TaxTMI 
TaxTMI 
2024 (4) TMI 196
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....r.Dileep Shivpuri, Adv. Mr.Kartikeya Sharma, Adv. For the Respondent : Mr.Anuroop Singhi, Adv., Mr.Sandeep Pathak, Adv. & Mr.Siddharth Bapna, Adv. assisted by Mr.Sarvesh Jain, Adv., Mr.Narendra Singh Bhati, Adv., Ms.Kriti Kalawatia, Adv., Mr.Meyhul Mittal, Adv. Mr.Aditya Khandelwal, Adv. Mr.Anurag Mathur, Adv. & Ms.Bhavna Laddha, Adv. for Mr.Shantanu Sharma, Adv. JUDGMENT 1. These petitions involve common fact and question of law and are being decided by this order. For convenience, the facts are being taken from the lead case D.B. Civil Writ Petition No.4677/2022. 2. Writ petition is filed challenging the notice issued under Section 148 of the Income Tax Act, 1961 (hereafter 'the Act') and the order dated 05.03.2022 rejecting the objections filed to issuance of notice. FACTS:- 3. The brief facts are that for Assessment Year 2014- 15 the petitioner filed income tax return declaring income of Rs.18,76,890/-. On 30.03.2021 notice was issued under Section 148 of the Act. The petitioner filed return on 07.01.2022 and sought the reasons for initiating the proceedings. On 18.02.2022 the reasons were supplied. The objections filed on 01.03.2022 were rejected on 05.03.202....
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....as conducted or requisitioned made. History of special provisons:- 8. Before proceeding further it would be necessary to trace the history of the extant special provisions for assessment in the cases of search and requisition. 9. The Finance Act, 1995 inserted Section 158B to 158BG, stipulating special procedure for assessment in cases where search were initiated after 30.06.1985 but before 1.1.1997. Prior to this, the assessment and reassessment in search cases were dealt under regular provisions of Section 143, 147 and 148. The Assessing Officer (for short 'AO') under the special provisions had to assess only the undisclosed income with regard to the block period (which prior to 01.06.2001 was ten years and after 01.06.2001 was six years) preceding the financial year in which search was conducted, by passing a single order. The undisclosed income was to be taxed at special rate specified under Section 113. The block assessment was independent of the regular assessment, resulting in parallel proceeding for assessment of regular income and the undisclosed income. 10. Finance Act, 2003 introduced Section 153A to 153D, laying down the special procedure for assessment in c....
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.... in a prescribed form and manner, for relevant year or years and for each of six assessment years preceding the assessment year relevant to previous years in which search is conducted (hereinafter referred to 'relevant preceding years') in cases of search and requisition. 14. As per first proviso total income is to be assessed or reassessed in respect of each of the assessment year. The second proviso provides that pending assessment or reassessment relating to the relevant preceding year on the date of initiation of search or requisition shall abate. Under the third proviso the Central Government may by Rules specify the class or classes of cases where the AO shall not issue notice for assessment or reassessment for the relevant preceding years. The exception being abated assessment or reassessment as per proviso (2). Under clause (a) of fourth proviso no notice for assessment or reassessment shall be issued in case escaped assessment amount revealed by the books of account or documents or evidence in possession of the AO is less than Rs.50 Lakh in the relevant year or in aggregate of the relevant assessment years. Clause (b) provides that income or part of it referred to Claus....
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....s conducted or requisition made, the AO having the jurisdiction on such other persons shall issue notice for assessing or reassessing total income in manner and for the assessments years provided under Section 153A. Notice shall be issued even if no return was furnished by such persons and no notice was issued under Section 142(1) or where the return was furnished but no notice under Section 143(2) was served and the limitation had expired or where the assessment or reassessment was made. 19. As per Sub-section (3) the Section 153C shall not apply to the search or requisition made on or after 01.04.2021. 20. Section 153D provides that no order of assessment or reassessment shall be passed by the Officer below the rank of Joint Commissioner except with the prior approval of the Joint Commissioner. Proviso precludes the application of Section in cases where assessment or reassessment as per Section 144BA (12) is to be passed with prior approval of the Principal Commissioner or Commissioner. CASE LAW:- 21. The Supreme Court in the case of Abhisar Buildwell P. Ltd. (supra) while dealing with the scope of assessment under Section 153A dealt with the following question. Para ....
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....reby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." CONCLUSION:- 23. The reasons supplied in case in hand for initiation of proceedings under Section 147/148 are based on the incriminating material and documents including Pen Drives seized during the search carried out of the Manihar Group and the statements recorded during proceedings. From the information received the AO noticed that the loan advanced and interest earned thereon were unaccounted. In other words the basis for initiation of Section 148 proceedings is the material seized relating to or belonging to the petitioner, during the search conducted of Manihar Group. 24. In the case where search or requisition is made, the AO under Section 153A mandatorily is required to issue notices to th....
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....d shall defeat the concept of single assessment order for each of relevant preceding years for assessing 'total income' in case of incriminating material found during search or requisition. 30. The argument that by enactment of Section 153A to 153D has not eclipsed Section 148 does not enhance the case of respondent to initiate the proceedings under Section 148. On fulfillment of two conditions for invoking Section 153C the proceeding in accordance with Section 153A are to be initiated. The operating field of and Section 153A to 153D and Section 148 are different. Applicability of Section 153C in cases where the seized material related to or belonged to person other than on whom search is conducted or requisition made does not render Section 148 otiose. Section 148 shall continue to apply to the regular proceedings and also in cases where no incriminating material is seized during the search or requisition. 31. The other aspect of the matter is that under Section 153A and 153C, 'the total income' is to be assessed. The total income includes returned income (if any), undisclosed income unearthed during the search or requisitioning and information possessed from the other sourc....
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....ght is created to the petitioner for getting the notice under Section 148 quashed. Moreover, learned Single Judge was not having the benefit of the decision of the Supreme Court in the case of Abhisar Buildwell P. Ltd. (supra). The appeal against the order was dismissed having rendered infructuous in view of the subsequent developments that the assessment order was passed. 37. The decision of the Madras High Court in the case of Saloni Prakash Kumar (supra) is of no help to the respondents. The High Court held that Section 153C does not preclude issuance of notice under Section 148. The field of applicability of two sections was not the issue before the Court. 38. The petitioner relied upon the decision of the Karnataka High Court in the case of Sri Dinakara Suvarna (supra). It would be relevant to quote Para-10:- 10. Admittedly no proceedings were initiated under Section 153C of the Act. Thus, there is patent non-application of mind. It is relevant to note that the author of the diary Smt. Soumya Shetty had passed away prior to the date of search. It was argued on behalf of the Revenue that Shri. Ashok Kumar Chowta had offered tax on lump-sum income. 39. Further ....