TaxTMI 
TaxTMI 
2015 (6) TMI 477
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....s Ltd., now Uflex Ltd. (Party B-2), in whose names/cases warrants of authorization had been issued. These documents were seized vide Annexures A-1, A-9 and A-10. The documents belonging to the assessee seized from various premises of the above referred two persons have been listed by the Assessing Officer (AO) as under:- Party Nos. Premises Annexure Page Nos. A-10 Residence of Sh. Manvinder Singh A-9 21, 24 B-2 Office of Flex Industries Ltd. A-1 20 to 42, 156 to 158, 168, 173 and 174 to 178 B-2 - Do - A-10 59 3. The case of the assessee was taken up for scrutiny u/s 153C of the Act. In response to the notice issued, the assessee filed return of income for the A.Y. 2002-03 declaring Nil income. The assessee had paid taxes on 'Book profit' of ` 2,68,344/- u/s 115JB. Eventual assessment was completed u/s 153C read with section 143(3) of the Act determining the book profit at the same level of ` 2,68,344/-, but changing the head of income from 'Business income' to 'Income from other sources'. The assessee challenged the assessment order before the ld. CIT(A) contending, inter alia, that no addition was mad....
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....in found from the premises of the person searched. There is another document on page No.36 which is a certificate issued by the assessee confirming that it had given a sum of ` 10 lac to Mr. S.A. Hashmi vide cheque No.995233 dated 2.6.2004. A close scrutiny of these documents belonging to the assessee found from the premises of the persons searched, indicates that these belong to the assessee but pertain to a period from 1.4.2004. In other words, these documents relate to assessment year 2005-06 onwards. The ld. AR bolstered the view canvassed by the ld. CIT(A) quashing the initiation of assessment for the year under consideration by contending that none of the seized documents relate to the assessment year under consideration. In the opposition, the ld. DR contended that the assessment was rightly framed u/s 153C read with section 153A of the Act. 5. In order to answer whether the quashing of the initiation of assessment for the year under consideration on the given count is valid or not, we need to consider the mandate of the relevant part of sub-section (1) of section 153C, which reads as under:- "Notwithstanding anything contained in section 139, section 147,....
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....ovisions 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:" 7. On circumspection of the clause (a) of the above provision, it is amply clear that the AO shall issue notice to such person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years as referred to in clause (b) and, the latter clause, provides that the Assessing Officer shall 'assesss 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.' When we read section 153C in conjunction with section 153A of the Act, the position which follows is that if the books of account or document etc. belonging to the other person are found during the course of the person searched, then the assessment or re-assessment of such other person is required to be ma....
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....assessee from another angle as well. It is relevant to note that the expression 'books of account or documents' employed in section 153C(1) is accompanied by the words 'money, bullion, jewellery or other valuable articles or thing'. It is axiomatic that 'money or jewellery' etc. belonging to the other person found from the premises of the person searched cannot per se be related to a particular assessment year. If we test the contention of the ld. AR on the touchstone of 'money or jewellery etc.' belonging to the assessee found from the person searched, then it will be very difficult at the stage of initiation of assessment or reassessment of the other person to relate it to a particular year, thereby jeopardizing the whole scheme of assessment pursuant to search or requisition. To a specific query, it was candidly accepted by the ld. AR that in terms of section 153A, the initiation of assessment or reassessment for all the six assessment years in the case of person searched is not dependent on the finding of any incriminating material. It is beyond our comprehension that when such a course of action is permissible u/s 153A in the case of person searched, then how can there be any ....
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....hat where books of account or documents, etc., have been received by the AO having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted u/s 132, etc., then, the AO shall issue notice and assess or reassess total income of the other person 'of such assessment year in the manner provided in section 153A.' The expression 'such assessment year' used in sub-section (2) of section 153C refers to 'the assessment year relevant to the previous year in which search is conducted u/s 132 or requisition is made u/s 132A.' Thus, it is amply clear that whereas sub-section (2) of section 153C deals with the assessment for the assessment year relevant to the previous year in which search is conducted, sub-section (1) of section 153C read with section 153A refers to 'six assessment years immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made.' As we are presently concerned with one of the six assessment years immediately preceding the assessment year relevant to the previous year in which such search was conduct....