TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 1768
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..... The director signed the relevant Appeal papers only on 23.12.2014 and thereafter handed over the same to the advocate on 24.12.2014. In the process there occurred a delay of 30 days in filing the appeal. 3. After considering the reasons for the delay in filing the appeal as stated above, we are satisfied that there was a reasonable and sufficient cause for the delay in filing the appeal by the assessee. Accordingly the same is condoned. 4. Grounds of appeal raised by the assessee read as follows :- "1. For that the Ld. CIT(A) ought to have quashed the entire assessment completed u/s. 153A/ 143(3) by the A.O. vide order dated 27.03.2014 since the said order is bad in law. 2. For that on the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the action of the A.O. in adding back the items of regular assessment in the proceedings u/s.153A. 3. For that on t e facts and in the circumstances of the case, the Ld. CIT(A) was not justified in confirming the disallowance of carriage inward and carriage outward expenses to the tune of Rs. 19,89,870/- made by the A.O. by wrongly invoking the provisions of sec. 40(a)(ia) of the Income Tax Act, ....
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....ccording to the AO by getting the electricity service connection the assessee has acquired a benefit of enduring nature. Therefore it was a capital expenditure. The AO therefore added the aforesaid sum also to the total income of the assessee. The total income of the assessee was determined by the AO in the order passed for A.Y.2009-10 u/s 153A of the act as follows :- "Computation of total income Rs. Rs. Business income 19,84,836/- Add: Carriage inward (as discussed above) 19,89,870/- Add: Disallowance for preliminary expenses Written off (as discussed above) 15,200/- Add: Disallowance of electric service connection Charges (as discussed above) 4,90,332/- 24,95,402/- Total Business income 44,80,238/-" 7. On appeal by the assessee the CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A) the assessee has preferred the present appeal before the Tribunal. 8. The ld. Counsel for the assesee addressed the arguments on ground nos. 1 and 2. In the aforesaid grounds the plea taken by the assessee is that order u/s 153A of the Act was bad in law. This ground was not raised before AO or CIT(A). Since this is a legal ground....
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....der section 143(3) r.w.s. 153A(1) of the Act. 11. The learned counsel for the Assessee on this aspect submitted that the Second proviso to sec 153A(1) of the Act contemplates that if any of the six assessments are pending on the date of initiation of the search and requisition, the same shall abate. However, there is no provision that even the completed assessment of the aforesaid six years shall abate. Therefore a distinction has been made between a pending assessment and a completed assessment. Thus it was submitted that a completed assessment becomes final unless some incriminating material is found in the course of search. It was argued that Section 153A of the Act does not authorize the making of a de novo assessment. An assessment u/s 153A of the Act is not meant to unsettle the income shown in the regular return in respect of which the assessment is complete. Section 153A of the Act does not lead to a whole exercise of assessment to be made afresh in respect of completed assessments. Therefore vide assessment u/s 153A of the Act, no new disallowance can be made by the A.O. where admittedly the regular assessments are shown as completed assessments on the date of initia....
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....sions. The provisions of section 153A of the Act were introduced by the Finance Act, 2003 with effect from 1-6-2003. Sec.153A of the Act lays down that in respect of searches carried out under section 132 of the Act or requisition of books and other documents made under section 132A of the Act after 31-5-2003, the Assessing Officer shall issue a notice calling upon assessee to furnish return of income in respect of six assessment years immediately preceding assessment year relevant to the assessment year in which search is conducted or requisition is made. The Assessing Officer is empowered to reassess the total income in respect of each assessment year falling with such six assessment years.Sec.153A of the Act reads thus: "153A. Assessment in case of search or requisition. - (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within....
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....(1)(b) and the first proviso? We are of the view that for answering this question, guidance will have to be sought from section 132(1). If any books of account or other documents relevant to the assessment had not been produced in the course of original assessment and found in the course of search in our humble opinion such books of account or other documents have to be taken into account while making assessment or reassessment of total income under the aforesaid provision. Similar position will obtain in a case where undisclosed income or undisclosed property has been found as a consequence of search. In other words, harmonious interpretation will produce the following results :- a) In so far as pending assessments are concerned, the jurisdiction to make original assessment and assessment u/s 153A merge into one and only one assessment for each assessment year shall be made separately on the basis of the findings of the search and any other material existing or brought on the record of the AO, (b) In respect of non-abated assessments, the assessment will be made on the basis of books of account or other documents not produced in the course of original assessment but found in ....
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....ew that the proposition canvassed by the learned counsel for the Assessee finds support from the various decisions cited by him. We therefore hold that the scope of the proceedings u/s.153A in respect of assessment year for which assessment have already been concluded and which do not abate u/s.153A of the Act, that the assessment will have to be confined to only incriminating material found as a result of search. 19. The next aspect to be considered is as to when returns of income filed u/s.139 of the Act are shown to have been accepted without an intimation u/s.143(1) of the Act or without any notice issued u/s.143(2) of the Act within the time limit contemplated by the proviso thereto, can be said to be assessment proceedings concluded that have not abated u/s.153A of the Act. Section 153A of the Act, uses the expressing "pending assessment or reassessment". When a return is filed and when neither an acknowledgement or intimation u/s.143(1)of the Act is issued nor a notice u/s.143(2) of the Act is issued within the time limit laid down in the proviso to Secc.143(2) of the Act, the proceedings initiated by filing the return are closed. In the present case, the period for is....