TaxTMI 
TaxTMI 
2021 (8) TMI 56
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....okerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in holding that the initiation of action u/s 153C of the Act, for completing assessment u/s 153C/153A of the Act, is barred by limitation by relying on the decision in the case of CIT vs. RRJ Securities Ltd. by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 6. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interp....
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.....10.2012 and the documents relating to the appellant were handed over to its AO on 12.02.2015 which is also the date of recording of the satisfaction note. In absence of any specific date of handing over of material in the satisfaction note, the date of recording of satisfaction will be assumed to be the date of handing over the material. Satisfaction notesare appended at page no.15-16 of the appellant's Paper Book. 6. According to the appellant, once the documents are handed over, six preceding assessment years from the date of handing over of the documents, lay open for assessment under section 153C read with section 153A of the Act. 7. According to the appellant, six preceding assessment years, from the date of the handing over of the documents, i.e. 12.02.2015, are beginning from A.Y. 2009-10 to 2014-15. The appellant contended that the impugned assessment related to A.Y. 2008-09. This assessment could not have been reopened for action under section 153C since first of the six preceding assessment years was A.Y. 2009-10 and not A.Y. 2008-09. Hence, according to the appellant, A.Y. 2008-09 does not come into the purview of the six preceding assessment years as envisaged under....
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....s attached at page no. 15 and copy of note recorded by the AO of the assessee is at page no.16 of the paper book) 6. The assessee vide letter dated 04.03.2015 the assessee had filed detailed objections against the initiation of the proceedings under section 153C of the Act. Refer page no. 25-26 of the paper book. 7. Thereafter the Ld. AO issued notices under section 142(1) along with questionnaire to the assessee and asked for the various detailsof share applicants and the evidences to establish their identity, creditworthiness and genuineness of the transaction. 8. In response to the notices issued by the Ld. AO the assesseefurnished the details as required by the Ld. AO from time to time. 9. In spite of the various explanations and documentary evidences submitted before the Ld. AO, the Ld. AO had completed the assessment u/s 153C of the Acton 31.03.2015 without passing the speaking order disposing off the objections raised by the assessee company against the initiation of proceedings under section 153C of the Act.The Ld. AO made following additions to the returned income: a. Unexplained credit under section 68 of the Act of Rs. 23,68,50,000/- being share capital and sec....
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....e A.Y. 2009-10 to A.Y. 2014-15. 4. The relevant assessment year i.e, A.Y. 2008-09istherefore barred by limitation. 5. Consequently, the notice under Section 153C (1) could have been issued for AYs 2009-10to A.Y. 2014-15. 6. It is a settled legal position that prior to the amendment by Finance Act, 2017 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. 7. Issuance of notice for the relevant assessment year is invalid and without jurisdiction. 8. To support its contentions the assessee relies upon the following judgements of the various High Courts and Tribunals: a. Hon'ble High Court of Delhi in the case of RRJ Securities (380 ITR 612) has held that: - dated 30.10.2015 Held: 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 Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedin....
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....f 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. b. Hon'ble ITAT Delhi - R.L. Allied Services - (54 taxmann.com 222) Held: In the case under appeal before us, as mentioned by the Assessing Officer in paragraph 2 of his order, the seized material was received on 12th March, 2009 from ACIT, Central Circle-17. Thus, the year in which seized material was seized is previous year 2008-09 relevant to AY 2009-10. The preceding six years would be AY 2008-09, 2007- 08, 2006-07, 2005-06, 2004-05 and 2003-04. Therefore, after considering the facts of the assessee's case and combined reading of Section 153C as well as Section 153A, in our opinion, the issue of notice under Section 153C for AY 2001-02 & 2002-03 is barred by limitation. Accordingly, we quash the same and consequentially, the assessment order passed in pursuance to the notice issued under Section 153C is also quashed....
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.... in the Act. This is further clarified by the jurisdictional Hon'ble Delhi High Court in the case of SSP Aviation Ltd. Vs. DCIT in W.P.C. No. 309/2011 dated 29.03.2012 in Para No. 13, 14 & 15 which are as under:- "13. Sections 153A to 153D are placed in Chapter XIV of the Act, which is titled "procedure for assessment". Section 153A provides for the assessment in case of search or requisition. This section applies to a person in whose case a search is initiated under Section 132 or books of account etc. are requisitioned under Section132A. The procedure prescribed under Section 153A is that the Assessing Officer shall call upon the assessee who is searched to furnish returns of income for six assessment years immediately preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made. The assessee, on receipt of the notice from the Assessing Officer, shall furnish the returns of income and thereafter the Assessing Officer is empowered to assess or re- assess the total income in respect of different assessment year falling within six assessment years. Now, a question may arise as to what would happen t....
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....person, the date with reference to which the proceedings for assessment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date of initiation of the search under Section 132 or the requisition under Section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009. However, in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the ao having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date. It needs to be appreciated that the satisfaction that is required to be reached by the ao having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. There is no requirement in Section 153C(1) that the ao should also be satisfied that such valuable ....
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....ee with the appellant. The determining date for determination of six preceding assessment years that would lay upon under section 153C read with section 153A of the Act would decidedly be the date of handing over of the documents. Here the satisfaction note recorded by the A.O, of M/s Prakash Industries Ltd. is 12.12.2015, as well as by the A.O. of the appellant is on 12.12.2015, which is to be taken as the date of handing over of documents and date. Six preceding assessment years begin with A.Y. 2010-11 and end with A.Y. 2015-16. It would be the date of handing over the documents or date of recording of satisfaction will be the date for determining the date for calculating the preceeding six assessment years is well settled by the judgement of Hon'ble Delhi High Court in the case of RRJ Securities (380 ITR 612) relevant portion of which is reproduced below:- Held: "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 Assessee (being the person other than the one searched) to the AO having jurisdiction to asses....
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....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." 13. This judgement has been followed in Hon'ble Delhi High Court in the case of: i) Hon'ble High Court of Delhi in the case of ARN Infrastructure India Ltd. (81 taxmann.com 260) has held that: 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 July, 2014 and the notice under Section 153C of the Act was issued on 23rd July 2014. The previous six AYs would therefore be from AY 2009-10 to AY 2014-15. This would therefore not include AYs 2007-08 and 2008-09. The decision in RRJ Secur....