2022 (9) TMI 70

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....o as 'the Act') for all the three assessee's, for the AY 2008-09, vide three different orders and all of even date 27.12.2019. 2. The only common issue for these three appeals of Revenue is as regards to the order of the CIT(A) holding that the AO has no jurisdiction to issue notice u/s. 153A of the Act for AY 2008-09, since search on these three assessees was conducted on 05.10.2017 and hence the assessment framed u/s. 153A r.w.s. 143(3) of the Act dated 27.12.2019 in all the cases is bad and illegal. The facts and circumstances are exactly identical in all the three appeals of Revenue despite the fact that three different assessees, and the grounds raised and issue on jurisdiction are exactly identical. Hence, will take the facts and grounds from ITA No. 56/Chny/2022 in the case of Shri V. Durai and will decide the issue which is also applied to other two appeals. The relevant grounds raised in the appeal of Shri V. Durai reads as under: "2.1. The Ld. CIT(A) erred in holding that no notice u/s. 153A could be issued for the asst. year 2008-09, since, the search was conducted on 05.10.2017, relying upon the Hon'ble Madras High Court decision in the case ....

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....ed in the Explanatory Notes may also be seen from the fact that the departmental portal, ITBA, allows issue of notice u/s. 153A in the manner described in the Explanatory Notes (Circular No. 2/2018 dated 15.02.2018)." 3. Brief facts are that Shri V. Durai is engaged in civil construction and a search action was taken on the assessees group of cases u/s. 132 of the Act by the Income Tax Department on 05.10.2017. Subsequently, assessee filed his return of income in response of notice u/s. 153A of the Act on 22.07.2019. The Assessing Officer while framing the assessment u/s. 153A r.w.s. 143(3) of the Act, noted that the assessee has sold agricultural land situated at Mugalivakkam Village, Chennai for an amount of Rs. 5,33,18,482/-. The AO denied exemption and completed the assessment by bringing this amount to tax being the share of the assessee received on sale of land under the head long term capital gains. The assessee before Assessing Officer raised the issue on jurisdiction vide letter dated 09.12.2019 and the relevant letter is reproduced in the assessment order reads as under: On Jurisdiction: Explanation 1 to 153A is reproduced below: For the purp....

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....d six earlier years. After the amendment, 4 years have been added for the purpose of relevant assessment year. In this connection, it is to be noted that the amendment speaks of six plus four more years other than the year of search. In the case of the assessee, the search was conducted during the financial year. 2017-18 relevant to the assessment year 2018-19. Counting backwards, notice can be issued up to the A.Y. 2008-09 which is well within the ambit of relevant assessment year mentioned in section 153A." 3.2. Aggrieved, assessee preferred appeal before the CIT(A). The CIT(A) relying on the decision of the Hon'ble Madras High Court in W.P.(MD) No. 4327 of 2021 in the case of A.R. Safiulla vs. the ACIT, Central Circle-1, Trichy order dated 24.03.2021. Relying on this decision the CIT(A) held that the 10th assessment year counted from this AY 2018-19 is AY 2009-10 and he held that notice issued u/s. 153A of the Act for AY 2008-09 could not have been issued. For this he held in Para 7.5 which is read as under: "7.5 The facts and circumstances of the case in the above writ order squarely applies to the facts and circumstances of assessee's case. The only differe....

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....urt in the case of A.R. Safiulla, (supra), Ld. CIT(DR) could not controvert the above decision and could not brought to our notice any other adverse judgments on this very issue. 5. After hearing rival contentions and going through the facts and circumstances of the case, we noted that the relevant AY is 2008-09 and date of search is 05.10.2017 in such situation Hon'ble Madras High Court in A.R. Safiulla (supra) has considered this and the relevant Paras are reproduced as under: "8. In fact, I am prepared to sail along with the learned standing counsel and hold that if there is any ambiguity while construing a provision meant for rooting out or investigating evasion of tax, it must be resolved in favour of the revenue and against the assessee. Jurisprudential speaking, the very object of law is to lay down norms for general behavior and prescribe sanction to ensure their compliance. Unless sanction is strictly enforced, it will incentivise deviation. Even in criminal law, while when it comes to substantive offences, retrospective application is forbidden, contrary approach is adopted in matters of procedure. I agree with the submission that Section 153A of the Incom....

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....er words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years over and above the six years already provided within the scope of the provision. When the law has prescribed a particular length, it is not for the court to stretch it. Plasticity is the new mantra in neuroscience, thanks to the teachings of Norman Doidge. It implies that contrary to settled wisdom, even brain structure can be changed. But not so when it comes to a provision in a taxing statute that is free of ambiguity. Such a provision cannot be elastically construed. 11. One other contention urged by the standing counsel has to be dealt with. It is pointed out that the petitioner has invoked the writ jurisdiction at the notice stage. Since the petitioner has demonstrated that the subject assessment year lies beyond the ambit of the provision, the respondent has no jurisdiction to issue the impugned notice. Once lack of jurisdiction has been established, the maintainability of the writ petition cannot be in doubt. 12. The notice....