searched person would record his satisfaction about escapement of income and transmit that IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 24 information to the ld. Assessing Officer of having jurisdiction on the other person regarding whom evidence exhibiting escapement of income was recovered during the course of search. The ld. Assessing Officer of the other person will record his satisfaction and proceed to determine the taxable income as per section 153C of the Income Tax Act. (f) A situation would come, namely that search has been conducted upon an assessee, but no incriminating material was found and, therefore, the earlier assessment orders passed under section 143(1) or 143(3), would attain finality. Similarly the ld. Assessing Officer has also not received any material exhibiting escapement of income from any other Assessing Officer, which was discovered during the search proceeding upon third person i.e. other than the assessee. This situation will rule out in passing of the assessment under section 153C of the Income Tax Act. However, the ld. Assessing Officer has received an information from other source, namely Investigation Wing of the Department, some other Assessing Officer, IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 25 who has collected some information in an assessment proceeding under section 143(3) or from any other individual or Agency, which satisfied the ld. Assessing Officer that income chargeable to tax has escaped assessment in the case of the assesese, then, whether assessment order could be reopened or not by issuance of a notice under section 148 of the Income Tax Act. Our reply to this question is in ‘Yes’ because there is no bar for reopening of an assessment even after 143(3), 153A or 153C assessments have been passed. The only care, which is to be taken, is that such reopening will be subject to section 148 to 153, i.e. limitation, relevant information etc. (g) Precisely, the last proposition canvassed by us is involved in these two years. As per the Revenue, no incriminating material was found during the course of search, on the basis of which additions could be made but the information has been transmitted by the Investigating Agency of the Income Tax Department contending therein that during enquiry of certain cases of entry providers, it revealed that the assessee is the beneficiary IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 26 of accommodation entries. On the basis of such enquiry, assessment is being reopened. 15. In the light of above, let us examine the facts of the present case. The assessee has filed the returns of income on 23.10.2009 and 04.10.2010 in A.Ys 2009-10 and 2010-11 respectively. Prior to these dates, a Company, namely Variety Dealcom Private Limited amalgamated with the assessee and this order was passed on 06.10.2010 i.e. after the filing of the return by the assessee, but this order was given effect from 1 st April, 2009. During the course of amalgamation proceedings, Hon’ble High Court had issued notice to the Income Tax Department inviting its objection if any on such a petition. The ld. Assessing Officer thereafter passed scrutiny assessments upon the assessee in both the years. Such assessment orders have been passed on 28.11.2011 and 20.06.2012 for A.Ys. 2009-10 & 2010- 11. The search was carried upon the assessee on 11.10.2012 and after this search, assessment orders were passed under section 153A read with section 143(3) in both the years on 30.03.2015. As observed earlier, the notices under section 148 in these assessment years have been issued to the assessee before expiry of six years, therefore, from the angle of limitation point, the notices are within the limitation. In view of the above situation, let us evaluate the merits of reopening. IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 27 16. The proviso appended to section 147 of the Income Tax Act puts an embargo on the powers of the ld. Assessing Officer for issuance of a notice under section 148 in the cases, where a scrutiny assessment was passed under section 143(3) of the Income Tax Act and four years have expired from the end of the assessment years, then, unless he is satisfied that income has escaped on account of failure of the assessee to disclose all material facts fully and truly in connection with its income. He cannot reopen the assessment. The assessment years involved herein are 2009-10 and 2010- 11. Four years would end on 31 st March, 2014-2015. The ld. Assessing Officer has passed the assessment under section 153A on 30.03.2015 and he has not issued any notice under section 148 before 31.03.2015. The notice has been issued in 2016. It is not discernable from the assessment orders as to how income of the assessee has escaped assessment on account of failure of the assessee to disclose all material facts fully and truly. The details tabulated in paragraph no. 5.2 of assessment order for A.Y. 2009-10 is not a complete chain of transactions demonstrating as to how this money has percolated to the assessee. The ld. Assessing Officer has just treated some information transmitted by the Investigating Wing of the Department as a gospel truth without collecting the supporting material for harbouring belief that income IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 28 has escaped assessment. After the amalgamation, search has been conducted upon the assessee, but no such information could be unearthed during the course of search. Therefore, we are of the view that ld. Assessing Officer was not possessing complete information exhibiting that income has escaped on account of failure of the assessee to disclose all material facts fully and truly. 17. In view of the above discussion, the reopening of these assessment years are not sustainable. Accordingly we allow both these appeals and quash the reassessment orders. 18. In the result, both the appeals of the assessee are allowed. Order pronounced in the open Court on August 11, 2023. Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 11 th day of August, 2023 IT(SS)A No. 42 & 43/KOL/2023 Assessment Years: 2009-2010 & 2010-2011 Gold View Financial Services Limited 29 Copies to : (1) Gold View Financial Services Limited, 5, Sree Charan Sarani, Bally, Howrah-711201 (2) Assistant Commissioner of Income Tax, Central Circle-2(1), Kolkata, 110, Shantipally, Aayakar Bhawan (Poorva), Kolkata-700107 (3) Commissioner of Income Tax (Appeals)-20, Kolkata; (4) Commissioner of Income Tax , (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.