TaxTMI 
TaxTMI 
2025 (11) TMI 715
X X X X Extracts X X X X
X X X X Extracts X X X X
.... bring on record any incriminating document found and seized during the course of search. 2. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Patna failed to appreciate that search u/s 132 in the residential premises and survey under section 133A in the business premises of the assessee were conducted simultaneously on 17.09.2020 and therefore, inter linked which implies that the documents marked as GDMIS-59 was impounded during the course of search operation u/s 132 of the I.T. Act. 3. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Patna failed to appreciate that survey under section 133A was a consequential proceedings of search operation u/s 132 and assessment proceedings under two different sections cannot be initiated in case of a single assessee. 4. That on the facts and in the circumstances of the case and in law, the Ld. CIT(A)-3, Patna failed to appreciate that the AO had rightly considered the impounded document marked as GDMIS-59 as incriminating document for assessment under section 153A as survey under section 133A was a consequential proceedings of search operation und....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ermined the total income at Rs. 2,16,76,600/-. 4. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated 29.05.2023 allowed the appeal. Aggrieved with the order of the Ld. CIT(A), the revenue has filed the appeal before the Tribunal. 5. Rival submissions were heard and the record and the submissions made have been examined. 6. The Ld. DR submitted that in the case of the assessee, along with the search, a survey action under section 133A of the Act was also carried out on 17.09.2020 and documents were found, which should be considered as part of the search carried out. The Ld. AO made the addition on the basis of the incriminating documents found in the course of survey. The relevant extract from the assessment order is as under: "Search & Seizure operation u/s 132 of the Income Tax Act, 1961 and Survey operations u/s 133A of the I.T. Act, 1961 were conducted on 17-09-2020 in the case of Nand Kumar Prasad Sah Group & Sh. Anil Kumar Chaudhary. In the course of Search & Seizure operation and Survey operation, certain books of accounts and other documents were seized/impounded from the Residential premises of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....able on record, following additions are hereby made:- 5. On-going through the impounded/seized documents with ID Mark GDMIS-59 and appraisal report, it is seen that assessee had accumulated cash of Rs. 2,16,76,600/- from the period 23.05.2017 to 07.06.2017 from total 21 persons including withdrawal of fund from the receipts of the school, collection of cash from various parties. The details are given below:- 7. The Ld. AO has given details in a tabular form for withdrawal of fund from school from 24.05.2017 to 05.06.2017 for the sum of Rs. 9,50,000/-, from 21 persons during the period 24.05.2017 to 07.06.2017 for Rs. 1,54,01,600/- and from the Chamber on 23.05.2017 for Rs. 53.25 lakh. The assessment order thereafter continues as under: "The amount of Rs. 2,16,76,600/- includes the amounts of Rs. 9,50,000/- Rs. 1,54,01,600/- and Rs. 53,25,000/- as discussed above. The assessee vide his reply dated 18.02.2022 submitted that the petition has offered the following amount as additional income in the return of income filed after search. The details are as under:- Assessment Year Income Offered in Rs. 2014-15 41,22,830/- 2015-16 91,10,627/- 2016-1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....peal before him, admitted the additional ground which was in respect of the addition being made on the basis of impounded material found during the course of survey proceedings under section 133A in the school premises of G.D. Mother International School as the addition under section 153A can be made only on the basis of documents/material found in the course of search. The Ld. AR relied upon the decision of Pr. CIT v. Saumya Construction Pvt. Ltd., SVL Mines Ltd. v. Dy. CIT, CIT v. Kabul Chawla [2016] 380 ITR 573 (Del) which has discussed the decision of CIT v Continental Warehousing Corporation (Nhava Sheva) Ltd. [2015] 374 ITR 645 (Bom) and also the decision of Hon'ble Supreme Court in the case of Principal Commissioner of Income Tax, Central-3 V Abhisar Buildwell P. Ltd. (Civil Appeal No. 6580 of 2021) order dated 24.04.2023 and has concluded as under: "The appellant has emphatically submitted that no incriminating document has been found during the search u/s 132. The addition has been made by the AO by making reference of the impounded material marked GDMIS-59 found during the course of survey u/s 133A in the school premises of G.D. Mother International School. The a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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. {emphasis supplied} The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs." In view of the above, it is clear that the assessment made in the case where no incriminating material were found, the AO cannot take into consideration the other material in respect of completed assessment/unabated assessments. Further, the AO has failed to bring on record any incriminating document found and seized during the course of search in respect of the assessment year in question. Accordingly, I find that the case of appellant is squarely covered by the decision of Hon'ble Supreme Court in case of Pr. CIT vs. Abhishar Buildwell P. Ltd. Respectfully following th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... preceding the search. Therefore, on true interpretation of section 153A, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the Assessing Officer would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the revenue would be to initiate the reassessment proceedings under section 147/48, subject to fulfilment of the conditions mentioned in section 147/148, as in such a situation, the revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the revenue to have the reassessment under section 147/148 has to be saved, ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... material unearthed during the search and the other material available with the Assessing Officer including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the Assessing Officer 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 Assessing Officer in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A. However, the completed/unabated assessments can be reopened by the Assessing Officer in exercise of powers under section 147/148, subject to fulfilment of the conditions as envisaged/mentioned under section 147/148 and those powers are saved. {emphasis supplied} The question involved in the instant set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the revenue are hereby dismissed. [Para 14]" 10. Admittedly, neither in the course of appeal before the Ld. CIT(A) nor before us any evi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... enable him to invoke the provisions of Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963. However, even though the Ld. CIT(A) has not adjudicated on the merits of the case, the fact remains that in the impounded document referred to by the Ld. AO aggregate cash of Rs. 2,16,76,600/- is found to be mentioned during the period relevant for AY 2018-19. The assessee contended before the Ld. AO that since he had filed the returns for AY 2014-15 to AY 2018-19 disclosing the additional income in the returns of income filed after search, which works out to Rs. 2,84,67,487/- and once income is offered to tax in the year, the subsequent application is not to be subjected to tax again in view of the benefit of telescoping as both income and its application cannot be added twice as it would amount to double taxation. However, the theory of telescoping can be applied only where the income shown in the returns filed subsequent to the search for earlier assessment years is in the form of cash or other assets which have been converted to cash so as to account for the sum of Rs. 2,16,76,600/- from the period 23.05.2017 to 07.06.2017 as per the impounded document with the ID marked GDMIS-59....