The Patna High Court observed that the Assessing Officer has power to modify completed assessments in Section 153A cases based on incriminating evidence.
Facts
In the assessment year 2002-03, the original assessment of the assessee was completed under Section 143(3) of the Act on 06.06.2003. This was subsequently set aside by the 1st Appellate Authority under Section 263 of the Act by order dated 24.11.2004; in which there was a remand back to the Assessing Officer for carrying out a fresh assessment. On 15.12.2004, a search was conducted in the premises of the assessee under Section 132(1) of the Act. Section 153A proceeding was initiated in pursuance of the search conducted.
Decision
The division bench of The Chief Justice K. Vinod Chandran and Justice Partha Sarthy observed that the assessment referred to in Section 153A enables the Assessing Officer to proceed for assessment, when any such assessment for the previous six years is pending, treating the proceedings to have abated. In so proceeding with the assessment, the Assessing Officer would be entitled to reckon both disclosed and undisclosed income of the assessee.
It was further observed by the court that insofar as completed assessment, they do not abate and for the purpose of re-assessing, there should be some incriminating material disclosed in the search, which alone can lead to reopening of the proceedings on the basis of the seized material, which has some relevance or nexus to the allegation of undisclosed income.
The court said that the assessee’s assessment for the relevant year stood completed as on 06.06.2003 long before the search and consequent proceeding initiated under Section 153A and there is no question arising of the relevant assessment to abate under the second proviso to Section 153A.
The bench held that the Tribunal was perfectly within the statutory framework, in making a remand directing the Assessing Officer to carry out re-assessment of the assessment year 2002-03, which stood completed as on the date of initiation of Section 153A proceedings, if some incriminating material seized during the search is available.
Case title: Assistant Commissioner of Income Tax v/s Satish Kumar Keshri, M/s Hira Panna Jewellers, Hira Palace
Citation: Miscellaneous Appeal No.823 of 2017
