TaxTMI 
TaxTMI 
2018 (6) TMI 156
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.....2006 but no further proceedings were taken up by the respective AO. Thereafter, on 19.02.2008, there was a search and seizure operation u/s 132 of the Act on the business premises of its assessee and also the residential premises of the Directors and Partners. Consequent thereto, notices u/s 153A dated 24.10.2008 were issued and served on the assessee. In response to the notices, the assessee filed its returns of income. The AO asked the assessee to furnish the details of housing project(s) under section 80IB of the Act and non 80IB projects, details of expenditure etc. However, the assessee did not file any information called for by the AO. 3. Consequent to the search and seizure operation, the group cases were centralized with the Central Circle, Hyderabad and notices were issued from time to time in the case of Janapriya Properties (P) Ltd (Company), M/s. Janapriya Properties (Firm), M/s. Engineers Syndicates Pvt. Ltd and M/s. Janapriya Engineers Syndicate Ltd etc., It was observed that the huge amount of on-money, unaccounted cash were paid to various landlords for purchase of land and in some cases the receipts from customers were not duly recorded in the books of account.....
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....ellate Commissioner erred in confirming the above disallowance made u/s 4OA(3). 6. The AO. erred in adding an amount of Rs. 1 ,93,91,192/- I u/s.68. 7. The Appellate Commissioner erred in confirming the above addition u/s.68". 5. In the ground of appeal No.2, the assessee is challenging the validity of the assessment u/s 153A of the Act when no fresh material was before the AO after completing the assessments u/s 143(3) of the Act. The CIT (A) had dealt with this issue at Para 4.2 of his order and following the decision of the Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar Bhatia in ITA Nos.1626, 1632 etc., of 2010, wherein it was held that once there is a search u/s 132 of the Act, it is mandatory for the AO to issue notices u/s 153A of the Act calling upon the assessee to file returns for the six A.Ys prior to the year in which the search took place and the assess or reassess the income, without having the need to follow the strict provisions of complying with the strict conditions of section 147, 148 and 151 and determine the total income of the assessee, he upheld the initiation of proceedings u/s 153A of the Act. 6. The learned Counsel f....
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....) CIT vs.Soumya Con.(P) Ltd (2016) 387 ITR 529 (Guj.) iv) CIT vs. Devangi Alias Rupa (2017) 394 ITR 184 (Guj.) v) CIT vs. Meeta Gutgutia (2017) 395 ITR 526 (Del.) vi) CIT vs. Dipak Jashvant Lal (2017) 397 ITR 153(Guj.) vii) CIT vs. SRS Ispat & Power Ltd (2017) 398 ITR 584(Bom.) viii) CIT vs. Deepak Kumar Agarwal (2017) 398 ITR 586 (Bom.) ix) CIT vs. Manoj Hora (2018) 402 ITR 175 (Del.) 10. The learned DR, on the other hand, supported the orders of the authorities below. 11. Having regard to the rival contentions and the material on record, we find that the assessee has filed a chart showing the status of the assessments u/s 143(3) of the Act and we find that all these assessments were completed before the date of search on 9.2.2008. The assessments u/s 143(3) for the A.Ys 2002-03 and 2003-04 were completed by the ACIT-11(II) Bangalore on 31.3.2006, whereas for the A.Y 2004-05, the ACIT 11(II) Bangalore has completed the assessment u/s 143(3) of the Act on 13.11.2006 and for the A.Y 2005-06 on 26.12.2007. For the A.Y 2006-07, the return was filed on 28.11.2006 and no proceedings were taken out by the AO thereafter. U/s 153A....
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....can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of the section the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisitio....
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....ncome of the assessee u/s 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition". vi) Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in (2016) 380 ITR 573 (Del.) held as under: "The legal position that emerges on a perusal of section 153A and section 132 of the Income-tax Act, 1961, is as under: (i) Once a search takes place under section 132 of the Act, notice under section 153A(l) will have to be mandatorily issued to the person in respect of whom search was conducted requiring him to file returns for six assessment years immediately preceding the previous year relevant to the assessment year in which the search takes place. (ii) Assessments and reassessments pending on the date of the search shall abate. The total income for such assessment years will have to be computed by the Assessing Officers as a fresh exercise. (iii) The Assessing Officer will exercise normal assessment powers in respect of the six years previous to the relevant assessment year in which the search takes place. The Assessing Officer has the power to assess and reassess the "total i....
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....he Assessee then appealed to the ITAT. One of the issues considered by the ITAT was whether the completed assessment on the date of the search would stand on the same footing as the pending assessments which in terms of the second proviso to Section 153A(1) of the Act would abate. It was noticed that in Anil Kumar Bhatia (supra), this Court had left open the question whether in order to frame an assessment in terms of the first proviso to Section 153A(1) of the Act in respect of those AYs for which the assessments had already been completed, there was a requirement that some incriminating material should be unearthed during the search. Nevertheless there were some observations in Anil Kumar Bhatia (supra), which would indicate that the AO would be able to reopen the assessments for those years for which the assessment already stood completed at the time of the search, only if some incriminating material was unearthed during the search. The ITAT concluded "if no incriminating material is found in respect of such completed assessments then the total income in the proceedings under Section 153A(1) of the Act shall be computed by considering the originally determined income. If some in....