TaxTMI 
TaxTMI 
2020 (2) TMI 1044
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....lant craves leave to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 2. In this case, search and seizure action u/s 132 of the Act was carried out on 20.01.2014 in the case of M/s Mapsa Logistics Pvt. Ltd., M/s Mapsa Infra Pvt. Ltd. and in case of Shri Pyare Lal Gupta, Mrs. Veena Gupta at D- 28, Model Town, Delhi. During the course of search operation at the above said premises certain documents/hard disk pertaining to the assessee were found and seized. Accordingly, notice u/s 153C of the Act was issued and in compliance return was filed declaring income of Rs. 41,13,310/- and Rs. 55,47,180/- for both the years respectively. Assessments u/s 153C/143(3) were completed on 31.03.2016 by making additions on account of share capital/premium and commission. 3. Assessee challenged the addition as well as assessment order to the illegal and without jurisdiction. It was submitted that AO had no jurisdiction to make assessment u/s 153C of the Act as no relevant material belonging to the assessee was found during the course of search. In absence of any incriminating material, proceedings u/s 153C of the Act could not be....
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....ct. Section 153C(1) of the Act clearly postulates that once the AO of a person, other than the one searched, has received the assets or the documents, he is to issue a notice to assess/reassess the income of such person - that is, the assessee other than the person searched - in accordance with provisions of Section 153A of the Act. 3.2 The proviso to Section 153C(1) of the At expressly indicates that reference to the date of initiation of search for the purposes of second proviso to section 153A shall be construed as a reference to the date on which valuable assets or documents are received by the Assessing Officer of an assessee (other than a searched person). Hon'ble Jurisdictional High Court in the case of CIT vs. RRJ Securitis Ltd. 380 ITR 612 (Del) has held that the date in terms of proviso to section 153C of the Act, a reference to the date of the search under the second proviso to section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assesee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further the reference to the date of handing over of asse....
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....n seized during the course of search. The AO, accordingly, issued notice u/s 153C on 23.02.2016. The issue is, therefore, covered by judgment of Hon'ble Delhi High Court in the case of RRJ Securities Ltd. (supra) as is considered by the Ld. CIT(A) in the impugned order. The six assessment years for which assessments/reassessments could be made u/s 153C of the Act would also have to be construed with reference to the date of handing over of the assets/documents to the AO of the assessee i.e. 23.02.2016. Therefore, the relevant assessment years for initiating proceedings u/s 153C would be assessment years 2010-11 to 2015-16. Therefore, the assessment years under appeal i.e. 2008-09 & 2009-10 would be beyond the period of six years. The same view is considered by ITAT Delhi 'A' Bench in the case of M/s BNB Investment & Properties Vs. DCIT & Ors. reported in 68 ITR 567 (Del.) following the judgment of Delhi High Court in the case of RRJ Securities Ltd. and Pr. CIT Vs. Server Agency Pvt. Ltd. & Ors. 397 ITR 400. The findings of the Tribunal are reproduced as under: IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES "A" : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ....
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....hallenged the validity of the proceedings under section 153C of the I.T. Act and addition of Rs. 3 crores. The assessee also moved an application for admission of additional grounds in which assessee raised the following additional grounds : 1. Additional Ground No. 1 "That under the facts and circumstances, in the absence of issuance and service of notice U/s. 153 C r/w. Sec. 153A of the I.T.Act, the jurisdiction for framing the impugned Asstt. has been wrongly assumed, hence, the impugned Asstt. is without jurisdiction, illegal and unsustainable in law." Additional Ground No. 2 "That without prejudice, As the seized documents in search of a 3rd party have been received by the AO of the assessee on 29.08.2013, therefore, in view of Sec. 153C(1) (first proviso), the search year is A.Y. 2014-2015 and not impugned A.Y. 2012-2013, hence, in case, if impugned Asstt. has been framed U/s. 153 B (1) (b) treating A.Y. 2012-2013 as the search year, the whole Asstt. Proceedings stands vitiated in law and unsustainable because the A.Y. 2012-2013 falls within period of preceding 6 Asstt. Years as provided in Sec.153A (1)(b), therefore, the ....
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....C) held that "the Tribunal could decide the appeal on a ground neither taken in the Memorandum of Appeal nor by seeking its leave. The only requirement was that the Tribunal could not rest its decisions on any other ground unless the party who might be affected had sufficient opportunity of being heard given on that ground. Therefore, the Tribunal ought to have exercised its discretion in view of the fact that assessee intended raising only a legal argument without reference to any disputed question of facts." 5.1. Considering the issue in the light of the factthat additional grounds are legal in nature and shall have bearing on the validity of the assessment proceedings, therefore, the same is admitted for the purpose of disposal of the appeal. 5.2. Learned Counsel for the Assessee submitted that search was conducted in the case of M/s Krrish Group of cases on 09.11.2011. A survey u/s 133A of the Act was also carried out on 22.11.2011 at the business premises of the Assessee-Company and its Director. The seized/impounded documents in the group were received by the A.O. on 29.08.2013. These facts are mentioned in the assessment order. He has referred to PB-161 whi....
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....iin ITA.Nos. 3185, 3186 & 3253/Del./2015 dated 04.10.2017. He has also referred to Memorandum explaining Finance Bill 2017 in which it is provided that "Amendment in Section 153C shall apply in respect of search conducted or requisition made on or after 1st day of April, 2017." 6. On the other hand, Ld. D.R. submitted that Section 153A(1) deals with the years of reopening in the case of search proceeding and as per Section 153C(1) after the satisfaction, the A.O. shall proceed in accordance with provisions of Section 153A(1) of the I.T. Act. Section 153A(1)(b) is very clear that "A.O. shall assess or re-assess the total income of 06 assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted".No where the Section contains the word "Date of initiation of the Search" which are referred to by the First Proviso to Section 153C of the I.T. Act. Hence, the First Proviso to Section 153C of the I.T. Act is only referring to the abatement of the existing proceedings mentioned in the Second Proviso to Section 153A(1) of the I.T. Act, as clearly mentioned in the First Proviso and further clarified by usage of words "the date o....
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....e for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.] [(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of a....
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.... construed with reference to the date of handing aver of assets or documents to the Assessing Officer of the assessee. The amendment in section 153C of the Act by the Finance Act, 2017 with effect from April 1, 2017 to the effect that the 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 years immediately preceding the year of search is prospective. A search under section 132 of the Income-tax Act, 1961 took place on November 11,2010 in the T group of cases. The documents pertaining to the assessee were forwardedalong with a satisfaction note by the Assessing Officer of the party in respect of which the search was conducted to the Assessing Officer of the*assessee on January 3, 2013. The Assessing Officer of the assessee issued notice to the assessee under section 153C of the Act on January 4,2013 for the assessment year 2006-07. The Tribunal held that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07, was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision under section....
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....sessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the ....
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....rred by limitation and without jurisdiction. Accordingly, the impugned assessment order is liable to be quashed. We decide accordingly." 7.3. The ITAT, Delhi, C-Bench, in the case of Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra) under the same circumstances held that "assessment completed under section 143(3) is invalid". The relevant para-16 of the order is reproduced as under : 16. "We find the year for which the impugned assessment order has been passed u/s 143(3) is for assessment year 2011-12. This year falls within the period of six years when counted from the date of recording of satisfaction note u/s 153/153C of the I.T. Act which is deemed date of search. The Act h a s been amended recently by the Finance Act, 2017 with prospective effect i.e., from assessment year 2018-19. Thus, the period is same now only for the searched parties as well as the other person as per the amended provisions of the said section. In view of the above, we hold that the assessment completed u/s 143(3) is invalid." 8. It is not in dispute that search was conducted on Krrish Group of cases on 09.11.2011. The impounded documents have be....