TaxTMI 
TaxTMI 
2009 (8) TMI 763
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....ed CIT(A) ought to have entertained the claim relating to non-taxability of the amount of sales-tax incentives and also ought to have held that the amount of sales-tax incentives is a capital receipt not liable to tax. 2. Briefly the facts are that an action under s. 132 of the IT Act, 1961, hereinafter referred to as 'Act' was taken at various business premises and residences of directors/partners of the companies/firms on 20th Feb., 2004. By a notification dt. 8th June, 2004, all these cases were centralized with the AO, Central Circle-1, Jodhpur. The same was communicated to these assessees on 23rd June, 2004. Notices under s. 153A(a) of the Act were issued on 5th Oct., 2004 requiring these asses sees to file return of income within 35 days of the receipt of notice which was served on them on 12th Oct., 2004. In compliance thereto, the returns declaring nil income from the manufacture of stainless steel sheets were filed belatedly on 7th April, 2005. 3. In the returns of income filed in response to notices under s. 153A of the Act, all these assessees claimed deduction of sales-tax incentive on the premise that the incentive so received being granted with an object to promote ....
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.... in all these cases have been completed at a total nil income with direction to carry forward the unabsorbed depreciation to be set off against income of subsequent years wherever available. In the case of M/s Jay Steels (India), the total income of Rs. 13,495 for asst. yr. 2001-02 and Rs. 81,780 for asst. yr. 2002-03 have been assessed. 6. While assailing these assessments in appeal before the learned CIT(A), the appellants stated that assessments for the year under consideration had already been completed under s. 143 of the Act. Such assessments cannot be disturbed. The second proviso below s. 153A of the Act speaks about pending assessments alone that are abated. In the proceedings under s. 153A of the Act. all the legal and factual claims can also validly be made regardless of the fact that such claims were not made in the original return filed under s. 139 of the Act. Accordingly the assessee's claim for grant of deduction/exemption against the sales-tax incentive needs to be allowed. 7. The learned CIT(A) found that the appellants neither made any such claim in the original return filed under s. 139(1) of the Act nor in regular assessment proceedings by way of filing any r....
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.... the Act. 10. The parties have been heard with reference to precedents cited at Bar, written submissions and material placed on record in terms of sub-r. (6) of r. 18 of ITAT Rules, 1963 that reads as under: "Documents that are referred to and relied upon by the parties during the course of arguments shall alone be treated as part of the record of the Tribunal." 11. Three new ss. 153A, 153B and 153C have been inserted by the Finance Act, 2003 to provide for assessment in case of search or requisition. The provisions of s. 153A of the Act that are relevant to controversy raised in these appeals are reproduced hereunder: "Notwithstanding anything contained in s. 139, s. 147, s. 148, s. 149, s. 151 and s. 153, in the case of a person where a search is initiated under s. 132 or books of account, other documents or any assets are requisitioned under s. 132A after the 31st day of May, 2003 the AO 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 cl. (b) in the prescribed form and verified in the prescribed mann....
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....down the manner in which such income is to be computed. 65.2 The Finance Act, 2003 has provided that the provisions of this chapter shall not apply where a search is initiated under s. 132, or books of account, other documents or any assets are requisitioned under s. 132A after 31st May, 2003 by inserting a new s. 158BI in the IT Act. 65.3 Further, three new ss. 153A, 153B and 153C have been inserted in the IT Act to provide for assessment in case of search or making requisition. 65.4 The new s. 153A provides the procedure for completion of assessment where a search is initiated under s. 132 or books of account or other documents or any assets are requisitioned under s. 132A after 31st May, 2003. In such case, the AO shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, return of income in respect of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted under s. 132 or requisition was made under s. 132A. 65.5 The AO shall assess or reassess the total income of each of these six assessment years. Assessment or reassessment, if any, relating to any ....
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.... is not allowed to be proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-s. (1) of s. 245D is received by the CIT under sub-so 20 of that section, shall be excluded. If, after the exclusion of the aforesaid period, the period of limitation available to the AO for making an order of assessment or reassessment as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. 65.9 The new s. 153C provides that where an AO is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in s. 153A, then the books of account, or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that AO shall proceed against such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of s. 153A. 65.10 An appeal against the ....
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....oes not say that the assessment or reassessments that has already been made before the date as aforesaid shall also abate. It is also not correct that all the proceedings or returns filed shall also abate. In fact the assessing authority is the custodian of all such returns including the returns relatable to pending assessments that stand abated. Sub-s. (2) of s. 153A of the Act mandates that if any proceedings initiated or any order of assessment made under sub-s. (1) relating to any assessment year, which has been abated under second proviso to s. 153A, shall stand revived from the date of receipt of the order of such annulment by the CIT. This goes to show that the assessing authority cannot and shall not destroy such returns from his record. Furthermore, the proceedings that are supposed to be abated are in relation to assessment or reassessment to be made by the officer of original jurisdiction i.e., the AO and not all other proceedings such as appeal, revision or rectification, which are continuation of assessment or reassessment proceedings as is evident from the Board in its Circular No. 7 of 2003 dt. 5th Sept., 2003 reproduced hereinbefore. The appellant's reference to Hon....
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....ssment' is used in a number of provisions in a comprehensive sense and it can comprehend the whole procedure for ascertaining and imposing liability upon the taxpayer and the machinery for enforcement thereof. The concept of expression 'assessment' used in the IT Act at different places with different connotations has been explained by the Hon'ble apex Court in G.A. Abraham vs. ITO (1961) 41 ITR 425 (SC), 429. The meaning to be assigned to the word 'assessment' has to be understood in each section with reference to the context in which it has been used as laid down by the Hon'ble apex Court in A.N. Lakshman Shenoy vs. ITO (l958) 34 ITR 275 (SC), 291. Thus in s. 153A the expression signifies merely computation of undisclosed income that shall form part of "total income" within the meaning of s. 2(45) of the Act in respect of each of the assessment falling within such six assessment years that is required to be aggregated with the income already assessed in cases of completed assessments, more so when s. 132 of the Act comprehends action to search of a person in possession of undisclosed income or property. In those cases where assessments are pending at the time of initiation of act....
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....n Stroud's Judicial Dictionary, Fourth Edn. Vol. 4 at p. 1975, it is stated as under: "A legal proceeding is 'pending' as soon as commenced and until it is concluded i.e., so long the long having original cognizance of it can make an order on the matters in issue or to be dealt with, therein. The passage from Stroud's Judicial Dictionary was approved by the Hon'ble Supreme Court in Asgarali Nazarali vs. State of Bombay AIR 1957 SC 503. At p. 509 of the report, Justice Bhagwati delivering the judgment of the Hon'ble Supreme Court set out this definition of 'pending' legal proceeding and then observed." Similar are the observations of Jessel M.R. in, In re Clagett's Estate Fordham vs. Clagett (1982) 20 Ch. D 637, 653 (CA): "What is the meaning of the word 'pending'? In my opinion, it includes every insolvency in which any proceeding can by any possibility be taken. That I think is the meaning of the word 'pending'....... A cause is said to be pending in a Court of justice when any proceeding can be taken in it. 'That is the test'." 21. Thus the entire overthrow or destruction or termination of pending assessment before the assessing authority who can take original cognizance is ....