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Showing contexts for: 153A in Pr. Commissioner Of Income Tax Central 3 vs Abhisar Buildwell P. Ltd. on 24 April, 2023Matching Fragments
V. Therefore, twin conditions need to be satisfied under Section 153A(1)-
A. Assessments have to be completed year wise and not for block period and B. Assessments have to be made for the total income and not just for the undisclosed income.
(vii) It is submitted that once this is evident and clear, the scope of interpretation of the second proviso to section 153A(1) read with Section 153A(2) becomes clear and unambiguous. It is submitted that as per the scheme of Section 153A of the Act, 1961, two parallel assessments have to be avoided. Therefore, any assessment under Section 143, 144 and 147 pending on the date of initiation of search u/s 132 or making of requestion u/s 132A has to abate, and the same needs to be subsumed into Section 153A(1). The second proviso using the expression “shall abate” should be read with the expressions “assessment” or “reassessment” employed in the very same proviso, i.e., it must be read with the expression employed in Section 153A(1)(b) “assess or reassess the total Income” and finally with the expression “notwithstanding” appearing as the opening phrase u/s 153A(1) of the Act.
assessme assessment, Originally
nt stood which was concluded
abated. pending on assessmen
date of t which has
search and attained
stood abated finality
as a result of cannot be
search. disturbed
AO not more so
entitled to go when no
beyond material
scope of found in
pending search.
assessment.
ii. No incriminating AO Scope of Assessmen
material found in entitled to assessment t u/s 153A
search. assess u/s 153A in absence
+ entire must be of any
Information/ income, as restricted to: incriminatin
document from pending (a) grounds g material
sources other than regular on which may be
search available assessme proceedings dropped.
with AO nt stood reopened;
abated. and Post
(b) additional dropping of
specific proceeding
information s u/s 153A,
coming to Revenue
knowledge may, basis
AO through other
modes other information,
than search. proceed u/s
AO not 147 and/or
entitled to 263 subject
reopen entire to
assessment satisfaction
and of
undertake jurisdictiona
roving/fishing l conditions
enquiries. under the
said
provisions.
iii. Incriminating AO Scope of Assessmen
material found entitled to assessment t u/s 153A
during search only assess u/s 153A to be
on issue ‘A’. entire must be restricted to
No other income, as restricted to: Issue A
information/materia pending (a) grounds relating to
l available or found regular on which which
from any external assessme proceedings incriminatin
sources. nt stood reopened; g material
abated. and is found
AO also (b) issue A during
entitled to detected search.
assess during
entire search. Original
income concluded
and not AO not assessmen
just issue entitled to t which has
A. reopen entire attained
assessment finality
and cannot be
undertake disturbed,
roving/fishing in context
enquiries. of issues in
relation to
which no
documents
are found in
search.
iv. Incriminating AO Scope of Assessmen
material found entitled to assessment t u/s 153A
during search only assess u/s 153A could only
on Issue ‘A’ entire must be be done in
+ income restricted to: respect of
Other including (a) grounds issue A
information/materia Issue A on which relating to
l available or found and/or proceedings which
from any external Issue B. reopened; incriminatin
sources (not in and g material
search) in respect (b) issue A is found
of Issue ‘B’. detected during
during search.
search; and On
(c) issue B conclusion
for which of
information assessmen
available. t u/s 153A,
Revenue
AO not may, basis
entitled to other
reopen entire information,
assessment proceed u/s
and 147 and/or
undertake 263.
roving/fishing
enquiries.
4.2 Learned counsel for the respective assessees have
“15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the’ assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub- section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of, the Act is annulled in appeal or any other proceeding.
9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under
Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search.