Search and seizure - whether orders of
unabated/completed assessment years can be reopened in the absence of any
incriminating evidences under section 153A read with 132 & 132A
Facts:
In
a series of batch petitions revenue sought review of the earlier dismissal of
SLP petition in the case of Income Tax, Central-III v. Kabul Chawla, (2015)
61 taxmann.com 412 (Delhi) : 2015 TaxPub(DT) 3486 (Del-HC) where
in it was held that in the absence of any incriminating evidence arising out of
a search/seizure, completed/unabated assessments cannot be disturbed. Plea of
the revenue was income tax is a tax on the income and the income has to be
complete so the law cannot be envisaged to tax half/part of income and
accordingly section 153A cannot be read in a manner to dilute the requirement
of taxing full income and thereby unearthing incriminating evidences is not a
sine qua non to disturb completed/unabated assessments.
Held against the revenue the order of Kabul
Chawla does not require any revision.
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 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.
Ed. Note:
The Apex court verdict permitting reopening under section 147 and 148 is not
something unheard of as any completed assessment if the conditions of section
147 and 148 are separately met may get reopened. The logic of reopening under
section 147 & 148 being tracked/pulled into section 153A is unwarranted is
what the Apex court has said.
Case: Pr. CIT v. Abhisar Buildwell (P.) Ltd. 2023 TaxPub(DT) 2442 (SC)