Assessment Order Declared Null & Void for Incorrect Year Treatment

The Tribunal declared the assessment order for the year 2012-13 as null and void due to incorrect treatment of the year of search and non-compliance with Section 153C provisions. The assessee's objection was allowed, and the Revenue's appeal on the addition of Short Term Capital Gain was dismissed as the assessment order was deemed invalid.

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Issues Involved:
1. Validity of assessment framed under Section 153B(1)/143(3).
2. Jurisdiction of Assessing Officer under Section 153C.
3. Addition of Rs. 38,61,24,029 on account of Short Term Capital Gain.

Issue-wise Detailed Analysis:

1. Validity of Assessment Framed Under Section 153B(1)/143(3):
The assessee challenged the validity of the assessment framed under Section 153B(1)/143(3), arguing that the assessment year 2012-13 was incorrectly treated as the year of search. The search and seizure action occurred on 09.11.2011, and documents related to the assessee were received by the Assessing Officer on 29.08.2013. The assessee contended that, according to the first proviso to Section 153C, the date of receiving the documents should be considered the date of search, making the relevant assessment year 2013-14. Consequently, the assessment for the year 2012-13 was argued to be void ab initio. The Tribunal agreed with the assessee, referencing the Hon'ble Jurisdictional High Court's judgment in CIT vs. RRJ Securities Ltd. and Pr. CIT vs. Sarwar Agencies Pvt. Ltd., which stated that the six assessment years should be reckoned from the date of receiving the documents.

2. Jurisdiction of Assessing Officer Under Section 153C:
The assessee also challenged the jurisdiction of the Assessing Officer under Section 153C, asserting that no satisfaction was recorded in the file of the searched person for assuming jurisdiction over the assessee's case. The Tribunal noted that the first proviso to Section 153C mandates that the date of receiving the documents by the Assessing Officer having jurisdiction over the other person should be considered the date of search. The Tribunal cited the Hon'ble Delhi High Court's judgment in the case of Ganpati Fincap Services P. Ltd., summarizing that the satisfaction note must be recorded by the Assessing Officer of the searched person before initiating proceedings against the other person. The Tribunal concluded that the assessment order was void as it did not comply with the mandatory provisions of Section 153C.

3. Addition of Rs. 38,61,24,029 on Account of Short Term Capital Gain:
The Revenue's appeal challenged the addition of Rs. 38,61,24,029 made on account of Short Term Capital Gain. The Assessing Officer had added the difference between the sale consideration of 2737 equity shares calculated at Rs. 1,57,517 per share and the amount declared by the assessee. However, since the Tribunal declared the assessment order null and void, the issue raised on merits by the Revenue became infructuous and was dismissed.

Conclusion:
The Tribunal held that the assessment for the year 2012-13 was not in accordance with the law, as it incorrectly treated the year of search and failed to follow the mandatory provisions of Section 153C. Consequently, the assessment order was declared null and void, and the Cross Objection of the assessee was allowed. The Revenue's appeal on the merits of the addition was dismissed as infructuous. The order was pronounced in the open Court on 9th August 2019.

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