TaxTMI 
TaxTMI 
2020 (2) TMI 1044
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....al 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 initiated. In addition, it was submitted that even otherwise, the proceeding....
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....e 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 assets/documents and accordingly the date of search would have to be construed as the reference to the date of re....
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....red 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 AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.No.504/Del./2015 Assessment Year 2012-2013 M/s. BNB Investment & Properties Ltd., Ground Fl....
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.... 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 Asstt. of A.Y. 2012- 2013 was to be framed only U/s. 153C and that too after issuance and service of notice U/s. 153C r/w. Sec. 153A of the I.T.Act which has never been issued as admitted by AO in RT1 reply. " 2. That both the above grounds are pure legal grounds which goes to the root o....
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....ave 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 which is satisfaction note recorded under section 153C of the I.T. Act in the case of assessee dated 03.10.2013. The satisfaction note was, therefore, recorded in the A.Y. 2014-2015 in the case of the person searched. PB-190 to 195 are the notices issued under section 153A r.w.s.153C of the I.T. Act in the case of the assessee for A.Ys. 2006-2007 to 2011-2012. He has submitt....
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.... 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 of initiation of search" which are no where mentioned in Section 153A(1) of the I.T. Act. Even after the Amendment in Section 153C, the First Proviso stands as it is in the statute which makes it further clear that First Proviso to Section 153C always referred to abatement of proceedings as mentioned in the second proviso Section 153A(1) of the I.T. Act, otherwise, the current 153C shall have ....
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....r 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 account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 7.1. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (2017) 397 ITR 400 (Delhi.) (HC) (supra), considering the identical issue h....
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....32 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 153C of the Act. On appeal: Held accordingly, dismissing the appeal, that the Tribunal was justified in holding 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." 7.2. The ITAT, Delhi, B-Bench in the case of ACIT, C.C.-2, New Delhi vs. Empire Casting Pvt. Ltd., New Delhi (supra), held in paras 5 and....
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....trary 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 one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year." 5.1. The fact that satisfaction u/s 153C of the Act in the case was recorded on 2nd November, 2009, is not dispute....
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....t 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 been received by the A.O. on 29.08.2013. The satisfaction under section 153C has been recorded on 03.10.2013. The A.O. passed the assessment order under section 153B(1)(b) of the I.T. Act, considering the assessment year under appeal i.e., A.Y. 2012- 2013 to be the year of search. However, the First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the ....