TaxTMI 
TaxTMI 
2021 (8) TMI 322
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....- as unexplained expenditure on account of brokerage. 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 toe 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 toe 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 end in the circumstances of the case, the Ld. CIT(A....
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....on. According to the appellant, the provisions of section 153C come into play on handing over of documents seized and belonging to the appellantduring the course of search by the AO of the searched person to the AO of the appellant. Admittedly, the search took place on 30.10.2012 and the documents relating to the appellant were handed over to its AO on 22.12.2014 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. 22A to 22D of the appellant's Paper Book. 7. 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. Thus, six preceding assessment years, from the date of the handing over of the documents, i.e. 22.12.2014, are beginning from A.Y. 2009-10 to 2014-15. The appellant contended that the impugned assessment related to A.Y. 2007-08 could not have been reopened for action under s....
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.... Ld. AO provided the copy of satisfaction note recorded by him and the AO of searched person but never provided the copy of seized material on the basis of which satisfaction was recorded. (Copy of satisfaction note recorded by the AO of searched person is attached at page no. 22A-22B and copy of note recorded by the AO of the assessee is at page no. 22C-22D of the paper book) 6. The vide letter dated 04.03.2015 filed detailed objections against the initiation of proceedings under section 153C of the Act. Refer page no. 23-24 of the paper book. 7. The Ld. AO also issued notices under section 142(1) along with questionnaire to the assessee and asked for the various details including details of Share capital issued by the assessee company during the year under consideration which were duly complied with by the assessee company. 8. The company has initially issued 10,000 shares of Rs. 1,00,000 subscribed in its memorandum of association and further during the year under consideration had allotted 99400 equity shares @ 500/- per share to the 8 allottees details of which including their name, address, PAN, no. of shares applied etc. Details a....
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....ion by the AO of searched person is 22.12.2014. In absence of any specific date of handing over of material in the satisfaction note, it was only on 12th December, 2014, the date of recording of satisfaction will be assumed to be the date of handing over the material. 3. Prior to the amendment by Finance Act, 2017, in terms of the proviso to Section 153C (1) of the Act, the date of receipt of the books and accounts by the AO of the Assessee is deemed to be the date of search. In the present case in absence of any specific date of handing over of material, the date of recording satisfaction i.e, 22.12.2014 is to be treated as the date of handing over of material and therefore the six AYs preceding the year of the search, for which the assessment was proposed to be reopened, should be A.Y. 2009- 10 to A.Y. 2014-15. 4. The relevant assessment year i.e, A.Y. 2007-08 is therefore barred by limitation. 5. Consequently, the notice under Section 153C (1) could have been issued for AYs 2009-10 to 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 search....
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....uments 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 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....
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....ion. 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 to the regular returns, if any, filed by the searched assessee for any of the six assessment years which are pending on the date on which the search was initiate. The answer is given by the second proviso to Section 153A, which says that if any of those returns is or are pending, the assessment or reassessment relating to those returns shall abate. The object obviously is to avoid multiplicity of assessment or ....
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.... 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 articles or books of account or documents belonging to the other person must be shown to show to conclusively reflect or disclose any undisclosed income." It is evident that the reference of Proviso 1of Section 153C is only in relation to the 2 nd proviso to subsection 1 of section 153A which speaks about the abatement of the pending proceedings of six assessment years and not r....
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....essment for A.Y. 2007-08, being beyond the period of 6 years. Accordingly, I agree with the arguments of the appellant and also the facts of die appellant are squarely covered by the ratio laid down by Hon'ble Jurisdictional High Court of Delhi, in die case of CIT-7 Vs. M/s RRJ Securities Ltd., (2016} 380 ITR 612 (Delhi) (supra). In these facts and circumstances, I hold that the assessment completed u/s 153C/153A, is void ab initio, since notice u/s 153C of the Act, was issued beyond limitation period of 6 years from the reference date of 2242.2014. Accordingly, ground No, 3, is hereby allowed. 13. We have carefully considered the above submissions and having gone through the facts of the case and applicable law, we would tend to agree with the appellant. The terminal 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 22.12.2014, as well as by the A.O. of the appellant is on 22.12.2014, which is to be taken as the date of handing over of documents and....
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.... 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 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." 14 This judgement has be....