Case Law Details
CIT Vs K.P. Ummer (Kerala High Court)
When a notice under Section 153A is issued, it enables the department to carry out re-assessment or assessment with respect to the six immediate prior years and the year in which the search is carried out. This does not require any incriminating material recovered on search relating to those prior years; in which there is no time left, on the date of search, for an assessment under Section 143. The provision under Section 153A is a non obstante clause having overriding effect over Sections 139, 147, 158, 149, 151 and 153. The intention of the legislature is to enable assessment, if it has not been regularly done in any of the previous years, or to re-initiate assessment in case there is already proceedings pending or to re-assess in the case of completed assessments; if the search under Section 132 reveals material pointing to a practice of suppression of income from taxation. These materials need not necessarily be that relevant to the previous six years since a practice of suppression detected in the subject year permits a like presumption to be drawn in the earlier six years too; on best judgment with reference to the business or profession carried on by the assessee. We have also held in Commissioner of Income Tax v. Orma Marble Palace P(Ltd) [ITA 19 of 2011] that a dishonest assessee would not keep evidence of his dishonesty to be discovered after a long time or even a short time. Hence there is no assumption possible that in any of the prior years in which assessments were not regularly completed and the time for the same has expired, there could be additions only on the basis of materials recovered relevant to those years. The returns filed in pursuance to a notice under Section 153A is also to be treated as a return filed under Section 139. Hence, we cannot agree with the Tribunal that the assessments carried out under Section 153A for the prior years in which the due date for notice under Section 143(2) has expired, can only be with reference to incriminating materials recovered on search.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
These appeals arise from the order of the Tribunal, which dealt with an assessment under Section 153A of the Income Tax Act,1961 (hereinafter referred to as ‘the Act’) for six plus one years, the last year being the year in which the search was conducted under Section 132. There were a number of issues arising before the Tribunal all of which except two, does not survive as of now, for reason of the revenue having not challenged certain issues before the Tribunal as also on the basis of the order passed giving effect to the order of the Tribunal. We would first look at the issues which do not survive for finalisation of the assessment for completeness.
2. One of the issues raised was on gifts received from friends for the assessment years 2003-04 to 2004-05. The Tribunal had remanded the matter to be considered by the Assessing Officer. The learned counsel for the assessee submits that the said individual gifts were considered and those which were proved were allowed by the Assessing Officer and others were added back to the income.
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