2023 (5) TMI 1356

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....ad in Income Tax (SS)A No. 464 of 2019 in respect of the Assessment Year 2011-2012. 2.1 The Revenue has proposed the following questions to be arising as substantial questions of law in the appeal, "(i) Whether in the facts and circumstances of the case and in law, the ITAT has erred in giving relief to the assessee holding that no incriminating materials were found with regard to the issue of additions made in the assessment order ? (ii) Whether in the facts and circumstances of the case and in law, the ITAT has erred in deleting the addition on account of unexplained cash credit u/s. 68 of Rs. 3,32,56,865/- and addition on account of expenses on bogus LTCG u/s 69C of Rs. 8,92,705/- ?" 3. The facts in brief are that....

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....2023. They were the group of appeals filed by the Revenue as well as the assessee respectively. The issue involved in the said appeals before the supreme court was about the scope of assessment under section 153A of the Act. According to the case of the Revenue, the Assessing Officer is competent to consider all the material available on record including the material found during the search and make assessment of 'total income'. While some High Courts had agreed with the said proposition, other High Courts took the view that if no assessment proceedings are pending on the date of initiation of search, the Assessing Officer can consider only such incriminating material found during the search and it is not permissible for the Assessing Offic....

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....decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. Commissioner of Income Tax v. Mehndipur Balaji, 2022 SCC Online All 444 : (2022) 447 ITR 517 has taken a contrary view." (para 7) 4.4 The Kabul Chawla (supra) was quoted for its ratio as under, "In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a ....

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.... 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. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of....