TaxTMI 
TaxTMI 
2022 (7) TMI 294
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....ER: SURYA PRAKASH KESARWANI, J. 1. All these appeals are admitted on the following substantial questions of law :- (i) Whether assessment or re-assessment under Section 153-A of the Income Tax Act 1961, can be framed only on the basis of incriminating material found during course of search under section 132 of the Act. (ii) Whether assessment or re-assessment under Section 153-A of the Income Tax Act 1961 can be framed where no incriminating material has been found in the search under Section 132 of the Act. 2. Since substantial questions of law involved in all these appeals are similar, therefore, all these appeals have been heard together. Facts:- 3. The facts with regard to disclosed and assessed income of the assessees involved in the 'First Set' of appeals are briefly described as under:- Sl.No. First Set of Income Tax Appeal Nos. Assessment Year Income as per return (in Rs.) Accommodation entries in the form of unsecured loan shown from/ entry provider/bogus LTCG Bogus LTCG/ STCG/Commission added under Sections 68/69 1 51 of 2021 2012-13 Rs.1,06,500/- Subodh Agarwal, Success Vyapar Ltd and Neil Industries Ltd. ....
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.... Act, 1961 passed by the Principal, CIT- 18, Delhi. Thus, search operations were conduced in respect of the assessees who are respondents in the above noted income tax appeals. Notices under Section 153A of the Act, 1961 were issued to the assessees requiring them to furnish return of the Income for the Assessment Years and the assessees filed return of income. Thereafter, notices under Section 143(2)/142(1) of the Act, 1961 were also issued and served upon the assessees. Show cause notices were also issued to the assessees requiring them to explain as to why the L.T.C.G. or unsecured loans shown from Success Vyapar Ltd. and Neil Industries Ltd. or payment of interest or commission be not added in the income. The explanation submitted by the assessees were not accepted by the Assessing Officer and certain amounts shown as unsecured loan from the aforesaid two companies or L.T.C.G. and interest/ commission shown were added to the income of the assessees under Section 68 of the Act, 1961. Similarly, interest payment shown and commission shown were disallowed and added under Section 69 of the Act, 1961 on account of accommodation entries. 5. Against the Assessment Orders, the asses....
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....inating documents were also found and seized. The cases were centralized to the Central Circle-I, Deputy Commissioner of Income Tax, vide Order No.02 of 2016-17, F.No.Pr.CIT-I/KNP/12-02/Cent./Goldie Masale Gr./2016-17/684 dated 27.05.2016 passed by the Principal CIT-I, Kanpur. Notices under Section 153A of the Act, 1961 were issued requiring the asssessees to file return of income. The notices were duly served upon the assessees. Thereafter, notices under Section 142(1) along with questionnaire were issued which were also duly served upon the assessees. Notices under Section 143(2) along with specific questionnaire were also issued which were also well served. The assessees filed their return of income in response to the aforesaid notice. After following due procedure of law, the assessment orders under Section 153A of the Act, 1961 were passed making certain additions. Aggrieved with the assessment orders, the assessees filed appeals before the CIT (Appeals), Kanpur, which were dismissed by common order. Aggrieved with the appellate orders, the assessees filed Income Tax Appeals before the Income Tax Appellate Tribunal, Lucknow which were allowed by the impugned common order dated....
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....7 ITR 517 (Alld.) and Commissioner of Income Tax Vs. Kesarwani Zarda Bhandar in ITA No. 270 of 2014 decided on 06.09.2016, and the judgments in Assistant Controller of Estate Duty Vs. Devaki Ammal (1995) 2012 ITR 395 SC, Taylor Instrument Co.(India) Ltd. Vs. Commissioner of Income Tax (1998) 99 Taxman 155 (Delhi) = (1998) 232 ITR 771(Delhi) and State of U.P. Vs. Aman Mittal and another 2019 (19) SCC 740 (para 24 and in ITA No.31 of 2016 E.N. Gopakumar Vs. Commissioner of Income Tax, decided on 3.10.2016 by Kerala High court (para 8). Submissions on behalf of the respondents/Assessee s :- 11. Sri Tarun Gulati, learned Senior Advocate, assisted by Sri Ashish Bansal learned counsel for the respondent Assessee, has referred to the provisions of Section 153A and 153 C of the Acrt 1961 and certain judgments of Delhi High Court and submitted as under :- (i) No incriminating material was found in the search on the assessee conducted by the Officers under Section 132 of the Act, 1961. (ii) Since no incriminating material was found, therefore, provisions of Section 153-A of the Act, 1961 could not be invoked inasmuch as assessment of all the assessees for all the asse....
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....39, 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, but on or before the 31st day of March, 2021, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly 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 and for the relevant assessment year or years : Provided that the Assessing Officer shall as....
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....d or building or both, shares and securities, loans and advances, deposits in bank account. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.-For the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 153C. (1) Notwithstanding anything contai....
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....b-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before 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, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. (3) Nothing contained in this section shall apply in relation to a s....
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....so not acceptable after placing reliance on following Judicial pronouncement. In the case of E.N. Gopakumar Vs CIT [(2016) 75 taxmann.com 215 (Kerala)]-Hon'ble Kerala High Court held that assessment proceedings generated by issuance of a notice under section 153A(1)(a) can be concluded against interest of assessee including making additions even without any incriminating material being available against assessee in search under section 132 on basis of which notice was issued under section 153A(1) (a). The above order has been passed after considering cases of: (i) CIT v Kabul Chawla [2016) 380 ITR 573/(20151 234 Taxman 300/61 taxmann.com 412 (Delhi). (ii) CIT v Continental Warehousing Corpn. (Nhava Sheva) Ltd. [2015] 374 ITR 645/232 Taxman 270/58 taxmann.com 78 (Bom.), (iii) Principal CIT v. Kurele Paper Mills (P.) Ltd. [2016] 380 ITR 571 (Delhi). (iv) CIT v Lancy Constructions [2016] 383 ITR 168/237 Taxman 728/66 taxmann.com 264 (Kar.), (v) CIT v ST. Francies Clay Decor Tiles [2016] 240 Taxman 168/70 taxmann.com 234 (Ker.) and (vi) CIT v Promy Kuriakose [20l6] 386 ITR 597 (Ker.). Further, in the case ....
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....ed finding of fact in his assessment orders. The relevant observation of AO is extracted from the assessment order as follows: i) An incriminating dairy was seized during the course of Shri Subodh Agarwal, which was hand written by him and relevant incriminating entries and its explanation as follows, a. At page number 45 " VMM-Sulabh+ Neil mein loss+ MKU mein. Profit" b. At page number 43 "Gravity--> merger order c. At page number 31, 32 and 33 names of Manoj Agrawal,.... i.e.. family members has been written in multiple places along with details of transactions where money has been received and given to them. The nature of entries are self-evident. This clearly establishes that you have very close nexus with Sh. Subodh Agrawal who also has been one of the directors of your company M/s Sulabh Engineering & Services Limited along with Sh. Manoj Agrawal. The above entries at page number 45 also clearly explain the nature of transactions in Neil industries limited is that of providing 'accommodation entries' as in the case of Success Vyapar Limited. Sh. Subodh Agrawal has already accepted that he has provided bogus LTCG i....
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.... Shri Abhiset Basu and Shri Pradeep Dey. From the perusal of these statements, it is evident that, actual business activity of their concerns is to provide the accommodation entries in the form of capital gains/share capital/share premium and unsecured loans. It is also accepted by them that, they are the dummy directors and they were acting on the behest and behalf of Raj Kumar Tharad and Anil Kumar - Khemka respectively. The statement of Raj Kumar Tharad and Shri Anil Kumar Khemka, which were recorded on oath reveals that, their concerns were engaged in providing the accommodation entries in various forms through their paper companies, which included the alleged creditors. As per statement of Mr. Subodh Agarwal related to the search of Godiee group by investigation wing of Kanpur, has accepted on oath that, Mr. Rishi Kant Awasthi was an employee in the office of Mr. Subodh Agarwal. Since, all the dummy directors and the details found at the office premises of the Mr. Subodh Agarwal, it is concluded that, creditor company M/s. Success Vyapar Ltd. is controlled by Mr. Subodh Agarwal. As discussed earlier, it is established that, Mr. Subodh Agrarwal is an entry provider through vari....
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....dent that, creditors companies have furnished very meager income to inspire the confidence of credit of huge amount of unsecured loans. Also, there is no agreement or the co-lateral security arrangements between the appellant and creditors companies. A careful, perusal of Bank statements of these two lenders reveal the astonishing similarly in the pattern of fund flow. It is invariably noted that the creditors account were deposited with cheque of equivalent or more amount of credit on the same date or prior to advancing the loan to the appellant company. Thus, the evidence submitted by the appellant does not inspire the confidence regarding credit capacity of the creditors and genuineness of the transactions, especially considering the fact that, lenders have disclosed meager income in their returns and each credit of unsecured loans to the appellant company is preceded by the equivalent or more amount of deposits of credit on the same date or on the prior dates. Also, AO has recorded the finding of fact that, most of the lenders do not exist on the given address and are paper companies providing the accommodation entries of unsecured loans. Also, AO has dealt at length on the sei....
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....ed preposition of law u/s. 68 of the IT Act that the initial burden of proof rest upon the appellant to establish the identity, credit capacity of the creditor and to establish the genuineness of transaction. For the sake of clarity provision of section 68 of the Act as amended read as under: "68. Where any sum is found credited in the books an assessee maintained- for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax- as the income of the assessee of that previous year: "Provided that where the assessee is a company (not being a company in which the public are substantially interested), and the sum so credited consists of share application money, share capital, share premium or any such amount by whatever name called, any explanation offered by Such assessee-company shall be deemed to be not satisfactory, unless- (a) the person, being a resident in whose name such credit is recorded in the books of such company also offers an explanation about the nature and source of....
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....establish the authenticity of transaction. The loan entries are generally masked to pump the black money into the banking channel and such practices continued to plague Indian Economy. Further, in the case of CIT Vs. N.R. Portfolio Pvt. Ltd. (ITA No. 1018,1019/2100 dated 22.11.2013) Hon'ble Delhi High Court has observed and held that "mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive companies no doubt are artificial or juristic person but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the person behind the company who take the decisions, controls and manage them." The cases relied upon by the Ld. AR are on their own footings and distinguishable on facts and are not applicable to the present case. Further, Hon'ble Calcutta High Court has observed and held in the case of....
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....ting entries and its explanation as follows: a. At page number 45 "VMM- Sulabh + Neil mein loss + MKU mein profit" b. At page number 43 "Gravity -- > merger order c. At page number 31, 32 and 33 names of, Manoj Agarwal,... i.e. family members has been written in multiple places along with details of transactions where money has been received and given to them. The nature of entries are self-evident. The above entries at page number 45 also clearly explain the nature of transactions in Neil industries limited is that of providing 'accommodation entries' as in the case of Success Vyapar Limited. Sh. Subodh Agrawal has already accepted that he has provided bogus LTCG in Oasis Cine Communication Limited, apart from Sulabh Engineering & Services Limited and Nikki Global Finance Limited. The above entries at page number 43 further clearly establishes that Sh. Subodh Agrawal has provided the bogus LTCG in Oasis Cine Communication Limited through merger/amalgamation of Gravity Barter Limited and Makeover Vintrade Limited. All the three companies are registered at the same premise In Kolkata at Bijan Theatre, 5A, Raja Raj Kissan Street, Kolkata-7....
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....ere recorded on oath reveals that, their concerns were engaged in providing the accommodation entries in various forms through their paper companies, which included the alleged creditors. As per statement of Mr. Subodh Agarwal related to the search of Godiee group by investigation wing of Kanpur, has accepted on oath that, Mr. Rishi Kant Awasthi was an employee in the office of Mr. Subodh Agarwal. Since, all the dummy directors and the details found at the office premises of the Mr. Subodh Agarwal, it is concluded that, creditor company M/s. Success Vyapar Ltd. is controlled by Mr. Subodh Agarwal. As discussed earlier, it is established that Mr. Subodh Agrarwal is an entry provider through various paper companies including the M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd., which advanced unexplained unsecured loans to various group companies of this appellant group in the different financial years in the form of accommodation entry. The facts of another creditor M/s. Neil Industries Limited is no different. In fact hard evidence of payment of cash for providing the accommodation entries were found in the search of Shri Subodh Agarwal, Rich capital and Goldiee group. ....
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.... statements of directors of M/s. Success Vyapar Ltd. and M/s. Neil Industries Ltd. evidencing the non-genuine nature of transactions. Finding of Hon'ble Allahabad High Court in WT No. 458/459 of 2015, wherein, it is held that, "the creditor companies are dubious entities laundering the money in the garb of LTCG/share capital/share premium/ unsecured loans." Thus, it is concluded that, genuineness of the transaction and credit capacity of the creditors are unsubstantiated and transaction of unsecured loans are non-genuine. Appellant, on the other hand has not placed any material before the undersigned to dislodged the finding recorded by the AO. Therefore, considering the totality of facts and circumstances of the case, it is concluded that, appellant has miserably failed to prove the credit capacity and genuineness of the transaction. 6.5 It is a settled preposition of law u/s. 68 of the IT Act that the initial burden of proof rest upon the appellant to establish the identity, credit capacity of the creditor and to establish the genuineness of transaction. For the sake of clarity provision of section 68 of the Act as amended read as under: "68. Where any sum is fo....
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....fronted to the appellant. Hence, the principal of natural justice is followed by the AO. It is also seen from the assessment orders that, AO has tried his best to call the persons, copies of whose statements in favour of the revenue were given to the appellant. Further, Hon'ble Supreme Court, in the well-known Dhakeswari Cotton Mills (26 ITR 775 at 782) case, ruled that the Evidence Act may have no application to tax assessment proceedings. However, the court also clarified later, in Chuharmal vs CIT (172 ITR 250 at 255 SC), that when the taxing authorities are desirous of invoking the principles of the Evidence Act in proceedings before them, they are not prevented from doing so. All that is required is that whatever material they collect will have to be placed before the tax paying assessee if adverse inference is going to be drawn - audi alteram partem is a well-known principle of natural Justice. This principle is established by the judgment of the Supreme Court in Dhakeswari Cotton Mills Ltd. v. C.I.T. (26 ITR 775, 783), and applied by that court in Kishinchand Chellaram v, C.I.T. (125 I.T.R. 713), where An assessment based on the result of private inquiries conducted behind t....
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....ted in tabular form mentioned here-in-under: S.No NAME & CODE OF THE SCRIP A.Y LTCG/LTCL (In Rs.) STCG/STCL Commission on LTCG (In Rs.) 1. M/s. Nikki Global Finance Limited (531272) 2012-13 23,16,765/- - 1,15,838/- 2. M/s. Nikki Global Finance Ltd. (531272) 2014-15 1,71,08,122/- - 8,55,406/- It is seen that, the A.O. has recorded very elaborate finding about the scam of laundering money in the Garb of Long/Short Term Capital Gain (LTCG/STCG). It is noted by the A.O. that, the Pr. DIT (Inv.), Kolkata has conducted the elaborate investigation and enquiries in case of 84 Penny Stock's cases to conclude that the unaccounted money of the beneficiary were routed through certain stock brokers/ entry operators in the script of penny stock, to generate the illusionary facade of exempted income in the form of LTCG/STCG. Further, a search was conducted on M/s. Rich Udyog Group of Kanpur on 28.04.2015, which reveals that, Shri. Subodh Agarwal is acting as the entry provider in the scrip of M/s. Nikki Global Finance Ltd. It is also investigated that, the purchasers or the exit provider of such Penny Stock's do not have....
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.... LTCG/STCG. (ii) Investigation wing of the revenue at Kolkata had recorded statements of various share brokers, operators & beneficiaries, who has dealt with the scrip of M/s. Nikki Global Finance Ltd., as per below details: Sl. No. Name Q. NO. IN WHICH THE CO. NAME IS MENTIONED STATEMENT UNDER SECTION STATEMENT DATE SHARE BROKER 1 Soumen Sen 19 131 10.02.2015 2 Anil Kedia 15 131 15.06.2015 3 Nikhil Jain 23 131 02.06.2015 OPERATOR 1 Anil Kedia 15 131 15.06.2015 2 Nikhil Jain 23 131 02.06.2015 BENEFICIARY 1. DEEPAK KUMAR AGARWAL 4,5,6,7,10,11,15,17,19 131 05.06.2015 in which, it was admitted by them that, in connivance with the promoters/broker of some listed companies, we trade in scrips of shares of these listed companies of promoters which are manipulated to artificially create either gain or loss to beneficiaries to whom entry of either long term capital gain or loss has to be provided. After holding these shares for some time, the clients sell such shares at either higher rates or very low rates. Such shares are bought from beneficiary clients. Whe....
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....perandi adopted in the scam of bogus LTCG/STCG. The same is elaborated and reproduced by the AO in his assessment order. ix) The exit provider or the entities, who has purchased the alleged shares are entities with unsubstantiated creditworthiness of genuineness of business activities. The same is elaborated by AO in his assessment order. x) Many individuals/entities have admitted the bogus claim of LTCG/STCG without any enquiry by any authority and also withdrawn their claim by filing the revised returns there by accepting there wrong claim of exemption u/s 10(38) of the Act for LTCG or payment of lesser tax for STCG. This strengthens the case of revenue. 7.5 Thus, from the above detailed observations, it is evident that appellant was one of the beneficiary of such bogus Penny Stocks Scheme for converting his black money into white without the payment of taxes in the garb of bogus claim of exemption u/s 10(38) of the Act for LTCG or payment of lesser tax for STCG. Appellant purchased shares through off market trade and could not substantiate the purchases of shares. Appellant has nothing except the paper work of contract note to explain his case. It is s....
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....g Officer and the CIT(A) as evident from the relevant portion of the orders aforequoted, it is evident that findings on the point of incriminating materials and all other materials available on record were recorded by the Assessing Officer and the CIT(A) after due consideration of evidences on record and principles of natural justice were well followed. The findings of fact recorded by the Assessing Officer and the CIT(A) have not been set aside by the ITAT and merely following its earlier decision in another case, the appeals have been allowed assuming that there was no incriminating materials found in the search. 19. So far as the provisions of Section 153A of the Act, 1961 are concerned, we find that sub-Section (1) of Section 153A starts with the non-obstante clause providing for assessment or reassessment. Clause (a) of sub- Section (1) empowers the Assessing Officer to issue notice to such person requiring him to furnish the return of income within such period, as may be specified in the notice, in respect of each assessment year falling within six assessment years and for the relevant assessment year or years in the prescribed form and verified in the prescribed manner an....
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....corded in the assessment order and in the order of the CIT(A) clearly reveal voluminous incriminating materials were not available in the hands of the Assessing Officer and on the basis of such incriminating materials, the Assessing Officer assessed the respondents-assessees under Section 153A of the Act, 1961. The incriminating materials found have been well discussed by the Assessing Officer in the assessment order and by the CIT(A) in the appellate order. Relevant portion of the order of CIT (A) has already been reproduced above and are not being referred here again so as to avoid repetition. 22. Findings of fact recorded in the assessment order and order of CIT (A), also clearly show that the incriminating materials relating to the respondents-assessees were available on record and were also found in the search/ investigation relating to certain other person. 23. Bare reading of Section 153A of the Act, 1961 reveals that it provides for assessment or reassessment of the total income and not merely computation of undisclosed income on the basis of evidence found as a result of search. Thus, for assessment or reassessment under Section 153A, it is not the mandatory requirem....
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....ailable at the time of the original assessment and held as under:- "8. Section 153A of the Act along with Section 153B and 153C replaced the "Post Search Block Assessment Scheme" in respect of any search under Section 132A or requisition under Section 132A made after 31.05.2003. CBDT explained these provisions through circular dated 5.9.2003, which is reported in (2003) 263 ITR (St) 62. The said circular is as under: "65. The special procedure for assessment of search cases under Chapter XIV-B be abolished: 65.1 The existing provisions of the Chapter XIV-B provide for a single assessment of undisclosed income of a block period, which means the period comprising previous years relevant to six assessment years preceding the previous year in which the search was conducted and also includes the period up to the date of the commencement of such search, and lay down the manner in which such income is to be computed. 65.2 The Finance Act, 2003, has provided that the provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after May 31....
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....rovides that assessment in respect of the assessment year relevant to the previous year in which the search is conducted under section 132 or requisition is made under section 132A shall be completed within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. 65.8 It also provides that in computing the period of limitation for completion of such assessment or reassessment, the period during which the assessment proceeding is stayed by an order or injunction of any court ; or the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending on the day on which the assessee is required to furnish a report of such audit under that sub-section, or the time taken in reopening the whole or any part of the proceeding or giving an opportunity to the assessee of being re-heard under the proviso to section 129, or in a case where an application made before the Settlement Commission under section 245C is rejected by it or is not allowed to be p....
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....rch took place. A perusal of Section 153A of the Act clearly indicates 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. 9. Under Section 153A of the Act, the Assessing Officer is bound to issue notice to the assessee to furnish return for each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. The Assessing Officer is required to assess or reassess the total income of the aforesaid years. 10. Under the block assessment proceeding under Chapter XIV-B only the undisclosed income found during the search and seizure operation were required to be assessed and the regular assessment proceedings were preserved. The introduction of Section 153A of the Act provides a departure from this proceeding. Under Section 153A of the Act, the Assessing Officer has been given the power to assess or reassess the total income of the assessment years in question in separate assessment orders. Consequently, there would be ....
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.... 06.09.2016, the substantial question of law involved was similar to those as involved in the present appeal and the Division Bench answered the questions as under: "8. Appeal was admitted on following substantial questions of law: (1) Whether the Hon'ble Income Tax Appellate Tribunal had erred in law and on facts in setting aside the assessment completed under Section 153A of the Income Tax Act, 1961 and not following the decision of Hon'ble Jurisdictional High Court in the case of CIT Vs. Raj Kuamr in ITA No. 56 of 2011 wherein it is held that the Assessing Officer has the power to re-assess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of original asseessment. (2) Whether in view of the law laid down by this Hon'ble Court in the case of CIT Vs. Raj Kumar ( supra), the Assessing Officer would be competent to reopen the assessment proceedings already made and determine the total income of the assessee ; the Assessing Officer, while exercising the power under Section 153A of the Act, would make assessment and compu....
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.... the search was made, the Assessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the assessee. The Assessing Officer, while exercising the power under Section 153A of the Act, would make assessment and compute the total income of the assessee including the undisclosed income, notwithstanding the assessee had filed the return before the date of search which stood processed under Section 143(1)(a) of the Act. In the light of the aforesaid, the reasons given by the Tribunal that no material was found during the search cannot be sustained, since we have held that the Assessing Officer has the power to reassess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of the original assessment." 12. In view of above decision which squarely clinches both the substantial questions of law pressed in these appeals, we find no reason to take a different view and hence answer the above questions in favour of Revenue and against Assessee." 27. The aforesaid two Division Bench judgments in th....