Tribunal Invalidates AO's Jurisdiction on Pre-Amended Section 153C for A.Y 2013-14 & 2014-15, Quashes Tax Assessments.

The Tribunal quashed the assessments for A.Y 2013-14 and A.Y 2014-15, ruling that the Assessing Officer (A.O) improperly assumed jurisdiction under the pre-amended Section 153C of the Income Tax Act, 1961. The Tribunal determined that the documents did not belong to the appellant, invalidating the jurisdiction. Consequently, the additions of Rs. 1,74,99,600 and Rs. 6,55,64,120 were not addressed on merits, leaving those issues open.

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Issues Involved:
1. Validity of jurisdiction assumed under Section 153C of the Income Tax Act, 1961.
2. Treatment of the statement of Shri. Suraj Parmar as a document belonging to the appellant.
3. Rejection of grounds related to non-provision of backup/soft copy of unaccounted tally data and violation of principles of natural justice.
4. Addition of Rs. 1,74,99,600/- and Rs. 6,55,64,120/- on account of alleged on-money received from Suraj Parmar or Cosmos Group for A.Y 2013-14 and A.Y 2014-15 respectively.

Detailed Analysis:

1. Validity of Jurisdiction Assumed Under Section 153C:
The primary issue revolved around whether the Assessing Officer (A.O) rightly assumed jurisdiction under Section 153C of the Income Tax Act, 1961. The appellant argued that no money, bullion, jewellery, or documents belonging to them were seized during the search of Cosmos Group, thereby challenging the jurisdiction under the pre-amended Section 153C (applicable before 01.06.2015).

The CIT(A) held that the post-amended provisions of Section 153C (effective from 01.06.2015) were applicable since the notice under Section 153C was issued in October 2016. According to the CIT(A), the material received by the A.O related to the appellant, thus validating the jurisdiction.

However, the Tribunal found that the search was conducted on 24.09.2014, and hence the pre-amended provisions of Section 153C should apply. The Tribunal noted that the Excel file "Jewels wrkng up to 31.08.2014.xls" and the statement of Shri. Suraj Parmar pertained to the appellant but did not belong to them. Citing various judicial pronouncements, the Tribunal concluded that the A.O could not have validly assumed jurisdiction under the pre-amended Section 153C as the documents did not belong to the appellant.

2. Treatment of the Statement of Shri. Suraj Parmar:
The appellant contended that the CIT(A) erred in treating the statement of Shri. Suraj Parmar as a document belonging to them. The CIT(A) clarified that the A.O did not treat the statement as a document belonging to the appellant but as material relating to them.

The Tribunal upheld that the statement of Shri. Suraj Parmar could not be considered a document belonging to the appellant, reinforcing that the jurisdiction under Section 153C was assumed incorrectly.

3. Rejection of Grounds Related to Non-Provision of Backup/Soft Copy of Unaccounted Tally Data and Violation of Principles of Natural Justice:
The appellant argued that the A.O failed to provide the backup/soft copy of the unaccounted tally data seized from Cosmos Group and passed the order in haste, violating principles of natural justice.

The Tribunal did not delve into these contentions in detail, as it quashed the assessment for want of jurisdiction. Thus, these grounds were left open without specific adjudication.

4. Addition of Rs. 1,74,99,600/- and Rs. 6,55,64,120/- on Account of Alleged On-Money Received:
The A.O added Rs. 1,74,99,600/- and Rs. 6,55,64,120/- for A.Y 2013-14 and A.Y 2014-15 respectively, based on the alleged on-money received from Suraj Parmar or Cosmos Group. The CIT(A) confirmed these additions.

However, the Tribunal, having quashed the assessments for want of jurisdiction under Section 153C, did not address the merits of these additions. The contentions regarding the merits of the case were left open.

Conclusion:
The Tribunal allowed the appeals for A.Y 2013-14 and A.Y 2014-15, quashing the assessments framed under Section 153C r.w.s 143(3) for want of jurisdiction. The Tribunal concluded that the pre-amended provisions of Section 153C applied, and the A.O could not assume jurisdiction as the seized documents did not belong to the appellant. The merits of the case were not adjudicated, leaving those contentions open.

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