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IN THE INCOME TAX APPELLATE TRIBUNAL "C" BENCH, MUMBAI
, ,
BEFORE SHRI SANJAY ARORA, AM AND SHRI AMIT SHUKLA, JM
./I.T.A. No. 1253/Mum/2012
( / Assessment Year: 2006-07)
Punjab Sind Dairy Products Pvt. Ltd. Asst. CIT, Central Circle-33,
C/o. K. K. Lalkaka & Co., Mumbai
/
507, Churchgate Chambers,
5, New Marine Lines, Vs.
Mumbai-400 020
. / . /PAN/GIR No.
( /Appellant) : ( / Respondent)
/ Appellant by : Shri K. K. Lalkaka
/Respondent by : Shri Neil Philip
/ : 05.11.2014
Date of Hearing
Date of Order : 11.11.2014
/ O R D E R
Per Sanjay Arora, A. M.:
This is an Appeal by the Assessee directed against the Order by the Commissioner
of Income Tax (Appeals)-41, Mumbai (`CIT(A)' for short) dated 27.01.2012, partly
allowing the assessee's appeal contesting its assessment u/s.143(3) of the Income Tax
Act, 1961 (`the Act' hereinafter) for the assessment year (A.Y.) 2006-07 vide order dated
31.12.2008.
2.1 The appeal, besides other issues, raises the principal issue, questioning the validity
of the assessment, vide the additional ground, as under:
`1. On the facts and in the circumstances of the case and in law, the
Assessment Order passed by Asstt. Commissioner of Income-tax, Central
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ITA No. 1253/Mum/2012 (A.Y. 2006-07)
Punjab Sind Dairy Products Pvt. Ltd. vs. Asst. CIT
Circle, Mumbai dated 31st December, 2008 is invalid and bad in law since a
search was initiated on 8th May, 2007 on the said appellant and having
regard to the provisions of section 153A, the legal position in terms of sub-
section (1) of section 153A that emerges is that when assessment is pending
completion when the search is initiated, such proceedings shall abate.'
The said issue, being legal and going to the root of the matter, the additional
ground was admitted in view of the settled law, and the appeal heard; in fact, only
thereon. It was pointed out by the ld. Authorized Representative (AR), the assessee's
counsel, that the assessment in the instant case was framed on 31.12.2008, i.e., much
after the date of search on the assessee on 08.05.2007, taking us through the Warrant of
Authorization (in Form 45) dated 07.05.2007 (PB pgs.1-2). The assessment being
pending as on the date of search, the same gets abated. Accordingly, the impugned
assessment is bad in law. Reliance for the purpose was placed by him on the decision in
the case of CIT vs. Anil Kumar Bhatia (reported at [2012] 211 taxmann 453 (Del)/PB
pgs.4-22). The Revenue has, in fact, subsequently also framed the assessment u/s.153A
r/w s. 143(3) for the relevant year on 29.12.2009, placing a copy thereof on record at the
instance of the Bench. This sums up the assessee's case.
2.2 The ld. Departmental Representative (DR) could not rebut the assessee's
contentions, though would state that the purview of an assessment, post search, u/s.153A,
would be the total income.
3. We have heard the parties, and perused the material on record.
3.1 The return of income, declaring an income of Rs.5,08,030/- for the relevant year,
was furnished on 29.11.2006 (refer the statement of facts before the first appellate
authority; the mention of the said date as `14.12.2007' in the assessment order is
incorrect). This date is material in-as-much as the assessment proceedings commence
with the filing of the return u/s. 139(1) of the Act. This was followed by a notice u/s.
143(2) on 27.09.2007, i.e., subsequent to the date of search. No assessment having been
made by 08.05.2007, the date of search, with the relevant year falling within the period of
six assessment years immediately preceding the assessment year relevant to the previous
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ITA No. 1253/Mum/2012 (A.Y. 2006-07)
Punjab Sind Dairy Products Pvt. Ltd. vs. Asst. CIT
year in which the search is conducted or requisition made, the same shall abate in terms
of the clear provision of law, which we may reproduce here-in-below for ready reference:
`Assessment in case of search or requisition.
153A. (1) Notwithstanding anything contained in section 139, section 147,
section 148, section 149, section 151 and section 153, in the case of a
person79 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 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 year relevant to the previous year in which such
search is conducted or requisition is made :
Provided that the Assessing Officer shall assess or reassess the total
income in respect of each assessment year falling within such six
assessment years:
Provided further that assessment or reassessment, 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 132A, as the case may
be, shall abate :
(2) ................
Explanation.--For the removal of doubts, it is hereby declared that,--
(i) save as otherwise provided in this section, section 153B and section
153C, all other provisions of this Act shall apply to the assessment made
under this section;
(ii) ..................'
3.2 The law in the matter is thus patently clear, and does not contemplate or envisage
two assessments proceedings running in parallel and, consequently, two assessments, i.e.,
one which stands initiated or may be on, as the case may be, i.e., at the time of search (or
requisition), and another subsequent thereto. This is as the scope of the proceedings
u/s.153A, falling under Chapter XIV of the Act, in contradistinction to those u/c.XIV-B
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ITA No. 1253/Mum/2012 (A.Y. 2006-07)
Punjab Sind Dairy Products Pvt. Ltd. vs. Asst. CIT
is to be assess (or reassess) the total income of the assessee for the relevant year/s. There
are, even as explained by the hon'ble court in Anil Kumar Bhatia (supra), no fetters on
the power of the Assessing Officer (A.O.), who is u/s.153A entrusted with the duty to
bring to tax the total income of an assessee whose case is covered u/s.153A (or section
153C). We may further clarify that there is no concept of undisclosed income, as
introduced in Chapter XIV-B, and the total income of the assessee for the relevant year is
to be subject to regular assessment. In the present case, rather, we find the notice
u/s.143(2) to have been issued and served on the assessee on 27.09.2007, i.e., the
procedure to be adopted for subjecting the assessee's return, as originally filed (which we
may clarify was a valid return in law), to verification procedure, subsequent to the date of
search. That is, rather than putting the assessment proceedings, where on, to rest, the
Revenue initiates steps for a regular assessment on the basis of the said return. The said
notice and, consequently, the assessment framed in pursuance thereof, are bad in law, and
we have no qualms in stating so. We, accordingly, set aside the impugned assessment as
bad in law. We, therefore, do not answer any of the other grounds raised by the assessee
per its appeal; the same not surviving for adjudication, with the ld. AR also resting his
case upon arguing the additional ground afore-referred. We decide accordingly.
4. In the result, the assessee's appeal is allowed.
Order pronounced in the open court on 05/11/2014 at the conclusion of the hearing
Sd/- Sd/-
(Amit Shukla) (Sanjay Arora)
/ Judicial Member / Accountant Member
Mumbai; Dated : 11.11.2014
. ../Roshani, Sr. PS
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ITA No. 1253/Mum/2012 (A.Y. 2006-07)
Punjab Sind Dairy Products Pvt. Ltd. vs. Asst. CIT
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent
3. () / The CIT(A)
4. / CIT - concerned
5. , , / DR, ITAT, Mumbai
6. / Guard File
/ BY ORDER,
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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