TaxTMI 
TaxTMI 
2020 (11) TMI 2
X X X X Extracts X X X X
X X X X Extracts X X X X
....n nature. (iii) On the point of law, the Ld. CIT (Appeals) erred in observing that provisions of section 153C can be initiated only if the seized documents are incriminating in nature when there is in specific definition of the word 'incriminating' in the income Tax Act, 1961. (iv) That, the appellant craves to add, amend, modify or alter any ground of appeal at the time or before hearing of appeal. 2. Brief facts of the case are that the assessee is a non-banking financial company and filed its return u/s. 139(1) of the Act, 1961 on 22.11.2011, for the assessment year 2011-12, declaring total income of Rs. 46,450/-. A search and seizure operation u/s. 132 of I.T. Act, 1961 was conducted at the residential and business-cum-office premises of Shri Basukinath Agarwal on 25.02.2014 at Barsuan, Dist-Sundargarh. The assessee belongs to Basukinath Roadways Pvt. Ltd. Group. During the course of search disclosure of unaccounted income at Rs. 15 crores in case of Basukinath Roadways Pvt. Ltd. and Rs. 5 crores in case of Bajrang Kumar Agarwal for the assessment year 2014-2015 was made u/s. 132(4) of I.T. Act, 1961. Thereafter the AO issued notice u/s. 153C of I.T. Act, 1961. Sub....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (I) 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. 3.1. On perusal of the section 153C of the Act, it may kindly be noticed that the said section provides that where the assessing officer of the person in whose case search was conducted is satisfied that any money, bullion, jewellery or other valuable articles or things or books of accounts of documents seized/requisitioned belongs to some other person, then such books of accounts or documents or assets seized shall be handed over to the AO having jurisdiction over such other person. Here the word "belongs" refers to any incriminating materials belonging to the assessee (in whose case proceedings u/s. 153C of the Act is to be initiated). In such cases it is prerequisite that the AO of the person, in whose case search was conducted, must be satisfied that the seized documents which are of incriminating nature belong or belongs to the assessee w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee-society, which is not relevant for the present assessee. In the process, the AO totally missed the requirements of the law i.e. only the assessment year with the pending assessments and the assessment year with the assessment year specific incriminating documents/transactions or seized asset should only be reopened under the provisions of the first proviso to s. 153 A and not otherwise. The reasons recorded by the AO do not contain anything incriminating for the assessment years upto 2003-04. There is no mention of any document in the said reasons relatable to the four years in question and the incriminating nature of the same is out of question. Where no assessment year and assessee specific incriminating "money, jewellery or other valuable article or thing or books of account or documents" is found, the assessments for assessment years cannot be disturbed Further, the concluded assessments should not be disturbed merely for making routine additions, which could have been otherwise done in the regular assessment and of course, the pending assessments fall under exceptions.--Kumar & Co. (ITA No. 463/Pn/2008, dl. 2nd Feb., 2010) and LMJ International Ltd. vs. Dy CTT (2008) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hould be dismissed. 7. After considering the submissions of both the parties and perusing the entire material available on record as well as the orders of authorities below, we find that the assessment was framed by the AO u/s. 153C of the Act observing that during the course of search and seizure operation certain books of accounts containing loose bundles identified as BNAH-01 & BNAH-02 were found which relate to the assessee company. The assessee explained the same, however, the AO did not convince with the explanation of the assessee. In appeal, the CIT(A) annulled the assessment completed u/s. 153C of the Act observing as under:- "3.7 I have carefully examined the assessment order and submissions of the appellant. It is important to note here that Section 153A of I.T. Act, 1961 is for notice and assessment in the case of a 'Searched Person'. Whereas, notice and assessment u/s. 153C of I.T. Act, 1961, is in respect of 'Other Person', wherein, incriminating material is seized during the course of search in the case of a 'Searched Person'. For notice and assessment u/s. 153C, the Income Tax Act, 1961, provides that undisclosed assets belonging to 'O....