Tribunal rules in favor of Assessee, deems assessment void ab initio

The Tribunal ruled in favor of the Assessee in an appeal challenging the assessment order passed under section 143(3) of the Income-tax Act for the assessment year 2014-15. The Tribunal held that the assessment should have been made under section 153C due to a search operation, deeming the section 143(3) order incorrect. It declared the assessment order void ab initio, quashed it, and allowed the appeal. Additionally, the Tribunal interpreted the time limit for reopening assessments under section 153C based on the date of satisfaction note, finding certain assessments beyond the six-year limitation period and void.

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Issues:
1. Jurisdiction of Assessing Officer to pass assessment order under section 143(3) instead of section 153C of the Income-tax Act.
2. Interpretation of the time limit for reopening assessments under section 153C based on the date of satisfaction note.

Issue 1: Jurisdiction of Assessing Officer

The appeal was against the order of the Commissioner of Income-tax (Appeals) upholding the assessment order passed under section 143(3) of the Income-tax Act for the assessment year 2014-15. The Assessee contended that the assessment should have been made under section 153C instead of section 143(3) due to a search and seizure operation conducted by the Revenue Department. The Tribunal held that as the assessment year fell within six years for the purpose of section 153C, the assessment order under section 143(3) was incorrect. The Tribunal quashed the assessment order, ruling it as void ab initio, and allowed the appeal.

Issue 2: Interpretation of Time Limit for Reopening Assessments

The Tribunal considered various judgments, including the case of ACIT vs. Ankit Nivesh, to interpret the time limit for reopening assessments under section 153C based on the date of satisfaction note. The Tribunal referred to judgments by the Delhi High Court in cases such as RRI Securities, ARN Infrastructure India Ltd., Raj Buildworth Pvt. Ltd., and Sarwar Agency Pvt. Ltd. to establish that the period of six years for assessing years preceding the year of the search should be calculated from the date of recording of satisfaction. Following the High Court's ratio, the Tribunal held that the terminal date for determining the six preceding assessment years for section 153C would be the date of handing over the documents or the date of recording of satisfaction. Consequently, assessments for certain years were found to be beyond the limitation period of six years and were held to be void.

In conclusion, the Tribunal allowed the appeal, quashed the assessment order passed under section 143(3), and set aside the order of the Commissioner of Income-tax (Appeals) based on the jurisdictional issue and the interpretation of the time limit for reopening assessments under section 153C.

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