TaxTMI 
TaxTMI 
2021 (6) TMI 368
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....ched person (Sh. Harvansh Chawla) was recorded on 29/3/2019. Learned Assessing Officer for the both, searched person and the assessee was same. Learned Assessing Officer recorded his satisfaction in case of assessee on 15/5/2019 and issued notice under section 153C of the Act. In response to the same, the assessee furnished return of income vide letter dated 15/12/2019. Learned Assessing Officer made an addition of Rs. 32,91,052 on account of Receipt of foreign inward remittance, Rs. 2,50,000 on account of non-deduction of TDs and Rs. 2,58,30,576/-on account of debtors written off. 3. Assessee filed appeal before Ld. CIT(A), who out of above additions, deleted addition of Rs. 32,91,052/- and confirmed addition of Rs. 2,50,000/- and in respect of addition of Rs. 2,58,30,576/-, the Ld. CIT(A) allowed relief to the extent of Rs. 2,51,30,576/- and confirmed addition to the extent of Rs. 7,00,000/-. Apart from this, Ld. CIT(A) made enhancement to income by Rs. 2,23,25,000/-. 4. Aggrieved by the said action of the Ld. CIT(A), assessee preferred this appeal on the following grounds:- 1. On the facts and circumstances of the case and in law, the assessment proceedings initiated u/ 153C....
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.... facts and circumstances of the case and in law, the assessment order passed by the assessing officer is liable to be quashed as approval u/s 153D of the Act by the JCIT/Addl CIT is not in accordance with the provisions of Act and CIT(A) erred in not holding so. 7. On the facts and circumstances of the case and in law, the assessment order passed by the assessing officer is liable to be quashed as no document identification number (DIN) was generated and CIT(A) erred in not holding so. 5. Insofar as the issue of limitation covered by ground No. 1 is concerned, it is argued by the Ld. AR that in case of a "searched person", provisions of section 153A are applicable, in accordance with which, the assessing officer is to assess or reassess total income of "searched person" for six assessment years immediately preceding the assessment year relevant to the assessment year in which search is conducted or requisition is made; whereas the second proviso to sub-section (i) of section 153A also provides that assessment or reassessment of these six assessment years, if pending on the date of initiation of search u/s 132 or making of requisition u/s 132A, as the case may be, shall abate. On....
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.... of 6 years for the purposes of section 153A of the Act and 153C of the Act respectively. 8. In reply, Ld. AR submitted that in Pr. CIT v Sarwar Agency P. Ltd. [2017)185 taxmann.com 269 (Delhi) the Hon'ble jurisdictional High Court held that the amendment is only prospective in nature and has no retrospective application, and since the search in this case happened to be on 7/4/2016 it is earlier to the amendment and the amendment has, therefore, no application to the facts of the case. He further placed reliance on the decisions of the Hon'ble jurisdictional High Court in the cases of CIT v RRJ Securities Ltd. 120151 62 taxmann.com 391 (Delhi) and ARN Infrastructure India Ltd v ACIT [20171 81taxmann.com 260 (Delhi) and the view taken by a coordinate Bench of this Tribunal in the case of MIKADOREALTORS P. LTD. VERSUS PR. CIT (CENTRAL) GURUGRAM. 2021 (5)TMI 722 - ITAT DELHI I.T.A. NO. 50/DEL/2021 in support of his argument that the assessment is time-barred. 9. We have gone through the record in the light of the submissions made on either side. Insofar as the facts are concerned there is no dispute. Search in the case of Harvesh Chawla took place on 7/4/2016, the satisfaction by th....
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....he 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 years 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 relevant to the previous year in wh....
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....fore not include AYs 2007-08 and 2008-09.The decision in RRJ Securities Ltd. (supra) is also an authority for the proposition that for the proceedings under Section 153C to be valid, there had to be a satisfaction note recorded by the AO of the searched person. 14. Lastly, in MIKADOREALTORS P. LTD. VERSUS PR. CIT (CENTRAL) GURUGRAM. 2021 (5)TMI 722 - ITAT DELHI I.T.A. No.50/DEL/2021 a coordinate Bench of this Tribunal held that,- 7. We will first take up the issue, whether in cases of Section 153C, the period of six years has to be reckoned from the date of recording of satisfaction note or from the date of search carried out in a case of a person provided in Section 153A. This precise issue has been dealt by the Hon'ble Delhi High Court in the case of CIT vs. RRJ Securities Ltd. as reported in 380 ITR 612 in the context of Section 153C of the Act, wherein it was laid down as under: "Further, the period of six years would also have to be reckoned with respectto the date of recording of satisfaction note - that is. 8th September. 2010 -and not the date of search. 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the sear....
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....arched 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 153 A 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." This principle was further reiterated in the case of ARN Infrastructure India Ltd. v. ACIT as reported in 394 ITR 569, wherein it has been held as under: "12. The decision in RRJ Securities Ltd. (supra) is categorical that under / Section 153C of the Act, the period of six years as regards the person other than the searched person would commence only from the year in which the satisfaction not is prepared by the AO of the searched person and a notice is issued pursuant thereto. The date of the Satisfaction Note is 21st My, 2014 and the notice under Sect....
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....n one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this Court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this Court as well as by this court. Thirdly, the recent amendment to Section 153C (1) of the Act states for the first time that for both the searched person and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective. 12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed." 9. Further, Hon'ble Gujarat High Court in the case of Anil Kumar Gopikishan Arawal v. CIT as reported in 418 ITR 25 has also clarified that such an amendment is prospective after observing as under:- "19.19 It may be pertinent to note that vide CBDT Circular No. 2/2018 / dated 15.2.2018, it has been clarified that the amended provisions of section 153A of the Act shall apply where search under section 132 of the Act is initiated or requisition under section 132A of the Act is made on or after 1st day of April, 2017. It is further stated....