TaxTMI 
TaxTMI 
2010 (10) TMI 1052
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....ncelling the order of Commissioner of Income Tax passed under Section 263 of the Income Tax Act, 1961 ? 3) The assessment year involved herein is AY 1998-99. Assessment order for AY 1998-99 was passed under Section 143(3) of the Income Tax Act, 1961 (for short, `IT Act') on 29/12/2000 determining loss of Rs. 43,02,246/-. Thereafter on 3/12/2003, there was a search action at the business/office premises of the assessee wherein several incriminating documents/ articles were seized. On issuance of notice under Section 153A of the IT Act, dated 13/9/2004, the respondent-assessee filed return of income pursuant to the said notice on 29/8/2005 declaring loss of Rs. 46,45,338/-. Thereafter the Assessing Officer passed an order on 30/3/2006 ....
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.... effect that the assessment order dated 30/3/2006 as modified after giving effect to the order of the Commissioner of Income Tax (A) is erroneous and prejudicial to the interest of the revenue and accordingly directed the Assessing Officer to adopt the book profit at Rs. 7,88,557/-. 6) Challenging the order of the Commissioner of Income Tax passed under Section 263 of the IT Act, the assessee filed an appeal and the ITAT by its order dated 5/1/2009 set aside the order of the Commissioner of Income Tax dated 4/10/2007 on the ground that neither the computation of book profit under Section 115JA nor deduction under Section 80HHC of the IT Act were the subject matter of the proceedings under Section 153A and, therefore, the Commissioner of ....
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....ssed under Section 153A read with Section 143(3) of the Income-tax Act. Accordingly, Mr. Jaiswal submitted that in the facts of the present case, the Commissioner of Income Tax was justified in invoking jurisdiction under Section 263 and the ITAT committed an error in setting aside the order passed by the C.I.T. 8) We find it difficult to accept the above contention raised on behalf of the revenue. The object of inserting Sections 153A, 153B and 153C by Finance Act, 2003 by discarding the existing provisions relating to search cases contained in Chapter XIV B of the Income-tax Act, as stated in the Memorandum explaining the provisions in the Finance Bill 2003 (see 260 ITR (St) 191 at 219) was that under the existing provisions relatin....
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....t, it becomes clear that on initiation of proceedings under Section 153A, it is only the assessment/reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalised for those assessment years covered under Section 153A of the Act. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/ reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal, r....
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....e finalised assessment/reassessment were contrary to the facts unearthed during the course of 153 A proceedings. 13) In the present case, there is nothing on record to suggest that any material was unearthed during the search or during the 153A proceedings which would show that the relief under Section 80 HHC was erroneous. In such a case, the A.O. while passing the assessment order under Section 153A read with Section 143(3) could not have disturbed the assessment order finalised on 29.12.2000 relating to Section 80 HHC deduction and consequently the C.I.T. could not have invoked jurisdiction under Section 263 of the Act. 14) Moreover, since the A.O. had made addition on account of undisclosed income at Rs. 89,19,477/- in the assessm....