Shri Deepak H.Rathod, Bhavnagar V. The ACIT.,Cent.Circle-1(1), Ahmedabad

ITSSA 474/AHD/2012

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3526 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-08-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA M AGARWAL
• Assessee Lawyers: S N SOPARKAR WITH PARIN SHAH
• Keywords: Gift; Search and seizure; Question of law; Validity of assessment; Reassessment proceedings
• Section: 143(3); 153A; 148; 263; 132; 15

Judgement Text

IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 1 OF 16 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND MAHAVIR PRASAD JM] IT(SS)A NOS.466 TO 470/AHD/2012 ASSESSMENT YEAR : 2004-05, 2005-06, 2007-08, 2008- 09 & 2009-10 SANJAY H. RATHOD .....APPELLANT PLOT NO.2153/A, OM, VADODARIA PARK, HILL DRIVE ROAD, BHAVNAGAR [PAN : ABJPR 3349 F] VS. ACIT .RESPONDENT CENTRAL CIRCLE 2(1), AHMEDABAD IT(SS)A NOS.471 TO 476/AHD/2012 ASSESSMENT YEAR : 2004-05, 2005-06, 2007-08, 2008- 09, 2009-10 & 2010-11 DEEPAK H RATHOD .....APPELLANT PLOT NO.2153/A, OM, VADODARIA PARK, HILL DRIVE ROAD, BHAVNAGAR [PAN : ABJPR 3347 M] VS. ACIT .RESPONDENT CENTRAL CIRCLE 2(1), AHMEDABAD IT(SS)A NOS.488 TO 491/AHD/2012 ASSESSMENT YEAR : 2004-05, 2005-06, 2008-09 & 2009 -10 SMT SHEETAL D RATHOD .....APPELLANT PLOT NO.2153/A, OM, VADODARIA PARK, HILL DRIVE ROAD, BHAVNAGAR [PAN : ABJPR 3418 F] VS. ACIT .RESPONDENT CENTRAL CIRCLE 2(1), AHMEDABAD IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 2 OF 16 IT(SS)A NO.492/AHD/2012 ASSESSMENT YEAR : 2009-10 HARSHAD M RATHOD .....APPELLANT PLOT NO.2153/A, OM, VADODARIA PARK, HILL DRIVE ROAD, BHAVNAGAR [PAN : ABJPR 3420 M] VS. ACIT .RESPONDENT CENTRAL CIRCLE 2(1), AHMEDABAD IT(SS)A NO.493/AHD/2012 ASSESSMENT YEAR : 2005-06 SMT. ARCHANA S RATHOD .....APPELLANT PLOT NO.2153/A, OM, VADODARIA PARK, HILL DRIVE ROAD, BHAVNAGAR [PAN : ABJPR 3421 L] VS. ACIT .RESPONDENT CENTRAL CIRCLE 2(1), AHMEDABAD APPEARANCES BY: SN SOPARKAR WITH PARIN SHAH FOR THE APPELLANT APARNA M AGARWAL FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : 06.12.2017 DATE OF PRONOUNCING THE ORDER : 13.12.2017 O R D E R PER BENCH: 1. THESE SEVENTEEN APPEALS TO A COMMON GROUP OF THE ASSESSEE, INVOLVE SOME COMMON ISSUES AND WERE HEARD TOGETHER. AS A MATTER OF CONVENIENCE, THEREFORE, ALL THE SEVENTEEN APPEALS ARE BEING DISPOSED OF BY WAY OF T HIS COMMON ORDER. 2. WE WILL FIRST PICK UP TWELVE APPEALS, DETAILS OF WHICH ARE SET OUT BELOW, WHICH CAN BE DISPOSED OF ON A COMMON GROUND REGARDING VALIDIT Y OF PROCEEDINGS UNDER SECTION 153 OF THE INCOME-TAX ACT, 1961. THESE TWELVE APPE ALS, WHICH WERE MENTIONED BEFORE US AS COVERED MATTERS, ARE AS FOLLOWS:- IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 3 OF 16 SR.NO. IT(SS)A NO. NAME OF THE ASSESSEE ASSESSMENT YEAR 1 466/AHD/2012 SANJAY H. RATHOD 2004-05 2 467/AHD/2012 SANJAY H. RATHOD 2005-06 3 468/AHD/2012 SANJAY H. RATHOD 2007-08 4 469/AHD/2012 SANJAY H. RATHOD 2008-09 5 471/AHD/2012 DEEPAK H. RATHOD 2004-05 6 472/AHD/2012 DEEPAK H. RATHOD 2005-06 7 473/AHD/2012 DEEPAK H. RATHOD 2007-08 8 474/AHD/2012 DEEPAK H. RATHOD 2008-09 9 488/AHD/2012 SHEETAL D. RATHOD 2004-05 10 489/AHD/2012 SHEETAL D. RATHOD 2005-06 11 490/AHD/2012 SHEETAL D. RATHOD 2008-09 12 493/AHD/2012 ARCHANA S. RATHOD 2005-06 3. LEARNED COUNSEL SUBMITS THAT THE IMPUGNED ASSES SMENTS UNDER SECTION 153A WERE FRAMED AS A RESULT OF SEARCH AND SEIZURE OPERA TION CARRIED OUT IN THESE CASES ON 12.01.2010 BUT THEN NO INCRIMINATING MATERIAL WAS F OUND IN THESE CASES. HE SUBMITS THAT COMPLETED ASSESSMENTS CAN BE INTERFERED ONLY O N THE BASIS OF SOME INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HOWEVE R, EVEN WHEN NO INCRIMINATING MATERIAL IS FOUND AND WHEN THE ASSESSMENTS HAD REAC HED FINALITY, THESE ASSESSMENTS ARE AGAIN FRAMED UNDER SECTION 153A. LEARNED COUNS EL SUBMITS THAT THE REVENUE AUTHORITIES HAVE PROCEEDED TO TREAT THE GIFT DEEDS AS INCRIMINATING MATERIAL BUT THEN THESE GIFTS WERE ALREADY ACCOUNTED FOR, WERE ALREAD Y IN THE KNOWLEDGE OF THE REVENUE AUTHORITIES AND CANNOT BE TREATED AS INCRIMINATING MATERIAL. LEARNED COUNSEL THEN INVITES OUR ATTENTION TO THE FACTS WHICH SHOW THAT THE ASSESSMENTS WERE ALREADY COMPLETED. THIS CHART IS SET OUT BELOW:- SNO. IT(SS)A NO. NAME OF THE ASSESSEE AY ROI FILED ON ASSESSED UNDER SECTION LAST DATE OF ISSUING NOTICE U/S 143(2) 1 466/AHD/2012 SANJAY H. RATHOD 2004-05 01.11.2004 143(1) 30.11.2005 2 467/AHD/2012 SANJAY H. RATHOD 2005-06 29.10.2005 143(1) 31.10.2006 3 468/AHD/2012 SANJAY H. RATHOD 2007-08 29.10.2007 143(1) 31.10.2008 4 469/AHD/2012 SANJAY H. RATHOD 2008-09 26.09.2008 143(1) 30.09.2009 5 471/AHD/2012 DEEPAK H. RATHOD 2004-05 01.11.2004 143(1) 30.11.2005 6 472/AHD/2012 DEEPAK H. RATHOD 2005-06 29.10.2005 143(1) 31.10.2006 7 473/AHD/2012 DEEPAK H. RATHOD 2007-08 31.10.2007 143(1) 31.10.2008 8 474/AHD/2012 DEEPAK H. RATHOD 2008-09 29.09.2008 143(1) 30.09.2009 9 488/AHD/2012 SHEETAL D. RATHOD 2004-05 01.11.2004 143(1) 30.11.2005 10 489/AHD/2012 SHEETAL D. RATHOD 2005-06 30.08.200 5 143(1) 31.08.2006 11 490/AHD/2012 SHEETAL D. RATHOD 2008-09 29.08.200 8 143(1) 30.09.2009 12 493/AHD/2012 ARCHANA S. RATHOD 2005-06 29.08.2005 143(1) 30.08.2006 4. IT IS THEN POINTED OUT THAT THE CIT(A) HAS PROCE EDED ON THE BASIS THAT WHEN A VALID PANCHNAMA IS DRAWN, AFTER EXECUTING A VALID A UTHORISATION OF SEARCH, THE ASSESSING OFFICER IS DUTY BOUND TO COMPLETE ASSESSM ENT UNDER SECTION 153A IN RESPECT IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 4 OF 16 OF SIX ASSESSMENT YEARS. THIS APPROACH, ACCORDING TO THE LEARNED COUNSEL, IS CONTRARY TO THE LOW LAID DOWN BY HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA [(2016) 380 ITR 573 (DEL)] WHICH HAS BEEN CONSISTEN TLY FOLLOWED BY AHMEDABAD BENCHES WHICH NOW STANDS APPROVED BY HONBLE JURISD ICTIONAL HIGH COURT. OUR ATTENTION IS DRAWN TO DECISIONS OF THE CO-ORDINATE BENCHES, I N THE CASES OF VIJAYKUMAR D. AGARWAL & ORS, SAUMYA CONSTRUCTIONS PVT LTD AND BABUBHAI R PATEL AND HONBLE JURISDICTIONAL HIGH COURTS JUDGMENTS IN THE CASES OF JAYABEN RATI LAL SORATHIA (TA NO.914 OF 2012; JUDGMENT DATED 02.07.2013), SAUMYA CONSTRUCTIONS PV T LTD (TA NO.24 OF 2016; JUDGMENT DATED 14.03.2016) AND BABUBHAI R. PATEL (T A NO.493 OF 2017; JUDGMENT DATED 17.07.2017). ON THE STRENGTH OF THESE ARGUME NTS, WE ARE URGED TO QUASH THESE TWELVE ASSESSMENTS ORDERS AS CONTRARY TO THE SCHEME OF SECTION 153A. 5. LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVER, DU TIFULLY RELIES ON THE STAND OF THE AUTHORITIES BELOW AND JUSTIFIES THE STAND OF TH E CIT(A). 6. WE FIND THAT THE ISSUE IS SQUARELY COVERED BY VA RIOUS DECISIONS OF THIS TRIBUNAL WHICH HAVE NOW BEEN APPROVED BY HONBLE JURISDICTIO NAL HIGH COURT AS WELL. IN ONE SUCH DECISION, I.E. IN THE CASE OF VIJAYKUMAR D. AG ARWAL VS. DCIT & ORS [IT(SS) A NO.153 TO 156/AHD/2012 AND OTHERS; ORDER DATED 29.0 4.2016], THE CO-ORDINATE BENCH HAS OBSERVED AS FOLLOWS: 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS THE VALIDITY OF TH E ASSESSMENT FRAMED U/S 153A. ON THE ISSUE OF VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT, IT IS LD AR'S CONTENTION THAT THE ASSESSMENT FRAMED U/S 1 53A IS BAD FOR THE REASONS NAMELY (I) NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE SEARCH WHICH WOULD AUTHORISE THE AO TO PROCEED TO MAKE THE ADDITIONS W HILE FRAMING OF ASSESSMENT U/S 153A (II) THE MATERIAL THAT WAS FOUND DURING TH E SEARCH (NAMELY THE GIFT DEEDS AND COPIES OF RETURN OF INCOME OF THE DONORS) WAS N OT IN THE NATURE OF INCRIMINATING MATERIAL (III) THE ASSESSMENT YEARS F OR 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 MATER IAL. 11. IT IS AN UNDISPUTED FACT THAT IN THE PRESENT CA SE SEARCH U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF ASSESSEE ON 15.10.2008 A ND DURING THE COURSE OF SEARCH, MATERIAL IN THE FORM OF GIFT DEEDS AND THE COPY OF RETURN OF INCOME OF THE PERSONS GIVING THE GIFT (I.E. DONORS) TO THE ASSESS EE WERE FOUND. IT IS ON THE BASIS OF THESE DOCUMENTS THAT WERE FOUND AT THE TIME OF S EARCH AND POST SEARCH INQUIRIES MADE BY ADIT (INV) WHICH LED TO THE DISCO VERY OF THE FACT THAT THE QUANTUM OF GIFTS, DONORS BEING NOT RELATED TO THE A SSESSEE, NO OCCASION NECESSITATING TRANSACTIONS OF GIFTS AND THEREFORE I T WAS CONCLUDED BY THE AO THAT THE GIFTS RECEIVED BY THE ASSESSEE AND HIS FAMILY M EMBERS WERE BOGUS GIFTS AND THEREFORE THE AO PROCEEDED TO MAKE ADDITIONS IN RES PECT OF THE GIFTS RECEIVED IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT. IT IS AL SO A FACT THAT IN THE ASSESSMENT ORDER THAT IS FRAMED UNDER 153A, AO IN R ESPECT TO THE GIFTS THAT HAS BEEN RECEIVED BY THE ASSESSEE IN VARIOUS ASSESSMENT YEARS HAS AT PARA 5.2 PAGE 2 OF THE ORDER HAS NOTED THAT THE GIFTS WERE R EFLECTED IN THE CAPITAL ACCOUNT OF THE ASSESSEE IN THE VARIOUS ASSESSMENT YEARS LIS TED THEREIN. THE EXACT NOTING IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 5 OF 16 OF THE AO READS 'ON VERIFICATION OF THE CAPITAL ACC OUNTS, IT IS SEEN THAT THE ASSESSEE HAS RECEIVED SUBSTANTIAL GIFTS FROM VARIOU S PERSONS AS DETAILED HEREUNDER' AND THEN HE PROCEEDS TO TABULATE THE DET AILS OF GIFTS RECEIVED BY THE ASSESSEE IN VARIOUS ASSESSMENT YEARS FROM AY 2003-0 4 TO AY 2009-10. BEFORE US, THEREFORE IT IS LD. AR'S CONTENTION THAT THE RE CEIPT OF THE GIFTS BY THE ASSESSEE HAS ALREADY BEEN ACCOUNTED FOR BY THE ASSESSEE IN T HE RESPECTIVE ASSESSMENT YEARS AND HAS ALSO BEEN REFLECTED IN THE RETURNS 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 BEE N PROCESSED U/S 143(1) AND TILL THE DATE OF SEARCH, NO NOTICE U/S 143(2) HAS B EEN ISSUED WITH RESPECT TO THE RESPECTIVE ASSESSMENT YEARS MEANING THEREBY THAT TH E TIME PERIOD FOR SELECTING THE RETURN OF INCOME FOR SCRUTINY HAS ELAPSED AND T HEREBY THE ASSESSMENT FOR THOSE ASSESSMENT YEARS HAD ATTAINED FINALITY AND TH EREFORE THE ASSESSMENT FOR THOSE YEARS COULD NOT BE CONSIDERED TO BE AS 'PENDI NG' 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 CHART GIVING THE A SSESSMENT 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 R EPRODUCED HEREINABOVE AT PARA NO.5). 12. AT THIS MOMENT IT WILL BE RELEVANT TO REFER 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 SECT ION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL-- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO F URNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF IN COME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN 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 IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 6 OF 16 INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKIN G OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE : [PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY R ULES 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 CLASSES 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 ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR R EQUISITION IS MADE.] [(2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF AS SESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING A NYTHING CONTAINED IN SUB-SECTION (1) OR SECTION 153, THE ASSESSMENT OR R EASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECO ND PROVISO TO SUB- SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM T HE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE [PRINCIPAL COMMISSIO NER OR] COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE.] EXPLANATION.--FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT,-- (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 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 RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABL E AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR.' 13. READING OF SECTION 153A IT IS SEEN THAT WHAT SE CTION 153A CONTEMPLATES IS THAT, NOTWITHSTANDING THE REGULAR PROVISIONS FOR AS SESSMENT/REASSESSMENT CONTAINED IN THE I.T. ACT, WHERE SEARCH IS CONDUCTE D UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A ON OR AFTER 31/5/2003 IN THE CASE OF ANY PERSON, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH RETURN OF INCOME WITHIN THE TIME STIPULATED THEREIN, IN RESPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR R EQUISITION IS MADE AND THEREAFTER ASSESS OR REASSESS THE TOTAL INCOME FOR THOSE ASSESSMENT YEARS. THE SECOND PROVISO TO SECTION 153A PROVIDES FOR ABATEME NT OF ASSESSMENT/REASSESSMENT PROCEEDINGS WHICH ARE PENDI NG ON THE DATE OF SEARCH/REQUISITION. SECTION 153A(2) PROVIDES THAT W HEN 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 / REA SSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH UNDER SECTION 132 OR MAKING IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 7 OF 16 REQUISITION UNDER SECTION 132A OF THE ACT STAND ABA TED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINALISED FOR THO SE ASSESSMENT YEARS COVERED UNDER SECTION 153A OF THE ACT. 14. HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL C HAWLA (2016) 380 ITR 573 (DEL) AFTER CONSIDERING THE VARIOUS DECISIONS CITED THEREIN HAS SUMMARISED THE LEGAL POSITION WITH 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 T HE AFOREMENTIONED DECISIONS THE LEGAL POSITION THAT EMERGES IS AS UND ER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY I SSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE S EARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INC OME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE AS SESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIO NS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F 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 THA T THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153A IS RELATABL E TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 8 OF 16 VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISC OVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DI SCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 15. WHEN THE FACTS OF THE PRESENT CASE ARE SEEN IN THE LIGHT OF THE OBSERVATIONS MADE BY HON'BLE DELHI HIGH COURT, THE RETURNS OF IN COME 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 ELAP SED, THOSE ASSESSMENTS HAVE TO BE CONSIDERED AS COMPLETED ASSESSMENTS AS O N THE DATE OF SEARCH AND IN TERMS OF THE PROVISIONS OF S. 153A, THE COMPLETE D ASSESSMENTS COULD BE INTERFERED BY THE AO WHILE MAKING ASSESSMENT U/S 15 3A ONLY ON THE BASIS OF INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVE RED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 16. IN THE PRESENT CASE, AS ALREADY NOTED ABOVE, TH E 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 RECEIVE D BY THE ASSESSEE ARE BOGUS GIFTS. BEFORE US, REVENUE HAS NOT PLACED ANY MATERI AL 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 . 17. WE FIND THAT IN THE CASE OF CIT VS. ASHOK DUA ( 2009) 177 TAXMAN 494 (DELHI), WHERE THE FACTS WERE THAT WHEN ASSESSEE HA D DISCLOSED GIFTS RECEIVED BY ASSESSEE AND MINOR SONS FROM NRI'S AND DURING THE C OURSE OF SEARCH GIFT DEEDS AND AFFIDAVITS OF THE DONORS WERE FOUND AND ON THE BASIS OF THESE MATERIAL AO HELD THE GIFT TO BE BOGUS, THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY TRIBUNAL. IN THE APPEAL OF REVENUE AGAINST THE ORDE R OF TRIBUNAL, THE ORDER OF TRIBUNAL WAS UPHELD BY THE HON'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 W ERE GENUINE OR REPRESENTED THE ASSESSEE'S OWN MONEY SOUGHT TO BE L AUNDERED 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 ASSESSEE'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 THE ASSESSEE RELIE D TO BASE HIS CLAIM ON THE SAID GIFTS WERE FOUND DURING THE COURSE OF SEAR CH AND THAT IT WAS NOT THE CASE OF THE DEPARTMENT THAT BUT FOR THE SEARCH, THE CLAIM OF THE GIFTS WOULD NOT HAVE BEEN RAISED BY THE ASSESSEE. THE TRI BUNAL CONCLUDED THAT IT COULD NOT BE SAID THAT THE GIFTS HAVE BEEN UNEAR THED AS A RESULT OF A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT, 196 1, ONLY. THE IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 9 OF 16 DOCUMENTS FOUND DURING THE COURSE OF SEARCH WERE TH E RECORDS AVAILABLE WITH THE ASSESSEE WHICH COULD BE RELIED UPON BY THE ASSESSEE BEFORE THE DEPARTMENT IN THE EVENT HIS CLAIM OF HAVING RECEIVE D THE NRI GIFTS WAS CALLED IN QUESTION. THE TRIBUNAL RETURNED A FINDING THAT THERE WAS NO NEXUS BETWEEN THE ADDITION AMOUNTING TO RS.6,50,000 MADE BY THE ASSESSING OFFICER ON BEHALF OF SAID GIFTS AND SEARCH UNDER SE CTION 132 OF THE INCOME- TAX ACT, 1961. 7. AT THIS JUNCTURE, IT MAY BE ALSO RELEVANT TO NOT ICE ANOTHER DECISION OF THIS COURT IN THE CASE CIT VS. VISHAL AGGARWAL [2006L 28 3 ITR 326 WHEREIN THIS COURT NOTED, WITH APPROVAL, THE OBSERVATIONS OF THE RAJASTHAN HIGH COURT IN CIT VS. ELEGANT HOMES (P.) LTD. [2003] 259 ITR 2 32 THAT IN CHAPTER XIV-B OF THE ACT, SPECIAL PROVISIONS FOR 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 UNDI SCLOSED INCOME. AS PER THE SCHEME OF SPECIAL ASSESSMENT UNDER CHAPTER XIV- B, THE ASSESSMENT HAS TO BE BASED ON INCRIMINATING MATERIAL FOUND IN THE COURSE OF THE SEARCH. IN THE PRESENT CASE, ALL THAT WAS FOUND WER E THE GIFT DEEDS AND THE AFFIDAVITS AND THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH TO SUGGEST THAT THE GIFTS WERE BOGUS. IN VIS HAL AGARWAL'S CASE (SUPRA) THE TRIBUNAL IN A SIMILAR SITUATION HAD RET URNED THE FINDING THAT THERE WAS NOTHING IN THE ASSESSMENT ORDER TO SHOW T HAT ANY EVIDENCE WAS FOUND DURING THE SEARCH TO SUGGEST THAT THE GIFTS W ERE BOGUS. THE GIFTS HAVING BEEN DECLARED IN THE RETURNS OF INCOME, FELL OUTSIDE THE PURVIEW OF CHAPTER XIV-B OF THE INCOME-TAX ACT, 1961. IN SUCH A SIMILAR SITUATION, THIS COURT IN VISHAL AGGARWAL'S CASE (SUPRA), DID NOT IN TERFERE WITH THE FINDINGS AND CONCLUSIONS RETURNED BY THE TRIBUNAL AND WAS OF THE VIEW THAT NO SUBSTANTIAL QUESTION OF LAW AROSE FOR THE CONSIDERA TION OF THIS COURT.' 18. 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 MATE RIAL 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-O RDINATE BENCH OF TRIBUNAL IN THE CASE OF ACIT VS PACL INDIA LTD. (ITA NO 2637/DEL/20 10 ORDER DATED 20TH JUNE 2013 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSE E BY HOLDING AS UNDER: '7. AFTER HEARING BOTH THE SIDES ON THE ISSUE AND T AKING INTO CONSIDERATION, RECORDS AVAILABLE THE FOLLOWING FACTS EMERGES AS UN DISPUTED. THE REGULAR RETURN OF INCOME WAS FILED ON 2.12.2003 AND THE SAM E WAS PROCESSED U/S 143(1)(A) OF THE ACT. THE TIME PERIOD FOR ISSUING N OTICE U/S 143(2) OF THE IT ACT FOR SELECTING CASE FOR SECURITY EXPIRED ON 31.1 2.2004. THE FIRST SEARCH WAS CONDUCTED ON THE PREMISES OF ASSESSEE ON 22.9.2 005 AND THE 2ND SEARCH WAS CONDUCTED ON 25.8.2006 AND IN BOTH THE S EARCHES, NO INCRIMINATING MATERIAL, DOCUMENT, UNACCOUNTED ASSET S AND BOGUS OF ACCOUNTS WERE FOUND AND SEIZED RELATING TO LAND DEV ELOPMENT EXPENSES DEBITED IN PROFIT AND LOSS ACCOUNT FOR THE YEAR. TH E BOTH SEARCHES ON IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 10 OF 16 ASSESSEE DID NOT YIELD ANY INCRIMINATING MATERIAL O N THE BASIS OF WHICH IT CAN BE SAID THAT ASSESSEE WAS INDULGENT IN DEBITING BOGUS LAND DEVELOPMENT EXPENSES IN ITS BOOKS OF ACCOUNT. THERE IS NO REFERENCE OF ANY MATERIAL FOUND IN THE SEARCH FOR MAKING ASSESSM ENT U/S 153A OF THE ACT. THUS THE BASIC CONTROVERSY BEFORE US REMAINS A BOUT THE SCOPE OF ASSESSMENT U/S 153(A) WHEN THE RETURN HAS BEEN ACCE PTED U/S 143(1)(A) AND TIME PERIOD FOR ISSUING NOTICE U/S 143(2) HAS E LAPSED. 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 PROCEEDINGS FOR ALL THE SI X YEARS TO COMPUTE THE TOTAL INCOME OF THE ASSESSEE INCLUDING THE UNDI SCLOSED 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 A RE 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) AR E 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 ACKNOWLED GEMENT OR INTIMATION ISSUED, THE PROCEEDINGS INITIATED BY FILING THE RET URN ARE CLOSED, 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 TH E NOTICE U/S 143(2) ELAPSED. THE PROCESS HAS ATTAINED THE FINALITY WHIC H 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 15 3A ALL SIX YEARS SHALL BECOME SUBJECT MATTER OF ASSESSMENT UNDER SEC TION 153A THE ASSESSING OFFICER SHALL HAVE A FREE-HAND, THROUGH A BATEMENT, ONLY ON THE PROCEEDINGS THAT ARE PENDING, TO FRAME THE A SSESSMENTS AFRESH. BUT IN A CASE WHERE THE PROCEEDINGS HAVE RE ACHED FINALITY, ASSESSMENT UNDER SECTION 153A READ WITH SECTION 143 (3) AND CERTAIN INCRIMINATING DOCUMENTS HAVE BEEN FOUND IND ICATING UNDISCLOSED INCOME, THE ADDITION SHALL ONLY BE REST RICTED TO THOSE DOCUMENTS OR INCRIMINATING MATERIAL, AND CLUBBED ON LY TO THE ASSESSMENT FRAMED ORIGINALLY, AS THE LAW DOES NOT P ERMIT THE ASSESSING OFFICER TO DISTURB ISSUES ALREADY CONCLUD ED. WHERE ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION OF IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 11 OF 16 BOOKS, NO PROCEEDING IS PENDING, BUT IN THE SEARCH, MATERIAL IS FOUND INDICATING INCRIMINATING MATERIAL, THE ASSESS ING OFFICER EMBARKS ON A JURISDICTION, WHEREIN HE HAS TO CLUB T HE TWO SETS OF INCOMES, THE RETURNED INCOME AND THE UNEARTHED INCO ME AND ARRIVE AT THE TOTAL INCOME. ALL CARGO GLOBAL LOGISTICS LTD. VS. DY. CIT [2012] 18 ITR (TRIB) 106 (MUMBAI) [SB] AND CIT VS. ANIL KUMAR BHA TIA [2013] 352 ITR 493 (DELHI) FOLLOWED. WHERE IN THE SEARCH OPERATION, NO INCRIMINATING MAT ERIAL IS FOUND AND THERE ARE NO PROCEEDINGS PENDING BEFORE THE ASS ESSING OFFICER, THE ASSESSING OFFICER HAS TO ISSUE NOTICES UNDER SECTION 153A, ASKING THE SEARCHED PERSON TO FILE ITS RETURN S. BUT SINCE THERE ARE NO PROCEEDINGS PENDING BEFORE HIM, THE SECOND P ROVISO STOPS THE ASSESSING OFFICER TO PROCEED FURTHER, BECAUSE P ROCEEDINGS CANNOT ABATE AND SINCE THERE IS NO MATERIAL, NO FUR THER JURISDICTION IS EMBARKED ON HIM. WHERE NO PROCEEDINGS ARE PENDING A ND NO INCRIMINATING MATERIAL HAS BEEN FOUND ON CLUBBING, WHAT REMAINS IS THE INCOME ORIGINALLY DETERMINED OR ASSESSED.' 10. THE ITAT SMC BENCH, MUMBAI IN ITA NO. 786 AND 7 87 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 SUBMISSIONS 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 Y EAR 2001-02, THE ASSESSMENT WAS COMPLETED 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 IN COME TAX RETURN FILED BY THE DONOR. THEREAFTER THE ASSESSMEN T 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 ASSESS EE. 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 W AS INITIATED EITHER BY ISSUING NOTICE UNDER SECTION 143(2) OR 14 8 WITHIN THE STIPULATED PERIOD OF TIME. NOW, DURING THE ASSESSME NT PROCEEDING UNDER SECTION 153A, THE ASSESSEE WAS REQUIRED TO PR ODUCE THE DONOR ONCE AGAIN, IN MY CONSIDERED VIEW, IS NOT JUS TIFIED OR TENABLE IN THE EYES OF LAW. THIS VERY ISSUE HAS BEEN DECIDE D BY THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF ALL CARGO GLOBAL L OGISTICS LTD. (SUPRA). THE SPECIAL BENCH OF THE TRIBUNAL HAS ANSW ERED THE QUESTION IN THE FOLLOWING MANNER :- IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 12 OF 16 '(A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM 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 T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF REL EVANT PROVISIONS MEANS- (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINA L ASSESSMENT. AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH.' 12. FROM THE FINDING OF THE SPECIAL BENCH, IT BECOM ES CLEAR THAT IN CASE OF ASSESSMENT ALREADY COMPLETED, NO ADDITION C AN BE MADE FURTHER WHILE COMPLETING THE ASSESSMENT UNDER SECTI ON 153A, IF THERE IS NO INCRIMINATING MATERIAL, WHICH IN THE CO NTEXT OF RELEVANT PROVISION, MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, 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 ASSESSMEN T YEAR 2001- 02, NO INCRIMINATING MATERIAL WAS FOUND OR ANY OTHE R DOCUMENTS WERE FOUND, WHICH SUGGESTS THAT THE ASSESSEE HAS CO NCEALED PARTICULAR OF INCOME. THEREFORE, IN VIEW OF THE OBS ERVATION MADE BY THE SPECIAL BENCH, NO ADDITION CAN BE MADE WHILE CO MPLETING THE ASSESSMENT UNDER SECTION 153A, IF THERE NO FRESH MA TERIAL OR DOCUMENTS WAS FOUND DURING THE COURSE OF SEARCH.' THE ISSUES ARISES FROM THOSE PROCESSED RETURN CAN B E 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 ASSESSM ENT ORDER AND THE INCOME THAT HAS ESCAPED ASSESSMENT ARE CLUBBED TOGE THER AND ASSESSED AS THE TOTAL INCOME. THE EXPIRY OF TIME FOR ISSUING NOTICE U/S 143(2) OF THE ACT TAKES AWAY THE JURISDICTION OF THE AO FOR ISSUI NG NOTICE U/S 143(2). IT IS JURISDICTIONAL POWER AVAILABLE WITH THE AO TO BE EX ERCISED IN A GIVEN PERIOD. ONCE, IT IS EXERCISED THEN IT CAN BE COMPLE TED ONLY BY MAKING ORDER U/S 143(3) OF THE ACT WITHIN THE TIME AVAILAB LE U/S 153(1) OF THE ACT. ONCE SEARCH TAKES PLACE U/S 132(1) OF THE ACT AND C OMPLETION OF PROCEEDING IS PENDING ON THAT DATE THEN SUCH PROCEE DINGS ABATE. THUS, THE SCOPE OF ASSESSMENT U/S 153A DEPENDS UPON WHETH ER ANY IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 13 OF 16 ASSESSMENT OR REASSESSMENT PROCEEDINGS WERE PENDING OR COMPLETED ON THE DATE OF THE SEARCH. WHENEVER THE ABATED PROCEED INGS ARE MERGED WITH THE PROCEEDINGS U/S 153A THEN SCOPE OF ASSESSMENT I S VIDE AND IT WILL COVER ALL ISSUES ARISING FROM THE ORIGINAL RETURN A ND ISSUE ARISING ON THE BASIS OF INCRIMINATING DOCUMENTS, AND ASSETS FOUND AND SEIZED DURING THE SEARCH. WHEREVER THE PROCEEDINGS ARE COMPLETED PRIO R TO THE SEARCH THEN NOTHING MERGES WITH PROCEDING U/S 153A OF THE ACT A ND NOTHING ABATES. IN SUCH A SITUATION, THE AO HAS TO RESPECT THE COMPLET ENESS OF THE PROCEEDINGS. ADMITTEDLY, IN THE CASE OF ASSESSEE, N O INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE PROVISIONS OF SECTION 153A GIVE POWER TO ASSESSING OFFICER TO ASSESS AND REASSESS T HE INCOME. THE ASSESSING OFFICER IS EMPOWERED TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OR INCOME ESCAPED ASSESSMENT. IN THE CASE UNDER CONSIDERATION, THERE IS NO INCRIMINATING MATERIAL F OUND DURING THE COURSE OF SEARCH RELATING TO THE ASSESSMENT YEAR UNDER CONSID ERATION. THE TIME PERIOD FOR ISSUING NOTICE U/S 143(2) WAS ALREADY EX PIRED PRIOR TO THE DATE OF SEARCH. THEREFORE, THE PROCEEDINGS DO NOT GET ABATE D BY VIRTUE OF PROVISO TO SECTION 153A. 10. THEREFORE, THE QUESTION ARISES WHETHER AO CAN M AKE ANY ADDITION IN THE REASSESSMENT PROCEEDINGS U/S 153(A) AFTER MAKIN G INQUIRIES WHICH ARE NOT SUGGESTED BY ANY DOCUMENT OR ASSET SEIZED DURIN G THE SEARCH. IT DEPENDS ON THE NATURE OF ADDITION. THE FACTS AND CI RCUMSTANCES OF THE ASSESSEE CLEARLY SHOW THAT NO INCRIMINATING DOCUMEN T FOUND RELATING TO THE LAND DEVELOPMENT EXPENSES DEBITED IN THE BOOKS OF ACCOUNTS. NO MATERIAL WAS ON THE RECORD ON THAT BASIS WHICH INCO ME OF ASSESSEE COULD BE FURTHER ASSESSED BY ASSESSING OFFICER. 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 SEAR CH 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 MA KING THE ADDITION IN THE YEAR UNDER CONSIDERATION, THE SAME ARE DELETED.' 19. WE ALSO FIND THAT THE CO-ORDINATE BENCH OF MUMB AI TRIBUNAL IN THE CASE OF GURINDER SINGH BAVA VS DCIT (2012) 28 TAXMANN.COM 3 28 (MUM) HAS AFTER RELYING ON THE DECISION OF SPECIAL BENCH OF TRIBUNA L IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. HAS HELD THAT WHEN THE ASSESSMENT HA D 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 SEA RCH AND THEREFORE THERE WAS NO ASSESSMENT PENDING IN AND IN SUCH A CASE THERE W AS NO QUESTION OF ABATEMENT. 20. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN CO MPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSU E OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE , THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS N O QUESTION OF ABATEMENT. IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 14 OF 16 THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. THE GIFT DEEDS AND THE COPIES OF RETURN OF INCOME OF THE DONORS THAT WERE FOUND 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 WER E CONSIDERED BY THE ASSESSEE WHILE CREDITING THE CAPITAL ACCOUNT. 21. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE V IEW THAT THESE ASSESSMENTS FRAMED U/S.153A NEED TO BE QUASHED. ORDERED ACCORDI NGLY. SINCE 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. 7. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH. RESPECTFULLY FOLLOWING TH E SAME, WE QUASH THE IMPUGNED ORDERS PASSED UNDER SECTION 153A, AS, IN VIEW OF TH E FACTS SET OUT IN THE CHART REPRODUCED EARLIER WHICH IS EXACTLY ON THE SAME L INES AS IN THE AFORESAID CO-ORDINATE BENCH ORDER, THE ASSESSMENTS IN QUESTION HAD ATTAIN ED FINALITY. THE PLEA OF THE ASSESSEE IS INDEED WELL TAKEN AND MEETS OUR APPROVA L. 8. IN THE RESULT, THE TWELVE APPEALS, (I.E IT(SS)A NOS. 466 TO 469, 471 TO 474, 488 TO 490 AND 493/AHD/2012) ARE ALLOWED ON THE GROUND OF VALIDITY OF 153A PROCEEDINGS, AND, AS SUCH, ALL OTHER ISSUES RAISED THEREIN ARE RENDER ED ACADEMIC. 9. WE NOW TAKE UP REMAINING APPEALS. 10. IN IT(SS)A NO.470/AHD/2012, I.E. APPEAL IN THE CASE OF SANJAY H. RATHOD, THE ONLY GRIEVANCE PRESSED BEFORE US IS AS FOLLOWS:- THE LD. CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CON FIRMING DISALLOWANCE OF INTEREST OF RS.2,04,002/- CLAIMED U/S 36 OF THE ACT ON THE A LLEGED GROUND OF DIVERSION OF INTEREST BEARING FUNDS FOR ADVANCING INTEREST FREE LOANS TO SANJAY CASTINGS INDIA PRIVATE LIMITED (SCIPL). THE DISALLOWANCE MAY KIND LY BE DELETED. 11. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE A BOVE ISSUE IS NOW COVERED, IN FAVOUR OF THE ASSESSEE, BY A CO-ORDINATE BENCH DECI SION DATED 29.08.2016 IN THE CASE OF BABUBHAI RAMANBHAI PATEL VS. JCIT. LEARNED DEPA RTMENTAL REPRESENTATIVE SIMPLY RELIED UPON THE STAND OF THE AUTHORITIES BELOW. 12. WE FIND THAT, IN BABUBHAI RAMANBHAIS CASE (SUP RA), THE CO-ORDINATE BENCH HAS, INTER ALIA , APPROVED THE PROPOSITION THAT THE MONEY UTILIZED BY THE ASSESSEE CANNOT BE SAID TO BE FOR NON BUSINESS PURPOSES AS...... THE E XTENSION OF INTEREST BEARING FUNDS TO A COMPANY IN WHICH THE ASSESSEE HAS A CONTROLLING INT EREST CAN BE SAID TO HAVE BEEN UTILIZED FOR BUSINESS PURPOSES. THERE IS NO DISPUTE THAT SANJAY CASTING PVT LTD TO WHICH INTEREST FREE FUNDS WERE GIVEN IS CONTROLLED BY THE ASSESSEE AND FAMILY MEMBERS. FOLLOWING THE SAID APPROACH OF THE CO-ORDINATE BENC H, THEREFORE, WE HOLD THAT THE FUNDS SO USED CAN ONLY BE TREATED AS HAVING BEEN USED FOR BUSINESS PURPOSE, AND, IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 15 OF 16 ACCORDINGLY DISALLOWANCE OF INTEREST ON RELATED BOR ROWINGS HAS TO BE DELETED. THE IMPUGNED DISALLOWANCE IS THUS DELETED. 13. IT(SS)A NO.470/AHD/2012 IS THUS ALLOWED IN THE TERMS INDICATED ABOVE. 14. IN IT(SS)A NO. 475/AHD/2012, THE ONLY GRIEVANCE PRESSED BEFORE US IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I II, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE DIS ALLOWANCE OF INTEREST PAID ON UNSECURED LOAN OF RS.1,38,500/- MADE ON ALLEGED GRO UND OF DIVERSION OF INTEREST BEARING FUNDS TO NON INCOME BEARING ADVANCES WITHOU T EXISTENCE OF BUSINESS RELATIONSHIP. THE DISALLOWANCE MAY KINDLY BE DELET ED. 15. AN IDENTICAL ISSUE CAME UP BEFORE US IN IT(SS)A NO.470/AHD/2012, AND, FOR THE REASONS SET OUT IN PARAGRAPH NO.12 ABOVE, WE UPHELD THE SAID GRIEVANCE. RESPECTFULLY FOLLOWING THE VIEW SO TAKEN, WE UPHOLD THIS GRIEVAN CE OF THE ASSESSEE AS WELL. 16. IN THE RESULT, IT(SS)A NO. 475/AHD/2012 IS THUS ALLOWED IN THE TERMS INDICATED ABOVE. 17. IN IT(SS)A NO. 476/AHD/2012, THE ONLY GRIEVANCE PRESSED BEFORE US IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I II, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE DIS ALLOWANCE OF INTEREST PAID ON UNSECURED LOAN OF RS.33,040/- MADE ON ALLEGED GROUN D OF DIVERSION OF INTEREST BEARING FUNDS TO NON INCOME BEARING ADVANCES WITHOU T EXISTENCE OF BUSINESS RELATIONSHIP. THE DISALLOWANCE MAY KINDLY BE DELET ED. 18. AN IDENTICAL ISSUE CAME UP BEFORE US IN IT(SS)A NO.470/AHD/2012, AND, FOR THE REASONS SET OUT IN PARAGRAPH NO.12 ABOVE, WE UPHELD THE SAID GRIEVANCE. RESPECTFULLY FOLLOWING THE VIEW SO TAKEN, WE UPHOLD THIS GRIEVAN CE OF THE ASSESSEE AS WELL. 19. IN THE RESULT, IT(SS)A NO. 476/AHD/2012 IS THUS ALLOWED IN THE TERMS INDICATED ABOVE. 20. IN IT(SS)A NO. 491/AHD/2012, THE ONLY GRIEVANCE PRESSED BEFORE US IS AS FOLLOWS:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I II, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN LAW IN CONFIRMING THE DIS ALLOWANCE OF INTEREST PAID ON UNSECURED LOAN OF RS.46,261/- MADE ON ALLEGED GROUN D OF DIVERSION OF INTEREST BEARING FUNDS TO NON INCOME BEARING ADVANCES WITHOU T EXISTENCE OF BUSINESS RELATIONSHIP. THE DISALLOWANCE MAY KINDLY BE DELET ED. 21. AN IDENTICAL ISSUE CAME UP BEFORE US IN IT(SS)A NO.470/AHD/2012, AND, FOR THE REASONS SET OUT IN PARAGRAPH NO.12 ABOVE, WE UPHELD THE SAID GRIEVANCE. RESPECTFULLY FOLLOWING THE VIEW SO TAKEN, WE UPHOLD THIS GRIEVAN CE OF THE ASSESSEE AS WELL. IT(SS)A NO. 466/AHD/2012 & 16 OTHERS - SANJAY H RATHOD & OTHERS A.Y. 2004-05 TO 2010-11 PAGE 16 OF 16 22. IN THE RESULT, IT(SS)A NO. 491/AHD/2012 IS THUS ALLOWED IN THE TERMS INDICATED ABOVE. 23. IN IT(SS)A NO. 492/AHD/2012, THE ONLY GRIEVANCE PRESSED BEFORE US IS AS FOLLOWS:- THE LD CIT(A) ERRED ON FACTS AS ALSO IN LAW IN CON FIRMING DISALLOWANCE OF INTEREST OF RS.97,196/- ON THE ALLEGED GROUND OF DIVERSION O F INTEREST BEARING FUNDS FOR ADVANCING INTEREST FREE LOANS TO SANJAY CASTINGS IN DIA PRIVATE LIMITED [SCIPL].EZS THE DISALLOWANCE MAY KINDLY BE DELETED. 24. AN IDENTICAL ISSUE CAME UP BEFORE US IN IT(SS)A NO.470/AHD/2012, AND, FOR THE REASONS SET OUT IN PARAGRAPH NO.12 ABOVE, WE UPHELD THE SAID GRIEVANCE. RESPECTFULLY FOLLOWING THE VIEW SO TAKEN, WE UPHOLD THIS GRIEVAN CE OF THE ASSESSEE AS WELL. 25. IN THE RESULT, IT(SS)A NO. 492/AHD/2012 IS THUS ALLOWED IN THE TERMS INDICATED ABOVE. 26. IN THE RESULT, ALL THE SEVENTEEN APPEALS ARE AL LOWED IN THE TERMS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER, 2017. SD/- SD/- MAHAVIR PRASAD PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD, THE 13 TH DAY OF DECEMBER, 2017 **BT* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER TRUE COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD 1. DATE OF TAKING DICTATION: .. .8 PAGE MANUSCRIPTS OF HONBLE AM ARE ATTACHED ...12.12.2017.. 2. DATE OF TYPING & DRAFT ORDER PLACED BEFORE THE DI CTATING MEMBER: ... 13.12.2017.................... ..... 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S.: .... 13.12.2017.... 4. DT. ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT: ... . 13.12.20 17. 5. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: . ... 13.12.2017................... 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: ..... 7. THE DT. ON WHICH THE FILE GOES TO THE ASTT. REGISTR AR FOR SIGNATURE ON THE ORDER: .................. ....... 8. DATE OF DESPATCH OF THE ORDER: ................. ........