Assessments under 153A/153C: fresh claims in abated assessments permitted when response return is treated as an original return filed in time

Assesses that in proceedings under assessments arising from searches, a return filed in response to notice under the relevant provisions is to be treated as an original return where the abated assessment is revived, permitting taxpayers to lodge fresh claims in abated assessments; consequence: additional claims made in the response return are maintainable. Clarifies that admissibility of Chapter VI-A deductions depends on claim being made in that return filed within the prescribed time, and where so claimed the statutory prerequisite is fulfilled; consequence: a fresh Chapter VI-A claim in a timely-filed response return meets the requirement for admitance, subject to merit of eligibility.

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Issues: (i) Whether an assessee, in an abated assessment consequent to search and notice under section 153C/153A, can for the first time claim a deduction under Chapter VI-A (specifically section 80-IA) in the return filed in response to the notice?

Analysis: The statutory scheme provides that where assessments pending on initiation of search abate, the return filed in response to notice under section 153A/153C is to be construed as a return filed under section 139(1). The second proviso to section 153A(1) results in the earlier pending assessment being treated as non est and the fresh return filed pursuant to the notice substitutes the original return. Provisions applicable to returns under section 139(1), including the eligibility and timing conditions for Chapter VI-A deductions under section 80AC and the requirement of Form 10CCB under section 80-IA(7), apply to the return filed under section 153A/153C when filed within the time permitted by the notice. Tribunal and High Court precedents hold that in abated assessments the assessee and the Revenue both may raise fresh claims or make additions respectively, and the admissibility of a Chapter VI-A claim in such return depends on compliance with the statutory conditions (including timely filing as required by section 80AC and furnishing prescribed certificates/reports).

Conclusion: The assessee is entitled to make for the first time a claim for deduction under Chapter VI-A (section 80-IA) in the return filed in response to notice under section 153C/153A in an abated assessment, provided the return and requisite documents (e.g., Form 10CCB) are furnished within the time allowed under the notice and the conditions of section 80AC are met. The Revenue's grounds challenging allowance of the deduction are dismissed.

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