CIT vs. Smt. Shaila Agarwal (Allahabad High Court)

DATE: (Date of pronouncement)
DATE: December 19, 2011 (Date of publication)

Click here to download the judgement (shaila_agarwal_153A_pending_assessment.pdf)

S. 153A: Assessments pending in appeal do not abate

For AY 2002-03, an addition of Rs. 99 lakhs was made by the AO & confirmed by the CIT (A). During the pendency of the appeal before the Tribunal, a search under s. 132 was conducted and s. 153A proceedings were initiated. The Tribunal held that in view of the s. 153A notice, the assessments of the six preceding assessment years prior to the date of search abated and that assessments pending in appeal would stand merged in the fresh assessment to be made by the AO u/s 153A pursuant of the search. The AO was directed to reconsider the additions in the s. 153A assessment. On appeal by the department, HELD reversing the Tribunal:

The second proviso to s. 153A provides that “assessments relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search u/s 132 shall abate“. The words “pending on the date of initiation of search” has to be assigned simple and plain meaning. If the assessment is finalized, there are no “pending proceedings” to be abated. The pendency of an appeal does not mean that the assessment proceedings are pending. The word ‘abatement‘ refers to something, which is pending or alive and its suspension or termination. Proceedings which are complete are not liable for abatement (Circular No.7 of 2003 dated 5.9.2003 referred)

See also: Anil Kumar Bhatia 1 ITR 484 (Delhi)(Trib), Eversmile Construction (ITAT Mumbai) & Assessment Of Search & Seizure Cases: A Treatise by K. C. Singhal, VP, ITAT (Retd)

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