TaxTMI 
TaxTMI 
2023 (8) TMI 452
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....l of the assessee on a technical ground without appreciating that said technical ground was never raised by the assessee during the course of the assessment proceedings and assessee never challenged notice u/s 148 during assessment proceedings. 3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the additional ground of appeal of the assessee ignoring the fact that the search was conducted on 13.11.2019 and proceedings u/s. 153A of the Act was optional for assessment year 2013-14." 3. The brief facts of the case as emanating from the record are: The assessee being an individual filed the return of income for the year under consideration on 27/09/2013, declaring a total income of Rs. 37,17,260. Subsequently, on the basis of information received from DGIT (Investigation) Unit-5(1), New Delhi that the assessee has traded in penny stock scrip M/s. Global Capital Market Ltd, and has sold shares worth Rs. 53,60,000, proceedings under section 147 of the Act were initiated and notice under section 148 of the Act was issued. On the basis of the aforesaid information, it was alleged that the assessee is a beneficiary of the tax-exemp....
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....he learned CIT(A), the assessee submitted that the AO has erred in initiating the assessment under section 147 of the Act without appreciating that the assessment for the current year can be done only under section 153A of the Act subject to the fulfilment of the conditions specified therein. The learned CIT(A), vide impugned order, allowed the appeal filed by the assessee and held that the year under consideration falls within the ambit of section 153A of the Act and therefore the assessment proceedings can only be initiated in the aforesaid section and the same cannot be initiated under section 147 of the Act. The relevant findings of the learned CIT(A), vide impugned order, are reproduced as under:- "7.1 During the appellate, through additional ground, the appellant has submitted that the assessment order passed u/s 147 of the Act is bad-in-law and without jurisdiction as the assessment relating to search matter can be re-opened only u/s 153A of the Act. On perusal of the impugned assessment order, I find that the AO has invoked proceeding u/s 147 of the Act for AY 2013-14 based on search conducted in the case of the Appellant. Therefore, it is relevant to discuss secti....
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....ng the proposition of law laid down in the above judicial pronouncements to the facts of the instant case, wherein consequences to search at the premises of director, proceedings u/s. 153C has been initiated in the hands of assessee company, the AO was not justified in not complying with the provisions of 153C and proceeding with the provisions of Section 147. Thus, assessment order framed u/s. 143(3) r.w.s. 147 is without any jurisdiction. Respectfully following the above judicial Pranouncements, I set aside the order passed by the AO." 7.3 Similar view has been taken by Hon'ble Visakhapatnam Tribunal in the case of G. Koteshwara Rao vs. DCIT [2015] 64 taxmann.com 159 (Visakhapatnam Trib.). The extract of the decision is as under: "A careful study of sections 153A to 153C and also the circular issued by the CBDT explaining the procedure of assessment in search cases shows that these are separate provisions independent of other provisions relating to reassessment, because of the non abstante clause begins with the said sections. The language used in these sections, i.e. notwithstanding anything contained in section 139, section 147, section 148, section 149, s....
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....ar 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 : 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^51 : Provided also that the Central Government may by rules^52a 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 immediat....
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....xchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction ITO v. Selected Dalurband Coal Co. (P.) Ltd. [1996] 217 ITR 597 (SC); Raymond Woollen Mills Ltd. v. ITO [1999] 236 ITR 34 (SC)." 9. Thus, if there is relevant material on the basis of which a reasonable person can form a requisite belief that income chargeable to tax has escaped assessment, then proc....