TaxTMI 
TaxTMI 
2026 (9) TMI 1391
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....e ground that the relevant assessment year is already under appeal before the Ld. CIT(A). 2. That, on the facts and in the circumstances of the case, the Ld. CIT(A) erred in not appreciating the fact that the assessment of the relevant assessment year, pending on the date of search, had already abated. 3. That, the Ld. CIT(A) further erred in not having considered that the assessment completed u/s. 143(3) of the Act on 15/03/2016 for the relevant AY 2013-14, pursuant to the date of search i.e. 20/01/2016, is bad in law. 4. That, on the facts and in the circumstances of the case, the Ld. CIT(A) wrongly assumed that the order of the Hon'ble Income Tax Settlement Commission dated 26/12/2017 states that the share capital addition of Rs. 2,93,00,000/- for the AY 2013-14 was not addressed by the Commission since the same year was already under appeal before the CIT(A), without appreciating that the relevant assessment year was already admitted vide order u/s. 245D(2C) of the Act dated 20/01/2017 as it was held therein that the relevant assessment year pending on the date of initiation of search had already abated. 5. That, therefore, as the order o....
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....13 declaring income of Rs. 59,15,980/- under Section 139(1) of the Act. The case of the assessee was selected for scrutiny and notice under Section 143(2) of the Act issued upon the assessee on 09.09.2014. Subsequently, other statutory notices were issued to the assessee. The assessee submitted reply, after considering the entire reply of the assessee the total income was assessed at Rs. 3,52,15,976/- and assessment was completed under Section 143(3) of the Act on 15.03.2016. A search and seizure operation under Section 132 of the Act was conducted on 20.01.2016 at the residence of the Sanjit Kumar Saha and the assessee company, M/s Amplex Projects Pvt. Ltd. Accordingly, notice under Section 153A of the Act was issued to the assessee for the assessment year 2010-11 to A.Y. 2015-16 including the impugned assessment year, a copy of notices are placed at additional paper book at page no. 1-6. 6. Aggrieved from the order of the Assessing Officer dated 15.03.2016 passed under Section 143(3) of the Act, the assessee filed appeal before the Ld. CIT(A)(NFAC) on 01.04.2016, the appeal was dismissed and the Ld. CIT(A) (NFAC) passed order on 03.09.2025. 7. Aggrieved from the above order....
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....ained that the impugned assessment completed u/s. 143(3) of the Act is bad in law. Inspite of the above, without appreciating the fact that the consequential appellate proceedings, in pursuance to the assessment order passed after the date of initiation of search, is also bad in law, the 14.CIT(A), passed the appellate order on 03/09/2025 thereby upholding the impugned addition of Rs 2,93,00,000/-made in the assessment completed us. 143(3) of the Act. Being aggrieved by the order of the Ld. CIT(A), the assessee seeks the kind justice of the Hon'ble Income Tax Appellate Tribunal and has filed an appeal in this regard The following submissions are, therefore, given by the appellant for your kind consideration: SUBMISSION OF THE APPELLANT: Additional Grounds: 1. That the impugned assessment made by the AD pursuant to return which was filed before the date of search which abated in terms of second proviso to section 153A of the Act the AD erred in completing the assessment on the abated return and the LCIA) erred in adjudicating the order and upholding the same. 2. That the impugned order passed ws.143(3) of the Act bei....
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....sment, if any, relating to any assessment year falling within the period of six assessment years **referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 1324, as the case may be, shall abate. **(2) If any proceeding initiated or any order of assessment or reassessment made sonder sub-section (1) has been annuled in appeal or any other legal proceeding then notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1) shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation For the removal of doubts, it is hereby declared that (i) save as otherwise provided in this section 1538 and section 153C all other provisions of this Act shall apply to the assessment made under this section. (ii) in an assessment or reassessment made in respect of an assessment year under this sectio....
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....to suspension or termination of the proceedings either of the main action, or the proceedings ancillary or collateral to it. The proceedings, which have already terminated are not able for abatement unless statute expressly provides for such consequence thereof. The word "pending' occurring in the second proviso to section 153A of the Act, is also significant It is qualified by the words "on the date of initiation of the search", and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate. In other words, Assessments which are not pending 1.e. completed assessments as on the date of search would hold their base and would not abate. Thus, what emerges is that only pending Assessments as on the date of search shall abate. The legislature is clear that any appeal, revision or rectification proceedings, if pending as on the date of search shall abate. On the contrary, as far as completed assessments are concerned, they do not abate and pending appeals etc in respect thereof continue to exist notwithstanding the fact that the search has been made. Thus a completed assessment becomes final unless some incriminating materia....
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....nd proviso to sec. 153A(1) and, therefore, is non-est. Since the assessment order passed by the AO u/s. 143(3) is held to be non-est, the instant appeal by the revenue is infructuous. Accordingly, the appeal vide ITA No. 785/Kol/2018 by the revenue is dismissed as infructuous." The above ratio has also been taken up by the hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. reported in 149 taxmann.com 399 (SC). Relevant extract of the judgment reproduced as under "As per the provisions of section 153A, in case of a search under section 132 or requisition under section 132A. the Assessing Officer gets the jurisdiction to assess or reassess the 'total income in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to section 153A, the assessment or reassessment, if any, 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 making of requisition under section 1324, as the case may be, shall abate. As per sub-sec....
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....unabated completed assessment, the Assessing Officer can assess or reassess the income total income taking into consideration the other material is accepted in that case there will be neo assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A is linked with the search and requisition under sections 132 and 132A The object of section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition Therefore, only in a case where the undisclosed income is found on the basis of incriminating material the Assessing Officer would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment As per the second proviso to section 153A, only pending assessment/reassessment shall stand abated and the Assessing Officer would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the revenue is accepted, in that case, second proviso t....
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....levant assessment year complied with the issuance of notice u/s. 131 of the Act by filing copies of PAN, ITR Acknowledgment, audited accounts, relevant extract of bank statement, declaration confirming the source of fund etc. Copies of the same are enclosed at pgs.78 to 191 of the P/b. In this connection, from a perusal of the Balance Sheets of the sand share applicant companies, it may be seen that the alleged share applicant companies possessed sufficient own funds to subscribe to share capital of the assessee company during the relevant assessment year. Therefore, clearly, the identity and creditworthiness of the share applicants and the genuineness of the transactions is fully explained and established. Under such circumstances, no addition can be made u/s. 68 of the Act as unexplained cash credit. In support of the above, reliance is being placed on the following judicial pronouncements The Hon'ble Delhi High Court in case of Commissioner of Income-tax v. Lovely Exports P. Ltd reported in [299 ITR 268] held that "In the case of a company the following are the propositions of law under section. 68. The assessee has to prima facie prove (1....
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.... "The initial burden is upon the assessee to explain the nature and source of the share application money received by the assessee In order to discharge this burden, the assessee is required to prove (u the identity of the share-holder, (ii) the genuineness of the transaction and (c) the creditworthiness of the shareholders. In case the investor shareholder is an individual. some documents will have to be filed or the shareholder will have to be produced before the Assessing Officer to prove his identity If the creditor/subscriber is a company, then the details in the form of registered address or PAN identity, etc can be furnished. When the money is received by cheque and is transmitted through banking or other indisputable channels, the genuineness of the transaction would be proved. Other documents showing the genuineness of the transaction could be copies of the shareholders register, share application forms, share transfer register, etc As far as the creditworthiness or financial strength of the creditor/subscriber is concerned, that can be proved by producing the bank statement of the creditors/subscribers showing that it had sufficient balance in its accounts to enable i....
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....-tax assessment number and shows the genuineness of transaction by showing money in his books either by account payee cheque or by draft or by any other mode, then the onus of proof would shift to the Revenue. Just because the creditors/share applicants could not be found at the address given, it would not give the Revenue the right to invoke section 68. One must not lose sight of the fact that it is the Revenue which has all the power and wherewithal to trace any person. Moreover, it is settled law that the assessee need not to prove the "source of source"." As such, taking into consideration the above judicial pronouncements, it clearly follows that the alleged share applicant companies by filing the aforementioned documents has duly established their identity and creditworthiness as well as the genuineness of the share transactions. As such, the allegation made by the Ld. AO that the assessee has introduced its own funds is nothing but a figment of his imagination based on suspicion. However, it is an undisputed fact as held by the Hon'ble Apex Court in the following cases that suspicion however strong cannot take the place of evidence Uma Charan S....
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....o be present (i) there has to be credit of amounts in the books maintained by the assessee (ii) such credit has to be a sum of money during the previous year, and (iii) either (a) the assessee offers no explanation about the nature and source of such credits found in the books or (b) the explanation offered by the assessee, in the option of the Assessing Officer, is not satisfactory It is only then that the sum so credited may be charged to income-tax as the income of the assessee of that previous year. It thus follows from the above that no addition can be made in the hands of the assessee on account of share capital raised during previous assessment years, by invoking sec 68 of the Act Further, as regards the reliance placed by the Ld. CIT(A) on the order of the Hon'ble Income Tax Settlement Commission, dated 26/12/2017, in upholding the addition for the relevant assessment year, it is submitted that it is an undisputed fact that in the instant case regular assessment u/s 143(3) of the Act was pending on the date of search u's 132 of the Act (20/01/2016) and therefore, the assessment order passed by t....
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....held to be non-est. For the sake of convenience, we are reproducing section 153A of the Act which is as under: **153 A. Assessment in case of search or requisition. (1) Notwithstanding anything contained in section 139 section 147 section 148. section 149, section 131 and section 153, in the case of a person where a search 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 failing within six assessment years referred to in clause (b), in the prescribed form und verified in the prescribed manner and setting forth such other particulars as muay be prescribed and the provisions of this Act shall so far as may be apply accordingly as if such return were a return required to be furnished under section 139 (b) assess or reassess the total income of six assessment years immediately preceding the assessment your relevant to the previous year in which such search is c....