{"id":555,"date":"2023-06-26T16:08:10","date_gmt":"2023-06-26T10:38:10","guid":{"rendered":"https:\/\/xpertslegal.com\/blog\/?p=555"},"modified":"2023-06-26T16:09:28","modified_gmt":"2023-06-26T10:39:28","slug":"assessment-officer-has-the-power-to-reassess-the-return-of-the-assessee","status":"publish","type":"post","link":"https:\/\/xpertslegal.com\/blog\/assessment-officer-has-the-power-to-reassess-the-return-of-the-assessee\/","title":{"rendered":"Supreme court holds that Assessment Officer has the power to reassess the return of the assessee not only for the undisclosed income but also with regard to material that was available at the time of original assessment"},"content":{"rendered":"

Principal Commissioner of Income Tax, Central-3 <\/strong>(Appellant) Vs. <\/strong>Abhisar Buildwell P. Ltd. <\/strong>(Respondent)<\/h1>\n

(CIVIL APPEAL NO. 6580 OF 2021)<\/p>\n

(2JB, M.R. SHAH and SUDHANSHU DHULIA JJ., delivered by M.R. SHAH J.<\/strong>)<\/p>\n

 <\/p>\n

Facts: <\/u><\/strong>Civil Appeal No. 6580 of 2021 and other connected appeals preferred by the Revenue, and Civil Appeal No. 15617 of 2017 and other allied appeals preferred by the assessees challenging the order passed by the respective High Courts taking the view that in case any incriminating material is found during search then even completed assessments can be assessed or reassessed taking into consideration the incriminating material and other material in possession of the Assessing Office.<\/p>\n

Issue:<\/u><\/strong> What is the scope of assessment under section 153A of the Income Tax Act, 1961, i.e., whether in respect of completed assessments\/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under Section 132 or requisition under Section 132A or not, i.e., whether any 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 132 A of the Act, 1961 or not.<\/p>\n

Arguments on behalf of counsel for appellant: <\/u><\/strong>Shri N. Venkataraman on behalf of the Revenue<\/p>\n

On behalf of Revenue, it is submitted that any interpretation of any provision of the Act, 1961 which seeks to exclude any portion of the \u2018total income\u2019 from the ambit of taxation runs contrary to the scheme of taxation and hence is impermissible. It is next submitted that while considering the issue involved, the manner and mode of passing assessment\/re-assessment orders is required to be considered. It is further submitted that the AO, in order to determine \u2018total income\u2019 correctly, needs to collect information from the assessee as well as third parties. It is submitted that once a search or requisition is initiated, all pending assessments or reassessments would abate. It is submitted that the language and meaning of Section 153A is plain and unambiguous, i.e., if search under section 132 of the Act, 1961 is conducted in a case, assessment of \u2018total income\u2019 for each of the six assessment years pending the assessment year relevant to the previous year in which such search is conducted, has to be made. Therefore, once upon the search under Section 132 or requisition under Section 132A, the assessment has to be done under Section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the \u2018total income\u2019 taking into consideration other material, though no incriminating material is found during the search even in respect of completed\/unabated assessments<\/p>\n

Arguments on behalf of counsel for respondent: <\/u><\/strong>S\/Shri Arvind P. Datar, Kavin Gulati, Preteesh Kapoor, Shri Ved Jain, on behalf of the assesses<\/p>\n

On behalf of assesses, it is submitted that jurisdiction to assess the total income under section 153A arises upon \u2018search\u2019 under section 132 and that the jurisdiction is not contingent upon unearthing incriminating material during the course of search. It is submitted that the assessment under section 153A is a special procedure for assessment in consequence of search and is distinct from regular scrutiny assessment under section 143(3) or reassessment under section 147 of the Act, 1961. It is submitted that it is the settled position of law that what cannot be done directly, cannot be done indirectly. It is submitted that the expression \u201ctotal income\u201d in such category of cases of completed assessments, where no incriminating material is found, ought to be interpreted, not as per definition provided under Section 2, but in light of the objective of Sections 132 and 132A, as the context so requires.<\/p>\n

Held: <\/u><\/strong>The court, while dismissing the present appeals, upheld the high court\u2019s order, and observed that \u201conce during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed\/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference.”<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Principal Commissioner of Income Tax, Central-3 (Appellant) Vs. Abhisar Buildwell P. Ltd. (Respondent) (CIVIL APPEAL NO. 6580 OF 2021) (2JB, M.R. SHAH and SUDHANSHU DHULIA JJ., delivered by M.R. SHAH J.)   Facts: Civil Appeal No. 6580 of 2021 and other connected appeals preferred by the Revenue, and Civil Appeal No. 15617 of 2017 and […]<\/p>\n","protected":false},"author":1,"featured_media":557,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[],"class_list":["post-555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-judgement"],"_links":{"self":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/comments?post=555"}],"version-history":[{"count":1,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/555\/revisions"}],"predecessor-version":[{"id":556,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/posts\/555\/revisions\/556"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media\/557"}],"wp:attachment":[{"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/media?parent=555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/categories?post=555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xpertslegal.com\/blog\/wp-json\/wp\/v2\/tags?post=555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}