TaxTMI 
TaxTMI 
2025 (11) TMI 644
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....worn affidavit for condonation of delay, explaining the reasons for such delay. Since the contents and circumstances narrated therein are identical for all the years, they are being considered together. 2.2 In the affidavit, the assessee has deposed that the delay occurred due to ignorance of legal proceedings and misinterpretation of law, coupled with a communication gap arising from incorrect email address recorded with the Department. It was explained that the orders of the CIT(A), National Faceless Appeal Centre (NFAC), Delhi were electronically communicated to the email ID of the assessee's former tax consultant ([email protected]), who did not inform the assessee about the passing of the orders. The assessee's current and correct email ID is [email protected], as mentioned in Form No. 35. Consequently, the assessee remained unaware of the appellate orders within the prescribed period. 2.3 It was further explained that due to the assessee's absence from town on account of religious functions, he could not access the Income Tax portal in time. Upon his return, when he checked the portal, he realized that the appellate orders had already been passed by NFAC. The....
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....f income. The information had emanated from the data collected during a search and seizure operation conducted on 26.05.2017 in the case of the said Co-operative Credit Society. On this basis, the AO recorded reasons to believe that income chargeable to tax had escaped assessment and accordingly issued notices under section 148 of the Act for the respective assessment years after obtaining necessary approval under section 151. The assessee's cases were subsequently selected for reassessment. However, despite issuance of multiple statutory notices under sections 148, 142(1) and 143(2) through the Income Tax Business Application (ITBA) platform, there was no compliance from the assessee. It is recorded that all communications were dispatched to the email address of the assessee's erstwhile tax consultant, which was no longer active. As a result, there was no effective representation or submission from the assessee during the reassessment proceedings. 4.3 In the absence of any explanation or documentary evidence, the AO proceeded to complete the assessments ex parte under section 147 r.w.s. 144 read with section 144B of the Act, treating the cash deposits appearing in the informati....
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.... were completed ex parte under the provisions of section 144, as the assessee had not responded to the notices issued during the assessment proceedings. 4.7 It was noted that the non-compliance was attributable to the fact that all departmental communications were sent to the e-mail ID [email protected], which pertained to the assessee's erstwhile Chartered Accountant who had expired prior to issuance of such notices. The CIT(A) observed that, owing to this inadvertent circumstance, the assessee could not receive the notices and hence was deprived of an effective opportunity of being heard during assessment. 4.8 The CIT(A) further observed that the assessment orders had been passed on the basis of limited material available with the Assessing Officer and without the assessee's participation. The appellate authority, therefore, considered it appropriate to refer to the nature of "best judgment assessment" contemplated under section 144 of the Act. The relevant statutory provision was reproduced, and it was emphasized that such assessments are to be framed on the basis of facts and material available, with fairness and prudence, and after affording the assessee reasonable o....
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....d, alter or amend any grounds at the time of hearing. 5. During the course of hearing, the learned Authorised Representative (AR) reiterated the facts and submitted that the notice issued under section 148 of the Act and the consequential reassessment order passed under section 147 were without jurisdiction and hence liable to be quashed. 5.1 It was contended that a search and seizure action under section 132 of the Act was conducted on 26.05.2017 in the case of M/s. Shri Renuka Mata Multi-State Urban Co-operative Credit Society Ltd. ("RMM"). During the course of the said search, certain information and materials were allegedly found in relation to the present assessee, including details of cash deposits in the assessee's account maintained with the said society. The AR argued that since the information forming the basis of the reassessment emanated from a search action, the correct course available to the Assessing Officer was to proceed under section 153C and not under section 147/148. Therefore, the reassessment initiated under section 148 was void ab initio. 5.2 The AR also drew attention to the recent coordinate bench decision of the ITAT Pune in the case of Adam Haji....
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....dent from the absence of any discussion or finding thereon. It was submitted that the failure of the CIT(A) to dispose of this ground renders the appellate order incomplete and nonspeaking to that extent. 6. The learned Departmental Representative (DR) relied on the order of CIT(A). 7. We have carefully considered the rival submissions, perused the record, and gone through the judicial precedents cited before us. The limited issue arising for our adjudication is whether the reassessment proceedings initiated under section 147 by issuance of notice under section 148 were invalid on the ground that the information forming the basis of reopening had emanated from a search action conducted in the case of M/s. Shri Renuka Mata Multi-State Urban Co-operative Credit Society Ltd. and therefore proceedings ought to have been taken, if at all, under section 153C of the Act. 7.1 The Assessing Officer completed the assessment under section 144 read with sections 147 and 144B on the basis of information received from the Investigation Wing that the assessee had deposited substantial cash in the Shri Renuka Mata Multi-State Urban Co-operative Credit Society Ltd. during the relevant year....
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....e gathered from the books of the society showing members' cash deposits. Such post-search information, though emanating from a search, cannot be equated with "seized material" as contemplated under section 153C. 7.8 The Assessing Officer, therefore, correctly invoked section 147 on the basis of tangible information indicating escapement of income. The jurisdiction assumed under section 147 cannot be said to be without authority merely because the information had a factual link with a search conducted in another case. In fact it has independent impact on the assessee's case. 7.9 The assessee placed reliance on the decision of this Tribunal in Mahesh D. Tekchandani v. ITO (ITA No. 1028/Ahd/2023, order dated 29.05.2024). In that case, the coordinate bench had quashed the reassessment on the ground that the Assessing Officer had relied directly upon seized documents pertaining to the assessee recovered during a search on a third party, thereby attracting section 153C. 7.10 The facts in the present case are clearly distinguishable. There is no finding that any seized material belonging to the assessee was found or relied upon. The reopening is based solely on post-search inform....
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....f the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, 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....
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....ng Officer is in possession of specific seized documents or assets belonging to or relating to the assessee found during search of another person, proceedings must necessarily be under section 153C. However, where the Assessing Officer merely receives information or intelligence derived from the search, without seizure of material belonging to the assessee, section 147 may validly be invoked. In the present case, there is no evidence on record to suggest that any books of account, documents, or assets belonging to the assessee were seized during the search on Shri Renuka Mata Multi-State Urban Co-operative Credit Society Ltd. The Assessing Officer acted upon information emanating from that search. 7.17 In view of the above authoritative pronouncement, it is evident that where incriminating material belonging to or relating to the assessee is found during a search on another person, the Assessing Officer is required to invoke section 153C and not section 147. Conversely, where no such material exists, reassessment under section 147/148 may validly be initiated. 7.18 We also note that the assumption of jurisdiction under section 153C is conditioned upon the recording of a two-s....