Assessment Pursuant to search has to be confined to undisclosed income only

[Harshavardhana Datar]

Hon. Mum Tribunal has held as under :

(i) S. 153A does not authorize the making of a de novo assessment. While under the 1st Proviso, the AO is empowered to frame assessment for six years, under the 2nd Proviso, only the assessments which are pending on the date of  initiation of search abate. The effect is that complete assessments do not abate. There can be two assessments for the same assessment year. Assessments which are not pending before the AO on the date of search but are pending before an appellate authority will survive.  


(ii)  An assessment can be said to be "pending" only if the AO is statutorily required to do something further. If a s.143(2) notice has been issued, the assessment is pending. However, the assessment in respect of a return processed u/s 143(1) is not "pending" because the AO is not required to do anything further about such a return.  


(iii) The power given by the Proviso to "assess" income for six assessment years has to be confined to the undisclosed income unearthed during search and cannot include items which are disclosed in the original assessment proceedings.  (iv) On facts, s the returns had been processed u/s 143(1), the assessments were not "pending" and as no material was found during the search, the additions could not be sustained.    

We delete all the additions made and allow the appeals of the assessee.

In the result, all the appeals of the assessee are allowed.

Copy of judgement is too long to be put here link is provided as under:

http://www.mediafire.com/file/zmannmnmnz2/MUM%20ITAT%20ON%20153A.pdf