PANCHSHEEL SOLVENT PVT. LTD., RAJNANDGAON,RAJNANDGAON V. ACIT, CENTRAL-2, RAIPUR , RAIPUR

ITSSA 3/RPR/2024

AI Insights

The case involves multiple appeals by Panchsheel Solvent Pvt. Ltd. against the orders of the Assistant Commissioner of Income Tax, Central-2, Raipur, concerning various assessment years. The primary issues revolved around the additions made under Section 68 of the Income Tax Act, 1961, concerning unexplained cash credits and the procedural validity of assessments made under Section 153A without incriminating material for unabated years. The tribunal examined the legal precedents and statutory provisions to determine the validity of the additions and the procedural correctness of the assessments.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 106771 (ITAT-RAIPUR)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-12-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Other Referred Cases: Abhisar Buildwell vs. Taxmann.com SC, Kabul Chawla vs. CIT, Saumya Construction vs. CIT, Mehndipur Balaji vs. CIT, N.K Industries Ltd. vs. Dy. CIT, Intel Technology India Pvt. Ltd. vs. CIT, Maruti Suzuki India Ltd. vs. CIT, Dayawanti vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Assessee Lawyers: SUNIL KUMAR AGRAWAL; VIMAL KUMAR
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Question of law; Corroborative evidences; Unexplained cash credit; Bogus purchase; Principle of natural justice; Search and seizure; Accommodation entries; Block assessment; Wrong claim; Assessment record; Validity of assessment; Procedural lapse; Bogus
• Section: 147; 148; 143(3); 292BB; 143(2); 64; 48; 153; 132; 153A; 68; 43; 22; 133(6); 113; 69C; 13; 139; 73; 72; 20

Judgement Text

"आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM आयकर अपील सं. / IT(SS)A Nos: 2,3,4,5 & 6 /RPR/2024 (िनधा[रण वष[ Assessment Year: 2010-11,2011-12,2012-13, 2013-14 & 2015-16) Panchsheel Solvent Pvt. Ltd., Baldeo Bagh, Near Old S P Office, Rajnandgaon, C.G., 491441 V s Assistant Commissioner of Income Tax, Central-2, Raipur, C.G. PAN: AAECP8898A (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से /Assessee by : Shri Sunil Kumar Agrawal & Vimal Kumar Agrawal, CA’s राजˢ की ओर से /Revenue by : Shri S. L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 22.10.2024 घोषणा की तारीख/Date of Pronouncement : 26.12.2024 आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeals of the assessee are directed against the orders of Commissioner of Income Tax (Appeals), Raipur-3 [in short “Ld. CIT(A)”], dated 02.02.2024 for the Assessment Years 2010-11 to 2013-14 & 2015-16, which in turn arises from a common order passed by the Assistant Commissioner of Income Tax, Central-2, Raipur (in short “Ld. AO”)which inter alia includes AYs 2 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 2010-11 to 2013-14 & 2015-16, by, under Section 153A / 143(3) of the Income Tax Act, 1961 (in short “the Act”) dated 16.12.2016. 2. The grounds of appeal, revised ground of appeal & additional ground of appeal raised by the assessee under respective appeals, are culled out as under: IT(SS)A No. 2/RPR/2024 for AY 2010-11: Original Grounds in form no. 36 of appeal 1. That the order of the Learned Commissioner (appeals) is arbitrary and illegal and against the principal of natural justice. 2. For the reason that the learned commissioner has not granted sufficient time for effective written submission for persuing appeal after requesting for 3- month time due to bulk nature of supporting evidences. however, only 5 days given instead of 3 months. 3. For the reason that learned commissioner has already made to decide to dismiss the appeal hastily, without necessary care and application of mind. 4. For the reason that by observing the fact of the case the o order passed by learned commissioner is bad in law as well as on the fact and circumstances of the case. 5. For the reason that the lumpsum adhock addition of Rs.1,58,26,000/- on account of share issued at premium and treating the officer same as unexplained cash credit by Hon’ble Assessing Officer and justified the order credit of Id AO by learned commissioner without application of mind is not proper and justified. 6. That the Appellant reserves the right to raise any other legal grounds and supporting evidences at the time of arguments. 3 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Revised ground Additional Grounds 4 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur IT(SS)A No. 3/RPR/2024: Original Grounds in form no. 36 of appeal 1. That the order of the Learned Commissioner (appeals) is arbitrary and illegal and against the principal of natural justice. 2. For the reason that the learned commissioner has not granted sufficient time for effective written submission for persuing appeal after requesting for 3- month time due to bulk nature of supporting evidences. however, only 5 days given instead of 3 months. 3. For the reason that learned commissioner has already made to decide to dismiss the appeal hastily, without necessary care and application of mind. 4. For the reason that by observing the fact of the case the o order passed by learned commissioner is bad in law as well as on the fact and circumstances of the case. 5. For the reason that the lumpsum adhock addition of Rs.4,29,12,600/- on account of share issued at premium and treating the officer same as unexplained cash credit by Hon’ble Assessing Officer and justified the order credit of Id AO by learned commissioner without application of mind is not proper and justified. 6. That the Appellant reserves the right to raise any other legal grounds and supporting evidences at the time of arguments. Revised Ground: 5 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Additional Grounds: IT(SS)A No. 4/RPR/2024: Original Grounds in form no. 36 of appeal 1. That the order of the Learned Commissioner (appeals) is arbitrary and illegal and against the principal of natural justice. 2. For the reason that the learned commissioner has not granted sufficient time for effective written submission for persuing appeal after requesting for 3-month time due to bulk nature of supporting evidences. however, only 5 days given instead of 3 months. 3. For the reason that learned commissioner has already made to decide to dismiss the appeal hastily, without necessary care and application of mind. 6 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 4. For the reason that by observing the fact of the case the o order passed by learned commissioner is bad in law as well as on the fact and circumstances of the case. 5. For the reason that the lumpsum adhock addition of Rs.45,70,000/- on account of share issued at premium and treating the officer same as unexplained cash credit by Hon’ble Assessing Officer and justified the order credit of Id AO by learned commissioner without application of mind is not proper and justified. 6. For the reason that the lumpsum adhock addition of Rs. 6,52,00,000/- on account of purchase made by assessee and treating the same as bogus purchase by the Hon Assessing officer and justified the order of Id AO by learned commissioner without application of mind is not proper and justified. 7. That the Appellant reserves the right to raise any other legal grounds and supporting evidences at the time of arguments. Revised Ground: 7 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Additional Grounds: 8 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur IT(SS)A No. 5/RPR/2024: Original Grounds in form no. 36 of appeal 1. That the order of the Learned Commissioner (appeals) is arbitrary and illegal and against the principal of natural justice. 2. For the reason that the learned commissioner has not granted sufficient time for effective written submission for persuing appeal after requesting for 3 month time due to bulk nature of supporting evidences. however only 5 days given instead of 3 month. 3. For the reason that learned commissioner has already has made to decide to dismiss the appeal hastily, without necessary care and application of mind. 4. For the reason that by observing the fact of the case the order passed by learned commissioner is bad in law as well as on the fact and circumstances of the case. 5. For the reason that the lumpsum adhock addition of Rs. 2,49,00,000/- account of purchase made by assessee and treating the same as bogus purchase by the Hon Assessing officer and justified the order of Id AO by learned commissioner without application of mind is not proper and justified. 6. That the Appellant reserves the right to raise any other legal grounds and supporting evidences at the time of arguments Revised Ground: 9 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Additional Grounds: IT(SS)A No. 6/RPR/2024 (Grounds of appeal, Revised & Additional Grounds of appeal) 1. That the order of the Learned Commissioner (appeals) is arbitrary and illegal and against the principal of natural justice. 2. For the reason that the learned commissioner has not granted sufficient time for effective written submission for perusing appeal after requesting for 3-month time due to bulk nature of supporting evidences. However, only 5 days given instead of 3 months. 3. For the reason that learned commissioner has already made to decide to dismiss the appeal hastily, without necessary care and application of mind. 4. For the reason that by observing the fact of the case the order passed by learned commissioner is bad in law as well as on the fact and circumstances of the case. 5. For the reason that the lumpsum adhock addition of Rs. 19,770/- on account of cash already recorded as well as explained in the books 10 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur of accounts of assessee is taken by department is bad in law and justified by the Hon Assessing officer and justified the order of Id AO by learned commissioner without application of mind is not proper and justified. 6. For the reason that the lumpsum adhock addition of Rs 2,64,28,891/- on account of stock already recorded as well as explained in the books of accounts of assessee is taken by department is bad in law by the Hon Assessing officer and justified the order of Id AO by learned commissioner without application of mind is not proper and justified. 7. For the reason that the lumpsum adhock addition of Rs. 3,05,00,000/- on account of irregularities, discrepancies related to bill and voucher of assessee, where no such discrepancies, irregularities has been noticed and which is already recorded as well as explained in the books of accounts of assessee is taken by department is bad in law by the Hon Assessing officer and justified the order of Id AO by learned commissioner without application of mind is not proper and justified. 8. That the Appellant reserves the right to raise any other legal grounds and supporting evidences at the time of arguments. Revised Grounds: 11 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Additional Grounds: 3. Since the aforesaid appeals pertains to one assessee, assailing the common, interconnected and interwoven controversies involved therein, therefore, for the sake of convenience and brevity all the aforesaid matters are being heard together and disposed of, under this common order. 4. We shall be adjudicating the specific issues, one by one, involved in the present appeals, in order to decide the common / identical issues in one appeal, wherein our observation and decision shall apply mutatis mutandis to the other identical issue having similar facts and circumstances, except the quantum involved in the remaining appeals. 5. Ground : Addition on account of share issued at premium and treating the same unexplained cash credit. 12 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 5.1 At the outset, Ld. AR Shri Sunil Kumar Agrawal, CA, Authorized Representative (Ld. AR) on behalf of the assessee, described the facts of the issue from the assessment order. He further referred to additional ground No. 1 and have submitted that the year under consideration is an unabated AY and there was no incriminating material found / unearthed during the course of search from the premises of the assessee company qua the assessee / qua the addition / qua the year, in absence of such factual conditions, the addition is not sustainable. It is further submitted that the issue is no more res integra, as the addition made u/s 68 of the Act, in the present case is squarely covered by the decision of Hon’ble Apex Court in the case of Abhisar Buildwell Taxmann.com SC dated 14.04.2023. The relevant extract from the said judgment is culled out for the sake of contemplation on the issue, considering the facts of present case, as under: \"5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under Section 132 or requisition under Section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under Section 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under Section 132 or requisition under Section 132A, the assessment has to be done under Section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the ‘total income’ taking 13 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. Commissioner Of Income Tax v. Mehndipur Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the ‘total income’ of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six AYs “in which both the disclosed and the undisclosed income would be brought to tax”. 14 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment “can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.” v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word ‘assess’ in Section 153 A is relatable to abated proceedings (i.e., those pending on the date of search) and the word ‘reassess’ to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under Section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: “15. On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the’ assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which 15 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the subsection pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub- section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub- section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of, the Act is annulled in appeal or any other proceeding. 16. Section 153A bears the heading “Assessment in case of search or requisition”. It is well settled as held by the Supreme Court in a catena of decisions that the heading of the, section can be regarded as a key to the interpretation of the operative portion of, the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning From the heading of section 153, the intention of the Legislature is clear, viz, to provide for assessment in case of search and requisition. When, the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment, should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which 16 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act.” 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 17 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: “153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— 18 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur (i) save as otherwise provided in this section, Section 153- B and Section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.” 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the ‘total income’ in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/148 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating 19 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub- section (2) of Section 153A would be redundant and/or re- writing the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the 20 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re- opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Civil Appeal Nos.7738-7739/2021, 7736-7737/2021, 7732-7735/2021 and 7740-7743/2021 15. Insofar as the aforesaid Civil Appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned, these appeals have been preferred against the impugned judgment and order dated 06.09.2016 passed in ITA Nos. 270/2014, 269/2014, 15/2015, 16/2015, 268/2014 and 17/2015, as also, against the order dated 21.09.2017 passed in the review applications. It is required to be noted that the issue before the Allahabad High Court was, whether in case of completed/unabated assessments, the AO would have jurisdiction to re-open the assessments made under Section 143(1)(a) or 143(3) of the Act, 1961 and to re- assess the total income taking notice of undisclosed income even found during the search and seizure operation. 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the aforesaid appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs. 21 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Civil Appeal Nos. 15617/2017, 10267/2017, 10266/2017 & 10268/2017 16. Insofar as the aforesaid appeals filed by the assessee – Dayawanti through legal heir against the impugned common judgment and order dated 27.10.2016 passed by the High Court of Delhi at New Delhi in ITA Nos. 357/2015, 358/2015, 565/2015 and 566/2015. The question before the High Court was, whether the Income Tax Appellate Tribunal was justified in upholding the addition made on the basis of the incriminating material during the course of search. 16.1 In view of the aforesaid discussion and the reasoning, all these appeals filed by the assessee – Dayawanti through legal heir fail and the same deserve to be dismissed and are accordingly dismissed. No costs.\" 5.2 Ld AR further explained that as per facts of the case, a search & seizure action was conducted on the premises of the assessee on 17.09.2014. It is clarified that as on the date of search the Assessment Year under consideration before us i.e., AY 2010-11 was not pending for any proceedings initiated by the department against the assessee. Accordingly, the relevant year i.e., AY 2010- 11 is an unabated assessment year. It is further submitted that, there was no incriminating material found / unearthed during the course of search from the premises of the assessee company qua the assessee/ addition or the year under consideration. Taking shelter of decision of Apex Court in the case of Abhisar Buildwell (supra), Ld. AR submitted that in absence of any incriminating material, being unabated year the addition is not sustainable as held by Hon’ble Apex Court. Ld. AR further argued that as the amount of share capital are a recorded transaction in the books of assessee, which was the basis for making 22 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur the addition, the same cannot be treated as incriminating material in terms of settled position of law. Ld. AR, further placed his reliance on the order of ITAT, Raipur in the case of NR Ispat and Power Limited, IT(SS)A No. 6/RPR/2021 & CO No.12/RPR/2022 & 8 Others, dated 30.08.2024, stressing upon the observations of the tribunal on the issue of addition in absence of incriminating material for the unabated assessment years, which are covered in the period picked up for assessment under the provisions of section 153A r.w.s. 143(3) of the Act. Ld. AR further submitted that the tribunal in the case of N R Ispat (supra) had categorically have held that, “the transactions recorded in books cannot be treated as incriminating material”. The relevant observations in the case of NR Ispat Limited (supra) following the judgment of Hon’ble Apex Court in the case of Abhisar Buildwell (supra) are culled out for the sake of reference and interpretation, as under: 49. Be that as it may, we shall independent of the aforesaid observations of the CIT(Appeals) deliberate upon the issue as to whether or not any incriminating material pertaining to the subject year was found or unearthed in the course of the search proceedings conducted on the assessee company. We find that the Hon'ble Apex Court in the case of Principal Commissioner of Income Tax, Central-3 Vs. Abhisar Buildwell (P) Ltd. (supra), while approving the view taken by the Hon'ble High Court of Delhi in the case of CIT Vs. Kabul Chowla (supra), had observed that the completed/unabated assessment can be interfered with by the AO while making the assessment under Section 153A of the Act only on the basis of some incriminating material found during the course of search; or requisition of 23 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur documents; or undisclosed income or property discovered in the course of search which was not produced or not already disclosed or made known in the course of original assessment. The Hon'ble Apex Court had further observed that in case of an unabated assessment if no incriminating material is found, then the only remedy available with the revenue would be to initiate reassessment proceedings u/ss.147/148 of the Act subject to fulfillment of the conditions contemplated in the said statutory provisions. For the sake of clarity, the observations of the Hon'ble Apex Court are culled out as under: \"……… Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy.\" Based on the aforesaid observations of the Hon'ble Apex Court, we find that in a case of an unabated/completed assessment for the subject year, it is only where any incriminating material pertaining to the said year is found or unearthed during the course of the search proceedings that the A.O can validly assume jurisdiction for making additions while framing assessment for the said year u/s. 153A of the Act. 54. Based on our aforesaid observations, we are of the view that as the contents of the seized document, viz. Page No.44 of LPS-1 makes a mention of the \"share capital\" and \"share premium\" that was received by the assessee company during the subject year, which as observed by us hereinabove were disclosed in its audited \"balance sheet\" for the said year, therefore, the same cannot be brought within the meaning of \"incriminating material\" found during the course of search proceedings. Our 24 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur aforesaid view that a transaction recorded in the books of account of an assessee which had been subjected to audit and was disclosed in its financial statements enclosed along with the original return of income, cannot be brought within the meaning of \"incriminating material\" found in the course of search proceedings is supported by the judgment of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Param Dairy Ltd. (2021) 439 ITR 89 (Del.). In the case before the Hon'ble High Court, search and seizure operations u/s. 132 of the Act were carried out on the assessee group on 28.02.2024. Although, the assessee company in its return of income had claimed cash payments of about Rs.17 crores to dairy owners from whom it had purchased milk, but in the course of search proceedings, it was found that the said payments were not made to the dairy owners but to middlemen. As the cash payments made by the assessee company to middlemen were not permitted, thus, the A.O made addition of the said amount to the income of the assessee company. 55. On appeal, the Tribunal observed that since the entries of cash payments were made in the books of account of the assessee company, which had been subjected to audit and formed part of the return of income filed by the assessee company, therefore, it could not be brought within the meaning of incriminating evidence found during the course of search proceedings. On further appeal, the Hon'ble High Court approved the view taken by the Tribunal. The Hon'ble High Court, inter alia, observed that the regular books of account of the assessee company by no stretch of imagination could be treated as \"incriminating material\" to form a basis for framing of the assessment u/s. 153A r.w.s. 143(3) of the Act. 5.3 In view of aforesaid submissions, it was the prayer by Ld. AR, that the addition so made on account of unexplained cash credit received by the assessee in the garb of share capital / share premium cannot be sustained, in absence of 25 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur any incriminating material surfaced during the course of search & seizure action and that the years i.e., AY 2010-11, 2011-12 & 2012-13 are unabated assessment years. 5.4 Ld. CIT DR on the other hand have vehemently supported the orders of Revenue Authorities. 5.5 We have considered the rival submissions, perused the material available on record and judicial pronouncements referred to and relied upon by the Ld. AR. Admittedly, on perusal of the assessment order, we find that certain additions on account of investment in the assessee company in the garb of share capital and share premium are made, after exhaustive deliberations by the Ld. AO. For the sake of completeness of facts, the relevant observations of Ld. AO, while making the additions, are extracted hereunder: 26 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 27 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 28 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 29 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 30 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 31 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 32 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 33 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 34 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 35 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 36 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 37 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 38 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 5.6 Against the aforesaid addition made by the Ld. AO, assessee preferred an appeal before the Ld. CIT(A), wherein the issue has been deliberated upon by the Ld. CIT(A) and had decided the same against the assessee. The observations of Ld. CIT(A) on the issue, which are identical in all the relevant years having involvement of the issue qua the addition u/s 68 on account of unexplained cash credit received by the assessee in the garb of share capital / premium, thus, for 39 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur the sake of clarity, the relevant observations of the Ld. CIT(A), for AY 2010-11, are extracted as under: 3.2 Ground No. 2 for A. Y. 2010-11:- Through this ground of appeal, the appellant has challenged the addition of Rs. 1,58,26,000/- During the course of assessment proceedings, the Id. AO found that several incriminating documents were recovered and seized from the office and business premises of appellant -in search and seizure proceedings u/s 132 of the Act. On the basis of various incriminating documents and other material found during the course of search and seizure proceedings, the Id. AO has given his findings in para 11 to 11.5 of the assessment order AY 2010-11. During the course of assessment proceedings, the Id. AO observed that the identity, creditworthiness and genuineness of transactions of the Kolkata based companies either could not be verified or their creditworthiness and genuineness of the transactions were not found to be sound and genuine. Hence, the amount of investment made by the Kolkata based companies in the form of paying huge premium in the appellants company during F.Y. 2009-10 is considered as unexplained cash credit. During the course of assessment proceedings, it was found from the submission that the appellant company has introduced share capital and share premium from following companies during the period as detailed below: F.Y. Share holder Total amount of share capital and Share premium in Rs. 2009-10 M/s Capricorn Vanijya Pvt. Ltd. 43,76,000/- M/s Fountain Head Mercantile Pvt. Ltd. 50,00,000/- M/s Panorama Vyapar Pvt. Ltd. 9,00,000/- M/s Sidhhanath Commercial Pvt. Ltd. 15,00,000/- 40 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur M/s Panchsheel Pountry / Credit Dealcom 10,00,000/- M/s Sargam Vincom Pvt. Ltd. 5,00,000/- M/s Credit Dealcom Pvt. Ltd. 10,00,000/- During the course of assessment proceedings, the ld. AO found that the appellant’s company was not established creditworthiness and genuineness of the transactions therefore, the amount of Rs.1,58,26,000/- u/s 68 of the IT Act was added to the total income of company for the year under consideration. No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Id. AO despite the repeated opportunity of hearing to him. In absence of any explanation & on the basis of facts gathered and discussed by the Id. AO, considering entire facts in the assessment order, I find that the Id. AO is justified in assessing the total income of the appellant as discussed above. All the concerns from where the amounts of share capital and share premium had been received are mainly shell companies from Kolkata. The credits received from such concerns are always doubtful. The AO has tried hard to geet the details from the assessee but nothing was furnished. In appeal proceedings also, nothing was submitted in support of appeal. In these circumstances & in view of supported by the judicial pronouncements mentioned in para 3.1. Respectfully, following the view taken in the case cited above, the appeal filed by the appellant deserves to be dismissed accordingly, addition of Rs. 1,58,26,000/- is hereby confirmed and ground of appeal is dismissed. 5.7 On consideration of the aforesaid facts, in light of the judgment by the Hon’ble Apex Court in the case of Abhisar Buildwell (supra), which has been regularly followed by this tribunal in the various other cases. During the search action, it was revealed by the revenue that the assessee company had received 41 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur certain funds by issuance of share capital and on account of share premium, for which the search team had investigated and found that such share application/ premium money was received by the assessee company through Kolkata based shell investor companies, for which various information were sought from the assessee, which were furnished as extracted in the assessment order, relevant observations of the Ld. AO are reproduced (supra), investigation by issuing notices u/s 133(6) of the Act are also initiated on the Kolkata based Investor Companies and based on such investigation, Ld. AO observed that the identity of the shareholder companies are doubtful. Further, after going through the financials of said investors companies, it is concluded that genuineness of transactions is also unproved, thus, the assessee company failed to substantiate the requisite parameters of section 68 of the Act, i.e., identity and creditworthiness of the investor companies and genuineness of transactions. Consequently, additions of Rs. 1,58,26,000/-, 4,29,12,600/-, 45,70,000/- are made u/s 68 respectively for the AY 2010-11, 2011-12 and 2012-13, treating the amount received in the garb of share application / premium, as unexplained cash credit in the hands of assessee. 5.8 Ostensibly, on perusal of the assessment record, it is noticed that the share capital and premium for which the addition u/s 68 made was based on the transactions recorded in audited books of account of the assessee, there is no specific comments qua the incriminating material surfaced during the search 42 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur proceedings, pertaining to the receipt of share application/ premium money. Apropos, the averment by the Ld. AR that, the 3 assessment years i.e., 2010-11, 2011-12, 2012-13 are unabated assessment years as on the date of search, there was dispute, in absence of any doubt raised by the revenue. However, qua the incriminating material, since there are certain issues pertaining to bogus purchases also in the period under consideration, therefore, utilization of cash generated from such transactions in the issuance of share capital at premium cannot be ruled out, thus, this aspect has to be looked into and examined meticulously. Before us, regarding incriminating material neither the assessee nor the revenue are able to produce the copies of seized material in the case of assessee, which was surfaced during the search & seizure action u/s 132 dated 17.09.2014, therefore, the issue needs to be decided after verification of the fact that whether there was any incriminating material substantiating that the amounts received in the garb of share capital and share premium are from shell companies through ingenuine / bogus transactions, and such transactions are eligible to fall within the realm of provisions of section 68 of the Act. Under such facts and circumstances, we deem it appropriate to restore this issue back to the file of Ld. AO to examine the assessment records including the seized material, and decide the issue afresh following the law laid down by Hon’ble Apex Court in the case of Abhisar Buildwell (supra). 43 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 5.9 Needless to say, reasonable opportunity of being heard shall be afforded to the assessee during the set aside assessment proceedings. 5.10 In result, Additional ground no. 1 in IT(SS)A No. 2/RPR/2024 for AY 2010-11 assailed by the assessee has been partly allowed, in terms of our aforesaid observations. 5.11 Similarly, additional ground no. 1 in IT(SS)A No. 3 & 4/RPR/2024 for the AYs 2011-12 & 2012-13, having similar facts circumstances and contentions are restored to the files of Ld. AO for fresh adjudication, resultantly the same is partly allowed, in terms of our aforesaid observations. 5.12 Since the issue regarding addition on account of share capital and share premium in ITA Nos. 2 to 4/RPR/2024 for the AY 2010-11, 2011- 12 & 2012-13, is restored back to the file of Ld. AO for verification and fresh adjudication following the principle and ratio of law laid by the Hon’ble Apex Court in the case of Abhisar Buildwell (supra), therefore, the other contentions qua the issue either on merits or legal, are not deliberated upon, thus, are left open. 44 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 6. Ground: Regarding addition on account of bogus purchase “Rice Bran” raw material as undisclosed income of the assessee, for an unabated year, without incriminating material 6.1 Additional ground No. 2 in IT(SS)A 4/RPR/2024 regarding addition of Rs. 6,52,00,000/- on account of bogus purchase “Rice Bran” raw material as undisclosed income of the assessee. On this issue also, it was the contention by the Ld. AR that the year under consideration i.e., AY 2012-13 was an unabated year as on the date of search & seizure and there was no incriminating material found / unearthed during the course of search from the premises of the assessee qua the assessee / addition / the year under consideration. On this issue, while making the addition, the observations of the Ld. AO are culled out for the sake of completeness of facts: 45 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 46 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 47 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 48 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 49 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 6.2 The assessee carried the matter before the Ld. CIT(A), wherein the issue has been deliberated upon, but the contentions of the assessee are not found convincing by the Ld. CIT(A), therefore, the issue has been decided against the assessee with the following observations for AY 2012-13: 3.2 Ground No. 2 for A.Y. 2012-13: - Through this ground of appeal, the appellant has challenged the addition of Rs.6,52,00,000/-. During the course of assessment proceedings, the Id. AO found that several incriminating documents were recovered and seized from the office and business premises of appellant in search and seizure proceedings u/s 132 of the Act. On the basis of various incriminating documents and other material found during the course of search and seizure proceedings, the Id. AO has given his findings in para 9 to 9.2 of the assessment order AY 2012-13. During the course of search and seizure operation, credible evidences were found and seized which clearly show that the appellant company had made bogus purchases from the following concerns: - (i) M/S Vardhman Trading Company (Prop. Shri Mukesh Jain): - Shri Mukesh Jain is the proprietor of M/s Vardhman Trading Company. His firm deals in brokering of grains. In his statement, Shri Mukesh Jain admitted that he had opened a bank account as directed by Shri Anil Sharma, an employee of the appellant company M/S Panchsheel Solvent Pvt. Ltd. And he had handed over the self-signed cheque book to him. He further stated that he had done so for the sake of commission to be received from the appellant company and that all transactions in this bank account were beyond his knowledge. From the above statement, it was found that Shri Mukesh Jain has received commission of Rs.70,000/- to 80,000/- (Average Rs.75,000/-) at the rate of 0.25% of the total transaction made in his account. 50 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur (ii) M/S Kishore Enterprises (Prop. Shri Kishore Jain): - Shri Kishore Jain is the proprietor of Kishore Enterprises. His firm deals in brokerage of grains. In his statement given on oath, Shri Kishore Jain has admitted that he had opened a bank account as directed by Shri Anil Sharma, an employee of the appellant company Panchsheel Solvent Pvt. Ltd. And he later handed over the self signed cheque book to Shri Anil Sharma. Further he stated that the account was operated by Shri Anil Sharma and all transactions in this bank account were beyond his knowledge. It was also found out from his statement that the appellant company has been shown as the introducer of the said account belonging to Shri Kishore Jain. The statement given by Shri Kishore Jain also shows that he had received Rs.25,000/- to 50,000/- as commission from the appellant company. (iii) Shri Firoj Khan (Prop. M/S Vishal Enterprises):Shri Firoj Khan is the proprietor of M/S Vishal Enterprises. His firm deals in brokerage of grains. In his statement given on oath, Shri Firoj Khan admitted that he had opened bank accounts in Bank of India, Punjab National Bank and Yes Bank as requested by Shri Dilip of Durg, an employee of the appellant company M/S Panchsheel Solvent Pvt. Ltd. And handed over the signed cheque book to him. Further he stated that all transactions in this bank account were beyond his knowledge. The statements given by Shri Kishore Jain, Shri Firoz Khan and Shri Mukesh Jain clearly explained the modus operandi adopted by the appellant company which indicate that the appellant company was indulged in bogus purchases. The Bank of India A/c No.930320110000310 of M/S. Kishore Enterprises, A/c No.930320110000322 of Vishal Enterprises and A/c No.930320110000272 of M/S Vardhman Trading Co. were opened and operated by the appellant company M/S Panchsheel Solvent Pvt. Ltd. For bogus entries. All the credited amounts in these accounts were withdrawn in cash by the self cheques retained in the custody 51 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur of the company. In this way the appellant company has shown payment in lieu of bogus purchases from the above three concerns as summarized below: - Party FY 2011-12 FY 2012-13 Total Bank of India A/c No. Kishore Enterprises 2.16 1.73 3.89 930320110000310 Vishal Enterprises 1.42 0.76 2.18 930320110000322 Vardhman Trading 2.94 - 2.94 930320110000272 Total 6.52 2.49 9.01 During the course of search proceedings, in his statement given on oath u/s 132(4) of the Act, Shri Sameer Lalani, the director of appellant company has accepted the statements of Shri Kishore Jain, Shri Firoz Khan and Shri Mukesh Jain and admitted that the bogus purchases have been made by the appellant company through the above cited concerns, i.e. Kishore Enterprises, M/S Vishal Enterprises and M/S Vardhman Trading Co. He has also offered the undisclosed income of Rs.9.01 Cr. in the hand of the appellant company on account of bogus purchases in the concerned FYs. During the course of assessment proceedings, vide questionnaire issued dated 08.02.2016, the appellant company was requested to explain the said bogus purchases made by it. Further, vide letters dated 22.06.2016 and 24.10.2016, the appellant was requested to furnish the name, PAN, complete address, copies of ledger account of all purchasers, transporters and suppliers associated with it during the period under consideration. 52 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur However, despite being provided with several opportunities, the appellant company failed to comply with the details requisitioned. The appellant company never furnished the names, PANs, complete addresses, copies of account of the purchasers, transporters and suppliers associated with it during the period under consideration. Thus, the appellant has failed to discharge its primary onus of furnishing books of account, copies of ledger accounts of suppliers/purchasers, details of payments made by way of account payee cheque and bills & vouchers in support of the purchase/supply/transportation of goods and raw materials. Therefore, the bogus purchases made by the appellant and duly admitted as undisclosed income in the statement recorded UIs 132(4) of the Act is hereby considered as the undisclosed income of the appellant company and accordingly Rs.6,52,00,000/- is added to the income of the appellant company for the A.Y. 2012-13. No explanation has been furnished by the appellant at this stage on the findings and conclusion of the Id. AO despite the repeated opportunity of hearing to him. In absence of any explanation & on the basis of facts gathered and discussed by the Id. AO, considering entire facts in the assessment order, I find that the Id. AO is justified in assessing the total income of the appellant as discussed above. In these circumstances & in view of supported by the judicial pronouncements mentioned in para 3.1. Respectfully, following the view taken in the case cited above, the appeal filed by the appellant deserves to be dismissed accordingly, addition of Rs.6,52,00,000/-is hereby confirmed and ground of appeal is dismissed. 6.3 On this issue of bogus purchase, Ld. AR submitted a written submission, which is identical for AY 2012-13 and 2013-14, therefore, for the 53 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur sake of brevity, the written submission for the AY 2012-13 has been culled out for appreciating the issue: 54 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 55 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 56 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 57 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 58 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 59 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 60 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 6.4 Based on aforesaid submissions, it was the prayer that the entire addition regarding the purchases from M/s Kishore Enterprises, Vishal Enterprises, & Vardhman Enterprises, on the basis of statement recorded u/s 132(4) of Shri Kishore Jain, Shri Firoz Khan & Shri Mukesh Jain, the proprietors of the aforesaid firms, was uncalled for, arbitrary and unjustifiable. It was the submission that the addition should have been restricted to the GP ratio or shall be deleted in entirety. 61 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 6.5 Ld. AR also placed his reliance on the order of ITAT, Raipur in the case of NR Ispat & Power Pvt. Ltd. referred to supra, raising the contention that the whether the statements of third parties prior to the date of search, recorded u/s 132(4) can be treated as incriminating material. 6.6 Ld. CIT-DR on the other hand vehemently supported the orders of revenue authority. 6.7 We have considered the rival submissions perused the material available on record and the judicial pronouncements relied upon. Under the factual matrix of present case, as the year under consideration i.e., AY 2012-13, is held to be an unabated AY, therefore, as the observation of the ITAT, Raipur in the case of NR Ispat (supra), wherein, it has been held that “the adverse statements of the directors of the investor companies, which were recorded much prior to the search conducted on the assessee company can be brought within the meaning of \"incriminating evidence\" found in the course of the search & seizure proceedings conducted on the assessee company on 24.10.2017 which, thus, vested jurisdiction with the A.O to make additions while framing the assessment u/s.153A of the Act”, shall apply in the present case, being addition is made based on statements of external parties, treating the same as incriminating 62 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur material. However, as the assessment order is silent about any other incriminating material other than the statements of third parties, and also the copies seized material could not be furnished before us by either of the parties, this matter needs exhaustive examination of reports and verification, accordingly, the issue needs to be restored back to the file of Ld. AO for fresh adjudication, following the analogy of law drawn by Hon’ble Apex Court in the case of Abhisar Buildwell (supra). 6.8 Needless to say, reasonable opportunity of being heard shall be afforded to the assessee during the set aside assessment proceedings. 6.9 In result, Additional ground no. 2 in IT(SS)A No. 4/RPR/2024 for AY 2012-13 assailed by the assessee has been partly allowed, in terms of our aforesaid observations. 6.10 Since the issue regarding addition on account of bogus purchases in ITA Nos. 4/RPR/2024 for the AY 2012-13, is restored back to the file of Ld. AO for verification and fresh adjudication, respectfully following the principle and ratio of law laid down by the Hon’ble Apex Court in the case of Abhisar 63 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Buildwell (supra), therefore, the other contentions qua the issues either on merits or legal, are not deliberated upon, thus, are left open. 7. Ground: Addition on account of bogus purchases for Rs. 2,49,00,000/-, treating the same as undisclosed income of the assessee for an abated AY. IT(SS) A No. 5/RPR/2024 for AY 2013-14 7.1 The brief facts of the issue are already extracted hereinabove, as the observations of Ld. AO on the issue are under a common order and the observations of Ld. CIT(A) are identical in both the years i.e, AY 2012-13 and AY 2013-14. The issue in the AY 2012-13 (unabated AY), however, was restore back to the file of Ld. AO for verification of incriminating material, whether the same has been unearthed during the search and seizure operation, so as to adjudicate the issue afresh in terms of sustainability of the said addition, following the ratio of law laid down by Hon’ble Apex Court in the case of in the case of Abhisar Buildwell (supra). 7.2 Adverting to the facts of the issue for the AY 2013-14 which is an abated year, we find that the similar issue is decided by this tribunal in assessee’s own case; while deciding the appeals in ITA No. 342 & 343/RPR/2024 for the AY 2012-13 & 2013-14 vide order dated 29.10.2024, 64 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur wherein similar additions, under similar facts and circumstances, were made under the reopening assessment u/s 147 r.w.s. 143(3), which are challenged by the assessee, have been adjudicated, the relevant findings of the tribunal in the impugned cases are as under: 13. We have given thoughtful consideration to the aforesaid issue in the backdrop of the orders of the lower authorities. As observed by us hereinabove, it is a matter of fact borne from the statement of Shri Mahendra Sharma, proprietor of M/s. Chhattisgarh Enterprises, that the bank account No.930320110000270 on 04.04.2011 with Bank of India, Branch: Rajnandgaon of his name sake proprietary concern, viz. M/s. Chhattisgarh Enterprises was opened and thereafter, operated by the assessee company. As is discernible from the orders of the lower authorities, the transactions/activities in the bank account of Shri Mahendra Sharam were in fact, transactions of the assessee company. Also, it transpires that Shri Mahendra Sharma (supra) used to sign the bank papers/cheques etc. as per the direction of the assessee company. Shri Mahendra Sharma in his statement, had stated that blank signed cheque books of his proprietary concern were delivered by him to Shri Lucky, i.e. accountant of the assessee company who, thereafter, had operated the said account. Apart from that, we find Shri Mahendra Sharma (supra), had admitted that bogus bills of M/s. Chhattisgarh Enterprises were issued to various parties as per their requirements without delivery of goods. Further, we find that though the current account No. 930320110000270 on 04.04.2011 with Bank of India, Branch: Rajnandgaon of M/s, Chhattisgarh Enterprises (supra) was opened disclosing his business as that of railway catering and running a hotel business, which was totally different from the nature of activities appearing in the said bank account. 14. Although the Ld. AR had tried to impress upon us that as the goods mentioned in the sale bills of M/s. Chhattisgarh Enterprises (supra) were actually purchased by the assessee company, therefore, there was no justification for the A.O to have disallowed 65 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur the entire amount of purchases, we are unable to concur with the same. At this stage, we may herein observe that it is a case where the bogus/accommodation entry provider, i.e. M/s. Chhattisgarh Enterprises (supra) was a bogus/sham concern which had been brought into existence by the assessee company itself. As observed by us hereinabove, the current bank account NO.930320110000270 of M/s. Chhattisgarh Enterprises (supra) with Bank of India, Branch: Rajnandgaon was opened by the assessee company, and thereafter, the said account was operated by Shri Lucky, i.e. accountant of the assessee company. Also, it transpires that the sale bills of the aforementioned concern, viz. M/s. Chhattisgarh Enterprises were prepared and issued by the personnel of the assessee company. Considering the aforesaid peculiar facts, wherein the assessee company in the garb of the aforesaid bogus/sham concern was in itself engaged in providing accommodation entries, we find substance in the view taken by the lower authorities that the assessee had only booked a bogus expenditure to reduce its income and had not made any corresponding purchases of goods. As the Ld. AR had failed to place on record any material which would point out any perversity in the view taken by the lower authorities, therefore, we uphold the addition/disallowance of Rs.46 lacs made/sustained by them. Our aforesaid view that the entire amount of bogus purchases of Rs.46 lacs had rightly been disallowed by the lower authorities is supported by the order passed by the Hon’ble High Court of Gujarat in the case of N.K Industries Ltd. Vs. Dy. CIT (2016) 72 taxmann.com 289 (Gujarat.). In the aforesaid case, search proceedings were conducted on the assessee company, in the course of which certain signed blank cheques and vouchers of the parties from whom the assessee had claimed to have made purchases were found. As the entire purchases shown by the assessee on the basis of fictitious invoices were debited in the trading account, therefore, the A.O disallowed the entire amount of purchase amounting to Rs.2,92,93,288/-. On appeal, the Tribunal retained the addition on account of alleged bogus purchases @25% i.e. Rs.73,23,322/- (out of total purchases of Rs.2,92,93,288/-). The revenue assailed the order of the Tribunal before the Hon’ble High Court of Gujarat in the case of N.K Industries Vs. DCIT, Tax Appeal No.261 of 2003 by, inter alia, raising the following substantial question of law: 66 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur “Tax Appeal No.261 of 2003 Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was justified in retaining the addition on account of alleged bogus purchases @25% i.e. Rs.73,23,322/- of the total purchases amounting to Rs.2,92,93,288/-?” The Hon’ble High Court in the backdrop of the facts in the case before them, observed that now when the Tribunal had categorically held that the assessee had shown bogus purchases of Rs.2,92,93,288/-, therefore, taxing only 25% of the said bogus claim was against the principles of Section 68 & 69C of the Income Tax Act. The Hon’ble High Court observed that the Tribunal having once come to a categorical finding that the amount of Rs.2,92,93,288/- represented alleged purchases from bogus suppliers on the basis of fictitious invoices, it was, thus, not incumbent on it to restrict the disallowance to only Rs.73,23,322/-. For the sake of clarity, the observations of the Hon’ble High Court are culled out as under : (relevant extract) “On consideration of the matter, we find that the facts of the present case are identical to those of M/s.Indian Woollen Carpet Factory (supra) or M/s. Vijay Proteins Ltd. In the present case the Tribunal has categorically observed that the assessee had shown bogus purchases amounting to Rs.2,92,93,288/- and taxing only 25% of these bogus claim goes against the principles of Sections 68 and 69C of the Income Tax Act. The entire purchases shown on the basis of fictitious invoices have been debited in the trading account since the transaction has been found to be bogus. The Tribunal having once come to a categorical finding that the amount of Rs.2,92,93,288/ represented alleged purchases from bogus suppliers it was not incumbent on it to restrict the disallowance to only Rs.73,23,322/-.” 67 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur (emphasis supplied by us) 15. As in the present case before us, Shri Mahendra Sharma (supra) had admitted that he had provided his blank signed cheques, blank bill books etc. to the assessee company, which, thereafter, had issued bogus/accommodation bills as per its requirements and operated his bank account, therefore, we are of a firm conviction that the facts involved in the present case falls within the four corners of the facts of the case as were there before the Hon’ble High Court of Gujarat in the case of N.K Industries Ltd. Vs. Dy. CIT (2016) 72 taxmann.com 289 (Gujarat.). Accordingly, finding no infirmity in the view taken by the CIT(Appeals), we uphold the same. Thus, the Ground of appeal No.6 raised by the assessee company is dismissed in terms of our aforesaid observations. 16. As the assessee had not only failed to come forth with any contention which would substantiate its claim that the CIT(Appeals) had disposed off the appeal without affording a reasonable opportunity of being heard to the assessee company nor any fact supporting the said claim had been placed on record, therefore, the same is rejected. Thus, the Grounds of appeal No.1 to 4 raised by the assessee company are dismissed in terms of the aforesaid observations. 7.3 Respectfully following the observations of ITAT, Raipur in assessee’s own case in ITA No. 342 & 343/RPR/2024 (supra), IT(SS)A No.5/RPR/2024, qua the issue challenging the sustainability of addition of Rs.2,49,00,000/- on account of bogus purchase, raised in revised ground no. 1, stands dismissed, in terms of our aforesaid observations. 68 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 7.4 Regarding additional ground no. 1 & 2 in ITA No. 5/RPR/2024 for AY 2013-14, raised by the assessee challenging the validity of assessment order passed u/s 153A r.w.s. 143(3) and approval u/s 153D, stating that the order of assessment and approval are granted under a combined / consolidated order and combined / common approval is not in accordance with the mandate of law prescribed under the impugned sections of the Act. We do not find any substance in the contentions raised by the assessee, as the issue is covered by the observations of Hon’ble Jurisdictional High Court in the case of Hitesh Golecha Vs. ACIT, Central Circle-1, Raipur, TAXC No.76/2024, dated 10.04.2024. 7.5 The Hon’ble High Court in its aforesaid order, after deliberating upon the similarly worded approval granted by the Jt. CIT, Range Central, Raipur, had observed, that as the A.O. in the case before them had obtained a prior approval of the Jt. CIT, therefore, the mandate of Section 153D of the Act was duly complied with. It was further observed by the Hon’ble High Court that in a given case, it cannot be presumed on the mere say of the assessee that no application of mind was there while granting the approval. The Hon’ble High Court had further observed that the language used in the letter granting the approval revealed the subjective satisfaction that was arrived at based on the documents that were produced before the Jt. CIT. It was further observed, 69 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur that on a perusal of the language of the approval letter, it cannot be presumed that there was no application of mind as the approval need not be a detailed assessment order. The Hon’ble High Court after pressing into service Section 114 of the Evidence Act had observed that in case where the official act had been done in accordance with official procedure, then it would lead to presumption that due diligence was followed. 7.6 As the facts involved in the present case remains the same as were there before the Hon’ble High Court in the case of Hitesh Golecha Vs. ACIT, Central Circle-1, Raipur (supra), wherein the Hon’ble High Court had looked into the similarly worded approval granted by the Jt. CIT, Range-Central, Raipur and had rejected the assessee’s claim that the said approval was granted without application of mind by the latter, therefore, we respectfully follow the same. 7.7 Accordingly, as the Jt. CIT, Range-Central, Raipur vide letter dated 16.12.2016 marked as F.No.Jt.CIT(C)/RPR/153D/2016-17/361 (copy placed before us) had, inter alia, granted the approval in the case of the assessee for the year under consideration, i.e. A.Y. 2013-14, therefore, we, in terms of our aforesaid observations finding no merit in the contentions advanced by the Ld. 70 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur AR, thus, reject the same. The validity of combined / consolidated assessment order, therefore, also acceptable following the analogy drawn in the case of Hitesh Golecha (supra). Thus, the additional ground of appeal 1 & 2 raised by the assessee are dismissed in terms of our aforesaid observations. IT(SS)A No. 6/RPR/2024 (A.Y. 2015-16) 8. First, we shall be taking up the additional ground no.2 of the impugned appeal, wherein the assessee has questioned the validity of assessment made u/s 143(3) taken up on account of search and seizure action on the assessee, wherein the approval required under the mandate of section 153D r.w.s. 153B(1)(b) of the Act, which is absent or not granted in the present case. 8.1 At the outset, Ld. AR submitted that there was no approval u/s 153D for the AY 2015-16 in the case of assessee, therefore, the order passed without complying the provisions of section 153D, was illegal, bad in law and has no standing in the eyes of law, the same is invalid and liable to be quashed. 71 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 8.2 On the other hand, Ld. CIT-DR vehemently supported the orders of revenue authorities. Ld. CIT-DR further submitted that it was just a clerical error which could be corrected u/s. 292B of the Act, that the same is evident from the letter of Ld. AO seeking the approval u/s 153D, wherein the AY’s are correctly mentioned, therefore, the approval u/s 153D cannot be held as absent or invalid. In order to substantiate that this fact copy of approval granted by the approving authority i.e., JCIT, Range- Central, Raipur, dated 16.12.2016 along with copy of letter seeking approval by the Ld. AO dated 13.12.2016 are furnished before us for our consideration, the same are extracted hereunder for the clarity of facts: 72 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 73 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 74 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 8.3 Based on aforesaid submissions, it was the prayer that the validity of approval u/s 153D cannot be questioned on the basis of clerical error in the approval and accordingly, the contention raised by Ld. AR that there was no approval u/s 153D has no merits and the same is liable to be rejected. 8.4 We have considered the rival submissions, perused the material available on record and judicial pronouncements relied upon by the parties. We may herein observe that the issue that the year of approval was not mentioned in the approval order u/s 153D by the sanctioning authority has been delt with by this tribunal in the case of Shri Santosh Daga, in IT(SS)A No. 9 to 11/RPR/2024, dated 09.12.2024, whose assessment u/s 153A r.w.s. 143(3), was also subject matter in the same approval u/s 153D dated 16.12.2016, extracted (supra), wherein the contentions raised by the assessee, are found to be acceptable, having substance to be concurred with, therefore, the issue is decided in favour of the assessee. The relevant findings in the said order of this tribunal, are as under: 30. Admittedly, in the letter of the Jt. CIT, Range-Central, Raipur dated 16.12.2016, there is no whisper of granting of approval u/s. 153D of the Act in the case of the assessee for the year under consideration i.e. A.Y.2014-15. As it is the Ld. DR’s/A.O’s claim that the mistake mentioning the incorrect years i.e. A.Y.2007-08 to A.Y.2013-14 by the Jt. CIT, Range-Central, Raipur while granting approval u/s. 153D of the Act, vide his letter dated 16.12.2016 is a mistake/omission curable u/s.292B of the Act, therefore, the same 75 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur will not have any bearing on the validity of the assessment framed by the A.O, therefore, we deem it fit to cull out the provisions of Section 292B of the Act, which reads as under: “292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.” As per section 292B of the Act, any mistake, defect or omission in the return of income, assessment, notice, summons or other proceeding, as long as such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act, would either render the same as invalid’ or deemed to be invalid. We are of the view that though Section 292B of the Act would take within its scope and gamut the mistake, defect or omission but the same cannot be stretched to an extent of correcting the foundational requirement to acquire jurisdiction in a case. Our aforesaid view is fortified by the judgment of the Hon’ble High Court of Bombay in the case of Sumit Balkrishna Gupta Vs. Assistant Commissioner Income Tax & Ors, (2019) 414 ITR 292 (Bom.). The Hon’ble High Court in its order had observed that Section 292B of the Act cannot be invoked to correct foundational/substantial error as it is meant to as to meet the jurisdictional requirements. In the case before the Hon’ble High Court notice u/s. 148 of the Act which was sine-qua-non for valid assumption of jurisdiction by the A.O to reopen the assessment was issued in the name of a dead person. The Hon’ble High Court had observed that as the aforesaid lapse on the part of the A.O could not be brought within the meaning of a procedural requirement, as the same was condition precedent to the notice being valid in law, therefore, the same was not protected by the provisions of Section 292B or 292BB of the Act. For the sake of clarity, the observation of the Hon’ble High Court is culled out as under: 76 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur “…Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee. The assessee on whom the notice must be sent must be a living person i.e legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and purpose of the Act. Therefore, Section 292B of the Act cannot be invoked to correct a foundational/substantial error as it is meant so as to meet the jurisdictional requirement.” 31. Also, we find that the Hon’ble High Court of Madhya Pradesh in the case of Khialdas and Ors Vs. CIT, (1997) 225 ITR 960 (MP), had observed, that as per Section 292B of the Act, if any minor defect is there which does not militate against the intent and purpose of the Act, then such minor defect can be cured. In the case before the Hon’ble High Court, the assessee firm had filed its return of income which was not signed by any of the partners in the manner required u/s. 140 of the Act. The A.O held the return filed by the assessee firm as invalid. The Hon’ble High Court had concluded that though if a minor defect is there which does not militate against the intent and purpose of the Act, then such minor defect can be cured u/s. 292B of the Act, but failure on the part of the assessee to sign and verify the return of income as per provisions of Section 140 of the Act would render the return of income so filed as invalid. For the sake of clarity, the observation of the Hon’ble High Court is culled out as under: “…..The idea is that if any minor defect is there which does not militate against the intent and purpose of the Act, then such minor defect can be cured but according to Section 140 which is mandatory, every return has to be signed and verified. Section 140 says ' that a return under Section 139 shall be signed and verified. The word \"shall\" has been used which shows that it is mandatory that every return should be signed and verified and if it is not signed and verified, then it is in breach of the provisions of Section 140 of the Act. Therefore, this cannot be a defect which can be cured and any return which has been filed 77 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur without signature and verification of the assessee, will not be treated as a valid return. In this view of the matter, we are of the opinion that the view taken by the Tribunal is justified.” 32. We find that the indulgence of the Hon’ble High Court of Karnataka in the case of Commissioner of Income Tax and Ors Vs. Intel Technology India Pvt. Ltd. (2016) 380 ITR 272 (Kar.), was sought for, inter alia, adjudicating the following question of law: “(2) Whether the Tribunal was correct in holding that the provisions of section 292B of the Act will not make the assessment valid as a defect/omission to incorporate the name of M/s. Intel Technology India Pvt. Ltd., in the assessment order as the same is not in substance and effect in confirmative with or according to the intend and purpose of this Act?” The Hon’ble High Court taking cognizance of the fact that in the case before them, the company viz. M/s. Software and Silicon Systems India Pvt. Ltd. had merged with M/s. Intel Technology India Pvt. Ltd. vide an order of amalgamation passed by the High Court on May, 28, 2004 which was effective from April 1, 2004. The amalgamating company, viz. M/s. Software and Silicon Systems India Pvt. Ltd. had filed its return of income for A.Y.2003-04 on November, 28,2003. The assessee company had intimated about the said fact of amalgamation to the department on June 29, 2004. The A.O issued notice u/s. 143(2) of the Act, on October 14, 2004 to M/s. Software and Silicon Systems India Pvt. Ltd. and framed the assessment in its case vide order u/s. 143(3) of the Act, dated 27.03.2006. 33. On appeal, the Tribunal quashed the assessment with an observation that the assessment proceedings carried out by the A.O against M/s. Software and Silicon Systems India Pvt. Ltd. (which was non 29 Santosh Kumar Daga Vs. DCIT, Central Circle-2, Raipur IT(SS)A Nos. 9 to 11/RPR/2024 existent on the date of passing of the assessment order) could not be held to be valid proceedings. 34. On further appeal, it was the Revenue’s claim that as per Section 292B of the Act, the defect/omission on the part of the A.O to incorporate the name of M/s. Intel Technology India Pvt. Ltd. i.e. amalgamated company, in the assessment order would not render the assessment order which was in substance and effect in conformity with or 78 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur according to the intent and purpose of this Act as invalid. However, the aforesaid claim of the department was rejected by the Hon’ble High Court which had approved the view taken by the Tribunal. The Hon’ble High Court while dismissing the appeal of the revenue, had observed, that as framing of the assessment of a non-existent entity/person did go to the roots of the matter and was not a procedural irregularity but a jurisdictional defect, therefore, the same would not be saved by the provisions of Section 292B of the Act. 35. Also, we find that involving identical facts as were there before the Hon’ble High Court of Karnataka in the case of Commissioner of Income Tax and Ors Vs. Intel Technology India Pvt. Ltd. (supra), the Hon’ble Supreme Court in the case of Pr. CIT Vs. Maruti Suzuki India Ltd. (2019) 416 ITR 613 (SC), had held that the issuance of a notice u/s. 143(2) of the Act by the A.O to a non-existent amalgamating company being a substantive irregularity could not be saved by the provisions of Section 292B of the Act. 36. We have thoughtfully considered the facts involved in the present case before us in the backdrop of the settled position of law as had been laid down by the Hon’ble Courts. As the Jt. CIT, Range-Central, Raipur in the present case before us, had vide his letter dated 16.12.2016 (supra), admittedly not granted any approval in the case of the present assessee viz. Shri Santosh Kumar Daga (supra) for the year under consideration, i.e. A.Y.2014-15, therefore, the same in our view is substantive irregularity and not a procedural violation as per section 292B of the Act. As the assumption of jurisdiction by the A.O for framing the assessment vide his order passed u/s. 153A r.w.s. 143(3) of the Act, dated 16.12.2016 presupposes the prior approval of the Jt. CIT, Range-Central, Raipur which as observed by us hereinabove, had not been granted, therefore, as stated by the Ld. AR, and rightly so, the assessment order so passed is liable to be quashed for want of valid assumption of jurisdiction. 37. At this stage, we may herein observe that the claim of the Ld. AR/AO that mentioning of a wrong assessment year by the Jt. CIT, Range-Central, Raipur in his letter dated 16.12.2016 is in the nature of a mistake/omission that would be protected by Section 79 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur 292B of the Act, would also fail for the reason that neither the said incorrect mentioning of the assessment year was got corrected by the A.O before passing of the assessment order nor any attempt to the said effect was ever made by him. Accordingly, we find substance in the claim of the Ld. AR that as the impugned assessment framed by the A.O vide his order passed u/s. 153(3) r.w.s. 143(3) of the Act, dated 16.12.2016 had been passed in absence of any approval u/s. 153D of the Act for the year under consideration, therefore, the same is liable to be quashed on the said count itself. 38. Alternatively, we may herein observe, that even if the contention of the Ld. DR was to be accepted, i.e. the Jt. CIT had vide his letter dated 16.12.2016 had granted the approval u/s. 153D of the Act for the year under consideration, i.e. A.Y.2014-15, the incorrect mentioning of the assessment year(s) by the Jt. CIT, Range-Central, Raipur in his approval letter dated 16.12.2016 beyond any doubts reveals granting of approval by him in a mechanical manner and without any application of mind. As had been deliberated at length by us hereinabove, the Hon’ble High Courts had held that granting of an approval u/s. 153D of the Act by the Jt.CIT in a mechanical manner and without any application of mind would not satisfy the mandate contemplated under the said statutory provision. Accordingly, the impugned approval granted by the Jt. CIT u/s.153D for the subject year, thus on the said count itself i.e. non-application of mind by the said approving authority cannot be approved on our part. 39. We, thus, in terms of our aforesaid observation quash the assessment framed by the A.O u/s.153(3) r.w.s. 143(3) of the Act, dated 16.12.2016 for want of valid assumption of jurisdiction. Thus, the Ground of appeal No.2 raised by the assessee is allowed in terms of our aforesaid observations. 8.5 Respectfully following the aforesaid decision of tribunal, we are of the considered view that the issue, is squarely covered. Therefore, the Additional ground no. 2 raised by the assessee, assailing that there was no 80 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur approval u/s 153D for AY 2015-16 in the case of assessee, therefore, the assessment framed without complying with the mandate of section 153D is liable to be quashed, found to be merits concurrence, thus, the same is allowed, in terms of our aforesaid observations. 8.6 As the assessment framed u/s 153A r.w.s. 143(3) dated 16.12.2016 for subject year i.e., AY 2015-16 is quashed by us in terms of our aforesaid observations, therefore, the remaining grounds raised by the assessee challenging the additions and validity of assessment under various issues, are not adverted upon, thus, left open. 8.7 In result, IT(SS)A No. 6/RPR/2024 of the assessee is allowed in terms of our aforesaid observations. 9 In combined result, IT(SS)A No. 2, 3 & 4/RPR/2024 are partly allowed, IT(SS)A No. 5/RPR/2024 is dismissed and IT(SS)A No. 6/RPR/2024 is allowed, in terms of our aforesaid observations. 81 IT(SS)A No. 2,3,4,5 & 6 /RPR/2024 Panchsheel Solvent Pvt. Ltd., Rajnandgaon Vs. ACIT, Central-2, Raipur Order pronounced in the open court on 26/12/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 26/12/2024 Vaibhav Shrivastav आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Senior Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- Panchsheel Solvent Pvt. Ltd. 2. ŮȑथŎ / The Respondent- ACIT, Central -2, Raipur 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "