“abatement of assessment”
The decision most relied on for abatement of assessment is CIT v. Kabul Chawla (380 ITR 573), cited in 3,235 judgments on BharatTax.
Leading authorities on abatement of assessment
In a search assessment under Section 153A, additions can only be made for completed or non-abated assessment years if incriminating material relevant to those years is found during the search, although notice under Section 153A(1) is mandatorily issued for six assessment years preceding the search.
In Section 153A proceedings, the scope of assessment extends to abated proceedings, enabling an assessee to raise fresh legal claims that could have been made in regular assessment proceedings.
In non-abated assessments, the Assessing Officer can make additions under section 153A based on books of accounts or documents found during a search but not produced during the original assessment, provided such material is incriminating.
Proceedings under Section 153A are initiated only if assessment/reassessment proceedings are pending on the date of search/requisition. Already finalized assessments for the years covered under Section 153A do not abate.
The date of initiation of search or requisition for the purpose of abatement of assessment proceedings is the date of search or requisition, or the date of receipt of seized documents by the jurisdictional Assessing Officer, whichever is later. Proceedings under section 153C can only be initiated by the Assessing Officer of the searched person after being satisfied that seized documents belong to another person.
For assessments under Section 153C, the commencement point for calculating the six or ten assessment year block period is the date of issuing the Section 153C notice, or the date of the satisfaction note/handing over of books, as clarified by the first proviso to Section 153C(1).
Recording satisfaction under Section 153C for initiating proceedings against a third person is not a mechanical exercise; it requires a finding that seized material has a direct bearing on the third person's income, and improper satisfaction vitiates the assessment. Abatement under the second proviso to Section 153A is an inevitable consequence of a search, irrespective of the Assessing Officer's opinion on the material's impact.
In a search assessment under Section 153A, the Assessing Officer has the power to assess or reassess the income of an assessee for the six assessment years immediately preceding the search. This power extends to both previously assessed and unassessed income within this period.
