TaxTMI 
TaxTMI 
2018 (4) TMI 321
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....same was enquiried, on behalf of all the family members of the assessee, Shri P.Srinivas, brother-in-law of the assessee had admitted a sum of Rs. 27 lakhs as unaccounted investment in purchase of the land at Annavaram Village for the FY 2006-07 in the hands of the assessee Smt. P.Annapurna. Subsequently, the assessee has retracted the admission given during the course of search proceedings stating that her brother in law has admitted the additional income without her consent and the funds for purchase of the lands were from her explained sources. In view of the information collected during the course of search, the Assessing Officer issued the notice u/s.148 of the Act on 13-10-2010. In response to the notice issued, the assessee submitted letter stating that the return of income filed on 4-9-2008, declaring taxable income of Rs. 1,39,135/- and agricultural income of Rs. 55,000/- be treated as the return filed in response to the said notice. The assessing officer completed the assessment making the addition of Rs. 35,00,000/- as unexplained investment for purchase of land at Annavaram village and accordingly determined the total income of Rs. 36,39,135/- apart from agricultural in....
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....e reopened the assessment by issue of notice u/s 148 of the Act and accordingly upheld the notice issued by A.O. u/s 148 of the Act. 4. With regard to the addition of Rs. 35 lakhs, Ld.CIT(A) held that despite being given more than sufficient opportunity, the appellant could not substantiate the genuineness of the claim regarding receipt of advance of Rs. 35 lakhs for the Ravada land in terms of the agreement dated 20-2-2007.Thus Upheld the addition of Rs. 35 lakhs and dismissed the appeal of the assessee. 5. Aggrieved by the order of the CIT(A), the assessee is in appeal before this Tribunal and challenged the validity of assessment made u/s 143(3) r.w.s. 147 of the Act instead of making the assessment u/s 153C r.w.s. 143(3) of the Act. 6. We have heard both the parties and perused the materials placed before us. During the course of search, carried out u/s 132 of the Act in the case of M/s. Sai Lakshmi Township Pvt. Ltd. and N. Suryanarayana Reddy, it was found that the assessee has invested unaccounted income in purchase of land at Annavaram village, Denkada Mandalam along with others during the financial year 2006-07 relevant to A.Y. 2007-08. This is established by the ....
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....income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.]" From plain reading of section 153C it is clear that in case of 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 the AO require to invoke the provision u/s 153C but not 147. 8. This view is supported by the order of this Tribunal in the case of G. Koteswara Rao Vs. DCIT (Central Circle), Visakhapatnam in ITA No.400/Vizag/2014 dated 29.10.2015. For ready reference, we extract relevant part of the order, which reads as under: 14. In the present case on hand, admittedly, the Assessing Officer has reopened the assessment based on a search conducted in a third party case. The AO formed the opinion based on the statement recorded from the assessee, consequent to post search proceedings taken up by the DDIT(Inv), which shows undisclosed income which is the very basis of reopening the assessment. The sear....
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....d u/s 132 or requisition is made u/s 132A. Therefore, in our opinion, the AO is not justified in reopening the assessment u/s 147 and his order is illegal and arbitrary. 15. A similar issue came up for consideration before the Special Bench of this tribunal and the special bench had an occasion to deal with the interpretation of section 153A of the Act in the case of All cargo Global Logistics Ltd &Ors. Vs DCIT (2012) 137 ITD 287 (Mum). The Special Bench after considering the provisions of section 153A and CBDT circular has held as under. "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to asses or reassess the total income of these six years. The pending proceedings shal l abate. This me....
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....el l as jurisdiction conferred on him under s. 153A for which assessments shall be made for each of the six assessment years separately ; 16. In yet another case, the ITAT Mumbai Bench, in the case of State Bank of India vs. Deputy Commissioner of Income Tax (2013) 22 ITR 609, had considered the issue. The Mumbai bench after considering the relevant sections and CBDT circular has held as under: 18. A perusal of Section 153A shows that it starts with a non obstante clause relating to normal assessment procedure which is covered by Sections 139, 147, 148, 149, 151 and 153 in respect of searches made after 31.5.2003. These Sections, the applicability of which has been excluded, relate to returns, assessment and reassessment provisions. Prior to, the introduction of these three Sections, there was Chapter XIV- B of the Act which took care of the assessment to be made in cases of search and seizure. Such an assessment was popularly known as,block assessment because the Chapter provided for a single assessment to be made in respect of a period of a block of ten assessment years prior to the assessment year in which the search was made. In addition to these ten assessmen....
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....one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. 20. A question may arise as to how this is sought to be achieved where an assessment order had already been passed in respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to r....
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....abate making way for the Assessing Officer to determine the total income of the assessee in which the undisclosed income would also be included, but in cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed determining the assessee s total income and such orders are subsisting at the time when the search or the requisition is made, there is no question of any abatement since no proceedings are pending. In this latter situation, the Assessing Officer will reopen the assessments or reassessments already made (without having the need to follow the strict provisions or complying with the strict conditions of Sections 147, 148 and 151) and determine the total income of the assessee. Such determination in the orders passed under Section 153A would be similar to the orders passed in any reassessment, where the total income determined in the original assessment order and the income that escaped assessment are clubbed together and assessed as the total income. In such a case, to reiterate, there is no question of any abatement of the earlier proceedings for the simple reason that no proceedings for assessment or reassessment....