The Assistant Commissioner Of Income Tax, Circle v. Rohit Karan Jain

GAHC010031852023 2025:GAU-AS:2649-DB THE GAUHATI HIGH COURT(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : ITA/5/2023 1.THE PRINCIPAL COMMISSIONER OF INCOME TAX,OFFICE OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, AAYAKAR BHAWAN, G.S. ROAD, GUWAHATI- 781005. 2: THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, GUWAHATI, OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, AAYAKAR BHAWAN, G.S. ROAD, GUWAHATI- 781005. ….. Appellants -VERSUS - ROHIT KARAN JAIN, 402, 4TH FLOOR, RAHEJA HEAVEN PRANANJALI, 10TH ROAD, JVPD SCHEME, JUHU MUMBAI- 400049, MAHARASTRA. …..Respondent – B E F O R E– HON’BLE THE CHIEF JUSTICE MR. VIJAY BISHNOI HON’BLE MR. JUSTICE KAUSHIK GOSWAMI For the Appellant(s) : Mr. S.C. Keyal, Advocate. For the Respondent(s) : Ms. P. Jain, Advocate (through video-conferencing), Mr. H. Betala and Ms. P.K.Khakolia, Advocates. Date of Hearing : 11.03.2025. Date of judgment : 13.03.2025. (Vijay Bishnoi, CJ) J UDGMENT&ORDER (CAV) This appeal is preferred on behalf of the appellants being aggrieved with the order dated 07.04.2022 passed by the Income TaxAppellate Tribunal, Guwahati Bench, Guwahati (hereinafter referred to as“ITAT”) in I.T.A. No.324/GAU/2019 for the Assessment Year 2014-2015 inrespect of the sole respondent. 2.This Court, vide order dated 09.10.2023, has admitted thisappeal on the following substantial questions of law: “1. Whether on facts and circumstances of the case, the Hon’bleTribunal was justified in confirming findings of the Ld. CIT (appeal) thatthe assessment for A.Y. 2014-2015 is not abated ? 2.Whether on facts and circumstances of the case, the Hon’bleTribunal was correct in law holding that the assessment for aAssessment Year is not abated when no assessment order was passedprior to passing order u/s 153A of the Income Tax Act?” 3. The brief facts of the case are that the sole respondent submittedIncome Tax Returns under Section 139(1) of the Income Tax Act, 1961(hereinafter referred to as “the Income Tax Act”) on 31.07.2014 declaringincome of Rs.2,00,080/-. However, a search and seizure operation underSection 132 of the Income Tax Act was conducted on the residentialpremises of the sole respondent on 02.06.2016 and thereafter, incontinuation of that, on 11.07.2016 again a search was conducted. On thebasis of the search results, the case was selected for scrutiny underSection 153A of the Income Tax Act and a notice was issued to the sole respondent to file Return of Income within 15 days. In compliance of thenotice under Section 153A of the Income Tax Act, the respondent e-filedhis return of income and thereafter, proceedings were carried out andultimately, the Assessing Officer has issued Assessment Order dated31.12.2018 and assessed the income of the assessee at Rs.4,25,30,080/-. 4. The relevant portions of the impugned Assessment Order dated31.12.2018 are reproduced hereunder: “12. As stated above, a search and seizure operation was conducted inthe CMJ Group of cases on 02/06/2016. In the course of search,statement of Shri Karan Jain was recorded on oath on 02.06.2016,wherein in reply to Q. No.7 to 16, he also admitted the fact of routing theunaccounted cash of the family by way of bogus LTCG/STCG in theregular books of account. Further, Shri Rohit Jain, the chairman of theCMJ group also accepted the fact of routing unaccounted cash of thefamily by the way of accommodation entry of LTCG/STCG in hisstatement on oath u/s 132(4) of the Act dtd. 11/07/2016. In this regard,Shri Rohit Jain, Chairman of the group also disclosed--Rs.14,21,00,000/ on account of prearranged bogus capitalgain/loss in the hands of various family members in therespective years vide his disclosure petition dated 29/08/2016 asdetailed below: his hand in his sworn statement u/s 131 of the Act on 09/09/2016. his hand in his sworn statement u/s 131 of the Act on 09/09/2016. 13. However on perusal of the Return of Income for the period underconsideration, it is seen that the disclosed amount of Rs.4,23,30,000/-for the financial year 2013-14 relevant to the assessment year 2014-15was neither incorporated in the Return nor offered for tax during periodunder consideration. As such, vide show cause notice dtd. 05/11/2018,Shri Rohit Jain, Chairman of the CMJ Group was show caused as towhy the Rs.4,23,30,000/- should not be added to the total income of theassessee as disclosed by him vide disclosure petition dtd. 29/08/2016. In reply, Shri Rohit Jain, Chairman of the CMJ Group submitted aretraction petition dtd. 07/12/2018 along with an affidavit stating thatthe disclosure was made under coercion and threat. However, the assessee has not been able to produce any evidence,documentary or circumstantial, in support of the averment ofcoercion, threat etc. In this regard reliance is made on the decision of various hon’ble judicialauthorities as under: In the case of the KTMS Mohammed, 197 ITR 196 (1992), the SCwhile throwing further light on the evidentiary value of the retractedstatement said that retracted statement has to be seen with greatcircumspection. The statement, if obtained by any inducement, threat,coercion or by any improper means, must be rejected. At the same time, itis to be noted that, merely because a statement is retracted, it cannot berecorded as in-voluntary or unlawfully obtained. It is only for the makerof the statement who alleges inducement, threat, promise, etc. toestablish that such improper means have been adopted. In P.S. Barkathali v. Directorate of Enforcement, New Delhi AIR1981 KER 81, the hon’ble High Court observed as under: “Even though the statement was subsequently retracted, the significanceof admission in the first place cannot be under-mined. It is wellestablished that mere bald retraction cannot take away the importanceand evidentiary value of the original confession, specially in view of thefact that in this case, the deponent of the statement had provided theminute details relating to the transactions. It appears that the retraction statement was made purely to avoid clutches of law which had caughtup with him and laid bare his nefarious activities.” 14. It is thus clear that even in criminal jurisprudence, the retractedstatement shall not carry the evidentiary value, unless it is shown byindependent evidence that the original statement was obtained undercoercion, duress or influence, mistaken belief of law or facts or otherwiseproved erroneous by the deponent. As such a rebuttal letter along with para wise reason for the nonacceptance of the retraction petition was issued and served to Shri RohitJain, Chairman of the CMJ Group on 07/12/2018. However considering the principle of natural justice, summon u/s 131 ofthe Act dtd. 17/12/2018 was issued to Shri Karan Rohit Jain to explainthe transactions along with supporting documents. In reply, Shri RohitJain, Chairman of the CMJ Group appeared on behalf Shri Karan Jainand his statement was recorded on oath u/s 131 of the Act on21/12/2018 relevant part of the same is reproduced below: Q. No.11:- I am showing you the statement of Shri KaranJain recorded on oath u/s 132(4) of the Income Tax Act, 1961wherein he admitted that your family member has bookedbogus LTCG by pre arranged manner to route the unaccountedincome. The same was also admitted in your statement u/s132(4) of the Income Tax Act, 1961 dtd. 11/07/2016. Pleaseoffer your comment. Ans. It was a force submission as such I stand by myaffidavit and retraction petition submitted to your office on07/12/2018. Further my family members Shri Karan Jain,Smt. Reshmi Jain and Miss Karishma Jain have also submittedtheir affidavit dtd. 15/11/2016 in this regard as on todaywhich denies the forced statements taken from them by thedepartment. Q. No.11:- I am showing you the statement of Shri KaranJain recorded on oath u/s 132(4) of the Income Tax Act, 1961wherein he admitted that your family member has bookedbogus LTCG by pre arranged manner to route the unaccountedincome. The same was also admitted in your statement u/s132(4) of the Income Tax Act, 1961 dtd. 11/07/2016. Pleaseoffer your comment. Ans. It was a force submission as such I stand by myaffidavit and retraction petition submitted to your office on07/12/2018. Further my family members Shri Karan Jain,Smt. Reshmi Jain and Miss Karishma Jain have also submittedtheir affidavit dtd. 15/11/2016 in this regard as on todaywhich denies the forced statements taken from them by thedepartment. However the deponent has not been able to produce any evidence,documentary or circumstantial, in support of the averment of coercion,threat etc. It has been discussed in earlier paras why a scrip is considered to be penny stock. The value as well as the trend of trading that determines ascrip whether it is penny stock or not. In the instant case, the details inregard to scrip, trend of trading, prices of shares over a certain period,background of the company etc. all these features are well discussed toshow that the shares are nothing but penny stock. Summing up the above facts, it appears that the assessee is basically asalaried person and does not bear even minimum interest andinformation in regard to the share trading. In his statement recorded onoath u/s 132(4) on 02.06.2016, he has admitted the fact of routing theunaccounted income of the family by way of pre-arranged long termcapital gain in the regular books of the account of the assessee. Thesame had also been accepted by Shri Rohit Jain, Chairman of the CMJGroup. Further unaccounted income of Rs.4,23,30,000/- had also beendisclosed in the hand of the assessee as tabulated above vide disclosurepetition dtd. 29/08/2016 which was subsequently admitted by theassessee in his statement on oath. 15. CONCLUSION 15.1. In view of the discussion made above and considering thefacts and circumstances of the case, the following facts becomemanifestly clear:- i) That some unscrupulous operators in the capital market wererunning a scheme of providing entries of LTCG for a commission. ii) The financial result of the Penny Stocks used for the purposeclearly indicate that its quoted price at the peak was the result ofrigging. iii) The above mentioned facts have been independently alsobeen confirmed by SEBI. iv) That such schemes are prevalent for converting black moneyinto white is common knowledge, independently confirmed by SEBI. v) That a large number, brokers/sub-brokers and individualsavailed of the benefits of the scheme and took entries of LTCG ores. vi) Many such individuals have voluntarily without any enquiryby any authority have voluntarily withdrawn their claim and filed revised return. vii) As per the Investigation Report of the Directorate ofIncome Tax (Investigation), Kolkata statements of brokers,operators, director of paper companies that has bought theseshares, directors of Penny stock companies all confess tosuch a scheme with detailed modus operandi which tallieswith actual transactions. viii) The assessee is one such beneficiary who has taken entry ofLTCG. ix) The assessee as well as the Key Person of ComfortSecurities Ltd Shri Anil Agarwal, admitted the fact ofbooking pre-arranged LTCG in their sworn statement. x) Exactly similar entries have been taken by other familymembers of the assessee for the period under consideration whosecases are under scrutiny under the same Range. xi) Further from data received from BSE India (As perannexure-A) it is evident that the trading in these shares areat a pre-determined time between pre-determined brokers ata pre-determined price; there is virtually no scope of anygenuine trader in share to buy or sell these shares. viii) The assessee is one such beneficiary who has taken entry ofLTCG. ix) The assessee as well as the Key Person of ComfortSecurities Ltd Shri Anil Agarwal, admitted the fact ofbooking pre-arranged LTCG in their sworn statement. x) Exactly similar entries have been taken by other familymembers of the assessee for the period under consideration whosecases are under scrutiny under the same Range. xi) Further from data received from BSE India (As perannexure-A) it is evident that the trading in these shares areat a pre-determined time between pre-determined brokers ata pre-determined price; there is virtually no scope of anygenuine trader in share to buy or sell these shares. xii) Thus whoever has benefitted from transaction in these shareshave transacted in accordance with the scheme and has admittedlyconverted his unaccounted cash equal to the sale proceeds of sharein to while in the guise of exemption under section 10(38) of theIncome Tax Act, 1961. xiii) With so much of evidence against the assessee, the onus wason assessee to prove that his transactions were genuine and that hehad not availed benefit of the aforementioned scheme to convertblack money into white. xiv) In Sumati Dayal vs. Commissioner of Income Tax .... theSupreme Court observed and I quote, “It is no doubt true that in all cases in which a receipt is sought to be taxed as income, the burden lies on the Department to prove that itis within the taxing provision and if a receipt is in the nature of income,the burden of proving that it is not taxable because it falls withinexemption provided by the Act lies upon the assessee. [See: ParimisettiSeetharamamma (supra) at P.5361. But, in view of Section 68of the Act,where any sum is found credited in the books of the assessee for anyprevious year the same may be charged to Income tax as the income ofthe assessee of that previous year if the explanation offered by theassessee about the nature and source thereof is, in the opinion of theAssessing Officer, not satisfactory. In such case there is, prima facie,evidence against the assessee, viz. the receipt of money, and if he falls torebut, the said evidence being un-rebutted, can be used against him byholding that it was a receipt of an income nature. While considering theexplanation of the assessee the Department cannot, however, actunreasonably.” 15.2. In the case the assessee has shown credit exempt income ofRs.4,23,23,713/- on sale of share of M/s Rutron InternationalLimited, as is evident from the investigation the actual source of thiscredit is the unaccounted cash of the assessee. The assessee wasasked to explain the source of this credit. The explanation offeredthat it is sale proceeds of shares are found to be not satisfactory.The assessee did not even furnish the purchase details of theshares, copy of demat account, contract notes. The background ofthe scheme given in the beginning of the order clearly shows thatboth the requirements are in-built in the scheme and does not ipsofacto prove genuineness of transaction. The SEBI after thoroughinvestigation has certified that such transactions are rigged and arecarried out to convert Black money into white. That being so, thecredit in the bank account of the assessee cannot be treated asexplained and is therefore, liable to be added under section 68 of theAct. The evidence gathered has to be evaluated in the background ofwhat the hon’ble Supreme Court referred to as the test ofpreponderance of human probability judged on the basis ofsurrounding circumstances. That there was a scheme is not in doubtand that the assessee is a beneficiary is also an admitted fact. Theonus was therefore, on the assessee to prove that either there wasno such scheme and even if there was one, the benefit to theassessee was as a result of genuine transaction. The assessee hasmiserably failed to discharge this onus and therefore, the onlyinescapable conclusion is that like many other individuals assessee has also taken entry of LTCG by paying cash. It is obvious that the assessee himself knows his assets andliabilities and considering all the factors Shri Rohit Jain,Chairman of the group disclosed Rs.14,21,00,000/- on-account of prearranged bogus capital gain in the hands ofvarious family members in the respective years vide hisdisclosure petition dated 29/08/2016 which was subsequentlyconfirmed by the assessee in his sworn statement. In view of the above the amount of Rs.4,23,30,000/- asdisclosed by Shri Rohit Jain on account of so called Longterm capital gain is added to Total income of the assesseewithin the meaning of section 68 of the Income tax Act, 1961.As the assessee has deliberately and wilfully concealed herunaccounted income, a conclusion which is obvious from thediscussion made in the order, penalty under section 271(1)(c)is also initiated. 16.The total income of the assessee is computed as under in lightof the discussions made in the foregoing paras:- Being aggrieved with the Assessment Order dated 31.12.2018, 5. the respondent preferred an appeal before the Commissioner of IncomeTax (Appeals), Guwahati under Section 250 of the Income Tax Act, raisingas many as 16 grounds. The Commissioner of Income Tax (Appeals), vide order dated 6. 08.04.2019, allowed the said appeal while recording a finding of fact thatthe Assessing Officer had invoked the jurisdiction under Section 153A ofthe Income Tax Act without there being any incriminating materialwhereas the law is well settled that in the absence of incriminating material, a completed assessment cannot be opened invoking the powersunder Section 153A. 7.The relevant portions of the judgment passed by theCommissioner of Income Tax (Appeals) are reproduced hereunder: 5. the respondent preferred an appeal before the Commissioner of IncomeTax (Appeals), Guwahati under Section 250 of the Income Tax Act, raisingas many as 16 grounds. The Commissioner of Income Tax (Appeals), vide order dated 6. 08.04.2019, allowed the said appeal while recording a finding of fact thatthe Assessing Officer had invoked the jurisdiction under Section 153A ofthe Income Tax Act without there being any incriminating materialwhereas the law is well settled that in the absence of incriminating material, a completed assessment cannot be opened invoking the powersunder Section 153A. 7.The relevant portions of the judgment passed by theCommissioner of Income Tax (Appeals) are reproduced hereunder: “The present legal position is that, in an assessment under Section153A, in absence of any "incriminating material", the completedassessment has to be reiterated. In other words, the completedassessment connot be disturbed in the absence of "Incriminatingmaterial”. Even if documents are available pertaining to theassessment year in question, but they have to additionally satisfy therequirement of law that "there must be incriminating material”andnot merely some material. Hence, there can be no addition under Section153A for a particular assessment year, in which the assessment iscomplete and is not pending, without there being some "incriminatingmaterial" qua that assessment which would justify such an addition. From the above observation/averment of the AO as is clear from hisletter dated 07/12/2018, which letter was written by the AO to Sh.Rohit Jain with regard to his retraction letter dated even date, it iscrystal clear that the AO has not been able to refer to any material, muchless any incriminating material as would even remotely indicate thatthere was any documentary evidence in the possession of the revenue,other than the department's own database or the confessional statementof the father of the Appellant. Per Contra, during the course of appellate proceedings, the Appellant hasvehemently stressed that in this case, there was no incriminatingmaterial with regard to the above addition. Thus, in the absence ofany reference to any incriminating material by the AO in theimpugned order and considering the submissions of the Appellantas also the ratio of the above judgments, it has to be held thatthe impugned addition as not based on any incriminatingevidence found during the course of search on the Appellant. I note that there is absolutely no corroborative evidence found in thecourse of search by the search team or material evidence brought on record by the Ld. AO in order give credence to the statement recordedduring search. Hence, I hold that no addition could be made merely byplacing reliance on the statement recorded during search and alsowithout reference to any incriminating document or material.xxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx I note that there is absolutely no corroborative evidence found in thecourse of search by the search team or material evidence brought on record by the Ld. AO in order give credence to the statement recordedduring search. Hence, I hold that no addition could be made merely byplacing reliance on the statement recorded during search and alsowithout reference to any incriminating document or material.xxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxx For the above assessment year, I note that the Appellant had filed areturn of income under Section 31/07/2014 wherein the Appellant hadduly disclosed the impugned capital gain and claimed the exemptionaccordingly. Admittedly there was no regular assessment made on theAppellant for the above assessment year. Also the time limit forissuance as well as service of notice under Section 143/2)of theAct in the case of the Appellant for the above assessment year hadalready expired on 30/09/2015. Thus as on the date of Search inthe case of the Appellant, i.e. on 02/06/2016, the assessment for theabove assessment year 2014-15was a completed assessmentandtherefore following the ratio of the above judgments as discussed earlier,in the absence of any incriminating documents or material, thealready completed assessment cannot be disturbed unless anyincriminating materialis found during the course of search. In thiscase, it is vivid that the AO has not referred to any suchincriminating materialfound during the course of search in theimpugned order. Thus, it is clear that the above addition has been madewithout reference to any incriminating material. Even at the cost of repetition, it is clear from the ratio of the abovejudgments, that the law is trite that in assessments under Section 153A,with regard to years where the assessment have been completed i.e.unabated assessment year, the scope of addition is to be restricted onlyto the extent of incriminating material found and there is no scope forany general or routine addition or disallowance. In view of the abovefacts, and in the absence of any reference to any incriminating materialas regards the impugned addition, found during the course of search, Ihave no hesitation in holding that the impugned addition which has beenmade solely on the basis of a retracted statement and without referenceto any incriminating material or document found during the course ofsearch is outside the realm of the assessment proceedings under Section153A of the Act. In view of the above discussion, I find no hesitation in deleting the impugned addition of Rs. 4,23,30,000/- as the same has beenmade for a year whose assessment stood already completed byvirtue of expiration of time limit to issue a notice under Section143(2) of the Act and without there being any reference to anyincriminating material or document. The above grounds ofappeal are, hereby, allowed. While adjudicating the above grounds of Appeal, my decision has beenrendered solely on the basis of the facts and observations stated by theAO in the impugned assessment order, submissions of the Appellant andthe ratio of judgments relied upon and referred above. As is evident myabove adjudication is purely legal in nature In this case, since theAppellant has not furnished the copies of Dmat Account, Contract Notesetc. as averred in the impugned order, these evidences filed before mehave not been considered as these are additional evidences which havebeen filed without any petition under Rule 46A My above decision isbased on the fact that the AO has not referred to any incriminatingmaterial or document while making the impugned addition in the handsof the Appellants and thus the impugned addition, in the absence ofreference to any incriminating material and considering that in view ofthe ratio of the judgment in the case of Kabul Chawla, discussed persupra, the proceedings for the impugned assessment year werecompleted and could not have been disturbed.” 8.Being aggrieved with the order dated 08.04.2019 passed bythe Commissioner of Income Tax (Appeals), the appellant preferred anappeal, being ITA No.324/GAU/2019 before the ITAT. The ITAT noted the grounds of appeal in para No.3 of the impugned order dated 07.04.2022, which are reproduced hereunder : “3. The grounds of appeal raised by the revenue are as under : “1. That in the fact and circumstances of the case and the law in this matter, theLd. CIT(A) is not justified in deleting the addition stating that the assessment for the Ay2014-15 is non-abated and stood already completed despite the fact that the originalassessment in this case for Ay 2014-15 against the return filed on 31.07.2014 wasabated and the assessment u/s 153A r.w.s. 143(3) on 31.12.2018 is an abated assessment.. 2. The Ld. CIT(A) was not justified in deleting the addition stating that inabsence of any incriminating material the addition made by the AO in the impugnedorder is deleted while the original assessment in this case for Ay 2014-15 was abated.” 9.The ITAT rejected both the above referred grounds videimpugned judgment dated 07.04.2022 and affirmed the findings of theCommissioner of Income Tax (Appeals). 10.The relevant portions of the impugned order dated 07.04.2022passed by the ITAT are reproduced hereunder: “11. The next issue is with regard to the Ld. CIT(A)'s finding that sincethere was no incriminating material and since the assessment year2014-15 is an unabated proceeding, no addition was warranted withoutany incriminating material. The Id. AR drew our attention to the fact thatthe AO has made the addition only on the basis of a statement given bythe assessee's father which was retracted within ten days. And the Ld.AR drew our attention to pages 96 to 105 of the paper book wherein theaffidavit of the assessee retracting the statement is found to bereproduced wherein he alleged coercion and duress to obtain it. The Ld.AR drew our attention to the decision of the Hon'ble Delhi High court inthe case of Pr. CIT, Delhi-2 Vs. Best Infrastructure (India) P. Ltd. (2017)84taxmann.com287 (Delhi) (Paper book pages 73 to 93 to be checked)wherein the Hon'ble High Court has held that on the sole basis of thestatement of the assessee when retracted subsequently, no additionshould be made unless there is any material to support the addition.And in this case in hand, other than the retracted statement, no otherevidence/material was relied upon by AO to make the addition in all thethree appeals. In the light of the aforesaid facts, and by relying on thedecision of the Hon'ble Delhi High Court in Kabul Chawla (supra) the LdCIT(A) held that since there was no incriminating material against theassessee in respect the share transaction in question, no addition couldhave been made and deleted the addition. This action of Ld. CIT(A) hasbeen challenged by the Revenue.xxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxx “14. Turning to the facts of the case, it is noted that only on the basis ofretracted statements, the AO has made the addition. From a perusal of theassessment order, it is noted that there is no other incriminating materialseized during search. Other than the retracted bald statement ofassessee's father addition has been made by AO [which has beenretracted within few days wherein assessee's father/assessee hasalleged coercion/duresse obtaining it (refer page 19 of paper book)]. It isnoted that other than the statement of his father which has been obtainedunder threat/coercion/duress [which has been retracted within few days]the AO has made the addition as undisclosed income the assesser's LTCGto the tune of Rs.4,40,50,000/-. However we find that other than theretracted statement there was no iota of evidence/material to substantiatethe impugned additions. The Id. CIT(A) has given a finding of fact thatother than the assessee's father's statement regarding the LTCG ofassessee, there was no incriminating material found during search quathe assessee qua the AY 2014-15. In such a scenario, no addition waslegally sustainable as held by the Hon'ble Delhi High court in KabulChawla (supra) and in this context it is noted that similar ratio wasagreed upon in the case of Meeta Gutgutia (supra) Delhi High Court. And itis noted that several other High Courts have also come to similarconclusion either by following Kabul Chawla (supra) or otherwise. Thisincludes the decisions of the Hon’ble Gujarat High Court in Pr CIT v.Soumya Constructions (P.) Ltd. [2016] 387 ITR 529[2017]81taxmann.com292 (Guj); Pr. CIT v. Devangi alias Rupa [Tax Appeal Nos54. 55 to 57 of 2017, dated 2-2-2017]; the Hon'ble Karnataka High Courtin CIT v. IBC Knowledge Park (P) Ltd. [2016] 385 ITR346/69taxmann.com108 (kar.); the Hon'ble Calcutta High Court in Pr. CITv. Salasar Stock Broking Ltd. [GA No. 1929 of 2016, date 24-8-2016] andthe Hon'ble Bombay High Court in CIT v. Gurinder Singh Bawa 12016]386 ITR 483/12017] 79taxmann.com398. In Meeta Gutgutia (supra) theHon'ble Delhi High Court has considered the entire gamut of the lis inhand and has analysed and the aforesaid legal position was reiteratedthat unless there is incriminating material qua each of the A Ys in whichadditions are sought to be made, pursuant to search and seizureoperation, the assumption of jurisdiction under Section 153A of the Actwould be vitiated in law for an unabated assessment. 15. In the light of the aforesaid facts and the law discussed, we do notfind any infirmity in the impugned order passed by the Ld CIT(A), so we are inclined to dismiss the revenue appeal ITA No.324/GAU/2019.” 11.During the course of hearing, learned counsel for the solerespondent has submitted that now it is well settled that in the absence ofincriminating material, no addition can be made in respect of a completedassessment. It is contended that in the present case, the assessment wascompleted but the Assessing Officer without there being any incriminatingmaterial has passed the Assessment Order by invoking the provisions ofSection 153A of the Income Tax Act, however, the same is not inaccordance with law and therefore, the Commissioner of Income Tax(Appeals) as well as the ITAT has not committed any illegality in passingthe impugned orders. It is further argued that the Commissioner ofIncome Tax (Appeals) as well as ITAT has recorded a finding of fact thatno incriminating material was available on record and in the absence ofthe same, the Assessing Officer has erred in passing the Assessment Orderwhile invoking the provisions of Section 153A of the Income Tax Act andthe said finding of fact recorded by the Commissioner of Income Tax(Appeals) and ITAT is not liable to be interfered with and in suchcircumstances, no substantial question of law arises in this appeal andtherefore, the present appeal is liable to be dismissed. 12.Learned counsel for the sole respondent has placed reliance onthe decision of the Hon’ble Supreme Court rendered in (i) PrincipalCommissioner of Income tax, Central 3 Vs. Abhisar Buildwell (P)Ltd., reported in [2023] 149 taxmann.com 399(SC); (ii) PrincipalCommissioner of Income –tax Vs. Saroj Sudhir Kothari, reported in[2023] 154 taxmann.com 360 (SC); (iii) Principal Commissioner of Income-tax (Central) 2 Vs. Jay Ambey Aromatics, reported in [2023]156 taxmann.com 691 (SC)and (iv) Principal Commissioner ofIncome-tax Central 2 Vs. S.S. Con Build (P) Ltd., reported in [2023].151 taxmann.com 317 (SC) 13.The Hon’ble Supreme Court, in Abhisar Buildwell (P) Ltd.(supra), while affirming the view taken by the Delhi High Court in the caseof Commissioner of Income Tax, Central III CIT Vs. Kabul Chawla,[2015] 61 taxmann.com 412/234 Taxman 300/ [2016] 380 ITR 573(Delhi)as well as by Gujarat High Court in the case of Pr.CIT Vs.Saumya Construction (P.) Ltd. [2017] 81 taxmann.com 292/[2016]387 ITR 529 (Guj.) has held as under: “8.For the reasons stated hereinbelow, we are in complete agreementwith the view taken by the Delhi High Court in the case of Kabul Chawla(supra) and the Gujarat High Court in the case of Saumya Construction(supra), taking the view that no addition can be made in respect ofcompleted assessment in absence of any incriminating material. 9.While considering the issue involved, one has to consider the objectand purpose of insertion of Section 153A in the Act, 1961 and when thereshall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevantprovision for block assessment was under Section 158BA of the Act, 1961.The erstwhile scheme of block assessment under Section 158BAenvisaged assessment of ‘undisclosed income’ for two reasons, firstly thatthere were two parallel assessments envisaged under the erstwhileregime, i.e., (i) block assessment under section 158BA to assess the‘undisclosed income’ and (ii) regular assessment in accordance with theprovisions of the Act to make assessment qua income other thanundisclosed income. Secondly, that the ‘undisclosed income’ waschargeable to tax at a special rate of 60% under section 113 whereasincome other than ‘undisclosed income’ was required to be assessedunder regular assessment procedure and was taxable at normal rate.Therefore, section 153A came to be inserted and brought on the statute.Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’income too at the normal rate of tax as against any special rate. Thus,after introduction of Section 153A and in case of search, there shall beblock assessment for six years. Search assessments/block assessmentsunder Section 153A are triggered by conducting of a valid search underSection 132 of the Act, 1961. The very purpose of search, which is aprerequisite/trigger for invoking the provisions of sections 153A/153C isdetection of undisclosed income by undertaking extraordinary power ofsearch and seizure, i.e., the income which cannot be detected in ordinarycourse of regular assessment. Thus, the foundation for making searchassessments under Sections 153A/153C can be said to be the existenceof incriminating material showing undisclosed income detected as a resultof search. 10.On a plain reading of Section 153A of the Act, 1961, it is evidentthat once search or requisition is made, a mandate is cast upon the AO toissue notice under Section 153 of the Act to the person, requiring him tofurnish the return of income in respect of each assessment year fallingwithin six assessment years immediately preceding the assessment yearrelevant to the previous year in which such search is conducted orrequisition is made and assess or reassess the same. Section 153A of theAct reads as under: 10.On a plain reading of Section 153A of the Act, 1961, it is evidentthat once search or requisition is made, a mandate is cast upon the AO toissue notice under Section 153 of the Act to the person, requiring him tofurnish the return of income in respect of each assessment year fallingwithin six assessment years immediately preceding the assessment yearrelevant to the previous year in which such search is conducted orrequisition is made and assess or reassess the same. Section 153A of theAct reads as under: ‘153A. Assessment in case of search or requisition - (1)Notwithstanding anything contained in Section 139, Section 147,Section 148, Section 149, Section 151 and Section 153, in the case ofa person where a search is initiated under Section 132 or books ofaccount, other documents or any assets are requisitioned underSection 132-A after the 31[st] day of May, 2003, the Assessing Officershall— (a) issue notice to such person requiring him to furnish within suchperiod, as may be specified in the notice, the return of income inrespect of each assessment year falling within six assessment yearsreferred to in clause (b), in the prescribed form and verified in theprescribed manner and setting forth such other particulars as maybe prescribed and the provisions of this Act shall, so far as may be,apply accordingly as if such return were a return required to befurnished under Section 139; (b) assess or reassess the total income of six assessment yearsimmediately preceding the assessment year relevant to the previousyear in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess thetotal income in respect of each assessment year falling within suchsix assessment years: Provided further that assessment or reassessment, if any, relatingto any assessment year falling within the period of six assessmentyears referred to in this sub-section pending on the date of initiationof the search under Section 132 or making of requisition underSection 132-A, as the case may be, shall abate. (2)If any proceeding initiated or any order of assessment orreassessment made under sub-section (1) has been annulled inappeal or any other legal proceeding, then, notwithstandinganything contained in sub-section (1) or Section 153, the assessmentor reassessment relating to any assessment year which has abatedunder the second proviso to sub-section (1), shall stand revived witheffect from the date of receipt of the order of such annulment by theCommissioner: Provided that such revival shall cease to have effect, if such order ofannulment is set aside Explanation.—For the removal of doubts, it is hereby declared that, —([) save as otherwise provided in this section, Section 153-B andSection 153-C, all other provisions of this Act shall apply to theassessment made under this section; (ii) in an assessment or reassessment made in respect of anassessment year under this section, the tax shall be chargeable atthe rate or rates as applicable to such assessment year.’ Provided that such revival shall cease to have effect, if such order ofannulment is set aside Explanation.—For the removal of doubts, it is hereby declared that, —([) save as otherwise provided in this section, Section 153-B andSection 153-C, all other provisions of this Act shall apply to theassessment made under this section; (ii) in an assessment or reassessment made in respect of anassessment year under this section, the tax shall be chargeable atthe rate or rates as applicable to such assessment year.’ 11. As per the provisions of Section 153A, in case of a search undersection 132 or requisition under section 132A, the AO gets the jurisdictionto assess or reassess the ‘total income’ in respect of each assessmentyear falling within six assessment years. However, it is required to benoted that as per the second proviso to Section 153A, the assessment orre-assessment, if any, relating to any assessment year falling within theperiod of six assessment years pending on the date of initiation of thesearch under section 132 or making of requisition under section 132A, asthe case may be, shall abate. As per sub-section (2) of Section 153A, if anyproceeding initiated or any order of assessment or reassessment madeunder sub-section (1) has been annulled in appeal or any other legalproceeding, then, notwithstanding anything contained in sub-section (1) orsection 153, the assessment or reassessment relating to any assessmentyear which has abated under the second proviso to sub-section (1), shallstand revived with effect from the date of receipt of the order of suchannulment by the Commissioner. Therefore, the intention of the legislationseems to be that in case of search only the pendingassessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for theentire six years period/block assessment period. The intention does notseem to be to re-open the completed/unabated assessments, unless anyincriminating material is found with respect to concerned assessment yearfalling within last six years preceding the search. Therefore, on trueinterpretation of Section 153A of the Act, 1961, in case of a search underSection 132 or requisition under Section 132A and during the search anyincriminating material is found, even in case of unabated/completedassessment, the AO would have the jurisdiction to assess or reassess the‘total income’ taking into consideration the incriminating material collectedduring the search and other material which would include incomedeclared in the returns, if any, furnished by the assessee as well as theundisclosed income. However, in case during the search no incriminatingmaterial is found, in case of completed/unabated assessment, the onlyremedy available to the Revenue would be to initiate the reassessmentproceedings under section 147/48 of the Act, subject to fulfillment of theconditions mentioned in section 147/148, as in such a situation, theRevenue cannot be left with no remedy. Therefore, even in case of blockassessment under section 153A and in case of unabated/completedassessment and in case no incriminating material is found during thesearch, the power of the Revenue to have the reassessment under section147/148 of the Act has to be saved, otherwise the revenue would be leftwithout remedy. 12. If the submission on behalf of the Revenue that in case of searcheven where no incriminating material is found during the course of search,even in case of unabated/completed assessment, the AO can assess orreassess the income/total income taking into consideration the othermaterial is accepted, in that case, there will be two assessment orders,which shall not be permissible under the law. At the cost of repetition, it isobserved that the assessment under section 153A of the Act is linked withthe search and requisition under sections 132 and 132A of the Act. Theobject of Section 153A is to bring under tax the undisclosed income whichis found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on thebasis of incriminating material, the AO would assume the jurisdiction toassess or reassess the total income for the entire six years blockassessment period even in case of completed/unabated assessment. Asper the second proviso to Section 153A, only pendingassessment/reassessment shall stand abated and the AO would assumethe jurisdiction with respect to such abated assessments. It does notprovide that all completed/unabated assessments shall abate. If thesubmission on behalf of the Revenue is accepted, in that case, secondproviso to section 153A and sub-section (2) of Section 153A would beredundant and/or rewriting the said provisions, which is not permissibleunder the law. 13. For the reasons stated hereinabove, we are in complete agreementwith the view taken by the Delhi High Court in the case of Kabul Chawla(supra) and the Gujarat High Court in the case of Saumya Construction(supra) and the decisions of the other High Courts taking the view that noaddition can be made in respect of the completed assessments in absenceof any incriminating material. 14.In view of the above and for the reasons stated above, it isconcluded as under: (I) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A;section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii)in case any incriminating material is found/ unearthed, even,in case of unabated/completed assessments, the AO wouldassume the jurisdiction to assess or reassess the 'total income'taking into consideration the incriminating material unearthedduring the search and the other material available with the AOincluding the income declared in the returns; andin case of unabated/completed assessments, the AO wouldassume the jurisdiction to assess or reassess the 'total income'taking into consideration the incriminating material unearthedduring the search and the other material available with the AOincluding the income declared in the returns; and (ii) all pending assessments/reassessments shall stand a