AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (4) TMI 1376
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....ly members of the assessee and the issues are also common and, therefore, he has common submissions to make and therefore the submissions made by him in the case of one appeal would be applicable to all the appeals. Learned Departmental Representative did not object to the aforesaid submission of the learned Authorised Representative. We, therefore, for the sake of convenience, proceed to dispose of all these appeals by this common order and proceed with the facts in assessee's appeal IT(SS) A No.153/Ahd/2012 for the assessment year 2003-04. 3. The assessee is an individual who is stated to be deriving income from salary, other sources and capital gains. Assessee filed his original return of income for the assessment year 2003-04 on 30.09.2003 which was initially processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act'). Thereafter, an action under section 132 of the Act was carried out in the case of assessee on 15.10.2008. During the course of search, evidence regarding acceptance of gift from several donors were found. Accordingly, notice under section 153A of the Act was issued on 21.07.2009 and served upon the....
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....68 of the Act. The same may kindly be deleted. 3. The Assessing Officer has erred on facts and in law charging interest u/s 234A, 234B and 234C when no such interest is leviable. The appellant denies its liability to pay interest." IT(SS)A No.155/Ahd/2012 for A.Y. 2005-06 "1. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has grossly erred in rejecting Grounds No.1 and 2 of the appellant's appeal before him challenging the validity of the assessment order passed u/s. 153A read with Section 143(3) of the Income Tax Act, 1961. 2. In law and in the facts and circumstances of the appellant's case, the learned CIT(A) has erred in confirming addition in respect of gifts received by assessee for Rs. 28,50,000/- by considering the same as unexplained gifts u/s. 68 of the Act. The same may kindly be deleted. 3. The Assessing Officer has erred on facts and in law charging interest u/s 234A, 234B and 234C when no such interest is leviable. The appellant denies its liability to pay interest." IT(SS)A No.156/Ahd/2012 for A.Y. 2006-07 "1. In law and in the facts and circumstances of ....
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....rse of original assessment and that the assessment under section 153A can be made only on the basis of evidence found in the course of search and in the absence of any incriminating material, the completed assessments could not be interfered. Learned Authorised Representative submitted that in the present case, the assessee had already accounted the gifts in the respective assessment years by crediting the capital account and the fact of the amount being reflected in the capital account is acknowledged by the Assessing Officer in para 5.3, page 2 of the order. He submitted that the gift deeds and the copies of acknowledgment of returns of income of the donors found at the time of search relates to the gifts which have already been accounted and no new material has been found during the course of search and the copy of gift deeds and copies of return of income of the donors cannot therefore be considered as incriminating material which would authorise the assessing officer to proceed with the framing of assessment under section 153A of the Act. His third argument was that in all the years in which the assessee had received the gifts, Assessee had filed the return of income and....
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....Ahd/2012 2006-07 30/03/2007 143(1) 31/03/2008 Santoshdevi V Agrawal 16 180/Ahd/2012 2003-04 27/09/2003 143(1) 30/09/2004 17 181/Ahd/2012 2004-05 01/11/2004 143(1) 30/11/2004 18 182/Ahd/2012 2005-06 27/03/2006 143(1) 31/03/2007 19 183/Ahd/2012 2006-07 24/03/2007 143(1) 31/03/2008 Vanita V Agrawal 20 187/Ahd/2012 2003-04 27/09/2003 143(1) 30/09/2004 21 188/Ahd/2012 2004-05 01/11/2004 143(1) 30/11/2005 22 189/Ahd/2012 2005-06 27/03/2006 143(1) 31/03/2007 23 190/Ahd/2012 2006-07 24/03/2006 143(1) 31/03/2007 Aruna A Agrawal 24 194/Ahd/2012 2003-04 24/11/2003 143(1) 30/11/2004 25 195/Ahd/2012 2004-05 05/08/2004 143(1) 31/08/2004 6. On the basis of the above chart, he....
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....ing given any gift to the assessee, the assessee did not produce the donors for examination before the ADIT(I). He further submitted that on a combined reading of the material found at the time of search namely the gift deeds and the return of income of the donors revealed that the donors had given the gift of more than the income shown in the return of income. On a sample basis he pointed to page nos.3 & 4 of the paper book and pointed out that Shri Mahavir Prasad Agrawal is stated to have given gift of Rs. 1,00,000/- whereas his total income as per copy of the return of income was Rs. 60,250/- only. He therefore submitted that on the basis of the material found during the course of search coupled with the post search inquiries by ADIT(I) indeed revealed that the document were incriminating and therefore the Assessing Officer was fully justified in framing assessment under section 153A of the Act. He further placed reliance on the decision of Hon'ble Allahabad High Court in the case of CIT vs. Raj Kumar Arora reported in (2014) 367 ITR 517 (All). 9. Learned Authorised Representative, in the rejoinder to learned Departmental Representative's submission, submitted tha....
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....the Act was carried out in the case of assessee on 15.10.2008 and during the course of search, material in the form of gift deeds and the copy of return of income of the persons giving the gift (i.e. donors) to the assessee were found. It is on the basis of these documents that were found at the time of search and post search inquiries made by ADIT (Inv) which led to the discovery of the fact that the quantum of gifts, donors being not related to the assessee, no occasion necessitating transactions of gifts and therefore it was concluded by the AO that the gifts received by the assessee and his family members were bogus gifts and therefore the AO proceeded to make additions in respect of the gifts received in the assessment framed u/s 153A of the Act. It is also a fact that in the assessment order that is framed under 153A, AO in respect to the gifts that has been received by the assessee in various assessment years has at para 5.2 page 2 of the order has noted that the gifts were reflected in the capital account of the assessee in the various assessment years listed therein. The exact noting of the AO reads "On verification of the capital accounts, it is seen that the assess....
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....cordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate : [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the as....
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....onducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalised for those assessment years covered under Section 153A of the Act. 14. Hon'ble Delhi High Court in the case of Kabul Chawla (2016) 380 ITR 573 (Del) after considering the various decisions cited therein has summarised the legal position with respect to s. 153A as under: "37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions the legal position that emerges is as under: i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of....
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....s of s. 153A, the completed assessments could be interfered by the AO while making assessment u/s 153A only on the basis of 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. 16. In the present case, as already noted above, the AO had proceeded on the basis of gift deeds and copies of return of income of the donors and the post search inquiries to conclude that the gifts received by the assessee are bogus gifts. Before us, Revenue has not placed any material on record to demonstrate that the gifts deeds and copies of return of income of the donors found at the time of search were different documents from those that were considered by the Assessee while claiming the amounts to be the gifts. 17. We find that in the case of CIT vs. Ashok Dua (2009) 177 Taxman 494 (Delhi), where the facts were that when assessee had disclosed gifts received by assessee and minor sons from NRI's and during the course of search gift deeds and affidavits of the donors were foun....
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....iminating material found in the course of the search. In the present case, all that was found were the gift deeds and the affidavits and there was no incriminating material found in the course of search to suggest that the gifts were bogus. In Vishal Agarwal's case (supra) the Tribunal in a similar situation had returned the finding that there was nothing in the assessment order to show that any evidence was found during the search to suggest that the gifts were bogus. The gifts having been declared in the returns of income, fell outside the purview of Chapter XIV-B of the Income-tax Act, 1961. In such a similar situation, this Court in Vishal Aggarwal's case (supra), did not interfere with the findings and conclusions returned by the Tribunal and was of the view that no substantial question of law arose for the consideration of this Court." 18. As far as the proposition that when the return has been processed u/s 143(1) and the time period of issuance of notice u/s 143(2) for selecting the return for scrutiny has elapsed and when no incriminating material has been found during the course of search then in such cases proceedings do not get abated by the virtue....
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.... "pending" "assessment" or "reassessment" and not "assessment orders". The assessment may not be pending even though there is no formal order u/s 143(1)(a). The moment return is filed and acknowledgement or intimation issued, the proceedings initiated by filing the return are closed, unless they are again triggered by issuing notice u/s 143(2) of the IT Act. In the case under consideration, the period for issuing the notice u/s 143(2) elapsed. The process has attained the finality which can only be assailed u/s 148 or 263 of the IT Act. Such proceedings can never be initiated u/s 143(2) when the time period for issuing notice u/s 143(2) has expired. Hon'ble ITAT, Mumbai C Bench in the case of ACIT Vs. Pratibha Industrialist Ltd. reported in 23 ITR Tribunal 766 Mumbai has also held as under :- "Although by proceedings initiated under section 153A all six years shall become subject matter of assessment under section 153A the Assessing Officer shall have a free-hand, through abatement, only on the proceedings that are pending, to frame the assessments afresh. But in a case where the proceedings have reached finality, assessment under section 153A read with section....
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.... received by the assessee. Similarly, for assessment year 2001-02, the assessee has enclosed all the details of the gift along with return and the same was processed under Section 143(1) and thereafter no proceeding was initiated either by issuing notice under Section 143(2) or 148 within the stipulated period of time. Now, during the assessment proceeding under Section 153A, the assessee was required to produce the donor once again, in my considered view, is not justified or tenable in the eyes of law. This very issue has been decided by the Special Bench of the Tribunal in case of ALL Cargo Global Logistics Ltd. (supra). The Special Bench of the Tribunal has answered the question in the following manner :- "(a) In assessments that are abated, the AO retains the original jurisdiction as well as jurisdiction conferred on him u/s 153A for which assessments shall be made for each of the six assessment years separately; (b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means- (i) books of account, other documents, ....
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....enever the abated proceedings are merged with the proceedings u/s 153A then scope of assessment is vide and it will cover all issues arising from the original return and issue arising on the basis of incriminating documents, and assets found and seized during the search. Wherever the proceedings are completed prior to the search then nothing merges with proceding u/s 153A of the Act and nothing abates. In such a situation, the AO has to respect the completeness of the proceedings. Admittedly, in the case of assessee, no incriminating documents were found and seized. The provisions of section 153A give power to assessing officer to assess and reassess the income. The assessing officer is empowered to make addition on account of undisclosed income or income escaped assessment. In the case under consideration, there is no incriminating material found during the course of search relating to the assessment year under consideration. The time period for issuing notice u/s 143(2) was already expired prior to the date of search. Therefore, the proceedings do not get abated by virtue of proviso to Section 153A. 10. Therefore, the question ar....