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Income Tax Appellate Tribunal, DELHI BENCH “A”, NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI L. P. SAHU
O R D E R PER AMIT SHUKLA, J.M.: The aforesaid appeals have been filed by the assessee against separate impugned orders of even date 2/7/2013, passed by the ld. CIT(Appeals)-XXXIII, New Delhi for quantum of assessment passed under section 153A/143(3) for assessment years 2003-04 and 2004-05.
Since the facts and the issues involved in both the appeals are common, arising out of identical set of facts, therefore, the same were heard together and are being disposed of by way of this consolidated order.
At the outset, both the appeals filed by the assessee are barred by limitation by 262 days. Along with the petition for 2 & 4680/DEL/2014 condonation of delay, the Ld. counsel for the assessee, Shri Sanjay Kumar, C.A. has also filed his sworn affidavit deposing that the delay in filing of the appeals was not on account of latches or fault on the part of the assessee, albeit it was due to renovation work carried out in his office and dislocation of related files of the assessee, the appeals could not be filed on time. In his sworn affidavit, Shri Sanjay Kumar has deposed as under:- “Affidavit of Shri Sanjay Kumar, S/o Late Hari Saran Dass, Resident of B- 2/38, Janakpuri, New Delhi-110058. I, Sanjay Kumar, the above named deponent do hereby solemnly declare and affirm as under:-
1. 1. That the deponent is fully acquainted with the facts of the case deposed to below as partner of M/s Sanjay & Sanjay, Chartered Accountants acting as Authorised Representative of M/s Appolo Traexim Private Limited in 2003-04 and ITA No. 4680/Del/2014 for the assessment year 2004- 05 and hence competent to swear and affirm this affidavit.
2. That appeal orders passed under section 250 by the Commissioner of Income-tax (Appeals) –XXXIII, New Delhi for the A.Y. 2003-04 and 2004-05 respectively were received by the appellant-assessee on 07.10.2013 and the same were delivered by the appellant-assessee in our office to file second appeal.
3. That against the aforesaid orders for A.Y. 2003-04 and 2004-05 respectively, second appeal before the Hon’ble Income Tax Appellate Tribunal, Delhi could be filed from our office on 25.08.2014 only with a delay of 262 days.
3 & 4680/DEL/2014 4. That delay in filing the aforesaid appeals was mainly caused due to dislocation of related files, as the same were placed with old/dead files during renovation of our office at A1-A, 14B, Janakpuri, New Delhi-110058 and could only be located in the first week of August 2014 during re-indexing of all the files besides VP-Finance of the appellant group namely Shri Rajnish Khanna, who was looking after and interacting with us for the tax matters of the appellant- assessee resigned from 22.04.2014.
5. That the delay in filing of appeal is wholly due to bona fide and sufficient reasons. Sd/- DEPONENT Place: New Delhi DATE: August 9, 2017”
Thus, he prayed that the delay should be condoned and the appeals should be admitted for being heard on merits, as there was a reasonable cause in not filing the appeals in time and in any case, there was no fault on the part of the assessee. In support, he strongly relied upon the decision of the Delhi Bench of the Tribunal in the case of M/s Machino Plastics Ltd. Vs. DCIT in I.T.A. No.4962/DEL/2011.
On the other hand, the ld. CIT D.R. objected for condoning the delay stating that the assessee should have been vigilant and should have ensured that the appeal is filed on time and the reasons stated by the ld. counsel for the assessee cannot be said to be sufficient and reasonable cause for condoning the delay.
4 & 4680/DEL/2014 6. After hearing the rival submissions on the issue of limitation, we find that here in this case, so far as assessee is concerned, there have been no latches or laxity on the part of the assessee for not pursuing the legal remedy, particularly when there is a huge tax liability fastened upon it. The reason which has been stated by the ld. counsel for the assessee that the file of the assessee got dislocated during the renovation of his office and the said files only got located during the re-indexing of all the files, do fall in the realm of probable factors and circumstances. Such an averment of fact, which has been deposed by the ld. counsel for the assessee, not only is plausible reason but also constitute a sufficient and reasonable cause in not filing the appeal within the limitation period. It is trite that the Courts and quasi-judicial authorities while considering the scope of expression “sufficient or reasonable cause” for condonation of delay, has to see that the litigants are not denied substantial justice when there is no negligence or latches or want of bona- fide which can be imputed upon the party. The Hon'ble Supreme Court in the case of N. Balkrishnan vs. M. Krishna Murti, AIR 1998 SC 322, has condoned the delay of 883 days in filing an application for setting aside an ex-parte decree, for which application for condonation of delay was filed. While condoning the delay, their Lordships laid down a very important proposition of law which is reproduced hereunder:- “8. The appellant’s conduct does not on the whole warrant to castigate him as an irresponsible litigant. What he did in defending the suit was not very much far from what a litigant would broadly do. Of course, it may be said that he should have been more vigilant by visiting his advocate at short intervals to check up the 5 & 4680/DEL/2014 progress of the litigation. But during these days when everybody is fully occupied with his own avocation of life an omission to adopt such extra vigilance need not be used as ground to depict him as a litigant not aware of his responsibilities, and to visit him with drastic consequences. It is axiomatic that condonation of delay is a 9. matter of discretion of the Court. Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to a want of acceptable explanation, whereas in certain other cases, delay of a very long range can be condoned as the explanation thereof is satisfactory. Once the Court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the superior Court should not disturb such finding, much less in revisional jurisdiction, unless the exercise of discretion was on wholly untenable grounds or arbitrary or perverse. But it is a different matter when the first Court refuses to condone the delay. In such cases, the superior Court would be free to consider the cause shown for the delay afresh and in its own finding even untrammelled by the conclusion of the lower Court. *************************************************************** The primary function of a Court is to adjudicate the dispute between the parties and to advance substantial justice. The time-limit fixed for approaching the Court in different situations is not because on the expiry of such time a bad cause would transform into a good cause. ”[Emphasis supplied is ours]
6 & 4680/DEL/2014 7. The Hon’ble Supreme Court further observed that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics, but seek the remedy promptly. The Hon’ble Court further observed that refusal to condone the delay would result in foreclosing a suitor from putting forth his cause. There is no presumptions that delay in approaching the Court is always deliberate. The Hon'ble Supreme Court in SLP [Civil No. 12980 of 1986, decided on 19th Feb., 1987, in the case of Collector, Land Acquisition v. Mst. Katiji (1987) 62 CTR (Syn) 23 (SC)] has laid down the following guidelines : Ordinarily a litigant does not stand to benefit by 1. lodging an appeal late. Refusing to condone delay can result in a 2. meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest then can happen is that a cause would be decided on merits after hearing the parties. “Every day’s delay must be explained” does not 3. mean that a pedantic approach should be made, why not every hour’s delay, every second’s delay. The doctrine must be applied on a rational commonsense pragmatic manner. When substantial justice and technical 4. considerations are pitted against each other, cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned 5. deliberately, or on account of culpable negligence, or on account of malafides. A litigant does not stand to 7 & 4680/DEL/2014 benefit by resorting to delay. In fact he runs a serious risk. It must be grasped that judiciary is respected not 6. on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to so.
If we apply the aforesaid ratio and principle laid down by the Hon'ble Apex Court on the facts of the present case, ostensibly there is no default on the part of the assessee for not pursuing the legal remedy and there is no dilatory tactics by the assessee. The ld. counsel for the assessee himself has owned up the responsibility and stated that there was a mistake on the part of his office that the appeal could not be filed on time. Thus, on the aforesaid facts, we are inclined to condone the delay in filing of the appeal, as rules of limitation are not meant to destroy the rights of the party for legal remedy and deny substantial justice. Thus, the delay of 262 days in filing of both the appeals is condoned and the appeals are admitted for hearing on merits.
For better understanding of the facts and the issues involved, we are taking up the appeal for assessment year 2003- 04 and it has been stated by the parties that the finding given in this year will apply mutatis-mutandis in the appeal for assessment year 2004-05 also. In the grounds of appeal
for assessment year 2003-04, the assessee has raised the following grounds:-
1. BECAUSE the Id. CIT(A) has erred in law and on facts in holding that validity of search and its procedures cannot be a matter of adjudication under section 250 of the Act.
8 & 4680/DEL/2014 2. BECAUSE on a due consideration of law, facts and circumstances of the case, particularly when no incriminating material was found during the global search carried out on the assessee or referred to for making addition/ disallowances in assessment framed U/s 153A of the Act, the Id. CIT(A) should have held that none of the addition made are sustainable in the present case.
3. BECAUSE the Id. CIT(A) has erred in law and on facts in confirming the addition of Rs.2,00,00,000 made under section 68 if the Act on account of share capital received as unexplained cash credit.
4. BECAUSE the learned CIT(A) has erred in law and on facts in sustaining the aforesaid addition under section 68 while the same was made by the learned Assessing Officer without referring to any incriminating material found during the course of search.
5. BECAUSE the learned CIT(A) has erred in merely stating that charging of interest is consequential in nature whereas in the facts and circumstances of the present case, no interest U/s 234A was chargeable at all.
BECAUSE the order appealed against is contrary to the facts, law and principles of natural justice.
At the outset, the ld. counsel, Shri Sanjay Kumar, argued the legal issue raised in ground no. 2 and submitted that, in the facts and circumstances of the present case, no addition could have been made within the scope of section 153A, because no incriminating material or documents were found or seized during the course of search carried out in the case of the assessee and, therefore, such additions made by the Assessing Officer and as confirmed by the ld. CIT(A) should be quashed or directed to be deleted. Explaining the relevant facts qua this 9 & 4680/DEL/2014 preliminary issue, he submitted that in this case, search and seizure action under section 132(1) was carried out on 19/1/2009 on the group concern, in which assessee’s name also figured in the warrant of authorization. He drew our attention to the copy of Panchnama dated 19/20.1.2009 and Panchnama dated 5/3/2009, the details of which are as under:- SI. Date, Place Warrants in the name of subjected to search No. (i) On 19/20.1.2009 Yogendra Chandra Kurele, Gahoi Buildwell Ltd. etc. 701, Mercantile House, 15 K.G. Marg, Search was temporarily concluded and New Delhi-110001 order under section 132(3) was served. (ii) On 5.3.2009 - In continuation of the proceedings on 20.1.2009 Sri Yogendra Chandra Kurele, Chanchal Kurele, Vinay Kr. Kurele, Praveen Kurele, 701, Mercantile Arun Kr. Gupta, Yogum Developers Ltd., House, 15 K.G. Marg, YMC Buildmore (P) Ltd., Kurele Buildmore New Delhi-110001 (P) Ltd., Gahoi Buildmore (P) Ltd., Kurele Infrastructure (P) Ltd., Kurele Developers (P) Ltd., Kurele Hotels (P) Ltd., Chand Fabricators (P) Ltd., Appolo Triexim (P) Ltd., Amtrac Automotive Industries (P) Ltd., Macurial Finrest Ltd., Padampat Gopal Kishan Organisation 11. From the second Panchnama, he pointed out that so far as first Panchnama is concerned, assessee’s name does not figure, whereas in second Panchnama which is merely a sequel to the first Panchnama, it can clearly deduced that firstly, the 10 & 4680/DEL/2014 assessee cannot be held to be a “person in whose case search has been initiated”; and secondly, from a bare perusal of Panchnama, it will be seen that nothing has been found and seized as mentioned in the Panchnama itself and not even any statement under section 132(4) has been recorded on that day. Thus, it is apparent from the search documents that neither there is any material in the form of books of account, documents, money, bullion, jewellery, etc. found or seized nor any statement under section 132(4) has been recorded. Once that is so, it can safely inferred that nothing incriminating has been found qua the assessee for any of the assessment years in terms of section 153A and, therefore, no addition could have been made for assessment years where assessments are unabated at the time of search. He pointed out that the assessee has raised this precise objection before the Assessing Officer vide letter dated 6/7/2010, the copy of which have been placed in the paper book at pages 12 to 19, wherein the assessee has specifically pointed out this fact that nothing incriminating has been found during the search relating to assessee and therefore, no addition can be made. Despite such objection before the Assessing Officer, the Assessing Officer has not given any rebuttal or counter finding that any incriminating material has been found at the time of search, neither there is any whisper regarding any reference to seized or incriminating material in the assessment order. In fact, the entire basis for making the addition is the figures given in the balance sheet filed alongwith the return of income with regard to the share capital and share premium which was already there on record. He submitted that now it is settled law, specifically in the jurisdiction of Hon'ble Delhi High Court, that in the case of unabated assessments, no addition can be made over and above 11 & 4680/DEL/2014 originally assessed income without any incriminating material found or seized during the course of search. In support, he relied upon the following judgments:-
1. 1. Judgment of Hon’ble Delhi High Court dt. 25.05.2017 in the case of Pr. CIT Vs. Meeta Gutgutia since reported in [2017] 82 taxmann.com 287 (Delhi) : 152 DTR 153 2. Judgment of Hon’ble Delhi High Court dt. 28.08.2015 in the case of CIT Vs. Kabul Chawla [2016] 380 ITR 573 (Delhi) : [2015] 234 Taxman 300 (Delhi).
3. Judgment of Hon’ble Karnataka High Court dt. 15.12.2015 in the case of CIT Vs. Lancy Constructions [2016] 237 Taxman 728 (Karnataka).
4. Unreported decision dated 14.11.2014 of Hon’ble Tribunal ‘D’ Bench, Delhi in the case of Dy. CIT vs. Kurele Paper Mills Pvt. Ltd. in ITA No.3761/Del/2011.
5. Unreported decision dated 06.07.2015 of Hon’ble Delhi High Court in the case of Pr. CIT vs. Kurele Paper Mills Pvt. Ltd. in ITA No.369/2015.
6. Hon’ble Supreme Court in the case of Pr. CIT vs. Kurele Paper Mills Pvt. Ltd. [2016] 380 ITR (St.) 65 in S.L.P. (C) No. 34554 of 2015 7. Judgment of Hon’ble Gujarat High Court dt. 14.03.2016 in the case of Pr. CIT Vs. Saumya Construction P. Ltd. [2016] 387 ITR 529 (Guj).
12. Drawing our specific attention to the relevant paras of the judgments, Shri Sanjay Kumar submitted that the ratio and principle laid down in the aforesaid cases are squarely applicable on the facts of the assessee’s case also, because here in this case, neither there is any statement on oath recorded under section 12 & 4680/DEL/2014 132(4) which can remotely be held as an incriminating material against the assessee nor there is any document or material found during the course of search, which can implicate the assessee for making any addition within the scope of section 153A for assessment years 2003-04 and 2004-05, as the assessments of which have been stood unabated at the time of search. Thus, the entire addition made by the Assessing Officer should be quashed on this legal ground only.
On the other hand, the ld. CIT (DR)., though did not controvert the finding that there is no incriminating material found at the time of search, but she submitted that once notice under section 153A is issued to the assessee, then it is incumbent upon the assessee to file the return of income and the Assessing Officer has all the powers to assess and re-assess the total income for the year and the same cannot be restricted to the seized material only. This is not the purport of section 153A. In support, she relied upon the following decisions and ratios laid down therein:- 1) Anil Kumar Bhatia, Delhi High Court, 24 Taxmann.com 98 2) CIT Vs Anil Kumar Bhatia, Delhi High Court, 24 taxmann.com 98 3) CIT Vs ST. FRANCIS CLAY DECOR TILES, Kerala High Court, 2016] 70 taxmann.com 234 (Kerala) 4) CIT Vs Chetan Das Lachman Das, Delhi High Court, 25 taxmann.com 227 (Delhi) 5) Canara Housing Development Co. Vs DCIT, Karnataka High Court, 49 taxmann.com 98 (Karnataka)
13 & 4680/DEL/2014 6) CIT Vs Kesarwani Zarda Bhandar Sahson Alld., Allahabad High Court, 2016, ITA No. 270 of 2014 5) Canara Housing Development Co. Vs DCIT, Karnataka High Court, 49 taxmann.com 98 (Karnataka) 6) CIT Vs Kesarwani Zarda Bhandar Sahson Alld., Allahabad High Court, 2016, ITA No. 270 of 2014.
We have heard the rival submissions, perused the relevant finding given in the impugned order as well as the material referred to before us at the time of hearing. The assessee for assessment year 2003-04 has filed its original return on 2/12/2003 and along with the return following documents were attached, which is evident from the documents appearing in the paper book from pages 1 to 10:- “Ack. for filing Original return dated 02.12.2003 for A.Y. 2003-04; along with following documents attached to it: (a) Computation of income (b) Statutory Audit Report (c) Balance Sheet as at 31.3.2003 (d) Profit & Loss Account for the year 31.3.2003 (e) Schedules to Annual Account” Similarly, for the assessment year 2004-05, also the assessee has filed its original return of income on 28/2/2004 which again was attached with the following documents:- “Ack. for filing Original return dated 28.10.2004 for A.Y. 2004-05; along with following documents attached to it: (a) Computation of income (b) Statutory Audit Report (c) Balance Sheet as at 31.3.2004 (d) Profit & Loss Account for the year 31.3.2004 14 & 4680/DEL/2014 (e) Schedules to Annual Account”
The said return of income stood duly accepted, as no notice under section 143(2) was issued and accordingly, returned income filed along with all its enclosures and disclosures stood accepted and finally assessed. At the time of search, i.e., on 19/1/2009, assessments for the assessment years 2003-04 and 2004-05 were not pending and, therefore, the same have to be reckoned as unabated assessment in terms of second proviso to section 153A. As stated by the ld. counsel for the assessee and also evident from the records relied upon during the course of hearing and ongoing through the relevant finding given in the impugned orders, it is an undisputed fact that nothing has been found or seized during the course of search relating to the assessee qua any of the assessment years impugned before us. This is fairly evident from the copy of Panchnama referred and also the observations and findings of the Assessing Officer as well as the ld. CIT(A). In fact, the ld. CIT(A) has dismissed assessee’s plea on this score after relying upon the decision of the Hon'ble jurisdictional High Court in the case of Anil Kumar Bhatia in ITA No.1626, 1632, 1998, 2006, 2019 & 2020 of 2010 dated 7/8/2012, as per his finding given in para 4.2. However, while giving his finding, nowhere he has rebutted that any incriminating document or material was found for these assessment years in the course of search. Thus, this fact is completely uncontroverted and also apparent from records. Now it is well settled law that, whence no incriminating material or document has been found during the course of search and assessments falling within the scope of section 153A are unabated, then no addition can be made over and above the 15 & 4680/DEL/2014 income originally assessed. For making any addition for the unabated assessment covered under section 153A, it is sine-qua- non that some incriminating material or documents should have been found at the time of search qua that assessment year which warrants additions while reassessing the completed assessments for those years. This proposition of law has been well settled and reiterated by the Hon'ble Delhi High Court in the case of CIT vs. Kabul Chawla reported in [2016] 380 ITR 573 (Delhi) and has been reiterated in the case of Pr. CIT vs. Meeta Gutgutia reported in [2017] 152 DTR 153 (Delhi).
In the case of CIT vs. Kabul Chawla (supra), the Hon'ble High Court, after discussing various judgments and analysing section 153A in-extenso, have laid down the following legal proposition:- i. Once a search takes place under Section 132 of the Act, notice under Section 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax".
16 & 4680/DEL/2014 iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” [Emphasis supplied by us] 17 & 4680/DEL/2014 17. The Hon'ble High Court has also taken note of the judgment of their earlier judgment in the case of CIT vs. Anil Kumar Bhatia reported in [2013] 352 ITR 493 (Del) and observe that this was not the issue before the Court. Again in the case of Pr. CIT Vs. Meeta Gutgutia’s (supra), their Lordships have again reiterated the same principle in a very detailed manner and have also distinguished one of their earlier judgment in the case of Smt. Dayawanti Gupta reported in 390 ITR 496. The relevant observations made by their Lordships are as under:- “56. Section 153A of the Act is titled "Assessment in case of search or requisition". It is connected to Section 132 which deals with 'search and seizure'. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re- open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of Section 153 A qua each of the AYs would be justified.
The question whether unearthing of incriminating material relating to any one of the AYs could justify the re- opening of the assessment for all the earlier AYs was considered both in Anil Kumar Bhatia {supra) and Chetan Das Lachman Das {supra). Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla {supra). As far as Anil Kumar Bhatia {supra) was concerned, the Court in paragraph 24 of that decision noted that "we are not concerned with a case where no incriminating material was found during the search conducted under Section 132 of the Act. We therefore express no opinion as to whether Section I53A can be invoked even 18 & 4680/DEL/2014 under such situation". That question was, therefore, left open. As far as Chetan Das Lachman Das {supra) is concerned, in para 11of the decision it was observed: "11. Section 153A (1) (b) provides for the assessment or reassessment of the total income of the six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. To repeat, there is no condition in this Section that additions should be strictly made on the basis of evidence found in the course of the search or other post-search material or Information available with the Assessing Officer which can be related to the evidence found. This, however, does not mean that the assessment under Section 153A can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material."
In Kabul Chawla {supra), the Court discussed the decision in Filalex India Ltd. {supra) as well as the above two decisions and observed as under: "31. What distinguishes the decisions both in CIT v. Chetan Das Lachman Das {supra), and Filatex India Ltd. v. CIT-IV {supra) in their application to the present case is that in both the said cases there was some material unearthed during the search, whereas in the present case there admittedly was none. Secondly, it is plain from a careful reading of the said two decisions that they do not hold that additions can be validly made to income forming the subject matter of completed assessments prior to the search even if no incriminating material whatsoever was unearthed during the search.
19 & 4680/DEL/2014 32. Recently by its order dated 6th July 2015 in ITA No. 369 of 2015 {Pr. Commissioner of Income Tax v. Kurele Paper Mills P. Ltd.), this Court declined to frame a question of law in a case where, in the absence of any incriminating material being found during the search under Section 132 of the Act, the Revenue sought to justify initiation of proceedings under Section I53A of the Act and make an addition under Section 68 of the Act on bogus share capital gain. The order of the CIT (A), affirmed by the ITAT, deleting the addition, was not interfered with."
In Kabul Chawla {supra), the Court referred to the decision of the Rajasthan High Court in Jai Steel (India) v. Assn. CIT [2013] 36 taxmann.com 523/219 Taxman 223. The said part of the decision in Kabul Chawla {supra) in paras 33 and 34 reads as under: '33. The decision of the Rajasthan High Court in Jai Steel (India), Jodhpur v. A CIT {supra) involved a case where certain books of accounts and other documents that had not been produced in the course of original assessment were found in the course of search. It was held where undisclosed income or undisclosed property has been found as a consequence of the search, the same would also be taken into consideration while computing the total income under Section 153A of the Act. The Court then explained as under: "22. In the firm opinion of this Court from a plain reading of the provision along with the purpose and purport of the said provision, which is intricately linked with search and requisition under Sections 132 and 132A of the Act, it is apparent that: (a) the assessments or reassessments, which stand abated in terms of II proviso to Section 153A of the Act, 20 & 4680/DEL/2014 the AO acts under his original jurisdiction, for which, assessments have to be made; (b) regarding other cases, the addition to the income that has already been assessed, the assessment will be made on the basis of incriminating material; and (c) in absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made.”
The argument of the Revenue that the AO was free to disturb income de hors the incriminating material while making assessment under Section 153A of the Act was specifically rejected by the Court on the ground that it was "not borne out from the scheme of the said provision" which was in the context of search and/or requisition. The Court also explained the purport of the words "assess" and "reassess", which have been found at more than one place in Section 153A of the Act as under: "26. The plea raised on behalf of the assessee that as the first proviso provides for assessment or reassessment of the total income in respect of each assessment year falling within the six assessment years, is merely reading the said provision in isolation and not in the context of the entire section. The words 'assess' or 'reassess'-have been used at more than one place in the Section and a harmonious construction of the entire provision would lead to an irresistible conclusion that the word assess has been used in the context of an abated proceedings and reassess has been used for completed assessment proceedings, which would not abate as they are not pending on the date of initiation of the search or making of requisition and which would also necessarily support the