TaxTMI 
TaxTMI 
2023 (3) TMI 200
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....rder passed u/s 153A, and • Lastly, in respect of one addition of Rs. 56,86,529/- on account of alleged bogus claimed of long term capital gain the same should have been considered u/s 153C and not u/s 147 as per the provisions of the law. 3. Besides this Assessee has challenged following additions on merits: i. Addition of Rs. 75,74,28,000/- for alleged cash loans given by the assessee but added u/s 68 based on some dumb documents at the time of search. ii. Addition of Rs. 56,86,529/- u/s 68 by treating long term capital gain on sale of shares as bogus. iii. Addition of Rs. 7,72,56,840/- on estimate basis of re- characterizing the addition as undisclosed interest income. iv. Addition of Rs. 2,84,326/- u/s 69 C for alleged commission at the rate of 5% paid for bogus long term capital gain. 4. The background of the case in brief are that, here in this case the original return of income was filed by the assessee on 19/09/2011 at an assessable income of Rs. 25,01,840/- and which was processed u/s 143(1) of the Act. No assessment order u/s 143(3) of the Act was passed for this assessment year. As per available information on record....
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....he returns of income as above had taxable incomes lower than Rs 20 lakhs and accordingly, the ITO Ward 20(2)(4) Mumbai was holding the assessment jurisdiction on the assessee as the returned income for all the above assessment years was less than Rs 20 lakhs being in the metro cities in view of the above instructions of the CBDT defining the assessment jurisdiction between an ITO and ACIT. 6. The reasons for reopening were provided by the DCIT, Central Circle 4(1) Mumbai to the assessee on his request on 22/11/2018. The assessee filed objections to the same before the DCIT Circle 4(1) Mumbai on 05/12/2018. The said AO disposed off the said objections vide letter dated 07/12/2018 stating that ―though the undersigned is not technically bound to pass a speaking order, yet the same are rebutted as under". 7. We heard, both the parties at length, Mr. Vinod Kumar, on behalf of the Assessee and the ld. CIT DR, Mr. Murli Mohan, on behalf of the Revenue, who also replied to the queries raised from time to time by the Bench seeking many clarifications on the arguments presented during the course of hearing. Since, the grounds taken by the assessee are on law and also on merits; i....
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....l assessment jurisdiction at all. (iii) Lastly, in respect of the addition of Rs 56,86,529/- made alleging bogus claim of a long term capital gain, the contention of the assessee is that the same could only be considered for reassessment by taking recourse to the non obstante provisions of the section 153C of the Act as has been mandated w.e.f. 01/06/2015 and not by taking recourse to the provisions u/s 148 of the Act because the entire information relied therein had emanated in the income-tax searches in the premises of the share brokers / operators of the scrip on which the said LTCG was earned by the assessee as no incriminating material in any manner for the same was detected in the search in the premises of the assessee. 9. At the outset, the Assessee has challenged the validity of the assessment order passed by the DCIT Central Circle 4(1) Mumbai u/s 147 of the Act as against the correct assessment jurisdiction to assess the same u/s 153A of the Act after the search in his premises. It was submitted on behalf of the assessee that, since this is the jurisdictional issue and goes to the root of the validity of the assessment order, therefore, it can be raised at any....
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....r u/s 147/148. The reasons recorded by the AO wherein he has referred to various information during the course of search and seizure carried out in the case of M/s Evergreen Enterprises, wherein assessee is one of the partner and it was found that assessee has taken some accommodation entry of bogus /long term capital gains on sale shares of M/s DB International during F.Y 2010-11 and various persons have taken loan from the assessee and M/s Evergreen Enterprises. The reasons recorded by the AO reads as under:- Reasons for reopening of the assessment in case of Nilesh Bharani (PAR- AABPB4581G for AY 2011-12 u/s. 147 of the Act 1. The assessee derives income from salary and business. The assessee has been filing his returns of income from A.Y. 2002-03. The assessee, has filed Return of Income for the A.Y: 2011-12 on 19/09/2011 declaring total income of Rs.25,01,840/- in the Individual capacity. The ROI was processed u/s 143(1) of the 1.T. Act, 1961 on 25/09/2012. The case was not selected for scrutiny for the A.Y. 2011-12. 2. In this case, information has been received from the Deputy Directorate of Investigation, Unit-5(4), Mumbai that during the course o....
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....n the part of the assessee to disclose fully and truly all material facts in respect of income of Rs.76,31,06,529/- Therefore, I have reason to believe that income chargeable to tax of Rs.76,31,06,529/- and has escaped assessment within the meaning of section 147 of the IT. Act, 1961 for the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for the previous year relevant to A.Y 2011-12 Hence, it is a fit case for initiation of proceedings u/s.147 of the Income Tax Act. 1961 by issuing notice u/s. 148 of the Income Tax Act, 1961. 7. In this case more than four years have lapsed from the end of assessment year under consideration. The case is put up before the Pr. CIT.-20, Mumbai for his kind sanction to issue notice u/s 148 in the light of proviso to sub-section 1 of section 151 of 1.T. Act, 1961. (NEELAM V. KORGAONKA) Income tax Officer-20(2)(4), Mumbai. 12. From the aforesaid reasons, it can be seen that, the AO has noted that based on search and seizure action in the case of M/s Evergreen Enterprises and materials on record had come to reason to believe that, firstly, assessee has taken bo....
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.... the consent of the parties nor by a superior court, and if the court passes order/decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the roots of the cause. Such an issue can be raised at any belated stage of the proceedings including in appeal or execution. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Acquiescence of a party equally should not be permitted to defeat the legislative animation. The court cannot derive jurisdiction apart from the statute. 14. Ld. A.R. pointed out that, The Hon'ble Delhi High Court in PCIT vs. S.S. Con Build Pvt. Ltd 2022-TIOL-656-HC-DEL-IT, following the above judgment of the Hon'ble Apex Court and again jurisdictional Bombay High Court in Mavany Brothers vs. CIT 2015 SCC Online Bombay 1686/ (2015) 62 taxmann.com 50 (Bom), held an identical view as above. Thus, in view of this specific direction / order of the Hon'ble Apex Court and the High Courts, the impugned reassessment proceedings are meaningless due to an invalid and illegal jurisdiction assumed by the AO in complete violation of the specific law for the p....
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....s or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless- (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.-For the purposes of this sub-section, the expression "relevant assessment year" shall ....
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.... Act and no notice for reassessment can be issued u/s 148. Now on the facts of the present case, it is seen that the evidences found during the course of search and seizure operation in the case of the assessee and M/s Evergreen Enterprises, wherein assessee was a partner that they have been giving cash loans to various persons for sums more than Rs. 75.74 crores. This cash loan is allegedly out of undisclosed investment or money. Giving of cash loans is certainly an asset within the meaning of Explanation 2 as incorporated above and is represented in the form of undisclosed investment in an asset which reveals undisclosed income escaping assessment. Even in the assessment order has held that assessee has given cash loans based on some entries in diary and documents. In any case, what is material as of now is the evidence which has been referred in the reasons, which was giving of cash loan and not receiving of cash loan and investment and sale of shares which was by way of alleged accommodation entry in the form of sale of an asset, i.e., shares as bogus LTCG. It has been thus submitted before us in light of these facts that the AO has erred in law in passing the impugned assessme....
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....plus four extended) assessment years subject to finding of definite incriminating material disclosing escaped income which pertains to or any information contained therein has bearing on determination of assessable income of such other person for any of those 10 assessment years. Accordingly, the notices u/s 153C of the Act for the first six assessment years can be issued only on the basis of some seized incriminating books pertaining to or information contained therein, but for the earlier 7th to 10th extended relevant assessment years, the condition of any escaped income being minimum of Rs 50 lakhs and that too when such income is represented in the form of an asset must also be met. 20. Now coming to the present facts, it has been pointed out by the ld. AR that, in para 4 of the reasons recorded on 28/03/2018, the AO has categorically held that after verification of the material available on record, it is certain that there is enough reason to believe that the assessee has not shown or offered this income (as mentioned in para 2 and 3 therein) to tax in her ROI filed for the AY 2011-12, (though the assessee is a male). However, undisputedly verification of the material avail....
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.... 153A of the Act and pointed out that it does not at all refer to any seized material for initiating a reassessment proceeding for the relevant extended 4 years. It just refers to information /material which suggest which reveals income in the form of an "asset" which has escaped assessment of income of Rs 50 lakhs and more for the said extended period. This could be either books of account or documents or evidence in any manner, not necessary seized from the assessee but should be with the AO in some manner which could be a document by way of a report sent by the investigation unit also. He also stated that there is a difference of application of the two non obstante sections 153A and 153C of the Act after the search. The section 153A of the Act applies irrespective of any incriminating material found during the search and an assessment therein of the searched person is must, which included the extended period of 4 relevant AYs also but that in case only, when any document or evidence or books of account disclosing the same represented by an asset of Rs 50 lakhs or more, was with the AO. However, the section 153C of the Act could be applied only and only if there was any incrimina....
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.... the assessment year out of the said 10 assessment years pending on the date of search shall compulsorily abate. It is because after the search, a reassessment could only be made u/s 153A of the Act for the 10 assessment years preceding the date of search and not under any other section. The ld. AR also vehemently stressed the importance of the same by referring to the Hon'ble Apex Court in Sinhgard Technical Education Society 2017-TIOL-309-SC-IT holding that an assessment after a search is a jurisdictional fact and which can only be derived from the legislature and not by the courts or even the parties by consent as has been held by the Hon'ble Apex Court in Kanwar Singh Saini (2012) 4 SCC 307. 26. It was also stated by the ld. A.R. by referring to the relevant sections legislated for the purpose that no time limit has been prescribed by the statute anywhere to issue a notice u/s 153A of the Act requiring the person searched to furnish the return of income therein for assessment / reassessment as is prescribed for issuing a notice u/s 148 of the Act. The limitation stipulated by the legislature is only for the time by which the said assessment u/s 153A of the Act must be comple....
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....ation Wing and a copy of which was also given to the assessee then. Thus, undisputedly, and as per the categorical admission of the revenue as above, the seized material of the assessee for this relevant assessment year was received by the AO, DCIT, CC 4(1) Mumbai before the date of completion of this assessment vide the assessment order dated 30/12/2018. The ld. AR further pointed out that admittedly, the AO has admitted in the reasons recorded by 28/03/2018 that the information received by him from the Investigation Unit was based on a search on the assessee where complete figures and seized information was duly mentioned besides referring to the statements of 4 employees of the assessee, recorded u/s 132(4) of the Act at that time of search and reliance was also placed on those statements in the said reasons. Thus, the ld. AR emphasizes on the fact of not only a search having taken place on the assessee before the date of issue of the said notice u/s 148 of the Act but definite evidence in respect of the alleged escaped income being Rs 50 lakh and above as is mentioned in the said reason was very well known to the AO then. Thus, he pleaded that in view of the above settled and u....
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....d 20(2)(4) Mumbai sent the assessment record for the relevant assessment year to the ACIT 20(2) Mumbai. In the covering letter thereto filed before the Bench, the revenue has categorically admitted that no mandatory assessment jurisdiction transfer order u/s 127(1) of the Act was ever passed for the purpose by the PCIT 20 Mumbai but the same was transferred by the ITO suo moto and which is totally illegal, because any assessment jurisdiction from an existing AO can only be transferred to another AO even under the charge of the same PCIT by passing a speaking and reasoned order u/s 127(1) of the Act by the PCIT as per the section 127(1) of the Act. The Ld. A.R. also admitted though there is no necessity at all to give an opportunity of hearing for the same to the assessee yet for the sake of even appreciation, the PCIT may also not pass a reasoned order, yet passing an assessment jurisdiction transfer order u/s 127(1) of the Act is mandatory by the PCIT as no AO can at all suo moto transfer the assessment jurisdiction to another officer even under the same PCIT charge. This is a jurisdictional matter, goes to the root of the assessment proceedings and has to be governed by the legis....
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....(2)(4) Mumbai which was automatically picked up by the income-tax returns filing software of the income-tax department when the PAN is filled therein. Thus, as per him, undisputedly the assessment jurisdiction was correctly lying with the ITO ward 20(2)(4) Mumbai when the impugned reassessment proceeding was initiated on 28/03/2018 by issuing the notice u/s 148 of the Act. 33. It was also pleaded on behalf of the assessee that in case, the revenue pleads that the correct jurisdiction for the purpose was with the ACIT Circle 20(2) Mumbai only at that time then the alleged notice issued u/s 148 of the Act by itself becomes void ab initio as having been issued by a non-jurisdictional assessing officer, i.e., the ITO Ward 20(2)(4) Mumbai and could not at all be proceeded with in any manner. The ld. AR also stated that thus, as per the prevalent income-tax returns filed for the four AYs till the AY 2016-17 and the location of the PAN of the assessee with the ITO, Ward 20(2)(4) Mumbai, as on the date of issuing the said notice u/s 148 of the Act, the correct assessment jurisdiction officer of the assessee was the ITO, Ward 20(2)(4) Mumbai who later on illegally transferred the same vo....
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....ferred may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, (b) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners aforesaid are not in agreement, the order transferring the case may, similarly, be passed by the Board or any such Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the Board may, by notification in the Official Gazette, authorize in this behalf. (3) Nothing in sub-section (1) or sub-section (2) shall be deemed to require any such opportunity to be given where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings and sha....
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....e assessed with the ITO and not by the ACIT/DCIT as per the instruction no. 1 of 2011 dated 31/01/2011 of the CBDT which was valid till they said date. He also averred that the said transfer memo also clearly indicated that there was no assessment jurisdiction transfer order passed by the PCIT-20, Mumbai for the purpose as was mandatory u/s 127(1) of the Act. 38. The Ld. AR finally concluded his submissions on this issue by stating that thus, on overall perusal of the law as submitted above by him, it is apparent that definitely there was a violation of the said law by the revenue authorities. They were bound to follow the Statute and not to have exercise jurisdiction worked as per their sweet will Since, this mandatory legal requirement to assume jurisdiction by the ACIT Circle 20(2) Mumbai whom from the impugned assessment jurisdiction transfer order was passed on 11/09/2018 by the PCIT 20 Mumbai was completely non-existent, any order to transfer the same from the ACIT Circle 20(2) Mumbai to the ACIT, Central Circle 4(1) Mumbai was a nullity ab-initio, because what one does not have, the same cannot be transferred to another from him by any authority. It was necessary for the ....
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....kata Investigation Unit engaged in the alleged scam of LTCG as has been alleged by the CIT(A) in para 7.2 of his appellate order under this appeal. 40. The ld. AR, further, submitted that the impugned issue could only be considered by taking recourse to the mandatory non-obstante provisions u/s 153C of the Act and not u/s 147/148 of the Act. The Ld. A.R. also submitted that the structural amendment made u/s 153C of the Act w.e.f. 01/06/2015, which altogether changed the scenario of its application in the case of the person not searched, does not at all specify anywhere that it would solely be applicable only in respect of the searches conducted w.e.f. the said date. The ld. AR vehemently submitted that any information received by the AO of the non-searched person after 31/05/2015 from the AO of the searched person in respect of a search conduced even before 01/06/2015 after that date will definitely be covered by the provisions of the section 153C of the Act as has been mentioned in the Proviso therein. 41. The ld. AR submitted as a corollary that the section 153B (2) of the Act also states that date of execution of the search will be the date when the last panchnama of the l....
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....efinition of 153C of the Act also does not at all state anywhere that it was applicable only in respect of the searches initiated w.e.f. 01/06/2015, particularly when there was no corresponding amendment in the section 153A of the Act. This clearly proves that this amendment was very much applicable in respect of the searches conducted earlier also but for which the requisite information as mentioned u/s 153C of the Act was received by the AO of the non-searched person after 31/05/2015 or from 01/06/2015. Similarly, this is also clear from the clause (36) of the Notes to the amendment proposed in the Finance Bill 2015. 44. The ld. AR also stated that since, as per the CIT (A), the impugned addition is based on the search operations carried out by the Directorate of Investigation New Delhi, on the persons who were involved in the business operations / other affairs of the said companies when the alleged relied information was found / seized in those searches. This proves beyond doubt that the alleged notice u/s 148 of the Act is based on the search proceedings undertaken by the revenue. 45. The ld. AR also submitted as is undisputedly apparent from the impugned assessment orde....
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.... in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and for the relevant assessment year or years as referred to in sub-section (1) of section 153A except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no....
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....the department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 49. Further, the Hon'ble Apex Court in its judgment dated 14/02/2020 in ACIT vs Pankajbhai Jaysukhlal Shah (2020) 120 taxmann.com 318 (SC) dismissed the SLP of the revenue against the judgment of the Hon'ble Gujarat High Court in the said case (2019) 110 taxmann.com 51 (Guj), which had quashed the assessment order passed on the strength of a notice issued by a non-jurisdictional assessing officer, though the assessment order was passed by a jurisdictional assessing officer. Here also the impugned notice u/s 148 of the Act was issued beyond jurisdiction as for the purpose of assessment of an income on any material relating to an assessee seized during a search on some other person, the legislature has specifically prescribed the law to assume jurisdiction by an AO, overriding the provisions of the section 147/148 of the Act by legislating in its thoughtful wisdom under the mandatory provisions of the sections 153A/153C of the Act. The same can only be assumed when first the AO of the searched person re....
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....ining to such other person is found AO can initiate 153C and can make addition or assessment for the relevant assessment year or years. 52. On perusal of the above section amended from time to time, it is clear that the provisions of the said section could only be applied till 31/05/2015 when from the premises of the searched person, some books of account and/or valuables or documents seized or requisitioned belongs to a person other than the person searched. Which meant that a document or books of account, valuables or asset seized etc belonging to the other person not searched should have been found in a physical form from the premises of the person searched. Any information contained in the material so seized from the premises of the person searched which did not belong to the non-searched person but contained therein any information relating to the non- searched person did not authorize the revenue to take an action u/s 153C of the Act. In that case, the only course available to the revenue till 31/05/2015 was to issue a notice u/s 148 of the Act because the information/ material seized did not belong to the non-searched person. There was a specific emphasis to the words BEL....
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....seized belong to another person, then, the assets or books of account or documents seized shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against such other person, if he is satisfied that the books of accounts or documents or assets seized have a bearing on determination on the total income of such other person. It is proposed to amend sub-section (1) of the said section so as to provide that where the Assessing Officer is satisfied that, (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned, shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisio....
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....ct. 57. We agree with the contention of the assessee that, since, section 153C of the Act overrides the provisions of the sections 147, 148,149, 151 and 153 of the Act, it was absolutely mandatory for the Assessing Officer of the person searched to send the same to the AO of the non-searched person and thereafter, the concept of verification of it being incriminating or not is in the sole domain of the Assessing officer of the person not searched who if after verification finds that the information received by him from the AO of the person searched is incriminating and contains details of some escaped income for one or more assessment years, he will record a satisfaction to the said effect and proceed to reassess the same u/s 153A of the Act which is clear by the words - if that AO (of the non-searched assessee) is satisfied that the information so received has a bearing on the determination of total income of the said person for the relevant year or years, which means that a satisfaction to the effect of escapement of such income may be for one year or more after verification of the material received, because in some cases it may be that the person searched may not be recording....
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....one reassessment proceedings for the same assessment year by taking recourse to the provisions of the section 153C of the Act as the action may follow on finding incriminating information for the same period but from different persons searched and at different locations or different times. In such a situation, every time when such information is found in a new search, a fresh proceeding u/s 153C of the Act will ensue irrespective of the earlier action(s). There is no limit to multiple reassessments in such cases as is in the case of reassessment proceedings u/s 148 of the Act,(3) The Hon'ble Apex Court in Sinhgad Technical Education Society 2017-TIOL-309-SC-IT (para 18)has also elaborated the above law as below: 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relat....
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....d not flow from any search anywhere. It could be also on the basis of information already on the record of the AO as was mentioned in the section 147 of the Act at the relevant time. It could also be received from the Assessing officer of any other assessee not searched but during the course of normal assessment proceedings of the said assessee, his AO discovers some escapement. In any of such situation, then after recording a satisfaction of an escapement of income by way of reasons u/s 148 of the Act, a reassessment u/s 147 of the Act is made. The said reasons u/s 148 of the Act could also be recorded on a prima facie escapement of income and which may not necessarily be beyond doubt. 62. However, w.e.f. 01/06/2015, after an income tax search u/s 132 of the Act on any person, if any incriminating information in any manner much less any material in physical form or even otherwise in any manner, is found therein relating (and not belonging) to a non-searched person then the Legislature, in its wisdom, created a special provision overriding the applicability of the sections 147/148 of the Act, thereafter, legislating assessment of any escaped income on the basis of the alleged de....
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...., determines its character, whether incriminating or not and being an escaped income, then records satisfaction by way of a note u/s 153C of the Act, issues a notice u/s 153C to file a return of income for reassessment, then he makes an assessment / reassessment of such income u/s 153A of the Act. 65. Now, the entire procedure is the same except under different sections having two separate contingencies. In our opinion, the Legislature has not left any discretion on the revenue officers to make the assessment /reassessment under any of the said set of provisions as per their choice. This is a jurisdictional aspect and goes to the root of the assessment. 66. We also notice that, the Legislature for enforcement of the provisions of the assessment after an income-tax search, has specifically provided u/s 132(9A) of the Act, that the seized material during the course of a search would be handed over to the Assessing Officer of the person searched and in further rhythm thereto, the Assessing officer of the person searched would examine the seized material including any information contained therein relating to a person not searched, and then will hand over the same to the Assessin....
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....suspected to have concealed their incomes as per the information gathered in any search, they can search those assessees" or any survey action and then send the information gathered therein directly to the AOs of the persons consequently later searched but who had not been searched earlier. Thus, sending of any intimation by the officers of the investigation unit on the basis of the material found in a search in respect of the non-searched persons directly to the AOs of the non-searched persons is apparently contrary to section 132(9A), whether pre or post amendment the 153C of the Act. Even in the pre amendment provision up to 31/05/2015, this intimation could only be sent by the AO of the searched person to the AOs of the non-searched person to take necessary action u/s 148 of the Act or any other applicable provision of the Act, as the officers of the investigation unit were not at all authorized for the same. At least we do not find any provision of the Act, which authorizes the officers of the investigation unit to send the information found during a search to the assessing officers of the persons not searched in any manner. Be that as may be, we are not going on the aspect or....
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.... application of the different provisions of the law. The ld. CIT DR also stated that reassessment proceedings initiated by issue of the notice u/s 148 of the Act on 28/03/2018 for this assessment year could not at all be abated as the said proceedings were not pending as on the date of the search in October 2017 but were initiated much thereafter, and also admittedly much before receipt of the seized books of account from the investigation wing by the AO on 31/10/2018. 70. The ld. CIT DR also stated that it is a normal established practice in the income-tax department to transfer the assessment records of assesses from an AO to another AO in the same PCIT charge without any specific order u/s 127(1) of the Act for the purpose. The assessee cannot have any grievance to the same as he is not at affected by such transfer because it is for the revenue to decide as to will be his assessing officer within the same territorial jurisdiction. Thus, he stated that the assessment jurisdiction was legally held by the ACIT Circle 20(2) Mumbai on 11/09/2018 when the PCIT 20 Mumbai passed the assessment jurisdiction transfer order over the assessee from him to the ACIT Central Circle 4(1) Mumb....
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....officer to apply the codified law by twisting or ignoring the said provisions as per their convenience or the past practices, which may be unchallenged so far. They are strictly bound to follow the law legislated in the same spirit in which the same has been crafted by the Legislature. The provisions of the law are not just guiding principles to collect the revenue but are the actual road map to be strictly adhered to in the letter and spirit by its adjudicators. None including any revenue officer can be permitted to perpetuate some wrongdoings as per the past usages which had gone unnoticed till questioned. There is option with them in any manner to violate the same. The revenue is also not permitted to presume something to have existed in the statute when the law has been crafted in an unambiguous and plain words with no if and buts, particularly with reference to the Memoranda explaining the insertion of the same in the statute, showing intentions of the Legislature. The sections 153A, 127 and 153C of the Act are worded absolutely in a simple language with no ambiguity at all in any manner to appreciate the meaning and purpose of the same, besides uniformity of adherence by the ....
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....y such escaped assessment for Rs. 50 lakhs or more which is in the form of asset based on any books of account or document or evidence, whether AO can initiate proceedings u/s 148. The conditions for invoking the 4th proviso read with Explanation 1 thereto is that the relevant assessment years relevant to previous year in which search is conducted which falls beyond the 6 assessment years, but not later than 10 assessment years, the AO has to necessarily frame the assessment u/s 153A and the statute bars the AO to issue any notice for assessment or re-assessment. Here in this case, from the perusal of the reasons recorded as incorporated earlier part of the order, we have already noted that AO has given a finding that based on search conducted in the case of M/s Evergreen Enterprises wherein assessee is one of the partner, it was found that assessee has taken bogus /LTCG for sale of penny stock. Another important fact which has been noted on the information from the said search and also consequently from the search conducted in the case of the assessee as has been referred to in the assessment order, it is seen that certain individuals and business concerns have borrowed cash loan ....
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....A of the Act for the 6 assessment years before the date of search which in this case were the AYs 2012-13 to 2017-18; and also mandatorily u/s 153A of the Act for the 4 earlier assessment years beyond the said 6 assessment years as above if and only if when the undisclosed income found in the material seized was Rs 50,00,000/- and above and which was represented by an asset defined in the Explanation 2 in the said section as below which categorically included loans also given by the assessee. "Asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in the bank account. 76. The alleged addition made by the AO in the assessment order and also mentioned in the said notice u/s 148 of the Act was Rs. 85 crores approximately which was far more than Rs 50,00,000/- and admittedly as per the AO, the same was in the form of loans given by the assessee though out of the books of account. Here in this case, the said Proviso definitely applies and the correct course for the AO was to undertake the reassessment proceedings under the mandatory provisions of the non-obstante section 153A of the Act for this assessment ....
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....it is both, then how addition can be made only for cash loans and why not commission is added, if it is undisclosed transaction. Thus, in these circumstances, we hold that looking to the documents and evidence which was in possession of the AO prima facie revealed that income representing in the form of asset which has escaped assessment which was more than 50 lakhs and in view of the amending provision AO was debarred from taking any action and for reassessment u/s 147/148. 78. The important phrase use in 4th proviso in Clause (a) is that "AO should be in possession of ......., which revealed that income representing in the form of asset which has escaped assessment......." The asset or liability is a part of balance sheet. If the AO based on evidence or documents found that these assets are in fact in the nature of income which has escaped assessment, the AO can acquire jurisdiction for going beyond the period of 6 years for further period of 4 years from the end of the assessment year relevant to previous in which search was conducted and then he has to mandatorily pass assessment order for that relevant assessment year u/s 153A and he is debarred from taking any action under....
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.... issue any notice for assessment / reassessment u/s 153A of the Act though there is a specific period of limitation after the search to complete the said assessment. The AO can also issue notice(s) u/s 153A of the Act at different times for different assessment year(s) within the limitation period, off course by adhering to the settled principles of law and natural justice by allowing sufficient reasonable time to the assessee for compliances required as per the law. The Act does not prescribe anywhere that all the notices u/s 153A of the Act must be issued simultaneously at the same time. Since, here the fact of the search had already come to the knowledge of the AO by 28/03/2018, the AO either should have issued a notice on 28/03/2018 u/s 153A of the Act for this assessment year to make a reassessment of income or should have made further enquiries from the Investigation Unit seeking other details including the books of account etc. if thought necessary by him and then the AO should have proceeded to issue the notices u/s 153A of the Act for the 6 assessment years plus the above relevant extended assessment year, because the limitation to complete the assessment / reassessment of....
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....nt jurisdiction u/s 120 of the Act. According to the Ld. AR, the jurisdiction to make an assessment of income of the assessee on the date of the said assessment jurisdiction transfer order was only with the ITO, Ward-20(2)(4), Mumbai and his PAN was also located with the ITO, Ward-20(2)(4), Mumbai and as per which the AO issued the notice u/s 148 of the Act on 28/03/2018, though may be incorrectly u/s 148 of the Act and not u/s 153A of the Act, after the AO received the alleged information of the search from the Investigation Unit based on the location of the PAN of the assessee with him. Since, we have already allowed the appeal on the other legal issues, therefore we are not deciding this issue and the same is treated as academic. 84. Now, in respect of the second plea of the assessee that the reassessment of income declared in the return of income as long-term capital gain could not be made by taking recourse to the section 148 of the Act and the same must have been made as per the provisions of the section 153C of the Act, it is not the case of the revenue that the AO did not have the requisite information in his possession, received from the Investigation Unit of the dep....
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....ically inserted therein for the searches conducted after 31/05/2003 and 31/03/2017 respectively. 87. However, while amending the provisions of the section 153C of the Act applicable w.e.f. 01/06/2015 there was no reference at all that the same is to be applied only in respect of the searches conducted after 31/05/2015 as has been specifically provided therein by the legislature on two other occasions as above. Thus, the provisions of the section 153C of the Act have to be seen by the AO as on the date when he receives the material from the AO of the person searched may be at any date and then apply accordingly. Therefore, it is also held that application of the provisions of the section 153C of the Act will be compulsory for all the assessment years extendable up to 10 years in the case of a non-searched person as is compulsorily for the assessee searched till 31/03/2021, even for the searches conducted prior to 01/06/2015 where the AO of the person not searched receives the alleged incriminating information after 31/5/2015. 88. However, in the case of a person not searched, the AO is permitted to issue the said notice u/s 153C r.w.s. 153A of the Act, only for the assessment ....
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.... the alleged escaped income either u/s 148 or section 153C of the Act practically is the same except the jurisdiction and root cause which are different. The legislature has specifically carved out scope of assessment / reassessment of income of a person not searched of such alleged escaped income based on some incriminating information found during a search on some other person searched by taking recourse to the section 153C of the Act. The AO has not been empowered to extend the scope of an assessment/ reassessment u/s 153A read with the section 153C of the Act beyond the alleged incriminating material found during the course of search in the case of some other person, because assessment / reassessment in such case is specifically restricted to the income based on the said incriminating information only. Whereas, in the proceedings initiated u/s 148 of the Act, the AO may extend the scope of the assessment / reassessment on other amounts also if any information about those is on his record over and above the alleged escaped income as per the reasons recorded. The purpose of restriction of assessment for amount of income by taking recourse to the provisions u/s 153C of the Act to ....