MYSORE FINLEASE PVT LTD.,DELHI V. ACIT, CENTRAL CIRCLE-27, NEW DELHI

ITA 3732/DEL/2023

AI Insights

The case involves Mysore Finlease Pvt. Ltd., which appealed against an assessment order for the year 2014-15. The primary contention was the improper application of the assessment procedure following a search operation under section 132 of the Income-tax Act, 1961. The Tribunal examined whether the assessment should have been conducted under the normal provisions or under the specific provisions applicable to 'searched' persons as per section 153A of the Act. The Tribunal found that the lower authorities erred in applying the normal assessment provisions instead of the specific provisions applicable post-search, leading to the quashing of the assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26150 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Other Referred Cases: National Thermal Power Co. Ltd. vs CIT, CIT vs. Jai Parabolic Springs Ltd., Jute Corporation of India Ltd. vs. CIT, Abhay Kumar Shroff vs CIT, All Cargo Global Logistics Ltd. & Ors. vs. DCIT, CIT vs. Anil Kumar Bhatia, CIT (Central) Kanpur vs. Smt. Shaila Agarwal, Union of India vs. Deoki Nandan Aggarwal, State of Kerala vs. Mathai Verghese, Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. vs. Custodian of Vested Forests, Federation of Andhra Pradesh Chambers of Commerce and Industry vs. State of Andhra Pradesh, CIT vs. Tara Agencies
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BALJEET KAUR
• Assessee Lawyers: KAPIL GOEL
• Keywords: Set aside; Reassessment proceedings; Question of law; Documents seized; Gift; Period of limitation; Search and seizure; Block assessment
• Section: 148; 143(3); 153; 132; 153A; 139(1); 153C; 246A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘E’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No.3732/Del/2023 Assessment Year: 2014-15 Mysore Finlease Pvt. Ltd. C/o- Kapil Goel, Adv., F-26/124, Sector-7, Rohini, New Delhi Vs. ACIT, Central Circle-27, New Delhi PAN:AAACM6761B (Appellant) (Respondent) ORDER PER SATBEER SINGH GODARA, JM This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)-29 [in short, the “CIT(A)”], Delhi’s order dated 15.09.2023 passed in case no. 10510/2016-17 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). 2. Heard both the parties. Case file perused. 3. It emerges during the course of hearing that the assessee’s first and foremost substantive ground raised in the instant appeal Assessee by Dr. Kapil Goel, Adv. Department by Ms. Baljeet Kaur, CIT(DR) Date of hearing 28.01.2025 Date of pronouncement 28.02.2025 ITA No.3732/Del/2023 2 | P a g e challenges the validity of the impugned assessment framed on 22.12.2016 itself as not sustainable in law given the fact that it had been subjected to a search action dated 23rd July, 2015. 4. We wish to make it clear there is no dispute raised at the Revenue’s behest regarding the assessee’s status on the “searched” persons on 23rd July, 2015. We wish to reiterate here that the assessment year before is assessment year 2014-15, wherein, the assessee had filed its return of income on 30th September, 2014. Meaning thereby that its assessment on the date of search was indeed an abated one going by section 153(A1) 2nd proviso, and therefore, we are of the considered view that going by statutory provisions containing a non-obstante clause “notwithstanding anything contained in section 139……….”, the learned lower authorities have erred in law and on facts in assessing it under the normal provision than the foregoing specific provision applicable in case of searched person. 5. Learned counsel has further quoted this tribunal’s order in ITA No.1074/Pn/2007 deciding the very issue against the department as under: ITA No.3732/Del/2023 3 | P a g e “5. The assessee vide petition dated. 12-9-2012 made a request for admission of additional ground of appeal which reads as under:- \"The ld. Commissioner of Income tax (Appeals) erred in confirming the assessment order under section 143(3) of the Income Tax Act passed on 27-12-2006 without considering the fact that a search and seizure action on the appellant under section 132(1) of the Act was carried out on 30- 11- 2006, the pending assessment had already abated on the date of the search under the second proviso to Section 153A of the Act which therefore had to be quashed.\" 6. In the said petition it was submitted by the assessee that a search and seizure action u/s 132(1) of the Act took place on the assessee on 30-11-2006 and on the date of the search the assessment for the A.Y. 2004-05 was pending. However, the A.O. passed the assessment order u/s. 143(3) on 27.12.2006 which had already abated as per the second proviso to Section 153A of the Act. It was further submitted that after the search, the A.O. issued notices under Section 153A for six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place and accordingly the A.O. passed the order u/s. 153A read with Section 143(3) for all these six assessment years on 27.11.2008 including the year of the search and seizure i.e. assessment year 2007-08. It was further submitted that the assessee filed an appeal against the order u/s.153A read with Section 143(3) before the C.I.T. (Appeals) which is pending. It was further submitted that since the assessment order for the A.Y. 2004-05 has been passed after the search operation on 30.11.2006 in pursuance to the pending assessment on that date, the same will not have any legal validity and it is to be quashed. The reliance was also placed in Abhay Kumar Shroff vs CIT and Ors reported in (2007) 210 CTR (Jharkhand) 602 : (2007) 290 ITR 114 (Jharkhand). In the light of the above, it was submitted that though the aforesaid additional ground was not raised before the Id. C.I.T.(Appeals) and is now being raised before the Tribunal for the first time, it is a pure question of law arising from the facts which are on record in the assessment proceedings, therefore, the additional ground may be admitted. For this purpose, the reliance was also placed on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs CIT (1998) 229 ITR 383 (SC) wherein it has been held that \"Undoubtedly, the Tribunal has the discretion to allow or not to allow a new ground to be raised. But where the Tribunal is only required to consider the question of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee.\" The reliance was ITA No.3732/Del/2023 4 | P a g e also placed in the case of ITO vs M.M. Textiles reported in (2010) 122 I.T.D 435 (Mum) wherein it was held that when additional legal grounds are raised, before the Tribunal after obtaining leave from the Tribunal, such legal grounds should be accepted by the Tribunal provided facts are on record in the assessment proceedings. It was, therefore prayed that such additional ground be admitted. 7. At the time of hearing the ld. Counsel for the assessee while reiterating the same submissions as submitted in the petition dtd. 12- 9-2012 further submits that in view of the decision cited in the said petition, the additional ground raised by the assessee be admitted. He also placed on record a copy of the assessment order for the same A.Y. i.e. A.Y. 2004-05 passed after the search u/s 153A r.w.s. 143(3) of the Act dtd. 27-11-2008. 8. On merit of the additional ground of appeal, the ld. Counsel for the assessee submits that there is no dispute that as on the date of search i.e. on 30-11-2006 the assessment for the A.Y. 2004-05 was pending. In other words as on the date of search, the pending assessment had already abated under the second proviso to section 153A of the Act and, therefore, the A.O. has grossly erred in passing the impugned assessment u/s 143(3) of the Act dtd. 27-12-2006 which is liable to be quashed and for this proposition, the reliance was also placed on the following CBDT Circular and decisions:- (i) Para No. 65.2 to 62.5 of CBDT Circular No. 7 of 2003 dtd. 5.9.2003, (ii) Abhay Kumar Shroff Vs. CIT (2007) 210 CTR (Jharkhand) 602 : (2007) 290 ITR 114 (Jharkhand) : (2007) 162 TAXMAN 429 (Jharkhand) [para 12 to 16). (iii) All Cargo Global Logistics Ltd. & Ors. Vs. DCIT (2012) 147 TTJ (Mumbai)(SB) 513 : (2012) 137 ITD 287 (Mum) (SB) [para 52 and 53] (iv) CIT Vs. Anil Kumar Bhatia (2012) 24 taxmann.com 98(Delhi) [para 21] (v) CIT (Central) Kanpur Vs. Smt. Shaila Agarwal (2011) 16 taxmann.com 232 (All.) : (2012) 346 ITR 130 (All.) In the light of the above, he submits that the impugned regular assessment passed by the A.O. is a nullity and, hence, the same may be quashed. 9. On the other hand, the ld. D.R. while agreeing that the facts are available on record, did not object to the admission of legal ground of appeal. He further submits that in the subsequent assessment order passed by the A.O. u/s 153A r.w.s. 143(3) of the Act, dtd. 27-11-2008, the A.O. has made similar disallowance u/s 80IA, 80IB, distribution expenses, foreign travelling expense to the extent as confirmed by the ld. CIT(A) and disallowance of staff welfare expense as per assessment order dtd. 27-11-2008 (supra), therefore, in the interest of justice, the said disallowance made by the A.O. may ITA No.3732/Del/2023 5 | P a g e remain to be considered as made in the assessment order u/s 153A r.w.s. 143(3) of the Act. 10. We have carefully considered the submission of the rival parties and perused the material available on record. We find that the facts are not in dispute inasmuch as it is also not in dispute that in this case a search and seizure action u/s 132(1) of the Act was taken place on the assessee on 30-11-2006 and on the date of search the assessment for the year under consideration i.e. A.Y. 2004-05 was pending and the same assessment order was passed by the A.O. u/s 143(3) of the Act on 27-12-2006 i.e. after the date of search. 11. The assessee in the additional ground has challenged the validity of the impugned assessment order on the ground that as on the date of search i.e. on 30-11-2006, the pending assessment had already abated under the second proviso to section 153A of the Act and in support he placed on record the copy of the assessment order dtd. 27- 11-2008 passed u/s 153A r.w.s. 143(3) of the Act and also relied on CBDT Circular and various decisions (supra). 12. A larger bench of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) observed that the question of law which arose from the fact as found by the income-tax authority any legal issue can be raised at any stage. The hon'ble Supreme Court observed that (page 387) : \"where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee\". 13. Similarly in the case of CIT vs. Jai Parabolic Springs Ltd. [2008] 206 ITR 42 (Delhi) it was observed that (headnote) : \"..........that there was no prohibition on the powers of the Tribunal to entertain an additional ground which according to the Tribunal arose in the matter and for the just decision of the case. There was no infirmity in the order of the Tribunal.\" 14. It is also pertinent to mention that in the case of Jute Corporation of India Ltd. v. CIT [1991] 187 ITR 688 (SC) it was observed that : \"An appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking ITA No.3732/Del/2023 6 | P a g e modification of the order of assessment passed by the Income- tax Officer. There may be several factors justifying the raising of such a new plea in an appeal, and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bonafide and that the same could not have been raised earlier for good reasons. Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. The same observations would apply to appeals before the Tribunal also\". 15. In the absence of any contrary material placed on record by the Revenue, keeping in view that all the material facts are available on record and the legal ground taken by the assessee goes to the root of the matter, we respectfully following the ratio of the above decisions, admit the additional ground raised by the assessee. 16. On merit, in order to appreciate the submissions of the parties and the relevant provisions of the Act, we find that recently the similar issue came up before the Hon'ble Delhi High Court in Anil Kumar Bhatia (supra) wherein Their Lordships after considering the relevant provisions section of 153A of the Act and CBDT Circular (supra) have observed and held as under:- \"16. We now proceed to discuss the correctness of the conclusion of the Tribunal that the Assessing Officer had wrongly invoked Section 153A of the Act. This Section was introduced into the Act by the Finance Act, 2003 w.e.f. 1.6.2003 along with Sections 153B and 153C. Section 153A provides for 'assessment in case of search or requisition'. It runs as follows: \"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 where 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 in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to ITA No.3732/Del/2023 7 | P a g e the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section(1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revised with effect from the date of receipt of the order of such annulment by the Commissioner. Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.- For the removal of doubts, it is hereby declared that- (i) save as otherwise provided in this section, section 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.\" 17. The three sections introduced w.e.f. 1.6.2003 replaced the \"Post Search Block Assessment Scheme\" in respect of any search under Section 132 or requisition under Section 132A made after 31.5.2003. In Circular No.7 of 2003 dated 5.9.2003 reported in (2003) 263 ITR (St)62, the new Scheme was explained by the CBDT in the following manner: \"65. The special procedure for assessment of search cases under Chapter XIV-B be abolished : 65.1 The existing provisions of the Chapter XIV-B provide for a single assessment of undisclosed income of a block period, which means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted and also includes the period up to the date of the commencement of such search, and lay down the manner in which such income is to be computed. 65.2 The Finance Act, 2003, has provided that the provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or ITA No.3732/Del/2023 8 | P a g e any assets are requisitioned under section 132A after May 31, 2003, by inserting a new section 158BI in the Income-tax Act. 65.3 Further three new sections 153A, 153B and 153C have been inserted in the Income-tax Act to provide for assessment in case of search or making requisition. 65.4 The new section 153A provides the procedure for completion of assessment where a search is initiated under section 132 or books of account, or other documents or any assets are requisitioned under section 132A after May 31, 2003. In such cases, the Assessing Officer shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, return of income in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted under section 132 or requisition was made under section 132A. 65.5 The Assessing Officer shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A, as the case may be, shall abate. It is clarified that the appeal, revision or rectification proceedings pending on the date of initiation of search under section 132 or requisition shall not abate. Save as otherwise provided in the proposed section 153A, section 153B and section 153C, all other provisions of this Act shall apply to the assessment or reassessment made under section 153A. It is also clarified that assessment or reassessment made under section 153A shall be subject to interest, penalty and prosecution, if applicable. In the assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 65.6 The new section 153B provides for the time limit for completion of search assessments. It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year, falling within six assessment years under section 153A within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed. 65.7 This section also provides that assessment in respect of the assessment year relevant to the previous year in which the search is conducted under section 132 or requisition is made under section 132A shall be completed within a period ITA No.3732/Del/2023 9 | P a g e of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed.\" 65.8 It also provides that in computing the period of limitation for completion of such assessment or reassessment, the period during which the assessment proceeding is stayed by an order or injunction of any court ; or the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub- section, or the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee of being re-heard under the proviso to section 129, or in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded. If, after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. 65.9 The new section 153C provides that where an Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. 65.10 An appeal against the order of assessment or reassessment under section 153A shall lie with the Commissioner of Income-tax (Appeals). 65.11 Consequential amendments have also been made in sections 132, 132B, 140A, 234A, 234B, 246A and 276CC to give reference to section 153A in these sections. 65.12 These amendments will take effect from June 1, 2003. ITA No.3732/Del/2023 10 | P a g e 18. A perusal of Section 153A shows that it starts with a non obstante clause relating to normal assessment procedure which is covered by Sections 139, 147, 148, 149, 151 and 153 in respect of searches made after 31.5.2003. These Sections, the applicability of which has been excluded, relate to returns, assessment and reassessment provisions. Prior to, the introduction of these three Sections, there was Chapter XIV- B of the Act which took care of the assessment to be made in cases of search and seizure. Such an assessment was popularly known as „block assessment because the Chapter provided for a single assessment to be made in respect of a period of a block of ten assessment years prior to the assessment year in which the search was made. In addition to these ten assessment years, the broken period up to the date on which the search was conducted was also included in what was known as „block period . Though a single assessment order was to be passed, the undisclosed income was to be assessed in the different assessment years to which it related. But all this had to be made in a single assessment order. The block assessment so made was independent of and in addition to the normal assessment proceedings as clarified by the Explanation below Section 158BA(2). After the introduction of the group of Sections namely, 153A to 153C, the single block assessment concept was given a go-by. Under the new Section 153A, in a case where a search is initiated under Section 132 or requisition of books of account, documents or assets is made under Section 132A after 31.5.2003, the Assessing Officer is obliged to issue notices calling upon the searched person to furnish returns for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted or requisition was made. The other difference is that there is no broken period from the first day of April of the financial year in which the search took place or the requisition was made and ending with the date of search/requisition. Under Section 153A and the new scheme provided for, the AO is required to exercise the normal assessment powers in respect of the previous year in which the search took place. 19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisition was made. Another significant feature of this Section is that the Assessing Officer is empowered to assess or reassess the \"total income\" of the aforesaid years. ITA No.3732/Del/2023 11 | P a g e This is a significant departure from the earlier block assessment scheme in which the block assessment roped in only the undisclosed income and the regular assessment proceedings were preserved, resulting in multiple assessments. Under Section 153A, however, the Assessing Officer has been given the power to assess or reassess the „total income of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having been pulled out, the Assessing Officer under Section 153A has been entrusted with the duty of bringing to tax the total income of an assessee whose case is covered by Section 153A, by even making reassessments without any fetters, if need be. 21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings \"shall abate\". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under ITA No.3732/Del/2023 12 | P a g e consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the „total income of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are pending on the date of initiation of the search or making requisition \"shall abate\". Once those proceedings abate, the decks are cleared, for the Assessing Officer to pass assessment orders for each of those six years determining the total income of the assessee which would include both the income declared in the returns, if any, furnished by the assessee as well as the undisclosed income, if any, unearthed during the search or requisition. The position thus emerging is that where assessment or reassessment proceedings are pending completion when the search is initiated or requisition is made, they will abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee s total income and such orders are subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment were pending since they had already culminated in assessment or reassessment orders when the search was initiated or the requisition was made\". ITA No.3732/Del/2023 13 | P a g e 17. Similar issue came up in Abhay Kumar Shroff (supra) wherein Ther Lordships after considering the relevant provisions of the Act (supra) and CBDT Circular (supra) have observed and held vide para 12 to 16 as under:- \"12. From a bare reading of the provisions of sections 153A, 153B and 153C of the Act and the Departmental Circular dated September 5, 2003 (see [2003] 263 ITR (St.) 62), it is manifestly clear that after May 31, 2003, the earlier provision of block assessment in the case of search initiated against the assessee, shall not apply. Instead, the provision that there shall be single assessment on undisclosed income comprising previous years relating to six assessment years preceding in which the search was conducted, shall apply. It further provides that the Assessing Officer shall issue notice to such person requiring him to furnish return of income in respect of six assessment years immediately preceding the assessment year relating to the previous year in which the search was conducted under section 132 or requisition was made under section 132A of the Act. 13. The second proviso to section 153A makes it clear that assessment or reassessment relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A shall abate. In other words, if on the date of initiation of search or requisition under section 132 or section 132A any assessment or reassessment proceeding is initiated relating to any assessment year falling within the period of six assessment years, it shall stand abated and the assessing authority cannot and shall not proceed with such pending assessment after initiation of search or requisition as contemplated hereinabove. 14. The word \"abate\" or \"abatement\" has not been defined in the Act or in the circular. According to Chambers Dictionary the word \"abate\" means demolition or to put an end to. The Law Lexicon defines the word \"abate\", which means to throw down, destroy or quash or to nullify. According to Black's Law Dictionary the word \"abatement\" means the act of eliminating or nullifying or suspension or defeat of a pending action. According to Advanced Law Lexicon by P. Ramanathan Aiyar the word \"abate\" means diminish or take away or to put end to or to come to a naught. The term is used in the U. S. A. to describe the cancellation in whole or in part of a Government levy (business term and international accounting). 15. Coming back to the instant case, as noticed above, the search and seizure was initiated by the respondents on August 24, 2006, which was carried out by various authorised ITA No.3732/Del/2023 14 | P a g e officials. Thereafter, as admitted by the respondents in their counter affidavit, no notice as required under section 153A was issued to the petitioner for the six assessment years, i.e., from 2001-02 to 2006-07. It has not been disputed by the respondents that the date on which the search was initiated the assessment proceeding was pending on the basis of the return furnished by the petitioner. Consequently, therefore, the pending assessment proceeding stood abated by virtue of the second proviso to section 153A of the said Act. Instead of complying with the requirements of section 153A of the Act, the respondents proceeded with the pending assessment proceeding for the assessment year 2004-05 and passed an assessment order during the pendency of the instant writ application. The said impugned order has also been challenged by the petitioner by filing amendment petition. 16. In the aforesaid facts and circumstances of the case, I am of the definite opinion that the entire action of the respondents in proceeding with the assessment after search in contravention of the provisions of section 153A is vitiated in law. Consequently, the impugned assessment order dated December 28, 2006, purportedly passed under section 143(3) of the Act in a pending assessment proceeding which stood abated is a nullity. As discussed above, continuation of the impugned assessment proceeding after the initiation of search without giving any notice under section 153A of the Act and passing the impugned final order of assessment is illegal, arbitrary and wholly without jurisdiction\". 18. Recently Their Lordships of Hon'ble Allahabad High Court in case of Smt. Shaila Agarwal (supra) while considering the provisions of section 153A of the Act and the meaning of words 'abate' and 'pending' referred in the above provision have observed and held as under (headnote) :- \"Section 153A of the Income Tax Act, 1961, provides that where notice under this section is issued as a result of any search under section 132, assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to under section 153, pending on the date of initiation of search under section 132 or requisition under section 132A shall abate. The words \"pending on the date of initiation of search under section 132 or making of requisition under section 132A, as the case may be,\" have to be assigned their simple and plain meaning. Where the assessment or reassessment is finalised, there are no pending proceedings to abate and be restored to the file of the Assessing Officer. The word \"abatement\" is referable to something which is pending, alive, or is subject to deduction. ITA No.3732/Del/2023 15 | P a g e Abatement refers to suspension or termination of proceedings either of the main action, or proceedings ancillary or collateral to it. Proceedings which have already terminated are not liable for abatement unless the statute expressly provides for it. The word \"pending\" occurring in the second proviso to section 153A of the Act is qualified by the words \"on the date of initiation of the search\", and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate. The pendency of an appeal in the Tribunal against the order of assessment against which an appeal has been decided by the Commissioner (Appeals) is not a continuation of the proceedings of assessment. An appeal under the Income-tax Act lies to the Appellate Tribunal on a question of law. Even f it is pending on the date of search the reassessment proceedings will not abate. The abatement of any proceedings has serious effect inasmuch as it takes away all the consequences that arise thereafter. The material found in the search may be a ground for notice and assessment under section 153A of the Act but that would not efface or terminate all the consequences, which arise out of the regular assessment or reassessment resulting in a demand or proceedings for penalty. The assessee filed a return for the assessment year 2002-03. She was required to produce evidence regarding gifts. He was unable to do so and hence an addition was made to her income. The Commissioner (Appeals) confirmed the addition. After the decision of the Commissioner (Appeals) search proceedings were initiated against the assessee. A notice under section 153A was issued to the assessee as a result of search and seizure, calling upon the assessee to file returns for six assessment years including the assessment year 2002- 03. The Tribunal held that once a notice under section 153A had been issued after search and seizure operations, according to the provisions of section 153A, all the assessments of the six preceding assessment years prior to the search abated. On appeal to the High Court: Held, that the assessment proceedings did not abate\". 19. Similar issue came up before the Special Bench of this Tribunal (in which, one of us was a party) and the Special Bench had an occasion to deal with the scope of interpretation of section 153A of the Act in the case of in All Cargo Global Logistics Ltd. (supra). The Special Bench of the Tribunal after considering the various decisions and CBDT circulars including the Circular No. 7 of 2003 dtd. 5-9-2003 and the decision of the Hon'ble Jharkhand High Court in Abhay Kumar Shroff (supra) [mentioned in the list of cases/circulars] has held as under:- ITA No.3732/Del/2023 16 | P a g e \"52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is \"shall\" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is \"shall\" and, therefore, the AO has no option but to asses or reassess the total income of these six years. The pending proceedings shall abate. This means that out of six years, if any assessment or reassessment is pending on the date of initiation of the search, it shall abate. In other words pending proceedings will not be proceeded with thereafter. The assessment has now to be made u/s 153A (1)(b) and the first proviso. It also means that only one assessment will be made under the aforesaid provisions as the two proceedings i.e. assessment or reassessment proceedings and proceedings under this provision merged into one. If assessment made under sub-section (1) is annulled in appeal or other legal proceedings, then the abated assessment or reassessment shall revive. This means that the assessment or reassessment, which had abated, shall be made, for which extension of time has been provided under section 153B. 53. The question now is - what is the scope of assessment or reassessment of total income u/s 153A (1) (b) and the first proviso ? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results :- a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the A.O. b) in respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in ITA No.3732/Del/2023 17 | P a g e the course of search, and undisclosed income or undisclosed property discovered in the course of search.\" ...... ........ ...... 58. Thus, question No.1 before us is answered a) as under : (a) In assessments that are abated, the A.O. retains the original jurisdiction as well as jurisdiction conferred on him under 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 assesed, the asesment u/s 153A wil be made on the basis of incriminating material, which in 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 asessment, and (i) undisclosed income or property discovered in the course of search. 59. Having come to this conclusion we need not go into various orders of the `Tribunal cited by the rival parties. The decisions inconsistent with the aforesaid view/conclusion stand disapproved and the decisions consistent with this view/conclusion are approved\". 20. Applying the ratio of the above decisions to the facts of the present case, we find that the search and seizure was initiated by the Department in assessee's case on 30-11-2006 on which date the assessment for A.Y. 2004-05 was pending which was completed on 27- 12-2006 u/s 143(3) of the Act. We further find that there is no dispute that the assessee is covered under the search action u/s 132(1) of the Act dtd. 30-11-2006. Consequently notice u/s 153A of the Act was issued to the assessee on 12-10-2007 and in response, the assessee filed its return of income on 15-11-2007 declaring total income of Rs. 1,64,50,999/- as against the income originally shown at Rs. 1,62,08,636/- in the return filed u/s 139(1) of the Act. It is also not in dispute that as on the date of search, the assessment proceeding for the A.Y. 2004-05 was pending and the regular assessment was completed on 27-12-2006 vide order passed u/s 143(3) of the Act. The position thus emerging is that where assessment proceedings are pending completion when the search is initiated, the pending assessment proceeding stood abated by virtue of the second proviso to section 153A of the Act. Instead of complying with the requirements of section 153A of the Act, the A.O. proceeded with the pending assessment proceeding for the A.Y. 2004-05 and passed the impugned assessment order during the pendency of the assessment u/s 153A of the Act which is a nullity and as such the assessment order dtd. 27-12-2006 passed u/s 143(3) of the Act is illegal, arbitrary, wholly without jurisdiction and, hence, the same is quashed. ITA No.3732/Del/2023 18 | P a g e 21. As regards the plea of the ld. D.R. that in the assessment order passed u/s 153A of the Act, the A.O. has made the additions/disallowances on the basis of the impugned assessment order passed u/s 143(3) of the Act, therefore, on equitable ground, the said additions may remain to be considered as made in the assessment order passed u/s 153A of the Act, we find that it is a settled law that where there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the court to undertake any exercise to read something into the provisions which the legislature in its wisdom concisely omitted. Such an exercise is undertaken by the court may amount to amending or altering statutory provisions. The courts have to decide what the law is and not what it should be. For this proposition, reliance is also placed on the following decisions:- (1) In Union of India vs. Deoki Nandan Aggarwal (1992) Supp. 1 SCC 323, a three judge Bench of Hon'ble Supreme Court held that it is not the duty of the Court either to enlarge the scope of legislation or the intention of the Legislature, when the language of the provision is plain. The Court cannot rewrite the legislation for the reason that it had no power to legislate. The power to legislate has not been conferred on the Courts. The Court cannot add words to a statute or read words into it which are not there. (2) In State of Kerala vs. Mathai Verghese (1986) 4 SCC 746, the Hon'ble Supreme Court has reiterated the well-settled position that the Court can merely interpret the section; it cannot rewrite, recast or redesign the section. In interpreting the provision the exercise undertaken by the Court is to make explicit the intention of the Legislature which enacted the legislation. It is not for the Court to reframe the legislation for the very good reason that the powers to \"legislate\" have not been conferred on the Court. (3) In Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. vs. Custodian of Vested Forests (1990) (Supp) SCC 785 the Hon'ble Supreme Court observed that in seeking legislative intention Judges not only listen to the voice of the Legislature but also listen attentively to what the Legislature does not say. 4. The Hon'ble Supreme Court in the case of Federation of Andhra Pradesh Chambers of Commerce and Industry v. State of Andhra Pradesh reported in [2001] 247 ITR 36 (SC) reiterated the basic principle that (page 39):- \"it is trite law that a taxing statute has to be strictly construed and nothing can be read into it..... In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can look fairly at the language used.\" The Hon'ble Supreme Court further went on to hold that (page 39) ITA No.3732/Del/2023 19 | P a g e \"the courts in interpreting a taxing statute will not be justified in adding words thereto so as to make out some presumed object of the Legislature...... If the legislature has failed to clarify its meaning by the use of the appropriate language, the benefit thereof must go to the taxpayer. It is settled law that in case of doubt, that interpretation of a taxing statute which is beneficial to the taxpayer must be adopted.\" (5) In CIT vs. Tara Agencies (2007) 292 ITR 444 (SC) it has been held by Their Lordships at page 464 as under:- \"Therefore, the legal position seems to be clear and consistent that it is the bounden duty and obligation of the Court to interpret the statute as it is. It is contrary to all rules of construction to read words into a statute which the legislature in its wisdom has deliberately not incorporated.\" 22. Respectfully following the above settled position of law, the plea taken by the ld. D.R. is devoid of any merit and, hence, rejected. 23. Since we have quashed the impugned assessment order on the legal ground raised by the assessee, therefore, we do not consider it necessary to discuss the grounds raised by the assessee and Revenue on merits of the additions sustained/relief allowed. Accordingly the other grounds taken by the assessee and Revenue are rejected.” 6. We adopt the foregoing detailed discussion mutatis mutandis to quash the impugned assessment framed by the Assessing Officer on 22.12.2016 as not sustainable in law. Ordered accordingly. 7. All other pleadings on merits in the instant appeal stand rendered academic. 8. This assessee’s appeal is allowed in above terms. Order pronounced in the open court on 28th February, 2025 Sd/- Sd/- (S. RIFAUR RAHMAN) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28th February, 2025. RK/- Copy forwarded to: ITA No.3732/Del/2023 20 | P a g e 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "