TaxTMI 
TaxTMI 
2017 (6) TMI 169
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....assessment and change of opinion has been made as such the order passed is illegal and therefore, is liable to be quashed. 2. The Ld. CIT(A) erred in law and facts by confirmed the addition of Rs. 97,10,000/- as unexplained cash credit u/s.68 of the I.T. Act, 1961. 3. The Ld. CIT(A) erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, notification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal. 3. The grounds raised in ITA No. 6802/Del/2013 (AY 2004-05) read as under:- 1. That the impugned order is bad in law, in nature as assessment has not been framed on the seized pursuant to an action taken under section 132 of the Act but the reassessment and change of opinion has been made as such the order passed is illegal and therefore, is liable to be quashed. 2. The Ld. CIT(A) erred in law and facts by confirmed the addition of Rs. 89,50,000/- as unexplained cash credit u/s.68 of the I.T. Act, 1961. 3. The Ld. CIT(A) erred in not considering the additional evidence filed. 4. The assessee craves leave for addition, notification, deletion, any of grounds of appeal either ....
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....lication money was either received or paid. On going through the balance sheet for the year, it has been gathered that reserve and surplus has been increased by Rs. 77,68,000/- on account of share premium. The assessee has also not furnished any detail in this regard. Moreover, it has not filed the name and addresses of the parties to whom these shares have been issued. During the assessment proceedings, the assessee's counsel was asked to furnish the details of the above amounts with supporting documents in order to prove the genuineness of the transaction and identity and creditworthiness of the parties. However, nothing has been brought on record by the Assessee. The AO observed that the assessee is a group company of "Rajdarbar Group" and in some other companies of the group that during the AYrs. 2003-04 and 2004-05, unexplained money was introduced by way of share capital through Kolkata based companies and in the case of certain Kolkata based companies enquiries were done by the Investigation Wing, Kolkata and some of those were found to be paper companies. AO further observed that in the present case the name of the particular company cannot be pointed out as the list of sha....
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....nd circumstances has admitted the additional grounds while adjudicating the ITA No. 1245/Del/2014 (AY 2005-06) & Others in the case of Global Realty Creations Ltd. Vs. DCIT & Ors. It was argued that admission of a ground under Rule 27 is absolutely discretionary and looking at the identical facts and circumstances of the matter the Hon'ble Tribunal not only admitted the legal ground under Rule 27 but also decided in favor of the assessee. 8.1 Ld. AR further argued that the AO has to tax the income of the assessee as per provisions of law. It was submitted that Tribunal in the umpteen numbers of cases almost without exceptions have admitted the question of law raised so as to deliver substantive justice to the appellants. Reliance was placed on CBDT's Circular No. 14(XL-35) dated 11-4-1955. In the said circular, the CBDT observed as under:- "3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or oth....
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....m.) Chicago Pneumatic India Ltd. v. DCIT (2007) 15 SOT 252 (Mumbai). 8.4 Ld. Counsel of the assessee has also filed the Written Submissions with regard to his contention on the incorrect assumption of jurisdiction u/s. 153C of the I.T. Act, 1961 and on additional legal grounds, which reads as under:- "INCORRECT ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. Ld. AO has provided copy of the satisfaction note before issuing notice under Section 153C of the Act. Copy of the satisfaction note is enclosed herewith for reference and records at Pg number of Paper Book-01. The satisfaction note reads as below:- "Satisfaction note for proceedings u/s 153C of the Income Tax Act, 1961 A search operation was conducted on Rajdarbar Group of cases on 31.07.2008. During the course of search operation at the premises of Party A-7 Global Reality Ventures Pvt. Ltd. Various papers were found and seized belonging to M/s Global Reality Creations Ltd. The annexure are marked as under: Party A-7 Annexure A-45, Hard Disc containing Books of Accounts of M/s Global Reality Creations Ltd. Thus the proceedings u/s 153C r.w.s. 153A of the Income Tax Act, 19....
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....equisitioned 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 notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) 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 sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer sh....
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....e use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would not meet the requirement of the concept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of the kind required under Section 153C of the said Act. (Emphasis Supplied) 12. This being the position the very first step prior to the issuance of a notice under Section153C of the said Act has not been fulfilled. Inasmuch as this condition precedent has not been met, the notices under Section 153C are liable to be quashed. It is ordered accordingly. The writ petitions are allowed as above. There shall be no order as to costs." In PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi)-Hon'ble Court was pleased to lay down the following proposition of law "13. Having set out the position in law in the decision of this Cour....
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....e deed, for example, "belongs to" the purchaser of the property although it obviously "relates to" or "refers to" the vendor. In this example if the purchasers premises are searched and the registered sale deed is seized, it cannot be said that it "belongs to" the vendor just because his name is mentioned in the document. In the converse case if the vendor"s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy "belongs to" the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents - copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement - can be said to "belong to" the petitioner. 17. In view of the foregoing discussion, we do not find that the ingredients of Section 153C of the said Act have been satisfied in this case. Consequently the notices dated 02.08.2013 issued under Section 153C of the said Act are quashed. Accordingly all proceedings pursuant thereto stand quashed." * emphasis supplied Subsequent to the aforesaid rulings, Hon'ble Delhi High Court has reaffirmed ....
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.... view of the coordinate Bench and would like to add that this satisfaction must be an objective satisfaction based on an enquiry by the AO to establish that the documents referred to in section 153C which is found during the search u/s. 132, which are seized or requisitioned belongs to a person other than the person searched; and there should be a clear finding to that effect based on which only satisfaction as envisaged u/s. 153C can be inferred. Such a finding by the AO is required for attaining the said satisfaction and then it should be recorded in the file of the assessee which is a 'sine-qua-non' to trigger the jurisdiction for the AO to proceed against such other person. In this case this exercise of recording the satisfaction during the assessment proceedings of the person searched has not been carried out and the satisfaction does not satisfy the requirement of Section 153C and in this case as seen from the satisfaction note itself that it has been done in a mechanical manner, without application of mind. On the same date i.e. 23.7.2010, similar satisfaction note, only with the change in the name of the assessee's has been issued arbitrarily which does not in any manner sa....
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....tated that the judgment of this court in Pepsico is pending consideration in a special leave petition in the Supreme Court. However no stay has been granted of the operation of the judgment of this court. 4. Learned Counsel for the Revenue submitted that the ITAT has also relied on the decision of its coordinate Bench in V.K. Fiscal Services Pvt. Ltd. vs. DCIT (ITA Nos. 5460-5465/Del/2012) which in turn relied on an earlier order of the ITAT in DSL Properties Pvt. Ltd. vs. DCIT (ITA No. 11349/Del/2012). He states that the decision of the ITAT in DSL Properties Pvt. Ltd. (supra) is the subject matter of a separate appeal in this court being ITA No. 585/2013 which is pending consideration. He accordingly prays that these appeals be taken up with ITA No. 585/2013. 5. The court is of the view that the essential principle of law that has been settled by this court in Pepsico in regard to the interpretation of the words "belongs to" in section 153C of the Income Tax Act, 1961 would apply on all fours to the facts of the present case irrespective of whether the document recovered (viz., the accounts) is in the form of hard copy or a hard disk. Consequently, the court does not fin....
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....aced in the paper book at Pg number 72-90. '13. The first and foremost step for initiation of proceedings under Section 153C of the Act is for the AO of the searched person to be satisfied that the assets or documents seized belong to the Assessee (being a person other than the searched person). The AO of the Assessee, on receiving the documents and the assets seized, would have jurisdiction to commence proceedings under Section 153C of the Act. The AO of the searched person is not required to examine whether the assets or documents seized reflect undisclosed income. All that is required for him is to satisfy himself that the assets or documents do not belong to the searched person but to another person. Thereafter, the AO has to transfer the seized assets/documents to the AO having jurisdiction of the Assessee to whom such assets/documents belong. Section 153C(1) of the Act clearly postulates that once the AO of a person, other than the one searched, has received the assets or the documents, he is to issue a notice to assess/re-assess the income of such person - that is, the Assessee other than the person searched - in accordance with provisions of Section 153A of the Act ......
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....f AkashArogya..Hon'ble High Court has held: "8. The Revenue has not placed any material to dispute the factual finding of the ITAT that the requirement of the law explained by this Court in Pepsi Foods regarding the recording of satisfaction by the AO even in respect of the searched person was not fulfilled. Consequently, the fact that it was the same AO both for the searched person and the Assessee makes no difference to the consequence of non compliance with the legal requirement regarding the recording of satisfaction. The Court also agrees with the ITAT that even if the AO were the same, satisfaction would have to be recorded separately qua the searched person and the Assessee." Copy of this ruling is also placed in the paper book at Pg number 52-60. Further, it is relevant here to point to the amendments introduced to Section 153C (1) of the Act by Finance (No.2) Act, 2014 w.e.f. 01.10.2014. We may notice the changes brought in to the Section 153C (1). The section before and after the amendment reads as below: After Amendment Before Amendment "153C.(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and se....
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....been subject matter of litigation. 2. The Hon'ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No. 3958 of 2014 dated 12-3-2014 [2014] 43 taxmann.com 446 (SC) (available in NJRS at 2014-LL-0312-51) has laid down that for the purpose of section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that "the satisfaction note could be prepared at any of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. " 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'bleSC, apply to....
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..../assets belonging to the other than searched person. 5. Separate satisfaction note has to be recorded even when the AO of the searched person as well as the other than searched person is the same. The appellant's case fails on all the aforesaid propositions of law and the assessment, therefore, deserves to be quashed. LIMITED SCOPE OF ASSESSMENT UNDER SECTION 153C/ 153A Additional ground of appeal number -2 raised by the appellant is as below:- Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the additions which were not based on the incriminating material found and seized during the course of search. Perusal of Section 153C as quoted earlier in this submission, clearly indicates that the assessments where proceedings are initiated u/s 153C are required to be completed in accordance with the substantive provisions for assessment as laid down under section 153A of the Act.Hon'ble jurisdictional High Court has reaffirmed the aforesaid proposition of law. What is the scope of assessment and what are the restrictions of assessment u/s 153A has been a matter of long controversy. In recent times there is near j....
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....wal, ITA No. 5518/D/2012 dated 30.01.2014 xviii. Marigold Merchandise (P) Ltd Vs DCIT ITA No 2666/D/2013 dated 27.12.2013 xix. Kabul Chawla vs. ACIT ITA No 779/D/2013 dated 23.05.2014 xx. CIT (C)-III vs. Kabul Chawla (Delhi) ITA No 707/2014 xxi. CIT (C)-I vs. MGF Automobiles Ltd. (Delhi) ITA No. 13,14/2014 xxii. Pr. CIT vs. Kurele Paper Mills (P) Ltd (Delhi) ITA No. 369/2015 xxiii. DCIT vs. Kurele Paper Mills (P) Ltd, ITA No. 3761/Del/2011 (ITAT Delhi) As the perusal of the assessment order undisputedly indicates that no reference whatsoever has been made to any material found/ seized during the course of search. The assessments are, therefore, clearly outside the scope of assessments u/s 153C which are required to be passed in accordance with the methodology laid down in section 153A of the Act. The appellant, therefore, deserves relief on this ground as well. In the Kabul Chawla case, (Copy of the order attached at Paper Book Pg 91-116)Hon'ble jurisdictional High Court has laid down following propositions of law.. 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of th....
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....e or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment" In the case of the appellant the assessment has not been restricted/based to incriminating documents. Assessments are therefore, unsustainable for this reason as well. 8.5 The Ld AR has further relied upon a number of cases pertaining to the assessee group to argue that identical action of assumption of jurisdiction based on the identical material was quashed by the Hon'ble Tribunal and the aforesaid orders quashing the assessments were accepted by the Hon'ble Delhi High Court. Relevant detailed specific details have been given in written submission filed during the course of proceedings. It was emphasized that there was absolutely no difference between the facts of those matters and the facts of the present appeals. Ld. Counsel of the assessee further relied upon the recent decision of the Tribunal dated 07.04.2017 in the case of Global Realty Creations Ltd. & Ors. passed in ITA No. 1245/Del/2014 (AY 2005-06) & Ors. wherein on identical facts and circumstances of the case the addition in dispute was deleted. 8.6 The Ld AR ha....
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....sse appears as companies whose shares are sold at huge premium. Is pointed out in the CIT(A) order. Secondly, there is a statement recorded u/s 132(4) on the date of search where the statement of the promoter of the company Shri Rakesh Kumar Garg has been taken on the issue of share premium which he evaded and did not reply. Decisions in favour of Revenue of the High Court: 1. CIT vs. Anil Kumar Bhatia 24 Taxman.com 98 (Delhi HC) dated 07.08.2012(Para 19, 20, 21 & 22) 2. Filatex India Ltd. ITA No. 269/2014(Delhi HC) dated 14.07.2014(Para 2, 3 & 4) 3. M/s. Canara Housing Development Company 49 Taxmann.com 98, ITA No. 38/2014 (Karnataka HC) dated 25.07.2014(Para 11) 4. Sri Raj Kumar Arora ITA No. 56/11 (Allahabad HC) dated 1.07.2014 5. Gopal Das Bhadruka 27 Taxmann.com 167 (Andhra Pradesh HC) (Para 5) 6. Mukundray K,. Shah 290 ITR 433 (SC) where the Supreme court held that a print out of audited books of account seized in the course of search can be used for assessment and tax accumulated profit u/s 2(22)(e). Decisions in favour of Revenue of ITAT 1. Apoorva Extrusion Pvt. Ltd. - ITA No. 3308/De1/2010(Delhi A-Bench) dated 09.10.2014 (Para 8) 2. Nandini D....
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.... and AO of the Person of 153C proceedings are the same and satisfaction was recorded in the file of the person to be assessed u/s 153C after centralization of the case to the same AO. The Hon'ble High Court considering all the facts nowhere held that AO is lacking jurisdiction as satisfaction has not been recorded in the case of Puri Group but recorded in the case of SSP Aviation Ltd. Rather, Hon'ble High Court has held assessment proceedings of 6 years initiated as valid counting from the previous year of date of search i.e. 05.01.2009 and not from the date of recording of satisfaction i.e. 03.11.2010 as was held in the case of DSL Properties. If the DSL Properties interpretation of 153C section is correct, Hon'ble High Court would have held the proceedings of AY. 2003-04 & 2004-05 as time barred in the case of SSP Aviation also. In all the orders of Hon'ble ITAT Delhi Benches relied heavily by Assessee, jurisdictional High Court decision of SSP aviation has not been considered where in Para 14 & 15 it is held by Hon'ble High Court that proviso of Section 153C (1) is for the purpose of abatement of proceedings in respect of second proviso of 153A and not for....
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....ent-firm had undisclosed income assessable under the Act by virtue of the powers conferred under section 158BO. Therefore he issued notice under section 158BD read with section 158BC and completed the assessment. The question to be considered is whether the procedure adopted by the Assessing Officer in this case leading to assessment is in accordance with statute and if not whether the assessment is invalid as held by the Tribunal, the decision of the Supreme Court relied upon by the assessee having been found not applicable to the facts of this case. "ln the case of DSL properties and other cases ITAT has not considered this judgment which is of prior date and is binding to be followed being the only known case of any High Court on this issue. Hence, the decision of DSL Properties is per incuriam and is not binding. In fact, the case of Piyush Infrastructure of ITAT Delhi is prior to the case of DSL Properties of ITAT Delhi which says that handing over and taking over of seized documents are not required to be made where the AO of the searched person and the person to be assessed u/s 153C is the same and also held that Assessment u/s 153A & 153C will be of the same year and the ye....
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....cerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 143(1)(a) intimation is not an assessment The observation of Hon'ble High Court in para 37 (vii) supra clearly reveals that Hon'ble High Court has considered the case of "completed assessments" which are made u/s 143(3) and 147 of the act but not the cases where assessments have not been made and only processing u/s 143(1 )(a) is made. This has already been held by Hon'ble Supreme Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P.) Ltd. 161 Taxman 316 and Hon'ble Delhi High Court in th....
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....med to be a notice of demand under section 156, for the apparent purpose of making machinery provisions relating to recovery of tax applicable. By such application only recovery indicated to be payable in the intimation became permissible. And nothing more can be inferred from the deeming provision." The relevant portion of the decision of Hon'ble Delhi High Court in the case of Punjab National Bank Supra is as below - "As a result of insertion of Explanation to section 143 with effect from 1-10-1991 and subsequently with effect from 1-6-1994 and ultimately omitted with effect from 1-6-1999 by Explanation as introduced by the Finance (No.2) Act, 1999, an intimation sent to the assessee under section 143(1)(a) was deemed to be an order for the purposes of section 246 between 1-6-1994 to 31-3- 1995, and under section 264 between 1-10-1991 and 31-5-1999. The expressions 'intimation' and 'assessment order' have been used at different places. Contextual difference between the two expressions has to be understood in the context the expressions are used. The assessment is used as meaning sometimes 'the computation of income', sometimes 'the determinat....
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.... Court has also held in this case in para 37 (i), (iv) & (v) that once the search is initiated in the case of the assessee jurisdiction of AD make assessment u/s 153A is valid and mandatory. It is only when the assessment u/s 143(3) has already been completed, addition u/s 153A is restricted to the seized material. In such cases where no material is found/seized as a result of search, the assessment made u/s 143(3) 'should be reiterated' meaning thereby 'should be repeated'. This does not mean that jurisdiction of AO u/s 153A is bad in law. Judgment of Hon'ble Delhi High Court in the case of Anil Bhatia (supra) and Filatex (supra) has not been over ruled. 8. Jurisdiction issue cannot be challenged after the completion of the assessment. The assessee has not challenged the notice u/s 153C issued by the assessing officer rather the return of income was filed in response to the said notice and assessee complied with the notices and questionnaires issued during assessment proceedings. No objection on the jurisdiction was ever raised by the assessee before the assessing officer. Hon'ble Delhi High Court in the case of CIT vs. Kapil Jain 50 DTR 342 vide o....
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....wo recent cases decided by Hon'ble Delhi High Court. One is ITA number 58 of 2017 in the case of Nau Nidh Overseas Pvt Ltd by order dated Feb 03, 2017. Through this the Ld DR has sought to argue that Hon'ble Delhi High Court decided this case relying upon Super Malls Pvt Ltd 2016-TIOL-2953-HC-Del-IT dated 22/11/2016 to canvass the argument that if the AO of the searched party and the other party in whose case action under section 153C is taken then there should not be need of recording two satisfaction notes i.e. one by the AO of the searched person and other by the AO of the other person. Other point emphasized by the Ld DR was that in these judgements it has been held that the term 'belonged to' must not be too literally interpreted rather the meaning of 'belonged to' should be seen akin to related to. It was also stated that these rulings held that one should not be hyper technical with regard to satisfaction note. 9.2 Ld. DR reiterated the written submissions as mentioned above and further relied upon the orders of the authorities below and stated that the provision of section 153 of the Act has rightly been applied in the case of the assessee on the material available with ....
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.... Hon'ble Court held that the law should not be interpreted too literally. Hon'ble Court perhaps was also persuaded by the admission of the assessee's counsel that he did not want to insist on the need for recording of separate satisfaction when the AO of the searched person and the other person was the same. This concession made by the counsel of the assessee was against the Board Circular number 24/2015 dated 31/12/2015 and detailed ruling of the Hon'ble Delhi High Court in the case of PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. Ltd v ACIT [W.P. (C) 415/2014 & CM 823/2014, RRJ Securities, CIT V/s Kabul Chawla 380 ITR 573. Law laid down by the aforesaid detailed rulings of the Hon'ble Court can be summed up as under; 1. It is necessary that the satisfaction is recorded by the assessing officer of the entity in whose case the document/ asset has been seized to the effect that the relevant document/ asset belong to the other person in whose case action under section 153C is contemplated. 2. It is essential to establish that the document belongs to the person in whose case action u/s 153C is contemplated. 3. Mere photocopies or ....
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....hat the Law laid down by the Hon'ble jurisdictional court in the cases of PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. Ltd v ACIT [W.P. (C) 415/2014 & CM 823/2014, RRJ Securities, CIT V/s Kabul Chawla 380 ITR 573 among other has by no stretch of imagination reviewed by the Hon'ble High Court by way of the judgements relied upon by Ld DR. Some of the very recent cases of the Hon'ble jurisdictional High Court which have followed /upheld the propositions/interpretation of law as detailed above are as under; 1. Rajeev Behl ( ITA- 84 to 86/2017) Date of order: 06/02/2017 2. Gurnam Arora ( ITA- 669/2016) Date of order: 10/02/2017 3. Baba Global Ltd ( ITA 938/2016) Date of order 23/12/2016 4. DMA Investments Pvt Ltd ( ITA-767-768/2016) Date of order 04/11/2016 5. Marichika Properties Pvt Ltd ( ITA 633/634/2016) date of order 19/10/2016 11. We have heard both the parties and perused the records and the case laws relied upon by both the parties, we are of the considered view that the additional grounds are on the assumption of jurisdiction u/s 153C of the Act besides the scope of assessment u/s 153A/153C of the Income Tax Act,....
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....tion should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. In the instant case, therefore, the Tribunal had jurisdiction to examine a question of law which arose from the facts as found by the lower authorities and having a bearing on the tax liability of the assessee." 11.1 In view of the decision of the Hon'ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 (Supra) and keeping in view of the facts and circumstances of the case circumstances of the case, we are of the view that the additional grounds raised by the assessee are purely legal grounds and do not require fresh facts which is to be investigated and goes to the root of the matter. In the interest of justice, we admit the following two common additional grounds raised by the assessee. 1. "The Ld. CIT(A) has erred on facts and in law in confirming the assessment of the appellant passed without satisfying the substantive and procedural requirements under section 153C of the Income Tax Act. 2. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the add....
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....f the aforesaid, it is very clear that in both the above cases, relied by Ld CIT(DR), Hon'ble High Court upheld the assumption of jurisdiction under section 153C on account very compelling specific facts evidencing that the documents/assets not only belonged to those person but those documents assets evidenced clear existence of undisclosed income. Confessional statement that the assets/document belonged to the person in whose case action under section 153C was taken was made by the directors of the very same companies who were subjected to the 153C proceedings. Also, there was no dispute in these two cases (either from the searched party or the other party) as to whom the documents/assets belonged to. On account of these compelling and exceptional circumstances, it appears; the Hon'ble Court held that the law should not be interpreted too literally. 11.7 After perusing the assessment order as well as appellate order, we find that in the present case the AO has completed the assessment u/s. 153C of the I.T. Act, 1961 and made the addition in dispute without any incriminating material found during the search and seizure operation and the addition in this case was purely based on ....
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....er 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 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.On the date of the ....