TaxTMI 
TaxTMI 
2025 (3) TMI 808
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....there is no dispute raised at the Revenue's behest regarding the assessee's status on the "searched" persons on 23rd July, 2015. We wish to reiterate here that the assessment year before is assessment year 2014-15, wherein, the assessee had filed its return of income on 30th September, 2014. Meaning thereby that its assessment on the date of search was indeed an abated one going by section 153(A1) 2nd proviso, and therefore, we are of the considered view that going by statutory provisions containing a non-obstante clause "notwithstanding anything contained in section 139..........", the learned lower authorities have erred in law and on facts in assessing it under the normal provision than the foregoing specific provision applicable in case of searched person. 5. Learned counsel has further quoted this tribunal's order in ITA No.1074/Pn/2007 deciding the very issue against the department as under: "5. The assessee vide petition dated. 12-9-2012 made a request for admission of additional ground of appeal which reads as under:- "The ld. Commissioner of Income tax (Appeals) erred in confirming the assessment order under section 143(3) of the Income Tax Act passed ....
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....of law arising from facts which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee." The reliance was also placed in the case of ITO vs M.M. Textiles reported in (2010) 122 I.T.D 435 (Mum) wherein it was held that when additional legal grounds are raised, before the Tribunal after obtaining leave from the Tribunal, such legal grounds should be accepted by the Tribunal provided facts are on record in the assessment proceedings. It was, therefore prayed that such additional ground be admitted. 7. At the time of hearing the ld. Counsel for the assessee while reiterating the same submissions as submitted in the petition dtd. 12- 9-2012 further submits that in view of the decision cited in the said petition, the additional ground raised by the assessee be admitted. He also placed on record a copy of the assessment order for the same A.Y. i.e. A.Y. 2004-05 passed after the search u/s 153A r.w.s. 143(3) of the Act dtd. 27-11-2008. 8. On merit of the additional ground of appeal, the ld. Counsel for....
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....e assessment order was passed by the A.O. u/s 143(3) of the Act on 27-12-2006 i.e. after the date of search. 11. The assessee in the additional ground has challenged the validity of the impugned assessment order on the ground that as on the date of search i.e. on 30-11-2006, the pending assessment had already abated under the second proviso to section 153A of the Act and in support he placed on record the copy of the assessment order dtd. 27- 11-2008 passed u/s 153A r.w.s. 143(3) of the Act and also relied on CBDT Circular and various decisions (supra). 12. A larger bench of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) observed that the question of law which arose from the fact as found by the income-tax authority any legal issue can be raised at any stage. The hon'ble Supreme Court observed that (page 387) : "where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess....
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....53A of the Act and CBDT Circular (supra) have observed and held as under:- "16. We now proceed to discuss the correctness of the conclusion of the Tribunal that the Assessing Officer had wrongly invoked Section 153A of the Act. This Section was introduced into the Act by the Finance Act, 2003 w.e.f. 1.6.2003 along with Sections 153B and 153C. Section 153A provides for 'assessment in case of search or requisition'. It runs as follows: "153A. [(1)] Notwithstanding anything contained in section 139, 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, 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 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 ....
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....osed 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, 2003, by inserting a new section 158BI in the Income-tax Act. 65.3 Further three new sections 153A, 153B and 153C have been inserted in the Income-tax Act to provide for assessment in case of search or making requisition. 65.4 The new section 153A provides the procedure for completion of assessment where a search is initiated under section 132 or books of account, or other documents or any assets are requisitioned under section 132A after May 31, 2003. In such cases, the Assessing Officer shall issue notice to such person requiring him to furnish, within such period as may be specified in the notice, retu....
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.... 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 subsection, 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 proceeded with by it, the period commencing on the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Commissioner under sub-section (2) of that section, shall be excluded. If, after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. 65.9 The new section 153C prov....
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....essment concept was given a go-by. Under the new Section 153A, in a case where a search is initiated under Section 132 or requisition of books of account, documents or assets is made under Section 132A after 31.5.2003, the Assessing Officer is obliged to issue notices calling upon the searched person to furnish returns for the six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted or requisition was made. The other difference is that there is no broken period from the first day of April of the financial year in which the search took place or the requisition was made and ending with the date of search/requisition. Under Section 153A and the new scheme provided for, the AO is required to exercise the normal assessment powers in respect of the previous year in which the search took place. 19. Under the provisions of Section 153A, as we have already noticed, the Assessing Officer is bound to issue notice to the assessee to furnish returns for each assessment year falling within the six assessment years immediately preceding the assessment year relevant to the previous year in which the search or requisitio....
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....he search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings "shall abate". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the „total income of the assessee in whose case a search or requisition has been initiated. Obviously there cannot be several orders for the same assessment year determining the total income of the assessee. In order to ensure this state of affairs namely, that in respect of the six assessment years preceding the assessment year relevant to the year in which the search took place there is only one determination of the total income, it has been provided in the second proviso of sub Section (1) of Section 153A that any proceedings for assessment or reassessment of the assessee which are ....
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....y 31, 2003, the earlier provision of block assessment in the case of search initiated against the assessee, shall not apply. Instead, the provision that there shall be single assessment on undisclosed income comprising previous years relating to six assessment years preceding in which the search was conducted, shall apply. It further provides that the Assessing Officer shall issue notice to such person requiring him to furnish return of income in respect of six assessment years immediately preceding the assessment year relating to the previous year in which the search was conducted under section 132 or requisition was made under section 132A of the Act. 13. The second proviso to section 153A makes it clear that assessment or reassessment relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or requisition under section 132A shall abate. In other words, if on the date of initiation of search or requisition under section 132 or section 132A any assessment or reassessment proceeding is initiated relating to any assessment year falling within the period of six assessment years, it sha....
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....ich stood abated is a nullity. As discussed above, continuation of the impugned assessment proceeding after the initiation of search without giving any notice under section 153A of the Act and passing the impugned final order of assessment is illegal, arbitrary and wholly without jurisdiction". 18. Recently Their Lordships of Hon'ble Allahabad High Court in case of Smt. Shaila Agarwal (supra) while considering the provisions of section 153A of the Act and the meaning of words 'abate' and 'pending' referred in the above provision have observed and held as under (headnote) :- "Section 153A of the Income Tax Act, 1961, provides that where notice under this section is issued as a result of any search under section 132, assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to under section 153, pending on the date of initiation of search under section 132 or requisition under section 132A shall abate. The words "pending on the date of initiation of search under section 132 or making of requisition under section 132A, as the case may be," have to be assigned their simple and pla....
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....e". 19. Similar issue came up before the Special Bench of this Tribunal (in which, one of us was a party) and the Special Bench had an occasion to deal with the scope of interpretation of section 153A of the Act in the case of in All Cargo Global Logistics Ltd. (supra). The Special Bench of the Tribunal after considering the various decisions and CBDT circulars including the Circular No. 7 of 2003 dtd. 5-9-2003 and the decision of the Hon'ble Jharkhand High Court in Abhay Kumar Shroff (supra) [mentioned in the list of cases/circulars] has held as under:- "52. The provision comes into operation if a search or requisition is initiated after 31.5.2003. On satisfaction of this condition, the AO is under obligation to issue notice to the person requiring him to furnish the return of income of six years immediately preceding the year of search. The word used is "shall" and, thus, there is no option but to issue such a notice. Thereafter he has to assess or reassess total income of these six years. In this respect also, the word used is "shall" and, therefore, the AO has no option but to asses or reassess the total income of these six years. The pending proceedings s....
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....urisdiction as well as jurisdiction conferred on him under s. 153A for which assessments shall be made for each of the six assessment years separately ; b) In other cases, in addition to the income that has already been assessed, the assessment u/s 153A will be made on the basis of incriminating material, which in the context of relevant provisions means- (i) books of account, other documents, found in the course of search but not produced in the course of original assessment, and (i) undisclosed income or property discovered in the course of search. 59. Having come to this conclusion we need not go into various orders of the `Tribunal cited by the rival parties. The decisions inconsistent with the aforesaid view/conclusion stand disapproved and the decisions consistent with this view/conclusion are approved". 20. Applying the ratio of the above decisions to the facts of the present case, we find that the search and seizure was initiated by the Department in assessee's case on 30-11-2006 on which date the assessment for A.Y. 2004-05 was pending which was completed on 27- 12-2006 u/s 143(3) of the Act. We further find that there is no dispute that the ....
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....uage of the provision is plain. The Court cannot rewrite the legislation for the reason that it had no power to legislate. The power to legislate has not been conferred on the Courts. The Court cannot add words to a statute or read words into it which are not there. (2) In State of Kerala vs. Mathai Verghese (1986) 4 SCC 746, the Hon'ble Supreme Court has reiterated the well-settled position that the Court can merely interpret the section; it cannot rewrite, recast or redesign the section. In interpreting the provision the exercise undertaken by the Court is to make explicit the intention of the Legislature which enacted the legislation. It is not for the Court to reframe the legislation for the very good reason that the powers to "legislate" have not been conferred on the Court. (3) In Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. vs. Custodian of Vested Forests (1990) (Supp) SCC 785 the Hon'ble Supreme Court observed that in seeking legislative intention Judges not only listen to the voice of the Legislature but also listen attentively to what the Legislature does not say. 4. The Hon'ble Supreme Court in the case of Federation of Andhra ....