The Hon’ble Karnataka HC holds that :
1. CIT cannot invoke revisional powers u/s 263 to review AO’s order once proceedings u/s 153A are initiated.
2. AO is entrusted with duty of bringing “total income” to tax u/s 153A by making reassessments even, means there can be only one assessment order in which both disclosed & undisclosed income would be brought to tax.
3. “Total income” u/s 153A to be determined after considering materials which were subject matter of tax return filed earlier, undisclosed income unearthed during search and any other income which comes to his notice.
4. Rejects Tribunal’s reasoning that scope of enquiry u/s 153A is to be confined only to the undisclosed income unearthed during search relying on SB decision in All Cargo Logistics.
5. Once AO’s order gets reopened u/s 153A, then there is no order which can be said to be erroneous insofar as it is prejudicial to Revenue’s interest which confers powers to CIT to exercise revision jurisdiction.
For complete text of judgement, click here Canara Housing-Kar HC