2014 (11) TMI 1012 - AT - Income Tax

Assessment order quashed for non-compliance with Section 153C, leading to successful appeal by assessee.

Jasjit Singh Versus ACIT, Central Circle-11, New Delhi And Vice-Versa

Jasjit Singh Versus ACIT, Central Circle-11, New Delhi And Vice-Versa - TMI Issues Involved:1. Sustaining the disallowance of deduction claimed under Section 54F.2. Not giving the credit of TDS.3. Sustaining the treatment of expenses incurred on telephone, vehicle, depreciation, and conveyance as personal in nature.4. Legality and maintainability of the assessment order passed under Section 143(3) instead of Section 153C.Issue-wise Detailed Analysis:1. Sustaining the Disallowance of Deduction Claimed under Section 54F:The Tribunal did not specifically address this issue in detail due to the resolution of the primary legal issue regarding the validity of the assessment order itself. As the assessment order was quashed, the disallowance of the deduction under Section 54F became moot.2. Not Giving the Credit of TDS:Similar to the first issue, the Tribunal did not delve into the specifics of the TDS credit due to the overarching decision on the legality of the assessment order. The quashing of the assessment order rendered this issue irrelevant for adjudication.3. Sustaining the Treatment of Expenses as Personal in Nature:The Tribunal did not need to address this issue directly. The primary focus was on the legal validity of the assessment order, and once it was quashed, the treatment of expenses as personal in nature was no longer pertinent.4. Legality and Maintainability of the Assessment Order Passed under Section 143(3) Instead of Section 153C:The Tribunal's primary focus was on this legal issue, which was deemed to go to the root of the matter. The assessee argued that the assessment should have been made under Section 153C, not Section 143(3), as documents pertaining to the assessee were found during a search conducted on another entity. The Tribunal agreed with the assessee, stating that the assessment order was invalid as it did not follow the mandatory provisions of Section 153C. The Tribunal referenced several decisions, including those of the Delhi Bench in the cases of V.K. Fiscal and DSL Properties, which supported the view that the date of receiving documents should be considered the date of search for the purposes of Section 153C. The Tribunal also considered the decision of the Hon'ble Delhi High Court in SSP Aviation Limited, which supported the interpretation that the date of receiving documents determines the period for which assessments can be made.Separate Judgments Delivered by Judges:No separate judgments were delivered by the judges in this case; the order was a unified decision by the Tribunal.Conclusion:The Tribunal quashed the assessment order passed under Section 143(3) for the assessment year 2009-10, declaring it void as it did not comply with the mandatory provisions of Section 153C. Consequently, the issues regarding the disallowance of deduction under Section 54F, TDS credit, and the treatment of expenses as personal in nature were rendered moot. The appeal by the assessee was allowed, and the appeal by the Revenue was dismissed.