TaxTMI 
TaxTMI 
2015 (11) TMI 1558
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.... controversy before me in the captioned appeals. 3. In so far as the appeals, which relate to the assessment years 2005-06, 2008-09 and 2009-10 are concerned, the assessee has raised an Additional Ground of appeal which was hitherto not raised before the lower authorities. Since such Additional Ground is common for the three assessment years except with regard to the amount of addition, the following Additional Ground relating to Assessment Year 2008-09 is reproduced below in order to appreciate the controversy:- "3. On the facts and circumstances of the case and in law, the Learned CIT(A) erred in affirming the action of the Assessing Officer in making following disallowance u/s.143(3) r.w.s. 153C of the Act in absence of any incriminating seized material found during the course of search and the disallowance are bad in law: (a) Rs. 56,912/- being Disallowance u/s.14A." 4. The relevant facts relating to Assessment Year 2008-09 are as follows. In pursuance to the search and seizure action under section 132 of the Act on 16/12/2010, assessee was served with a notice under section 153C of the Act calling for filing her return of income. In response, the assessee filed a retur....
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....so far as the aspect of admission of the aforesaid Additional Ground is concerned, the Ld. Departmental Representative appearing for the Revenue has not made any cogent reasoning to oppose the plea of the appellant. Moreover, in my considered opinion, the aforesaid Additional Ground involves a question of law which arises from the facts already available on record and the same is also relevant to determine the correct tax liability of the assessee. Therefore, following the ratio of the judgment of Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. (supra), I deem it fit and proper to admit such Additional Ground of appeal for adjudication. The aforesaid decision was pronounced in the course of hearing and accordingly the rival counsels made their respective submissions on the merits of the Additional Ground. 7. The Ld. Representative for the assessee contended that in the absence of any incriminating material found and seized during the course of search, the impugned addition was unsustainable. It was pointed that in the context of the original return filed under section 139(1) of the Act on 30/09/2008, no notice under section 143(2) of the Act was issued within ....
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....32A of the Act respectively. The said section envisages that the Assessing Officer shall assess or reassess the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search was conducted. The second proviso to section 153A (1) of the Act also prescribes that assessment or re-assessment, if any, relating to any assessment year falling within the period of six years referred to in sub-section (1) of section 153A of the Act, which is pending on the date of initiation of search or making of requisition as the case may be, shall abate. In other words, in so far as the pending assessments are concerned, the competence of the Assessing Officer to make the original assessment converges with the assessment to be made u/s.153A of the Act, i.e. only one assessment shall be made for such assessment years based on the findings of the search as well as any other material existing or brought on record by the Assessing Officer. Notably, there would assessments in the period of the six assessment years identified in section 153A (1) of the Act, which would have become final (i.e. which are not pending on the date of search); such asse....
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....will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search take place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other postsearch material or information available with the AO which can be related to the evidence found, it does not mean that the assessment " can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153A is relatable to abated procee....
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.... assessment which had otherwise become final, in the absence of any incriminating material having not been found in the course of search, qua the impugned disallowance u/s. 14A of the Act. Accordingly, I set aside the order of the CIT(A) and direct the Assessing Officer to delete the addition of Rs. 56,917/- as the same is purported to be beyond the scope and ambit of assessment envisaged under section 153A of the Act. Thus, on this aspect, the assessee succeeds. 10. Since assessee has succeeded on the Additional Ground of appeal, the other Ground raised regarding merits of the disallowance of Rs. 56,912/- is not adjudicated as it is rendered academic. Thus, appeal for Assessment Year is allowed. 11. So far as the appeals for assessment year 2005-06 and 2009-10 are concerned, it was a common point between the parties that the facts and circumstances in relation to the Additional Ground of appeal are similar to those considered by me in relation to Assessment Year 2008-09. Therefore, my decision in the appeal for Assessment Year 2008-09 shall apply mutatis mutandis in the appeals for Assessment Years 2005-06 and 2009-10, which are also allowed accordingly. 12. In so far as appeal....