TaxTMI 
TaxTMI 
2023 (4) TMI 1445
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....he Hon'ble Bombay High Court in the case of Continental Warehousing Corporation (Nhaseva) Ltd ignoring that the SLP filed against the said decision before the Hon'ble Supreme Court on the questions as to whether addition can be made in absence of incriminating material under the provision was not adjudicated on this issue but adjudicated on the issue of deduction u/s 80IA, hence the issue as to whether addition can be made in absence of incriminating material under the provision has not been decided conclusively by Hon'ble Supreme Court." 3. "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the addition of Rs. 2,91,194/- on account of bogus purchase ignoring the facts that the assessee failed to prove the genuineness of purchases, and any expenditure in respect of which payments by account payee cheques is not enough evidence to prove the genuineness of the transaction?" 4 "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) is justified in deleting the addition of Rs. 14,38,923/- as alleged labour and jobwork expenses ignoring the facts that the assessee failed to pro....
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....d on the jurisdictional Hon'ble Bombay High Court decision of M/s. Allcargo Global Logistic Ltd and CIT Vs Continental ware housing corporation (Nhavaseva) Ltd and the Hon'ble Tribunal decisions. Whereas, the CIT (A) has considered the grounds of appeal, submissions of the assessee, findings of the scrutiny assessment, remand report, and provisions of law and judicial decisions and decided on merits and cancelled the assessment order as no incriminating material was found during the course of search proceedings and allowed the grounds of appeal observing at page 24 Para 4.3.3 to 4.3.5 of the order read as under: 4.3.3 During the course of appellate proceedings, the appellant company has provided the copies of panchnama dated 07.11.2019 alongwith inventory of the books of accounts found and seized, cash and jewellery found/seized. The appellant has also provided a copies of statements of Shri Mahabir Thanvi, Accountant and Shri Jayantilal Shah, Director, Shri Anuj Parikh, Smita Parikh, Partners, whose statements were recorded u/s 132(4) on 09.11.2019 during the search proceedings. On perusal of these statements, it is seen that there is no reference to any incriminating doc....
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....uring the search. It has been held that once the original assessment has attained finality, then the Assessing Officer while passing the independent assessment order u/s. 153A r.w.s. 143(3) cannot disturb the assessment/reassessment order which has attained finality, unless the materials gathered in the course of the proceedings u/s. 153A establish that the reliefs granted under the finalized assessment/reassessment were contrary to the facts unearthed during the course of 153A proceedings. The Hon'ble jurisdictional High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd. Has held as under: A bare perusal of section 153A would indicate as to how a non-obstante clause has been inserted and with a defined intent. Where search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after 31-5- 2003, that the Assessing Officer is in a position to and mandated to issue notice within the meaning of subsection (1) of section 153A. That is because, Chapter XIII within which the powers of search and seizure and powers to requisition books of account are spelt out enable the revenue ....
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....t is only the assessment/reassessment proceedings that are pending on the date of conducting search under section 132 or making requisition under section 132A stand abated and not the assessments/reassessments already finalised for those assessment years covered under section 153A. By a Circular No. 8 of 2003, dated 18-9- 2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending against finalised assessment/reassessments would not abate. Therefore, the argument of the revenue, that on initiation of proceedings under section 153A, the assessments/reassessments finalised for the assessment years covered under section 153A stand abated cannot be accepted. Similarly on made under section annulment of assessment made under section 153A (1) what stands revived is the pending assessment/reassessment proceedings which stood abated as per section 153A(1). Once it is held that th....
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....e with regard to the ambit and scope of the powers conferred under section 153A. Even if the exercise of power under section 153A is permissible still the provision cannot be read in the manner suggested by the revenue. Not only the finalised assessment cannot be touched by resorting to those provisions, but even while exercising the power can be exercised where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under after 3 section 132A after 31-3- 2003. There is a mandate to issue notices under section 31-3- 153(1)(a) and assess or reassess the total immediately preceding the assessment year come of such search is conducted or requisition is made Six assessment years relevant to previous year in which Thus, crucial words 'search' and 'requisition' appear in the substantive provision and the provisos. That would throw light on the issue of applicability of the provision. It being enacted to a search or requisition that its construction would have to be accordingly. That is the conclusion reached by the Division Bench in Murli Agro (supra). These are the conclusions which can be reached and upon reading of t....
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....he Ld. AR that the CIT (A) was correct in deciding the appeal on legal ground as the AO could not have made addition in these years in the absence of incriminating material and the assessment year falls under the category of unabated assessment years. The Ld. AR emphasized that the CIT (A) has considered the fact that the search has taken place on 06.11.2019 and the return of income for A.Y. 2015-16 was filed on 29.11.2015 and the assessment order u/s 143(3) was passed on 30.09.2016, the time limit for issue of notice u/s 143(2) of the Act is 30-09-2016 and was considered. The contentions of the Ld.AR are that in respect of A.Y. 2015-16 the time limit for issue notice u/s 143(2) of the Act has expired much prior to date of search i.e. 6-11-2019 and all the Assessment year will come under the category of unabated assessments and further the revenue could not unearth any incriminating material warranting disturbance of already completed assessments and the Ld. AR has submitted that the additions are deleted by the CIT (A) relying the on decisions of Hon'ble Bombay High Court. The Ld. AR substantiated the submissions with the factual paper book, chart and judicial decisions and emphas....
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....roceedings, are found. 9. Whereas the provisions of sec. 153A of the Act provide for issuing of notice u/s 153A of the Act for six assessment years immediately preceding the year of search and thereafter, the AO shall assess or reassess the total income for the above said six years. This section further provides that all pending assessment or re-assessment pending as on the date of search shall abate. Hence the assessments of the assessment years falling within the period of above said six years which are not pending, i.e., which have attained finality shall not abate. Assessments of such assessment years are called "unabated / completed / finalized" assessments. The question as to whether the AO is entitled to interfere with such kinds of unabated/completed/ finalized assessments or not without there being any incriminating material found during the course of search, was examined by the Special bench of Tribunal in the case of All Cargo Logistics Ltd vs. DCIT (2012)(137 ITD 287)(Mum), wherein it was held that the AO could interfere with the unabated/completed/finalized assessments only if the incriminating materials found during the course of search warrant such interference, m....
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....ther words these two assessments coalesce into one assessment. The second proviso does not contain any word or words to the effect that no reassessment shall be made in respect of a completed assessment. The language is clear in this behalf and therefore literal interpretation should be followed. Such interpretation does not produce manifestly absurd or unjust results as section 153A (i)(b) and the first proviso clearly provide for assessment or reassessment of all six years. It may cause hardship to some assesses where one or more of such assessments has or have been completed before the date of initiation of search. This is hardly of any relevance in view of clear and unambiguous words used by the legislature. This interpretation does not cause any absurd etc. results. There is no casus omissus and supplying any would be against the legislative intent and against the very rule in this behalf that it should be supplied for the purpose of achieving legislative intent. The submissions of the Ld. Counsels are manifold, the foremost being that the provision u/s 153A should be read in conjunction with the provision contained in section 132(1), the reason being that the latter ....
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....arrant of search can be issued will have to be taken into account. 51. Having held so, an assessment or reassessment u/s 153A arises only when a search has been initiated and conducted. Therefore, such an assessment has a vital link with the initiation and conduct of the search. We have mentioned that a search can be authorised on satisfaction of one of the three conditions enumerated earlier. Therefore, while interpreting the provision contained in section 153A, all these conditions will have to be taken into account. With this, we proceed to literally interpret to provision in 153A as it exists and read it alongside the provision contained in section 132(1). 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 A....
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.... Logistics Ltd. was questioned about the scope of pending assessments as it was his contention that all six assessments are to be made, if necessary, on the basis of undisclosed income discovered in the course of search. He was specifically questioned about the jurisdiction of the AO to make original assessment along with assessment u/s 153A, merging into one. However he took an evasive view submitting that this question need not be decided in his case although the question of jurisdiction u/s 153A was vehemently pressed on account of which ground No. 1 in the appeal for assessment year 2004-05 was admitted as additional ground. He also wanted the additional ground to be retained in case of any future contingency." 11. Similarly the findings and views expressed by Hon'ble jurisdictional Bombay High Court in the case of Continental Warehousing Corporation (Nhava Sheva) Ltd (supra) was reiterated by the Hon'ble Bombay High Court in yet another case of Gurinder Singh Bawa (2017)(70 taxmann.com 398) as under:- "5. On further appeal before the Tribunal, the assessee interalia challenged the validity of the assessment made under Section 153A of the Act. This on account o....
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....ntal Warehousing Corporation (Nhava Sheva) Ltd. (supra) would apply to the present facts and also that there are no assessments pending on the time of the initiation of proceedings under Section 153A of the Act. The occasion to consider the issues raised on merits in the proposed questions becomes academic. 8. In the above view, the questions as framed in the present facts being academic in nature, do not give rise to any substantial question of law. Thus not be entertained." 12. The Coordinate bench of the Tribunal has followed the above said binding decisions of jurisdictional High Court in the cases of Smt Anjali Pandit vs. ACIT (ITA No. 3028 to 3032/Mum/2011 & others - order dated 17.11.2016) and held as under:- "8. From the propositions in the above mentioned decisions, we find that the case of the assessee is squarely covered by the ratio laid down in the decisions cited supra. We therefore respectfully following the same hold that the AO has not jurisdictional to assess the long term capital gain as income from other sources as the same is not based upon the seized or incriminating materials found during the search proceedings qua the long term capi....