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TaxTMI 
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2024 (4) TMI 135
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....he assessment framed u/s 143(3) r.w.s 153C of the Act as a typographical error thereby improving the assessment order and not considering the fact that the Assessing Officer should have suo motto rectified the alleged typographical error u/s 154 of the Act. 4. Whether the ld. JM erred in ignoring the ground taken by the assessee in respect of validity of the assessment order framed u/s 143(3) r.w.s 153C of the Act ? 5. Whether the ld. JM erred on facts in remitting the matter to the file of the Ld. CIT(A) to revisit same facts thereby giving second innings to the first appellate authority to adjudicate upon the same set of facts considered earlier ? 6. Whether the ld. JM erred on facts in not appreciating that the cash found to be deposited in the bank account was of a stranger and not related to the assessee ?" 3. The question proposed by the Ld. Judicial Member are as under:- "1.) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in confirming the framing of Assessment Order by the AO dated 29-12-2019 for the Assessment year 2017.18 u/s 143(3) of the Act on the assessee and not under the provisions of Section 153C consequent to se....
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....'153C' in the First page of the Assessment Order will vitiate the entire Assessment Order? or being a last fact-finding Authority, the Tribunal is bound to read the entire Assessment Order and come to the just conclusion when the correct section which is Section 143(3) of the Act has clearly been mentioned in the assessment order by the AO ? 7). Without prejudice to the above, on facts and circumstances of the case, whether the Ld. CIT(A) justified in sustaining the additions of Rs. 4,67,50,000/- cash deposited in Kotak Mahindra Bank of Ringing Bells Pvt. Ltd. on 23/11/2016 on the basis of material evidence and statement of searched person and also the admission of the partners of the Assessee. ? 8). Whether on facts and circumstances of the case, the Ld. CIT(A) justified in sustaining the proportionate addition of Rs. 21,63,486/- out of total addition of Rs. 1,52,00,000/- made by Ld. AO in the hands of Assessee on account of commission paid to Mohit Goel u/s 69C read with Section 115 BBE of the Act?. 9). Whether on the facts and circumstances of the case, that the Ld.CIT(A) has erred in law and on facts in sustaining the addition of Rs. 6,65,670/- on account of disal....
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....facts and circumstances of the case and considering the principle of natural justice, the Assessing should have been given an opportunity of cross examining the witnesses by following the recent binding Judgment dated 12-02-2020 of the Hon'ble Supreme Court on India in the case of I.C.D.S. Ltd. Vs. CIT (2020) 273 Taxmann 12/194 DTR 18/316 CTR 679 (SC) ?" 4. In addition to the questions proposed by the Ld. Members, in course of hearing before me, the Ld. Counsel appearing for the assessee as well as Ld. Standing Counsel appearing for the Revenue have proposed their own sets of question. Questions proposed from assessee's side are as under:- "(i) "Whether on the facts and circumstances of the case, the addition of Rs. 32,81,90,000/- being cash deposited in the specified bank accounts of Ringing Bells Private Limited ("RBPL") made u/s 69A r.w.s 115BBE of the Act, ought to be deleted in law and on the basis of the facts on record? (ii) Whether on the facts and circumstances of the case, the order of the CIT(A) should be set aside to his file with the direction to give cross-examination of Mohit Goel and CCTV Footage of Kotak Mahindra bank dated 23.11.2016 along with the certificat....
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....aw since it has been passed without fulfilling the requirements of Section 153C of the Act? E. Whether on the facts and circumstances of the case and in law, the impugned assessment order for AY 2017-18 passed u/s 143(3) of the Act can be stated as invalid only for the reason that the heading of the said order also includes the words" r/w Section 153C" which is a curable defect and therefore cannot vitiate the assessment proceedings? F. Whether on the facts and circumstances of the case and in law, the decision of Hon'ble Delhi High Court in case of CIT Vs RRJ Securities Ltd [2016] 380 ITR 612 (Del) is applicable to present case in view of the fact that the Assessing officer was aware of the fact at the time of issuing notice u/s 143(2) of the Act for AY 2017-18 on 28.09.2018 and at the time of recording satisfaction note that the Parliament has made an amendment under Section 153C of the Act vide Finance Act, 2017 applicable w.e.f 01.04.2017, that six years as per Section 153C would be six years prior to the date of search however the decision passed by the Hon'ble Delhi High Court in RRJ Securities Ltd. (Supra) could not have the occasion to deal with the issue as the....
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....r:- (i) Whether in the facts and circumstances of the case, the assessment order dated 29/12/2019 passed u/s 143(3) r.w.s 153C of the Income Tax Act, 1961 can be said to be a valid order. (ii) Whether in the facts and circumstances of the case, the Assessing Officer had validly made addition of Rs. 32,81,19,000 u/s 69A r.w.s. 115BBE of the Act. 7. Before I proceed to decide the core issues as well as the ancillary issues arising therefrom, it is necessary to briefly deal with relevant facts. The assessee, a resident corporate entity, is stated to be engaged in the business of gold bullion/jewellery. For the Assessment Year under dispute, the assessee filed its return of income on 07/11/2017 declaring total income of Rs. 34,63,730/-. A search and seizure operation u/s 132 of the Act was carried out on 22/12/2016 at the residential premises of Sh. Kapil Kumar and Sh. Ashwini Singhla, partners of M/s JMK Export. Consequently, a search and seizure operation was also carried out in the residential premises of Sh. Mohit Goel, erstwhile Director of M/s Ringing Bells Private Limited. ("RBPL") on 23/12/2016. Simultaneously, survey action u/s 133A of the Act was conducted at the busines....
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....commission of Rs. 1.52 crores to Sh. Mohit Goel. So, ultimately, he held that the cash deposits of Rs. 32,81,19,000/- and commission paid of Rs. 1,52,00,000/- have to be treated as assessee's income u/s 69A of the Act and, accordingly, added back to the income of the assessee. Besides the aforesaid additions, the Assessing Officer made couple of other additions amounting to Rs. 6,65,670/- representing labour expenses and Rs. 1,16,62,097/- representing unexplained liability on account of sundry creditors and unexplained purchases. 10. Contesting the aforesaid additions, the assessee filed an appeal before Ld. First Appellate Authority. Based on submissions made in course of first appellate proceedings, both on the issue of validity of assessment order as well as on merits, Ld. First Appellate Authority called for a remand report from the Assessing Officer. After examining the remand report, submissions of the assessee and other materials on record Ld. First Appellate Authority rejected assessee's submissions on the issue of validity of assessment order passed u/s 143(3) r.w.s 153C of the Act. He held that since the date of recording of satisfaction has to be construed as the date o....
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....inita Chaurasia, 394 ITR 758, he held that the assessment order is bad in law, hence, deserves to be quashed. 12. Having held so he proceeded to decide the appeal on merits as well. While dealing with the merits of the issue Ld. Accountant Member observed that the addition made by the Assessing Officer and part of it sustained by Ld. CIT was entirely on the basis of CCTV footages of Kotak Mahindra Bank on 23/11/2016. Whereas, he observed that cash was found to have been deposited in various other bank accounts and there is no evidence or any adverse finding as to who deposited cash in the other bank accounts. He observed, even if the CCTV footage shows two close relatives and driver of the assessee entered the bank with bags in their hands, however, there is no evidence to show that the bag contained demonetized currency. He further observed that neither the persons carrying the bags nor the Branch Manager were examined. He observed, the SMS messages of Smt. Dharna Goel relied upon by the Assessing Officer is neither sufficient nor conclusive proof that the assessee is owner of the cash found deposited in bank accounts of M/s RBPL. Thus, ultimately he held that simply relying upon....
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.... to the said additions to the First Appellate Authority with a direction to provide opportunities of cross examination of witnesses and also to provide CCTV footage along with certificate issued u/s 65B of the Indian Evidence Act. As regards couple of other additions, Ld. Judicial Member held that in absence of any documentary evidences, addition of Rs. 6,65,670/- has to be sustained. Whereas, in respect of addition of Rs. 1,16,62,097/- he restored back the issue to Ld. First Appellate Authority. 16. Before me, Ld. Counsel appearing for the assessee submitted that assessment order passed u/s 143(3) r.w.s 153C of the Act is invalid as the Assessing Officer has not recorded any satisfaction note for assumption of jurisdiction u/s 153C of the Act for the impugned assessment year. He submitted, in terms of first proviso to section 153C(1) of the Act, in case of a person other than the searched person, the date of search has to be reckoned to be the date on which the Assessing Officer receives the books of accounts or documents or assets seized and records his satisfaction note for assumption jurisdiction u/s 153C of the Act. He submitted in the facts of the present case, the Assessing....
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.... Trib.) (xviii) CIT v. Kabul Chawla [2016] 380 ITR 573 (Del. HC) 18. Per contra, Ld. Standing Counsel appearing for the Revenue strongly contested the submissions of the assessee. He submitted, undoubtedly the assessment order has been passed u/s 143(3) of the Act and not u/s 143(3) r.w.s 153C of the Act. Drawing my attention to section 153C of the Act, he submitted that the said provision does not override section 143(3) of the Act. Thus, he submitted, because of section 153C of the Act, the Assessing Officer does not lose his jurisdiction u/s 143(3) of the Act. He submitted, on the date of search on 23/12/2016 the assessee had not filed its return of income for A.Y.2017-18. He submitted, since incriminating materials pertaining to assessee was found during search and on the date of search assessee had not filed the return of income for the year under consideration, the Assessing Officer validly issued notice u/s 143(2) of the Act and completed the assessment u/s 143(3) of the Act. Thus, he submitted the assessment having been made u/s 143(3) of the Act is valid. In support of his contention learned counsel relied upon a number of judicial precedents furnished before me by way ....
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....ore, the block of six immediately preceding assessment years would be assessment years 2012-13 to 2017-18. Therefore, considering the fact that the assessments are based on incriminating material found as a result of search, the Assessing Officer should have initiated proceedings u/s 153C of the Act for the impugned assessment year as well. However, the Assessing Officer has failed to do so. Thus, in my view, the Assessing Officer has acted in complete violation of the statutory mandate contained u/s 153C of the Act. 22. In case of RRJ Securities (supra), the Hon'ble Jurisdictional High Court, in no uncertain terms, has held that for assumption of jurisdiction u/s 153C of the Act the date of recording of satisfaction note is relevant for counting the block of six immediately preceding assessment years. There are number of other decisions, relied upon by Ld. Accountant Member holding identical view. In fact, as on date, the issue is no more res-integra in view of the decision of Hon'ble Supreme Court in case of CIT vs. Jasjit Singh, S.L.P No.6644 of 2016 judgment dated 26/09/2023, wherein, the Hon'ble Supreme Court agreeing with the view expressed by Hon'ble Delhi High Court in the....
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....encies Pvt. Ltd. (supra) (iii) Karina Airlines International Limited vs. ACIT (supra) 24. In any case of the matter, not only the Assessing Officer has mentioned in the body of the assessment order that the order has been passed u/s 143(3) r.w.s 153C of the Act but Ld. First Appellate Authority has also held that the assessment order, indeed, has been passed u/s 143(3) r.w.s 153C of the Act. Admittedly, the Revenue has not challenged the aforesaid finding of Ld. First Appellate Authority. It is evident, the Assessing Officer has not recorded any satisfaction u/s 153C of the Act for A.Y. 2017- 18. Therefore, in absence of any satisfaction the Assessing Officer could not have proceeded to frame assessment u/s 153C of the Act. In view of the aforesaid, I fully agree with the view expressed by Ld. Accountant Member and hold that the impugned assessment order is invalid. Hence, deserves to be quashed. 25. So far as the contention of Ld. Standing Counsel appearing for the Revenue that assessment order has been passed u/s 143(3) of the Act and the Assessing Officer retains his jurisdiction to make assessment u/s 143(3) of the Act despite the provisions of section 153C, I am not convin....
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.... Chawla) and Shri Manpreet Singh, Driver of Rajesh Chawal. He has observed that after reaching the bank these three persons met Sh. Anmol Goel, Director of RBPL, who was waiting in a separate room. Thereafter, all the four persons entered the bank and after few minutes Sh. Anmol Chawla along with Sh. Akshay Chawla were seen leaving the bank branch. However, Sh. Manpreet Singh, the Driver of Sh. Rajesh Chawla stayed behind till later in the day and was seen leaving the bank branch with empty bags. The Assessing Officer has also referred to SMS conversion between Sh. Rajesh Chawla and Smt. Dharna Goel and some other persons to draw inference that Shri Rajesh Chawla delivered cash of Rs. 32,81,90,000/- to Sh. Mohit Goel for depositing in bank accounts of RBPL. He has also referred to the deposit slips through which the demonetized cash was deposited in the bank account of RBPL. 28. Thus, as could be seen from the aforesaid facts, the edifice of the entire assessment order concerning the addition of Rs. 32,81,90,000/- was founded on the statement recorded from Sh. Mohit Goel on the date of search and CCTV Footage of 23/11/2016 obtained from the Kotak Mahindra Bank, Noida Branch. It is....
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....on and suspicion unless there are evidences on record to justify the addition. In the facts of the present appeal, the Assessing Officer has not brought any conclusive evidence to establish beyond reasonable doubt that it is the assessee who has given demonetized cash for depositing in the bank accounts of M/s RBPL. 30. It is also relevant to observe, the Assessing Officer has placed strong reliance upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel, erstwhile Director of M/s RBPL. It is established on record that on the date of search i.e., 23/12/2016, when statement u/s 132(4) of the Act was recorded from Sh. Mohit Goel, neither he was Director of M/s RBPL nor was in any way involved in the functioning of M/s RBPL. In fact, materials on record clearly reveal that Sh. Mohit Goel was not associated in any capacity with M/s RBPL on the date of search on 26/12/2016. In the statement recorded u/s 132(4) Sh. Mohit Goel has very clearly stated that he resigned from the directorship of the company on 28/07/2016 and is in no way concerned with the company. He has further stated that he had sold all his shares in the company by May, 2016 and has no control over the comp....
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....44 of the Act. This is something which does not appeal to common sense. It is relevant to observe, in course of proceedings before the First Appellate Authority, the entire evidence available on record was again examined and remand report was called from the Assessing Officer. After examining the evidences and the remand report of the Assessing Officer, Ld. First Appellate Authority has recorded the following factual findings. (i) The statement recorded u/s 132(4) of the Act from Sh. Mohit Goel is of limited validity as he was not the Director of M/s RBPL at the time of deposit of cash of Rs. 32,81,00,000/- in M/s RBPL Bank Account. (ii) Almost all cash deposit slips of M/s RBPL account of Kotak Mahindra Bank bear signature of Sh. Sumit Kumar. Therefore, Sh. Sumit Kumar was the right person to be questioned to ascertain who had given him the cash for depositing in the bank account. (iii) Sh, Mohit Goel has not stated the date and place where the cash was received from Sh. Rajesh Chawal. He has also not furnished the details as to how cash received by him was deposited by Sh. Sumit Kumar and Sh. Anmol Goel and Sh. Mohit Kumar. (iv) Each cash deposit in Kotak Mahindra Bank Ac....
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....ested by law enforcement agency. 36. It is not a fact that the Assessing Officer was not conscious of the credentials of Sh. Mohit Goel as he himself has rejected assessee's request for cross examination of Sh. Mohit Goel on the reasoning that he was absconding. Another crucial fact which needs mention is, as per CCTV footages of Kotak Mahindra Bank dated 23/11/2016, three closely associated persons of Sh. Rajesh Chawla were found entering the Kotak Mahindra Bank branch carrying bags. Though, the Assessing Officer was very much aware of the identity of the concerned persons, however, he has not examined either Sh. Akshay Chawla (Nephew of Sh. Rajesh Chawla) or Sh. Anmol Chawla (son of Sh. Rajesh Chawla). Of course Sh. Manpreet Singh, Driver of Sh. Rajesh Chawla was examined. Interestingly, in the statement recorded u/s 132(1A) of the Act, when Sh. Manpreet Singh was specifically asked about the cash deposit made in the bank account, he very clearly and categorically stated that they had gone to the bank to deliver 2-3 kg gold bullion to Sh. Anmol Goel, one of the Directors of M/s RBPL and delivered the gold in parking of Kotak Mahindra Bank branch. However, since Sh. Anmol Goel wa....