Siddharth Totuka v. Assistant Commissioner Of Income Tax, Central Circle-04, Newcentral Revenue Building, Janpath, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 13424/2021 Siddharth Totuka S/o Late Shri Anil Totuka, Aged About 47Years, C-11, K.k. Square, Prithvi Raj Road, C-Scheme, Jaipur. ----Petitioner Versus Assistant Commissioner Of Income Tax, Central Circle-04, NewCentral Revenue Building, Janpath, Jaipur. ----Respondent For Petitioner(s) : Mr. Dileep Shivpuri For Respondent(s): Mr. Siddharth Bapna HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE BHUWAN GOYAL Order 18/04/2024 1.Heard. 2.Learned counsel for the petitioner would submit that theissue raised in this petition is no longer res integra and standsconcluded under a common order passed by a Coordinate Benchof this Court on 19.03.2024 in Shyam Sunder Khandelwal vs. Assistant Commissioner of Income Tax (D.B. Civil WritPetition No.18363/2019) and connected petitions. 3.Learned counsel for the parties bring to the notice of thisCourt that an appeal has already been filed against theassessment order which was passed later on. 4.Learned counsel for the petitioner makes an emphaticstatement at the Bar that the appeal is still pending and no ordershave been passed in that appeal. 5.Present petition has been filed by the petitioner challengingnotice dated 24.03.2020 under Section 147/148 of the Income TaxAct pertaining to assessment year 2013-14 issued by the AssistantCommissioner of Income Tax, Circle-IV, Jaipur, reopeningassessment for assessment year 2013-14 and also subsequentorders including the assessment order dated 23.09.2021, mainlyon the ground that the basis for initiation of proceedings was asearch carried out in the premises of Shri Ramesh Manihar. 6.It is the case of the petitioner that where the basis forreopening is not material independent of a search but based onmaterial collected during search, reopening would be permissibleonly in accordance with the provisions of Section 153-C andrecourse could not be had to Section 148 of the IT Act. 7.The aforesaid issue has been considered and decided by aCoordinate Bench of this Court in the case of Shyam SunderKhandelwal (supra). In that case, it has been held as below: "13.The heading of Section 153A is Assessment in Caseof Search or Requisition. Section 153A notwithstandingSections 139, 147, 148, 149, 151 and 153, obligatesthe AO to issue notices for furnishing income taxreturns in a prescribed form and manner, for relevantyear or years and for each of six assessment yearspreceding the assessment year relevant to previousyears in which search is conducted (hereinafterreferred to ‘relevant preceding years’) in cases ofsearch and requisition. 14.As per first proviso total income is to be assessed orreassessed in respect of each of the assessment year.The second proviso provides that pending assessmentor reassessment relating to the relevant preceding yearon the date of initiation of search or requisition shallabate. Under the third proviso the Central Governmentmay by Rules specify the class or classes of caseswhere the AO shall not issue notice for assessment orreassessment for the relevant preceding years. Theexception being abated assessment or reassessment asper proviso (2). Under clause (a) of fourth proviso no notice for assessment or reassessment shall be issuedin case escaped assessment amount revealed by thebooks of account or documents or evidence inpossession of the AO is less than Rs.50 Lakh in therelevant year or in aggregate of the relevantassessment years. Clause (b) provides that income orpart of it referred to Clause (a) should have escapedthe assessment for such year or years. Clause (c)provides that the search or requisition should havebeen initiated on or after 01.04.2017. notice for assessment or reassessment shall be issuedin case escaped assessment amount revealed by thebooks of account or documents or evidence inpossession of the AO is less than Rs.50 Lakh in therelevant year or in aggregate of the relevantassessment years. Clause (b) provides that income orpart of it referred to Clause (a) should have escapedthe assessment for such year or years. Clause (c)provides that the search or requisition should havebeen initiated on or after 01.04.2017. Explanation (1) explains the relevantassessment year. Explanation (2) provides that the‘asset’ in the fourth proviso shall be inclusive ofimmovable property, land or building or both, sharesand securities, loans and advances, financial depositsin Bank. Sub-section (2) deals with eventuality ofannulment of assessment or reassessment made undersub-Section (1), in appeal or other legal proceedings.In such event the abated assessment or reassessmentshall stand revived with effect from the date of receiptof order of such annulment by the Commissioner. Asper the proviso on setting aside of annulment order therevival shall cease. 15.Section 153B deals with time limit for completion ofassessment under Section 153A. 16.The heading of Section 153C is Assessment ofIncome of any other person. Proceedings under Section153C are notwithstanding provisions of Sections 139,147, 148, 149, 151 & 153. On satisfaction of the AOdealing with seized money, bullion, jewellery orvaluable article or thing, seized or requisitioned booksof account or document (for brevity ‘seized material’)that information contained in it belongs to or relates toperson other than on whom search was conducted,shall hand over the seized material to the AO havingjurisdiction of such other person. The AO on receivingthe seized material and being satisfied that it hasbearing on the determination of total income ofrelevant preceding years shall issue notice to assess orreassess the ‘total income’ of relevant preceding yearsand proceed in accordance with Section 153A. 17.Under first proviso the date of initiation of search orrequisition in Sub-section (1) of Section 153A shall bethe date of receiving of seized material by the AOhaving jurisdiction over the other person. Under secondproviso the Central Government can frame Rules forthe class or classes of cases of other persons to whomAO is not required to issue notice for assessing or reassessing for the relevant preceding years. Theexception being abated assessment or reassessment. 18.Under Sub-Section (2) in case of receipt of seizedmaterial after the due date for furnishing the incometax return of assessment year in which the search wasconducted or requisition made, the AO having thejurisdiction on such other persons shall issue notice forassessing or reassessing total income in manner andfor the assessments years provided under Section153A. Notice shall be issued even if no return wasfurnished by such persons and no notice was issuedunder Section 142(1) or where the return wasfurnished but no notice under Section 143(2) wasserved and the limitation had expired or where theassessment or reassessment was made. 19.As per Sub-section (3) the Section 153C shall notapply to the search or requisition made on or after01.04.2021. 20.Section 153D provides that no order of assessmentor reassessment shall be passed by the Officer belowthe rank of Joint Commissioner except with the priorapproval of the Joint Commissioner. Proviso precludesthe application of Section in cases where assessmentor reassessment as per Section 144BA (12) is to bepassed with prior approval of the PrincipalCommissioner or Commissioner." 8.In view of the above, this petition is also allowed and thenotice as well as all consequential orders including orders ofassessment are set aside. The petitioner shall submit a copy ofthis order before the Appellate Authority for closure of the appealcase. 19.As per Sub-section (3) the Section 153C shall notapply to the search or requisition made on or after01.04.2021. 20.Section 153D provides that no order of assessmentor reassessment shall be passed by the Officer belowthe rank of Joint Commissioner except with the priorapproval of the Joint Commissioner. Proviso precludesthe application of Section in cases where assessmentor reassessment as per Section 144BA (12) is to bepassed with prior approval of the PrincipalCommissioner or Commissioner." 8.In view of the above, this petition is also allowed and thenotice as well as all consequential orders including orders ofassessment are set aside. The petitioner shall submit a copy ofthis order before the Appellate Authority for closure of the appealcase. (BHUWAN GOYAL),J(MANINDRA MOHAN SHRIVASTAVA),CJ KAMLESH KUMAR-RAHUL/49