TaxTMI 
TaxTMI 
2022 (4) TMI 1523
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....taking up the facts from AY 2013-14 i.e. IT(SS)A No. 27/Kol/2021. 4. The brief facts of the case are that the assessee has filed its return of income u/s 139 of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 26.09.2013 and 29.11.2014 declaring total income at Rs. 38,11,850/- and Rs. 6,30,000/- in AY 2013-14 and 2014-15 respectively. The scrutiny assessments in both the years have been passed on 28.03.2016 and 26.12.2016 respectively. A search u/s 132 of the Act was conducted on 12.09.2017 and subsequent dates in GPT Group of cases. According to the AO the business premises of the assessee as well as residential premises of the directors were searched which led to discovery of incriminating materials, therefore, he issued notice u/s 153A of the Act in the case of assessee for both the years. The Ld. AO thereafter passed the assessment order on 30.12.2019 in both the years. The AO has determined the taxable income of the assessee at Rs. 3,41,07,970/- and Rs. 60,65,410/- in AYs. 2013-14 & 2014-15 respectively. 5. Appeal to the Ld. CIT(A) did not bring any relief to the assessee. 6. The ld. Counsel for the assessee took us through the finding of the AO from p....
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.... AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. I....
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.... 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." Order of the ITAT Delhi Bench in other cases viz. Asha Rani Lakhotia vs. ACIT and Subhag Khattar Vs. ACIT are on the same line. Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law?" After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: "6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia....
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....14) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?" 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section 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 section 153, 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 assessmen....
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....reshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for fra....
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....uted that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 11. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon'ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon'ble Delhi Court as completion of assessments and this acceptance of return, according to the Hon'ble Delhi High Court, could be tin....
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....ents. The assessee in its reply stated that out of all the seized/impounded documents have been incorporated in the return of the income filed u/s 139 & in response to notice u/s 153A. 5. Consequent upon the search operation, the cases of GPT Group of cases where authorization for search were executed were centralized with the Central Circle-3(1), Kolkata vide centralization order in File No. DGIT(Inv.)/Kol/Tech-2/28/2017-18/5508 dated 21.11.2017. Subsequently the case was transferred to this charge vide order dated 16.01.2018 passed u/s 127 of the Act by Ld. Pr. CIT-2, Kolkata in File No. Pr. CIT2/Kol/Centralization/GPT Group/2017-18/9146-51. Subsequently a notice dated 28.02.2018 under Section 153A of the Act was issued and served upon the assessee requesting thereby to file return of income for the year under consideration. In response to notice u/s 153A, the assessee filed return of income for the instant year on 19.06.2019 declaring total income at Rs. 38,11,850/-. Consequently, a notice u/s 143(2) of the Act was issued and duly served upon the assessee on 18.07.2019. 6. A notice u/s 142(1) of the Act dated 17.05.2019 along with a set of questionnaire on anal....