TaxTMI 
TaxTMI 
2018 (8) TMI 510
X X X X Extracts X X X X
X X X X Extracts X X X X
....1-2002 and have submitted that the Order in this case may be followed in remaining ITA.Nos.1615 to 1618/Del./2011 for A.Ys. 2002- 2003 to 2005-2006. We, therefore, proceed to decide ITA.No.1614/Del./2011 as under : ITA.No.1614/Del./2011 - A.Y. 2001-2002 : 4. This appeal by assessee has been directed against the Order of the Ld. CIT(A)-1, Ludhiana, Dated 28.01.2011, for the A.Y. 2001-2002. 5. Briefly, the facts of the case are that a search and seizure operation was conducted at the residential premises of Shri Navneet Jhamb and Shri Shri S.D.Kathuria partners of assessee-firm on 04.08.2005. A survey under section 133A of the I.T. Act, 1961 was also carried out at the business premises of the assessee-firm. During the course of search operation at the residential premises of Shri Navneet Jhamb documents/ loose papers detailed as A-l to A-2 were seized as per Panchanama dated 04.08.2005. Documents detailed as A-l to A-3 were also seized from residential premises of Shri S.D.Kathuria as per Panchnama dated 04.08.2005. Further, documents detailed as Annexures A-l to A-9 and D-l to D-26 were impounded from business premises of assessee-firm. On examination of Annexure A-l seize....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions under section 153C of the Act were not complied with. Further, the A.O. was not satisfied that any books of account or documents seized in any search belong to the assessee-firm. No copies of the satisfaction note have been given to the assessee-firm and statutory conditions are not satisfied. The remand report from the A.O. was called for, in which, the A.O, reiterated the same facts as noted in the assessment order that assessee-firm earned undisclosed commission and profit and that satisfaction as required under section 153C have been recorded. The assessee-firm also filed rejoinder in which same facts have been explained and it was submitted that satisfaction as required under section 153C have not been recorded, therefore, assumption of jurisdiction is illegal and void abinitio. The assessee-firm relied upon the Judgment of the Hon'ble Supreme Court in the case of Manish Maheshwari 289 ITR 341 and Order of ITAT, Lucknow Bench in the case of ACIT vs. Smt. Surinder Kaur 120 TTJ 618. The A.O. did not bring any evidence on record that the documents found during the course of search belong to the assessee-firm. Several decisions in support of the above contention were also rel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... were seized from the residence of both the partners. Papers pertaining to purchase, and sale of land measuring 89 Kanal 13 Merla at Jharsetli were seized from the residence of Sh. Navneet Jambh. There are calculations of these papers regarding receipt of cheque amount and cash amount in respect of sale of above said land. Reference is invited to page 56- 62. Document A-1 and also pages 13-17 of Document A-l and further pages 53-57 of Document A-2. Page 53 of annexure A-2 contains details, of commission and profit earned by M/s. Reliance Estate Agency. Pages 45 to 48 of annexure A-l also contain details of commission account earned, by the Reliance Estate Agency. 2. Document A-l seized from the residence of Sh S.D.Kathuria partner is a pocket diary and contains entries pertaining to M/s. Reliance Estate Agency. Some of entries are reflected, in the books of account of M/s. Reliance Estate Agency and some of the entries are not reflected. Similarly seized annexure A-3 contains 25 pages most of the pages pertain to M/S Reliance Estate Agency. There are details of commission earned by the M/S Reliance Estate Agency. A. part of the cash seized from the residences of the partne....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reflects whether any document seized, on application of his mind, disclosed that it belonged to the assessee, and if so, its prima facie nature. Whilst an AO of the searched party and that of the individual under Section 153C may be the same, nevertheless at the stage of sending notice under Section 153C, the AO has to record a specific reason or reasons, why the material seized from the other person has a nexus to the assessee, to whom the notice under that provision is addressed. In this case, this never happened. Thus, for the previous years, the rule in Commissioner of Income Tax v Kabul Chawla 380 ITR 573 (Del), i.e., that in the absence of any incriminating materials, the previous years‟ assessments cannot be disturbed, applies." 7.2. In the same decision, the conclusion is as under : "Where in course of search carried out at premises of a third person, a hard disk was seized and on basis of same proceedings under section 153C were initiated against assessee, since Assessing Officer of searched person failed to record a specific satisfaction as to how said hard disk belonged to assessee, impugned proceedings under section 153C were unjustified." 7.3. Learned....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erved to be quashed." 7.9. Learned Counsel for the Assessee further submitted that satisfaction note though recorded in the case of assesseefirm does not say which documents belongs to the assessee-firm or to a particular assessment year. Therefore, proceedings under section 153C are invalid and bad in law. In support of his contention, he has relied upon the decision of Hon'ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society 397 ITR 344 (SC). He has submitted that the assesseefirm is situated in Faridabad and the decision of the Tribunal in the case of JMSW Infra.com Pvt. Ltd., (supra) is a later decision, therefore, it should be given preference. In support of his contention, he has relied upon the following decisions : * Govindanaik G. Kalaghatigi vs. West Patent Press Co. Ltd. And Anr. - AIR 1980 (Karnataka) 92. * Shri Vasant Tatoba Hargude and others vs. Dikkaya Muttaya Pujari - AIR 1980 Bombay 341. * Karnataka State Road Transport Corporation, Bangalore vs. R. Maheshwari and others - AIR 2003 Karnataka 456. 7.10. He has also relied upon the decisions of the Hon'ble Supreme Court in the case of Manish Maheshwari vs. ACI....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed by the A.O. on the basis of the seized papers for all the assessment years under appeals. The Ld. CIT-D.R. relied upon the following decisions. 8.1. Judgment of Hon'ble Delhi High Court in the case of PCIT vs. Sheetal International Pvt. Ltd., 2017-TIOL-1355-HCDEL, in which it was held as under : "Where Hon'ble Delhi High Court held that proceedings u/s 153C cannot be invalidated, merely because the AO of the searched who was also that of the Assessee, did not record a separate satisfaction note." 8.2. Judgment of Hon'ble Delhi High Court in the case of PCIT vs. Instronics Ltd., (2017) 82 taxmann.com 357 (Del.) (HC), in which it was held as under : "Delhi High Court held that where satisfaction note was recorded by Assessing Officer of searched person who also happened to be Assessing Officer of assessee (other person) to effect that seized documents belonged to assessee, issuance of notice under section 153C against assessee on basis of said note was justified." 8.3. Judgment of Hon'ble Delhi High Court in the case of Ganpati Fincap Services (P.) Ltd., vs. CIT (2017) 82 taxmann.com 408 (Del.), in which it was held as under : "Where Hon'ble Del....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere Assessing Officer of search person recorded that document found during search was copy of a ledger of books of account of assessee company which evidenced certain cheque payments as well as cash payments to a company by assessee, there was prima facie material to suggest that satisfaction as per section 153C was duly recorded and thus, notice issued to file return to assessee was justified." 8.8. Judgment of Hon'ble Gujarat High Court in the case of Kamleshbhai Dharamshibhai Patel vs. CIT-3 (2013) 263 CTR 362 (Gujarat), in which it was held as under : "Where assessee sold certain land to purchaser, documents, viz., sale deeds of said land and agreements executed between assessee and erstwhile tenants regarding their eviction, found during search upon purchaser, would be said to be belonging to assessee for purpose of section 153C." 8.9. The Ld. CIT-D.R. accordingly submitted that since satisfaction note have been recorded as per Law and the seized material belongs to the assessee-firm, therefore, A.O. has correctly assumed jurisdiction under section 153C of the I.T. Act, 1961. 9. We have considered the rival submissions. According to Section 153C of the I.T. A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee that provisions of section 153C of the Act could not be applied in the case and initiation of proceedings u/s 153C was not proper and bad in law. 2. The Commissioner of Income Tax (Appeals) erred in law and on facts in holding that for initiating valid jurisdiction u/s 153C, even if the AO of the searched person and the AO of such other person is same, it is mandatory that he has to first record satisfaction note in the file of the person searched and thereafter such satisfaction note along with the seized documents or books of account to be placed in the file of such other person. 3. The Commissioner of Income Tax (Appeals) erred in law and on facts in holding that no fair opportunity of hearing u/s 143(2) of the Act was given to the assessee before completing the assessment u/sl53C of the !T Act. 4. The Commissioner of Income Tax (Appeals) erred in law and on facts in deleting the addition of Rs. 48,00,000/- on account of deemed income under section 68 of the Income Tax Act, 1961." 2. Brief facts of the case as mentioned in the impugned orders are that assessee-company is engaged in the business of a Builder and a Developer of Real Estate.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der section 68 of the I.T. Act on account of unaccounted income which represented the amounts credited in the books of account of assessee as 'share application money' received during the assessment year under consideration. 3. The assessee-company challenged the validity of the proceedings initiated under section 153C of the I.T. Act as well as the addition on merit before Ld. CIT(A). The assessee-company contended that the assessment order under section 153C of the I.T. Act is bad in law and contrary to principles of natural justice. No incriminating material belonging to assessee-company was found during the course of search. No search was conducted in the case of the assessee-company. The A.O. did not raise any query on documents filed by the assessee-company in respect of evidence of share application money received. The A.O. merely initiated the proceedings under section 153C of the I.T. Act, on the basis of copy of the balance sheet seized during the course of search which pertains to A.Y. 2010- 2011. No undisclosed income was unearthed on examination of any documents found in search. Several case Laws were relied upon in support of the same. 3.1. The Ld. C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0 in the case of Sh. Pramod Goel, Smt. Savita Goel, and Sh. Ashish Goel at BN-33, East Shalimar Bagh, Delhi. Under mentioned documents belonging to M/s Victory Accommodations Pvt. Ltd. were found and seized from the above premises. Page no. 102 and 103 of Annexure A-l of Party V-2 is a copy of the Balance Sheet, Profit loss account, pertaining to M/s Victory Accommodations Pvt. Ltd. for the fin. year ending 31.03.2010. The case of M/s Victory Accommodations Pvt. Ltd. was centralized with this office vide F.NO;. ClT-Delhi- Vl/Centralization/2011-12/648 dated 22.06.2011 issued by the CIT, Delhi-Vl, New Delhi. I am therefore satisfied that the documents seized, as referred to above, belong to M/s Victory Accommodations Pvt. Ltd. warranting action u/s 153C in this case. 27.02.2013 (Sumesh Swani) Deputy Commissioner of Income Tax Central Circle-09, New Delhi Notices u/s 153C of the Income-tax Act, 1961 are hereby issued for the assessment years 2005- 06 to 2010-11. (Sumesh Swani) Deputy Commissioner of Income Tax Central Circle-09, New Delhi" 3.2. The Ld. CIT(A) on reading the abo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee-company held that no sufficient time was given to the assessee-company to represent before A.O. Therefore, he found merit in the grievance of the assesseecompany that no proper opportunity was provided to the assessee-company. 3.4. As regards the addition on merit of Rs. 48 lakhs on account of unexplained share application money, Ld. CIT(A) noted that survey was conducted under section 133A at the business premises of assessee-company at Azadpur, in which, some documents have been impounded which were Annexurised as A-5, pages 51 to 55, which contain the transactions of the Company of Victory Group with different companies in tabular form. The same were scanned in the assessment order, upon perusal, the A.O. noted that various companies purchased the shares of the company of the Victory Group at a premium of Rs. 90/- to Rs. 190/- per share on a face value of Rs. 10/- per share. According to A.O. the transactions for M/s. Victory Apartments P. Ltd., were arranged by Shri Tarun Goel, Entry Operator, who are running several companies. The assessee-company filed several documents before A.O. in support of genuineness of the share application money received such as shar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e is qua the other person. Further, it is sufficient that such satisfaction note is placed in the file of the other person by the A.O. in his capacity as the A.O. of such other person." 4.1. The Ld. D.R. also relied upon the decision of Hon'ble Supreme Court in the case of CIT vs. S. Ajit Kumar in Civil Appeal No.10164 of 2010 dated 02.05.2018 in which search was conducted by the Officer of the Income Tax Department in the premises of the assessee and on the same date, there were survey in the premises of Elegant Constructions and Interiors Ltd., who constructed and decorated the house of the assessee. Pursuant to the same, the fact that the assessee having engaged the above work of Contractor for construction of houses came out, in these premise, it was held that "the power of survey has been provided under Section 133A of the I.T. Act. Therefore, any material or evidence found/collected in a Survey which has been simultaneously made at the premises of a connected person can be utilized while making the Block Assessment in respect of an assessee under Section 158BB read with Section 158 BH of the IT Act." The Ld. D.R. relied upon order of ITAT, Delhi Bench in the case of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) and decision of Hon'ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Index Securities Private Limited, Vidya Shankar Investment Private Limited 2017- (9)-TMI-585 (Del.). Learned Counsel for the Assessee submitted that since no satisfaction note has been recorded in the case of the person searched and no incriminating material was found during the course of search against the assessee-company, therefore, the issue is covered in favour of the assessee-company by the Judgment of Hon'ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (supra). He has submitted that assessee company filed all the documents before A.O. on merits but the A.O. without making any enquiry or without verifying any fact, made the addition which was correctly deleted by the Ld. CIT(A). A.O. relied upon the report of the Investigation Wing, Kolkata, which was not connected with the assessee-company. He has also relied upon the decision of Hon'ble jurisdictional Delhi High Court in support of his contention in cases of CIT vs. Fair Finvest Ltd., 357 ITR 146 and ACIT vs. Best Infrastructure (India) Pv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ad been searched or whose documents and other assets had been requisitioned under Section 132A of the Act." 6.1. It was further held by the Hon'ble Supreme Court in para-16 in the case of Manish Maheshwari (supra) as under : "Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the part of the Assessing Officer. Documents and other assets recovered during search had not been handed over to the Assessing Officer having jurisdiction in the matter." 6.2. It was further held in para-22 by the Apex Court in the case of Manish Maheshwari (supra) as under : "As the Assessing Officer has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the Assessing Officer having jurisdiction over the matter, we are of the opinion that the impugned judgments of the High Court cannot be sustained, which are set aside accordingly. The appeals are allowed. However, in the facts and circumstances of the case, there shall be no order as to costs." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Apex Court." 6.4. The Hon'ble Bombay High Court in the case of CIT vs. Singhad Technical Education Society (2015) 378 ITR 84 (Bom.) held as under : "In terms of section 153C of the Income-tax Act, 1961, the Assessing Officer should be satisfied that any money, bullion, jewellery or other valuable articles or thing or books of account or documents seized or requisitioned belong or belongs to a person other than the person referred to in section 153A of the Act and he can hand over the seized documents to the Assessing Officer having jurisdiction over that person. The assessee was an educational institution since the assessment year 1994-95. A search and seizure operation was carried out and certain loose papers were seized from the president of the assessee. Simultaneously a survey action was conducted on the assessee. On the basis of loose papers found with and seized from the president the Assessing Officer issued a notice under section 153C on the assessee and assessed the income. The Tribunal set aside the assessments. On appeals to the High Court: Held, dismissing the appeals, that the reasons assigned by the Assessing Officer in the satis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1999-2000 or assessment year 2006-07. The necessary consequence would be that the conclusions of the Assessing Officer in his assessment order regarding the activities of the trust not being genuine and not carried out in accordance with the trust deed or cancellation of registration, denial of benefits of sections 11 and 12 would not be affected by this judgment." 6.6. The Hon'ble Madras High Court in the case of CIT vs. Late J. Chandrasekhar (HUF) (2011) 338 ITR 61 (Mad.) held as under : "On the search conducted in the case of A and group on November 25, 2003, material pertaining to "on-money" payment paid to the assessee in respect of property purchased from the assessee were seized. Based on that, the Assessing Officer issued notice under section 153C of the Income-tax Act, 1961, and reworked the capital gains. The Commissioner (Appeals) and the Tribunal held that the notice under section 153C was not valid. On appeal to the High Court : Held, dismissing the appeals, that the Assessing Officer did not have the benefit of the seized material while issuing the notice under section 153C. In the light of the fact that the Revenue did not produce any mater....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 2009-2010 and 2010-2011 in the matter of Victory Accommodation Pvt. Ltd., vs. ACIT, Central Circle-09, New Delhi 2017 (5) TMI 1050-ITAT-Delhi (supra), on identical facts held as under : "Assessment framed u/s 153C - absence of satisfaction note - Held that:- From the plain reading of the Circular No. 24/2015 dated 31.12.2015 issued by the Central Board of Direct Taxes, it is crystal clear that even if the AO of the searched person and of the other person is one and the same then he is required to record his satisfaction in the case of searched person. In the present case, it is an admitted fact that the AO of the searched person has not recorded any satisfaction rather the satisfaction is recorded by the AO of the other person i.e. the assessee which is evident from the satisfaction note, copy of which is placed at page no. 21 of the assessee's paper book. Therefore, the assessment framed in the hands of the assessee was not valid. Moreover, from the observation of the AO in the satisfaction note also it is crystal clear that no incriminating material was found, the addition was made only on the basis of the copy of balance sheet, profit and loss account and sc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee-company under section 153C of the I.T. Act. It may also be noted here that initially the A.O. proceeded against the assesseecompany under section 153A of the I.T. Act, on the premise that search was conducted against the assessee-company under section 132 of the I.T. Act, therefore, he has issued notice under section 153A of the I.T. Act against the assessee-company. When it was found later on, that no search have been conducted in the case of assesseecompany, therefore, notice under section 153A was withdrawn. The A.O. of the assessee later on recorded satisfaction note under section 153C of the I.T. Act, which is not valid in Law. The A.O. of the assessee referred to balance sheet of the assessee-company for other year, therefore, the same cannot be considered to be incriminating in nature against the assessee-company as it is part of Department record and in public domain. Therefore, it is clear from the above facts that the condition precedent for issuing notice under section 153C are not satisfied in this case because no satisfaction have been recorded under section 153C in the case of the person searched and no incriminating material was seized pertaining to assessment y....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imply relied upon report of the Investigation Wing, Kolkata, which is not relevant to the assessee-company. The A.O. did not make any independent enquiry on the documents furnished by the assessee-company. Therefore, Ld. CIT(A), correctly deleted the addition on merit. Since, we have confirmed the order of the Ld. CIT(A) with regard to Ground Nos. 1 and 2 that initiation of proceedings under section 153C is illegal and bad in law, therefore, no further findings are given on merits. In view of the above discussion, the Departmental Appeal stands dismissed. 9. In the result, appeal of the Department is dismissed". 9.1. It is an undisputed fact that no satisfaction note under section 153C have been recorded by the A.O. of the person searched. The Ld. CIT-D.R. has produced the assessment records on both the person searched and the assessee-firm. The satisfaction note under section 153C dated 22.02.2007 (supra) found placed in the assessment record of the assessee-firm and the same is also noted in the satisfaction note itself and the notice under section 153C have been issued on the same day by the A.O. of the assessee-firm. Since satisfaction under section 153C have been r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ral A.Ys. i.e., 2000-2001 to 2005-2006. The decisions relied upon by the Ld. CIT-D.R. would not support the case of the Revenue. It is clear from the above discussion and material on record that satisfaction note is not recorded by the A.O. in capacity of A.O. of the searched person. Therefore, the proceedings initiated under section 153C of the Act against the assessee-firm are clearly illegal, bad in law and void abinitio. The decisions relied upon by the Learned Counsel for the Assessee clearly apply to the facts and circumstances of the case. Considering the facts of the case in the light of submissions of both the parties and material on record, we are of the view that A.O. of the searched person has not recorded satisfaction note as per law. The notice under section 153C was issued on the same day when satisfaction note was recorded by the A.O. of the assessee-firm i.e., other person. The same A.O. who recorded satisfaction in the case of the assessee-firm passed the assessment order under section 143(3)/153C of the I.T. Act. Therefore, the condition precedent for issuing notice under section 153C are not satisfied in this case because no satisfaction note have been recorded ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ircumstances of the case, more so when assessment order was not passed u/s 153C in view of judgement of Hon'ble High Court of Delhi in the case of CIT vs. RRJ Securities L.td., (2016) 380 ITR 0612. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in lav. end on facts in ignoring that impugned assessment year is out of block period of search years, more so in view of judgement of Hon'ble High Court of Delhi in the case of CIT vs. RRJ Securities Ltd., (2016) 380 ITR 0612." 14.1. Learned Counsel for the Assessee submitted that the above grounds are purely legal and did not require fresh facts to be investigated and go to the root of the matter. He has, therefore, prayed that the same may be admitted for disposal of the appeal. In support of his contention, he has relied upon the following decisions : (i) CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) (ii) NTPC Ltd., vs. CIT (1998) 229 ITR 383 (SC) (iii) CIT vs. Sam Global Securities (2014) 360 ITR 682 (Del.) (HC) (iv) VMT Spinning Co. Ltd., vs. CIT & Another (2016) 389 ITR 326 (P & H) (HC) (v) Inventors Industrial Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. [Provided further that the Central Government may by rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Assessing Officer having jurisdiction over such other person". In terms of section 153A(1)(b) of the Act. the Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of section 153A of the Act states that assessment or reassessment relating to any assessment year falling within the period of six assessment years referred to in the said sub-section pending on the date of initiation of the search under section 132, would abate. In CIT v. RRJ Securities Ltd. [2016] 380 ITR 612 (Delhi), the court held that in the context of proceedings under section 153C of the Act, the reference to the date of initiation of the search in the second proviso to section 153A has to be construed as the date on which the Assessing Officer receives the documents or assets from the Assessing Officer of the searched person, that further proceedings, by virtue of section 153(1) of the Act, would have to be in accordance with section 153A of the Act and the reference to the date of search would have to be construed as the reference to the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/ reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment year 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year rele....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tiated. Since the Hon'ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this count. Respectfully following the above judgment of the Hon'ble High Court in RRJ Securities (supra) the date of handing over of seized material/ record by the Assessing Officer of searched party to the Assessing Officer of the assessee would be 2nd November, 2009. Further, following the judgment, the six assessment years for which assessment/re-assessment could be made u/s 153C of the Act would also have to be construed as from the reference date of handing over of assets/documents to the Assessing Officer of the assessee. In the case in hand, it would be the date of recording satisfaction under section 153 of the Act i.e. 2nd November, 2009, and therefore, six assessment years which would eligible for assessment/reassessment would commence from assessment year 2004-05 to assessment year 2009-10. The assessment/re-assessment in respect of assessment year 2003-04 would, thus, be beyond the period of six assessment year as reckoned with reference to the date of satisfaction recorded by the Assessing Officer of the searched....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the "other person" would be the same six assessment year immediately preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon'ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New Delhi and Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra). The A.O, therefore, should have framed the assessment under section 153C of the I.T. Act in the case of the assessee and at the time of initiating the proceeding against the assessee, should have issued notice under section 153C of the I.T. Act which have not been done in this case. The issue of notice under section 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. The assessment order, therefore, vitiate, void, illegal and bad in law and cannot be sustained. The contention of the....