Assessment under Section 153C invalid as it exceeded six-year limitation period from document receipt date

ITAT Delhi held that assessment under Section 153C for AY 2013-14 was invalid and void ab initio as it exceeded the six-year limitation period. The Tribunal ruled that for persons other than those searched, the limitation period must be calculated from the date when the AO receives seized documents/assets, not from the search date. Following RRJ Securities Ltd. and Jasjit Singh SC precedents, the Tribunal confirmed that assessments for AY 2003-04 and 2004-05 were also outside Section 153C scope. Revenue's appeal was dismissed.

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Issues Involved:
1. Quashing of the assessment order due to limitation.
2. Validity of assessment for AY 2013-14 based on the date of satisfaction.
3. Interpretation of Section 153C(1) and its provisos.
4. Reference to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd.
5. General validity and tenability of the CIT(A)'s order.

Summary:

1. Quashing of the assessment order due to limitation:
The Revenue questioned whether the CIT(A) was correct in quashing the assessment order by the AO as barred by limitation without discussing the merits, despite the alleged use of unaccounted cash by the assessee to get accommodation entries from M/s Faith Jewellers.

2. Validity of assessment for AY 2013-14 based on the date of satisfaction:
The CIT(A) held that the assessment for AY 2013-14 was invalid since the six previous assessment years should be reckoned from the date when the books of accounts or seized documents were handed over to the AO or when the satisfaction was recorded. The Tribunal referred to the Delhi High Court's judgment in CIT-7 Vs. RRJ Securities Ltd., which clarified the procedure under Section 153C, emphasizing that the date of receiving the documents by the AO is crucial for determining the relevant assessment years.

3. Interpretation of Section 153C(1) and its provisos:
The Tribunal discussed the interpretation of Section 153C(1) and its provisos, stating that the period of six assessment years should be reckoned from the date of receiving the seized documents by the AO of the other person. The Tribunal cited several judgments, including SSP Aviation Ltd. and Pepsi Foods Pvt. Ltd., to support this interpretation.

4. Reference to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd:
The Tribunal noted that the CIT(A) referred to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd, where the SLP was dismissed on the ground of delay, and the case was not heard on merit. The Tribunal emphasized that the recording of satisfaction and the date of receiving documents are crucial for initiating proceedings under Section 153C.

5. General validity and tenability of the CIT(A)'s order:
The Tribunal, guided by the Supreme Court's judgment in Commissioner of Income Tax-14 Vs. Jasjit Singh, reiterated that the assessments made for AY 2013-14 u/s. 153C, based on the satisfaction note recorded on 26.03.2021 (AY 2021-22), were beyond the prescribed time limit and hence, void ab initio. The appeal of the Revenue was dismissed.

Conclusion:
The Tribunal upheld the CIT(A)'s decision to quash the assessment order for AY 2013-14 as barred by limitation, emphasizing the importance of the date of recording satisfaction and the transfer of documents in determining the validity of assessments under Section 153C. The appeal of the Revenue was dismissed.

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