TaxTMI 
TaxTMI 
2016 (8) TMI 327
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....wo appeals filed by the Revenue concerning the assessment years 2004-05 and 2005-06 were dismissed. 2. Briefly stated, facts of the case are that there was a search under section 132 of the Income Tax Act on 13.2.2007 in the case of one P.A.Kuriakose and Paulson P.Varkey group, which is stated to be mainly engaged in hotel and jewellery business. In the course of search in M/s.Matha Enterprises, a concern of the aforesaid group, large scale suppression of sale was found. It was also found that M/s.P.A.Kuriakose Jewellers and M/s.Matha Enterprises had introduced loans and credits in the name of the family members. The respondent assessee is one of the family members of P.A.Kuriakose and Paulson P.Varkey. 3. Based on the aforesaid search, proceedings under section 153C of the Act were initiated against the assessee and assessments under section 153A read with section 153C and 143(2) were completed for the assessment years 2001-02 to 2007-08. The assessee filed appeals which were partly allowed by the first appellate authority. Aggrieved by the orders passed by the first appellate authority, the assessee filed I.T.A.Nos.423/10, 424/10, 370/11, 371/11, 425/11 and 426/11 concernin....
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....ovisions itself. Section 153C (1) alone, being relevant, read as follows: "153C. Assessment of income of any other person- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income such other person in accordance with the provisions of section 153A: Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by th....
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....ation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate." 9. This provision also starts with a non obstante clause excluding the provisions that are excluded in section 153C and it authorises the Assessing Officer to issue notice to the other person mentioned in section 153C, 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. 10. A comparative analysis of the provisions contained in sections 153A and 153C reveal that jurisdiction under section 153C can be invoked by the Assessing Officer only when money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned and it is found that the seized or requisitioned articles belongs or belong to a person other than the person referred to in section 153A. In such a case, the Assessing Officer shall hand over the books of account or documents or assets se....
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....ling of returns for the assessment years 2001-02, 2003-04, 2004-05 and that even for the assessment year 2005- 06, the period expired on 31.3.2007. On that basis, the Tribunal held that for the assessment year 2001- 02, 2003-04, 2004-05 and 2005-06, the assessment proceedings are terminated/concluded by operation of law and were not pending. Therefore, according to the Tribunal, for these assessment years, the income disclosed in the regular returns before the date of search cannot be re-assessed under section 153C after the search. 14. Learned senior counsel for the Revenue contended that this conclusion of the Tribunal relying on the proviso to section 143(2) is not only against the statutory provisions but is also opposed to the principles laid down in the judgment of the Delhi High Court in Ashok Chaddha v. Income-Tax Officer [(2011) 337 ITR 138] and the Panjab and Haryana High Court in Tarsem Singla v. Deputy Commissioner of Income Tax [(2016) 385 ITR 138]. This contention was contradicted by the learned counsel appearing for the assessee and according to him, the terms of the proviso are plain and clear and that therefore, the time limit prescribed in the proviso should ap....
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....ed to the requirement of service of notice upon the assessee within a prescribed time and thus not applicable to be present case. The case of Pawan Gupta [2009] 318 ITR 322 (Delhi) related to a mandatory issue of notice under section 143(2) of the Act in the case of regular assessment as also on block assessment. This being not a case of assessment based on search under section 153A, the same is not applicable to the present case. In the case of Raj Kumar Chawla [2005] 277 ITR (AT) 225 (Delhi) {SB} relied upon by learned counsel for the assessee was that of the Tribunal, wherein, a view was taken that if a return filed under section 148 of the Act is sought to be scrutinized, the compliance with the provision contained in the proviso under section 143(2) of the Act is mandatory. The issue of requirement of notice under section 143(2) for an assessment under section 147 came up for consideration before this court recently in CIT v. Madhya Bharat Energy Corporation Ltd. (I.T.A.No.590 of 2008, decided on July 11, 2011) [2011] 337 ITR 389 (Delhi). In that case also, this court has held that in the absence of any specific provision under section 147 of the Act, the issuance of notice un....
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....o further notice under section 143(2) could be contemplated for assessment under section 153A." 16. Following the judgment in Ashok Chaddha (supra), the Punjab & Haryana High Court in Tarsem Singla (supra) also reiterated the same legal position. Obviously therefore, there is no requirement of a notice under section 143(2) for completing an assessment under section 153C and if that be so, the question of time limit prescribed under the proviso to section 143 (2) does not have any relevance for assessments under section 153C. Therefore, that finding of the Tribunal that the assessments for the years 2001-02, 2003-04, 2004-05 and 2005-06 are terminated/concluded by operation of law and that the assessee cannot be re-assessed under section 153C is untenable and is set aside. 17. The third issue debated before us was regarding the finding of the Tribunal with respect to ITA.346/11 concerning the assessment year 2005-06, against which, ITA.296/13 has been filed by the Revenue. The issue raised in this appeal is with regard to telescoping of investment of Rs. 22,87,818/- in the unaccounted profit of the partnership firm. According to the Revenue, taxability of the firm was consider....