TaxTMI 
TaxTMI 
2024 (4) TMI 268
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....130/2023 & CM APPL. 20048/2023 (Stay), W.P.(C) 5150/2023 & CM APPL. 20099/2023 (Stay), W.P.(C) 5181/2023 & CM APPL. 20217/2023 (Stay), W.P.(C) 5182/2023 & CM APPL. 20219/2023 (Stay), W.P.(C) 5215/2023 & CM APPL. 20383/2023 (Stay), W.P.(C) 5216/2023& CM APPL. 20385/2023 (Stay), W.P.(C) 5217/2023 & CM APPL. 20387/2023 (Stay), W.P.(C) 5224/2023& CM APPL. 20409/2023 (Stay), W.P.(C) 5236/2023 & CM APPL. 20429/2023 (Stay), W.P.(C) 5240/2023 & CM APPL. 20469/2023 (Stay), W.P.(C) 5249/2023 & CM APPL. 20484/2023 (Stay), W.P.(C) 5252/2023 & CM APPL. 20552/2023 (Stay), W.P.(C) 5368/2023 & CM APPL. 20965/2023 (Stay), W.P.(C) 5370/2023 & CM APPL. 20969/2023 (Stay), W.P.(C) 5626/2023 & CM APPL. 22083/2023 (Stay), W.P.(C) 5976/2023 & CM APPL. 23470/2023 (Stay), W.P.(C) 5643/2023 & CM APPL. 22123/2023 (Stay), W.P.(C) 5662/2023 & CM APPL. 22160/2023 (Stay), W.P.(C) 5789/2023 & CM APPL. 22664/2023 (Stay), W.P.(C) 5790/2023 & CM APPL. 22666/2023 (Stay), W.P.(C) 5794/2023 & CM APPL. 22676/2023 (Stay), W.P.(C) 6160/2023 & CM APPL. 24242/2023 (Stay), W.P.(C) 6260/2023 & CM APPL. 24598/2023 (Stay), W.P.(C) 6284/2023 & CM APPL. 24651/2023 (Stay), W.P.(C) 6673/2023 & CM APPL. 26129/2023 (Stay), W.P.(C) 696....
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....y), W.P.(C) 1207/2024 & CM APPL. 5026/2024 (Stay), W.P.(C) 1208/2024 & CM APPL. 5028/2024 (Stay) W.P.(C) 1209/2024 & CM APPL. 5030/2024 (Stay), W.P.(C) 1212/2024 & CM APPL. 5047/2024 (stay), W.P.(C) 1213/2024 & CM APPL. 5049/2024 (Stay), W.P.(C) 1214/2024 & CM APPL. 5051/2024 (Stay) The Pr. Commissioner of Income Tax-Central-1, Assistant Commissioner of Income Tax Central Circle 17, & Anr. Ashwani Kumar Gupta, Kapareva Development Private Limited, Alankit Insurance Brokers Limited, Alankit Finsec Limited, New Wave Realtors Private Limited, Shashi Garg, Vinod Kumar Garg, Alankit Insurance TPA Limited, Alka Agarwal, Vikas Surya Developers Private Limited, Alankit Forex India Limited, Tina Organics Pvt. Ltd., Pratishtha Images Private Limited, Tarun Kumar Sahay, Vikas Promoters Private Limited, Vinod Kumar Maheshwari, Shanti Kumar Agarwal HUF, Sakshi Agarwal, Vivek Garg, Anuj Sharma, Ankit Agarwal -Legal Heir of Late Shanti Kumar Aggarwal, Sunoj Engineers Pvt. Ltd., Saksham Investor Services Private Limited, Pack Plast -India- Private Limited, Saksham Commodities Limited, Susheel Jain, Vikas Wahi, Jagmohan Kejriwal, Mamta Agarwal, Ashutosh Agarwal, Indo Greenfuel Private Limited, B....
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....102 I. ISSUE OF FINALITY/CLOSURE FOR AYs' 2010-11 AND 2011-12 AND THE APPLICABILITY OF THE 2017 AMENDING ACT 103 - 116 J. DECISION ON ITA 52/2024 117 - 118 K. SUMMARY OF CONCLUSIONS 119 L. DISPOSTIF 120 - 123 A. INTRODUCTION 1. This batch of writ petitions and an Income Tax Appeal filed under Section 260A of the Income Tax Act, 1961 [Act] (ITA 52/2024) assail the initiation of assessment proceedings pursuant to the provisions of Section 153C of the Act. The challenge is firstly raised with the petitioners questioning the identification and computation of the block of six Assessment Years [AYs] immediately preceding the AY relevant to the previous year in which the search was conducted or requisition made. The petitioners additionally impugn the manner in which the respondents have reckoned the years which would be included within the phrase "relevant assessment year" as defined by Explanation 1 to Section 153A(1) of the Act. 2. The petitioners would contend that insofar as the impugned notices pertaining to AYs' 2010-11, 2011-12, 2012-13 and 2013-14 are concerned, they would be liable to be quashed since they fall beyond the ambit of "re....
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.... (Annexure P 2) Alankit Insurance Brokers Ltd. 4784/2023 2010-11 Not Provided 24.12.2021 (Annexure P 5) 28.12.2021 (Annexure P 2) Alankit Finsec Ltd. 4836/2023 2010-11 Not Provided 24.12.2021 (Annexure P 8) 28.12.2021 (Annexure P 2) New Wave Realtor Pvt. Ltd. 4944/2023 2010-11 14.02.2022 (Annexure P 16) 25.02.2022 (Annexure P 8) 25.02.2022 (Annexure P 4) Vineeta Gupta 4993/2023 2011-12 Undated (Annexure P 16) 17.03.2022 (Annexure P 2) 23.03.2022 (Annexure P 3) Shashi Garg 5128/2023 2010- 11 09.03.2022 (Annexure P 7) 15.03.2022 (Annexure P 11) 15.03.2022 (Annexure P 2) New Wave Realtor Pvt. Ltd. 5150/2023 2011-12 14.02.2022 (Annexure P 14) 25.02.2022 (Annexure P 6) 25.02.2022 (Annexure P 2) Alankit Insurance Brokers Ltd. 5181/2023 2011-12 Not Provided 24.12.2021 (Annexure P 5) 28.12.2021 (Annexure P 2) Alankit Insurance TPA Ltd. 5182/2023 2011-12 Not Provided 24.12.2021 (Annexure P 6) 28.12.2021 (Annexure P 2) Alka Agarwal 5216/2023 2010-11 Not Provided 24.12.2021 (Annexure P 7) 30.12.2021 (Annexure P 2) Vikas Surya D....
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....021 (Annexure P 6) 28.12.2021 (Annexure P 2) Alka Agarwal 7272/2023 2012-13 Not Provided 24.12.2021 (Annexure P 5) 30.12.2021 (Annexure P 2) Alankit Insurance TPA Limited 7279/2023 2012-13 Not Provided 24.12.2021 (Annexure P 6) 28.12.2021 (Annexure P 2) Alankit Insurance Brokers Ltd. 7281/2023 2012-13 Not Provided 24.12.2021 (Annexure P 5) 28.12.2021 (Annexure P 2) AlankitFinsec Ltd. 7283/2023 2012-13 Not Provided 24.12.2021 (Annexure P 5) 28.12.2021 (Annexure P 2) Shanti Kumar Agarwal HUF 7374/2023 2012- 13 Not Provided 28.02.2022 (Annexure P 5) 02.05.2022 (Annexure P 2) Alankit Forex India Ltd. 7401/2023 2012-13 Not Provided 24.12.2021 (Annexure P 7) 28.12.2021 (Annexure P 2) Vivek Garg 7821/2023 2011-12 Not Provided 11.03.2022 (Annexure P 6) 05.05.2022 (Annexure P 2) Vivek Garg 7822/2023 2010-11 Not Provided 11.03.2022 (Annexure P 6) 05.05.2022 (Annexure P 2) New Wave Realtors Pvt. Ltd. 9124/2023 2012-13 14.02.2022 (Annexure P 15) 25.02.2021 (Annexure P 7) 25.02.2022 (Annexure P 2) 5. List II, which....
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.... 24.08.2022(Annexure P-5) Jagmohan Kejriwal 794/2024 2012-13 20.06.2022 (Annexure P-9) Not Provided 30.06.2022 (Annexure P-6) Jagmohan Kejriwal 795/2024 2011-12 20.06.2022 (Annexure P-9) Not Provided 30.06.2022 (Annexure P-6) Jagmohan Kejriwal 824/2024 2010-11 20.06.2022 (Annexure P-9) Not Provided 30.06.2022 (Annexure P-6) Jagmohan Kejriwal 826/2024 2013-14 (20.06.2022) (Annexure P-9) Not Provided 30.06.2022 (Annexure P-6) Subodh Kant Sahay (HUF) 1071/2024 2011-12 24.06.2022 (Annexure P-9) Not Provided 09.03.2023 (Annexure P-6) Subodh Kant Sahay (HUF) 1072/2024 2010-11 24.06.2022 (Annexure P-9) Not Provided 09.03.2023 (Annexure P-6) Subodh Kant Sahay (HUF) 1073/2024 2012- 13 24.06.2022 (Annexure P-9) Not Provided 09.03.2023 (Annexure P-6) Subodh Kant Sahay (HUF) 1074/2024 2013-14 24.06.2022 (Annexure P-9) Not Provided 09.03.2023 (Annexure P-6) Mahavir Prasad Gupta 1206/2024 2011-12 24.06.2022 (Annexure P- 13) Not Provided 26.08.2022 (Annexure P-6) Mahavir Prasad Gupta 1207/2024 2012-13 24.06.2022 (Annexure ....
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....nexure A- 8) 28.09.2022 (Annexure A-2) Betsy Growth Finance Limited 1063/2024 2010-11 12.05.2022 (Annexure A- 11) Undated (Annexure A- 11) 30.06.2022 (Annexure A-2) Mamta Aggarwal 829/2024 2010-11 24.06.2022 (Annexure A- 6) Undated (Annexure A- 9) 18.08.2022 (Annexure A-1) Mamta Aggarwal 861/2024 2011-12 24.06.2022 (Annexure A- 7) Undated (Annexure A-10) 18.08.2022 (Annexure A-2) Mamta Aggarwal 873/2024 2012-13 24.06.2022 (Annexure A-7) Undated (Annexure A- 10) 18.08.2022 (Annexure A-2) Ashutosh Aggarwal 991/2024 2010-11 24.06.2022 (Annexure A- 6) 31.05.2023 (Annexure A- 6) 12.06.2023 (Annexure A-2) Ashutosh Aggarwal 1025/2024 2011-12 24.06.2022 (Annexure A- 6) 31.05.2023 (Annexure A- 6) 12.06.2023 (Annexure A-2) Ashutosh Aggarwal 1018/2024 2012-13 24.06.2022 (Annexure A- 6) 31.05.2023 (Annexure A- 6) 12.06.2023 (Annexure A-2) Naresh Mittal 1113/2024 2011-12 24.06.2022 (Annexure P-9) 08.08.2022 (Annexure P- 5) 22.08.2022 (Annexure P-2) Naresh Mittal 1110/2024 2012-13 24.06.2022 (Annexure P-9) 08.08.2022 (Annexure P- 5) ....
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....Act requiring it to submit a true and correct return of its total income for AY 2011-12. The aforesaid notice was followed by a communication dated 22 December 2022 under Section 142(1) requiring the petitioner to produce accounts and documents as per the annexure appended thereto. A follow-up notice under Section 142(1) of the Act was thereafter issued on 01 February 2023. It is alleged by the respondents that since the petitioner did not respond to the aforesaid communications, they were constrained to issue notices under Section 144 of the Act and which were dated 22 February 2023 and 03 March 2023. In response to the aforesaid, the petitioner submitted its response on 15 March 2023. 8. In order to appreciate the challenge which stands raised, we deem it apposite to extract the Satisfaction Note which came to be recorded by the AO of the writ petitioner. The Satisfaction Note which is dated 17 February 2022 is extracted hereinbelow: "Name of the Assessee: M/s Vikas Surya Developers Pvt. Ltd. PAN AADCV3771F Date of Search 18.10.2019 Date of receipt of documents 17.02.2022 Satisfaction note for issuing notice u/s 153C of the Income Tax Act....
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....Tax Act, 1961 as per provisions of section 153C(2) is being issued for A.Ys 2010-11 to A.Y. 2020-21." 9. On culmination of the proceedings so initiated, an assessment order came to be framed on 25 March 2023. The aforesaid order discloses the following facts. The AO refers to various ledgers which were obtained in the course of the subject search as well as digital data retrieved from the laptop belonging to one Mr. Sunil Kumar Gupta. It proceeds to refer to the statements of various individuals recorded in the course of that search and ultimately comes to the following conclusions: "11. Thus, Sh. Sunil Kumar Gupta has explained entire modus operandi by which unaccounted cash is received and utilized to provide accommodation entry. He has also explained in detail the manner in which he records these transactions in his Hand written diary/Excel Sheets/Tally books. 12. The transactions entered into by the assessee with various entities/companies controlled by Alok K Agarwal against unaccounted cash or otherwise to take accommodation entries, are as tabulated below: Name of beneficiary F.Y. Transaction done with Amount debited to beneficiary Amount ....
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....ction 153C on 23 March 2022. In response to the aforesaid notice, the petitioner submitted its ROI on 21 April 2022. The assessment is thereafter stated to have been centralized pursuant to orders made under Section 127 of the Act. The Satisfaction Note dated 17 March 2022 as penned by the AO in the case of the petitioner is reproduced hereinbelow: "Satisfaction note for initiating proceedings u/s 153C of the Income Tax Act 1961 in the case of Smt. Vineeta Gupta (PAN- AEIPG1608L), by AO of other than the searched person 1. A search and seizure operation was carried out in the Alankit Group of cases on 18.10.2019 subsequently the said group was centralized to the jurisdiction of the undersigned. Accordingly, during the course of assessment proceedings u/s 153A of Alankit Group, material /documents related to case of Smt. Vineeta Gupta have been found. 2. Ledgers related to Sh. Vinod Gupta and Ms. Loveleen have been obtained from laptop of Sh. Sunil Kumar Gupta found and seized from the residence of Sh. Sunil Kumar Gupta, at 3584/4, Narang Colony, Gali No. 4 Tri Nagar Delhi (Path: F:\SKGR A- 32\SUNIL KUMAR GUPTA HP LAPTOP EXTRACTED DATA\Tally\[root].1\Local Disk ....
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....dated 13 February 2023. We deem it apposite to extract the following from the aforesaid order: "3. It can be seen that search in this case was conducted on 18.10.2019 which means six assessment years immediately preceding the assessment year relevant to the previous year can be opened u/s 153C of the Act for assessment/reassessment. In the extant case, relevant previous year would be F.Y. 2019-20 relevant to A.Y. 2020-21. In view of the provisions of section 153C of the Income-tax Act, 1961, the relevant six years involved in this case are A.Ys. 2014-15, 2015-16, 2016-17, 2017-18, 2018-19 and 2019-20. Proceeding for the A.Y. 2020-21 is opened u/s 153C r.w.s 143(3) of the Income-tax Act, 1961. 4. Further, incriminating seized evidences suggest that income chargeable to tax pertaining to four years preceding the 6 year period has escaped assessment in this case, hence, the case has been rightly opened u/s 153C of the Act for the A.Y. 2011-12 to 2020-21. It is submitted that on the basis of seized material confronted to the assessee as well, it is revealed that the assessee was found to be involved in unaccounted Cash Transactions, receiving and providing accommodati....
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....4 AAL 69,19,221 Vineeta Gupta 2009-10 AFL 1,63,00,000 Cash 2,37,00,000 EFL 45,15,700 Vineeta Gupta in Newwave 2012-13 Cash 35,00,000 Vineeta Gupta 2009-10 Eurogold 74,00,000 3. From perusal of the reply filed, it is noticed that you have not filed any satisfactory reply in respect of the amounts found credited and debited against Vineeta Gupta in the afore-discussed ledger. Accordingly, you are required to show cause as to why not addition in respect of the above amounts be made as per the relevant provisions of the Act. You are also required to show cause as to why not commission @ 1.5% paid to the facilitator for arranging these transaction be added to your total income u/s 69C of the Act, being amount paid through your unaccounted sources income. In absence of satisfactory response / explanation, you are show caused as to why the amounts as recorded in the ledgers as above may not be added to your total income as per the relevant provisions of the Income Tax Act, 1961. You are further show caused as to why penalty as per the relevant provisions of t....
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.... 15,00,000 2014-15 Sunil Bhala 64,33,562/- 2012-13 Cash 21,00,000 4. As AO of the person other than the searched person, I have carefully perused the above referred satisfaction note and other related documents. Hence, I am satisfied that the above material/documents pertain to Shri Anuj Sharma (PAN: BEBPS2370N) and the entries appearing therein have a bearing on the determination of the income of Shri Anuj Sharma (PAN: BEBPS2370N). 5. In view of the above, I am satisfied that it is a fit case for initiating proceeding u/s 153C r.w.s. 153A of the I.T. Act 1961, for the period relevant to the A.Ys. 2010-11 to 2020-21. Accordingly, notice u/s 153C r.w.s. 153A of the Act, for the A.Ys. 2010-11 to 2020-21 are being issued." 14. Similarly, in WP(C) 384/2024, the AO of the petitioner in its Satisfaction Note dated 10 February 2023 stated: "3. As per satisfaction note dated 20.06.2022, during the course of search and seizure operation, some incriminating documents were found and seized marked as Annexure A-32 as SUNIL KUMAR GUPTA HP LAPTOP. The ledgers of Shri Vijay Kumar obtained from the laptop of Shri Sunil Kumar Gupt....
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....y be. C. SUBMISSIONS OF THE PETITIONERS 16. Leading submissions on behalf of the writ petitioners, Mr. Kapoor submitted that undisputedly the timelines prescribed and stipulated for the purposes of reopening or reassessment had expired on 31 March 2016 and 31 March 2017 and thus before the promulgation of the 2017 Amending Act. It was submitted that consequently the additional four years which came to form part of the block by virtue of the definition of the phrase "relevant assessment year" would not apply to expired or lapsed assessments. In order to elaborate upon that submission, Mr. Kapoor referred to the following chart: Chart A This chart is prepared on the presumption that date of search is/ was (I) (II) (III) Between 01.04.2015 - 31.03.2016 i.e. before insertion of 2017 amendment Between 01.04.2016 - 31.03.2017 i.e. before insertion of 2017 amendment On or after 01.04.2017 i.e., after the insertion of the 2017 amendment Search year AY 2016-17 AY 2017-18 AY 2018-19 First year AY 2015-16 AY 2016-17 AY 2017-18 Second year AY 2014-15 AY 2015-16 AY 2016-17 Third year AY 2013-14 AY 201....
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.... in the year 1981. Subsequently, by another judgment dated July 31, 1991, the assessee was awarded a sum of Rs. 1,10,20,624, which was received by it between October 15, 1992 and May 25, 1993. The said amount comprised of principal compensation as well as interest up to May 18, 1992. As land acquired was agricultural land, principal amount was not chargeable to tax ; however, interest amounting to Rs. 76,84,829 was chargeable on year to year basis. The assessee claimed that proceedings till assessment year 1982-83 had already attained finality and therefore, filed a letter requesting the Assessing Officer to initiate proceedings for subsequent assessment years for bringing to tax interest component relatable to the said assessment years. The assessee was, however, issued notices under section 148 of the Act for fifteen assessment years, viz., assessment years 1968-69 to 1971-72 and assessment years 1981- 82 to 1992-93 which were challenged on the ground of limitation. This court declined to exercise jurisdiction ; on appeal, the Supreme Court held that the provision regulating period of limitation ought to receive strict construction. The Supreme Court held that the law of limitati....
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....cle 19(1)(g) of the Constitution of India, i.e., a fundamental right to practice any profession, or to carry on any occupation, trade or business. The court said : "In testing whether a retrospective imposition of a tax operates so harshly as to violate the fundamental rights under article 19(1)(g), the factors considered relevant include the context in which retroactivity was contemplated such as whether the law is one of validation of taxing statute struck-down by courts for certain defects ; the period of such retroactivity, and the decree and extent of any unforeseen or unforeseeable financial burden imposed for the past period, etc." 18. In Govinddas v. ITO [1976] 103 ITR 123 (SC) ; AIR 1977 SC 552 the Supreme Court held that section 171(6) of the Income-tax Act was prospective and inapplicable for any assessment year prior to April 1, 1962, the date on which the Act came into force and observed that (page 132 of 103 ITR) : "Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given....
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....p of machinery to ascertain the taxable income, and to assess tax on the income, but that does not impress the proceeding with the character of an action between the citizen and the State : Commissioner of Inland Revenue v. Sneath [17 TC 149, 164] ; and Shell Co. of Australia Ltd. v. Federal Commissioner of Taxation [(1931) AC 275] . 10. Again the period prescribed by Section 34 for assessment is not a period of limitation. The section in terms imposes a fetter upon the power of the Income Tax Officer to bring to tax escaped income. It prescribes different periods in different classes of cases for enforcement of the right of the State to recover tax. It was observed by this Court in Ahmedabad Manufacturing and Calico Printing Co. Ltd. v. S.C. Mehta, Income Tax Officer [48 ITR (SC Section) 154, 171] : "It must be remembered that if the Income Tax Act prescribes a period during which tax due in any particular assessment year may be assessed, then on the expiry of that period the department cannot make an assessment. Where no period is prescribed the assessment can be completed at any time but once completed it is final. Once a final assessment has been made, it can ....
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.... of the Income Tax Act, 1922, shall be deemed to have come into force on March 30, 1948, and the period under the unamended section within which notice could be issued under Section 34(3) against the assessee company ended on March 31, 1951. Before that date the amending Act came into operation, and at no time had the right to reassess become barred. 12. In considering whether the amended statute applies, the question is one of interpretation i.e. to ascertain whether it was the intention of the legislature to deprive a taxpayer of the plea that action for assessment or reassessment could not be commenced, on the ground that before the amending Act became effective, it was barred. Therefore the view that even when the right to assess or reassess has lapsed on account of the expiry of the period of limitation prescribed under the earlier statute, the Income Tax Officer can exercise his powers to assess or reassess under the amending statute which gives an extended period of limitation, was not accepted in Calcutta Discount Co. case [23 ITR 471]. 13. As we have already pointed out, the right to commence a proceeding for assessment against the assessee as an agent of....
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....er Section 149 to enable the authorities to reopen assessments not only on the basis of orders passed in the proceedings under the IT Act but also on order of a court in any proceedings under any law has to be applied prospectively on or after 1-4-1989 when the said amendment was introduced to sub-section (1). The provision in sub-section (1) therefore can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under Section 149 of the Act. 15. To hold that the amendment to sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under Section 149 of the Act as applicable prior to 1-4-1989, would amount to giving sub-section (1) a retrospective operation, which is neither expressly nor impliedly intended by the amended sub-section. xxxx xxxx xxxx 20. This Court took similar view in the case of S.S. Gadgil [(1964) 53 ITR 231 : AIR 1965 SC 171] in somewhat comparable situation arising from the retrospective operation given to Section 34-I of the Income Tax Act, 1922 as amended with retrospecti....
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....herwise provided expressly or by necessary implication. Even a procedural provision cannot in the absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable the authorities to affect finality of tax assessments or to open up liabilities, which have become barred by lapse of time. Our conclusion, therefore, is that sub-section (1) of Section 150, as amended with effect from 1-4- 1989, does not enable the authorities to reopen assessments, which have become final due to bar of limitation prior to 1-4- 1989 and this position is applicable equally to reassessments proposed on the basis of orders passed under the Act or under any other law." 20. The petitioners also sought to draw sustenance from a decision rendered by a Division Bench of our Court in C.B. Richards Ellis Mauritius Ltd v. Assistant Director of Income Tax & Ors 2012 SCC Online Del 3085. Justice Khanna (as his Lordship then was) speaking for the Bench had enunciated the legal position in the following words: "12. Law of limitation does not create any right in favour of a person or define or create any cause of action, but simply prescribes....
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....o Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a "vested right" arises in the assessee. On the expiry of the period the assessments, if any, may also become final and conclusive but only so long as the law is not altered retrospectively. Under the scheme of the Income Tax Act a liability to pay tax is incurred when according to the Finance Act in force the amount of income, profits or gain....
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.... CIT, Madras v. Janabha Muhammad Hussain Nachiar Ammal, AIR 1963 SC 1401 and in ITO, A-Ward, Sitapur v. Murlidhar Bhagwandas, Lakhimpur Kheri, (1964) 52 ITR 335 (SC). xxxx xxxx xxxx 16. Going back a little in point of time J.P. Jani, ITO v. Induprasad Devshankar Bhatt, (1969) 72 ITR 595 (SC), it was held that the Income Tax Officer cannot issue notice under Section 148 of the Act, where the right to re-open an assessment was barred under the Income Tax Act, 1922 on the date when the 1961 Act came into force. This is a separate issue and aspect which need not be examined and dealt with in this case. The issue/question in Induprasad Devshankar (supra) was what would be the legal position in case the period prescribed for initiation of the re-assessment proceedings is enhanced or extended under the new statute. We are not required to and do not examine or consider this aspect/question." 21. Mr. Kapoor reminded us of the well-settled position in law of every statute being prima facie viewed as prospective, unless a contrary intention appears either from the express language employed by the statute or by necessary implication. According to learned counsel, unless th....
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.... counsel for the parties. In any case, we shall refer to few judgments containing this dicta, a little later. 30. We would also like to point out, for the sake of completeness, that where a benefit is conferred by a legislation, the rule against a retrospective construction is different. If a legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally, and where to confer such benefit appears to have been the legislators' object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Govt. of India v. Indian Tobacco Assn. [(2005) 7 SCC 396], the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in Vijay v. State of Maharashtra [(2006) 6 SCC 289]. It was held that where a law is enacted for the benefit of community as a....
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....ssages from the decision in Jasjit Singh: "8. In SSP Aviation (supra) the High Court inter alia reasoned as follows:- "14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the, manner contemplated by the provisions of Section 153A. Now a question may arise as to the applicability of the second proviso to Section 153A....
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....ave to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts." 23. Mr. Kapoor then highlighted the following observations as appearing in Vikram Sujitkumar Bhatia: "41. Thus, as per the proviso to Section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a deeming fiction wherein any reference made to the date of initiation of search is deemed to be a reference made to the date when the Assessing Officer of the non-searched person receives the books of account or documents or assets seized etc. Thus, in the present case, even though the search under Section 132 was initiated prior to the amendment to Section 153C w.e.f. 01.06.2015, the books of account or documents or assets were seized by the Assessing Officer of the non-searched person only on 25.04.2017, which is subsequent to the amendment, therefore, when the notice under Section 153C was issued on 04.05.2018, the provision of the law existing as on that date....
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....ding of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the Assessing Officer of the assessee. In this case, it would be the date of the recording of satisfaction under section 153C of the Act, i.e., September 8, 2010. In this view, the assessments made in respect of the assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the Assessing Officer of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, ....
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....r requisitioned by the Assessing Officer having the jurisdiction over such other person..." 26. It was submitted that the respondents have committed a manifest illegality while calculating the ten year block period with reference to the date of search even though the First Proviso bids them to compute that period from the date of handing over of material to the jurisdictional AO of the "other person". Mr. Kapoor further pointed out that although the respondents had called upon this Court to reconsider the correctness of the view taken in RRJ Securities, the same came to be negatived in PCIT vs R.L. Allied Industries Order dated 28 January 2016 in ITA 370/2015 and connected matters as would be evident from the following passages of that decision: "5. It is sought to be urged by the learned counsel for the Revenue that the decision of this Court in SSP Aviation Ltd. v. DCIT (2012) 346 ITR 177 and the subsequent decision in CIT v. RRJ Securities Ltd. (2015) 62 taxmann.com 391(Del.) perhaps did not discuss the first proviso to Section 153B (1) of the Act. The further contention is that in any event the effect of a combined reading of the first proviso to Section 153B (1) an....
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.... Act. According to learned counsel, the primary objective of the amendments was to expand the reach of Section 153A beyond six AYs' in cases where evidence or material may have been gathered in the course of a search. It was submitted that since the expression "relevant assessment year" came to be introduced in Section 153A, corresponding amendments were necessarily required to be made to Section 153C. According to learned counsel, notwithstanding those amendments, the statutory position would remain unaltered since the six years would have to be calculated with reference to the year in which the requisition was made by the jurisdictional AO of the "other person". Mr. Kapoor submitted that the amendments made to Section 153C were merely aimed at aligning that provision with Section 153A. The fact that these amendments introduced in Section 153C were consequential would be evident from the Memorandum to the Finance Bill 2017, the Notes on Clauses as well as the Explanatory Notes to the provisions of the 2017 Amending Act. Relevant extracts of the Memorandum to the Finance Bill, 2017 is reproduced hereinbelow: "Memorandum to the Finance Bill, 2017 It is however prop....
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....income escaping assessment is represented in the form of asset; (iii) the income escaping assessment or part thereof relates to such year or years. 80.5 Applicability: The amended provisions of section 153A of the Income-tax Act shall apply where search under section 132 of the Income-tax Act is initiated or requisition under section 132A of the Income-tax Act is made on or after the 1st day of April 2017. 80.6 Section 153C of the Income-tax Act has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A of the Income-tax Act. 80.7 Applicability: These amendments take effect from 1st April, 2017." 30. According to Mr. Kapoor, notwithstanding the expansion of the assessment period to ten years, the Legislature consciously did not amend the commencement point for the purposes of computation and which stood embodied in the Proviso to Section 153C(1). This, according to Mr. Kapoor, is unassailable evidence of the position with respect to computation of the block period remaining unaltered. Mr. Kapoor then submitted that the calculation of the six and ten year block is governed by distinct pr....
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.... 2011-12 10th Year 2010-11 The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department. 10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten asses....
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....the serious prejudice which would be caused to an assessee if the Revenue's contentions were to be accepted or if an inordinate delay in handing over papers and materials to the jurisdictional AO of the non-searched person was to be ignored. According to Mr. Jain, the time gap that may occur clearly assumes a status of criticality in light of the binding decisions handed down by the Supreme Court. 32. Mr. Jain also reiterated the contentions addressed by Mr. Kapoor and insofar as they pertained to the computation of the six and ten AYs' as also the distinction between the starting point from which those periods are to be reckoned. Learned counsel submitted that the respondents clearly did not have jurisdiction to issue notices for AYs' 2010-11 to 2013-14 since the period for which an assessment could have been undertaken would have to be reckoned from the deemed date of search, a concept introduced in terms of the First Proviso to Section 153C. According to learned counsel, in WP(C) 1113/2024 the material gathered in the course of the search was handed over to the jurisdictional AO of the non-searched person on 24 June 2022 and which would thus fall in FY 2022-23 with its corres....
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....being relevant. The aforesaid position, according to Mr. Jain, can no longer be doubted bearing in mind the judgments in Jasjit Singh and RRJ Securities. Mr. Jain then submitted that insofar as the ten year block period is concerned, Section 153C enables reopening of assessments for a period of ten years including the year of receipt of documents. Learned counsel laid stress upon Section 153A speaking of the end of the assessment year and identifying that date as relevant for the purposes of identification of the ten year period. The aforesaid argument was sought to be explained with the aid of the following table: "AYs No. of Years Year of passing/ handover of documents AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 AY 2017-18 7 AY 2016-17 8 AY 2015-16 9 AY 2014-15 10 AY 2013-14 11 Barred by limitation [point no. 2] AY 2012-13 12 Barred by limitation [Point Nos. 1 & 2]" 36. Mr. Rohit Jain then contended that prior to the 2017 Amending Act being enforced, proceedin....
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....monize the provisions of Section 153C with Section 153A and thus construct a holistic scheme of assessment pertaining to searches. It was further submitted that in the absence of Section 153C independently defining "relevant assessment year", the expression would have to be necessarily understood in light of its definition as appearing in Section 153A. This position, according to learned counsels, is also manifest from para 80 of the aforenoted CBDT Circular which is extracted hereinbelow:- "80. Rationalisation of provisions of the Income Declaration Scheme, 2016 and consequential amendment to section 153A and 153C. 80.1 The provisions of clause (c) of the section 197 of the Finance Act, 2016 provide that where any income has accrued, arisen or been received or any asset has been acquired out of such income prior to commencement of the Income Declaration Scheme, 2016 (the Scheme), and no declaration in respect of such income is made under the Scheme, then, such income shall be deemed to have accrued, arisen or received, as the case may be, in the year in which a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 or section....
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....ue this court to reconsider its view in RRJ Securities (supra). The court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this court as well as by this court. Thirdly, the recent amendment to section 153C(1) of the Act states for the first time that for both the searched person and the other person the period of reassessment would be six assessment years preceding the year of search. The said amendment is prospective." 41. The submission in essence was that the identification of "relevant assessment year" must be construed and interpreted harmoniously since it could not have been the intent of the Legislature to provide two separate yardsticks for the purposes of computing the assessment period under Sections 153A and 153C. Learned counsels contended that the phrase "six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted.." reiterates the position which prevailed even prior to 01 April 2017. It was submi....
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....ll proceed to determine the undisclosed income of the block period in the manner laid down in Section 158-BB and the provisions of Section 142, sub-sections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply; (c) the assessing officer, on determination of the undisclosed income of the block period in accordance with this Chapter, shall pass an order of assessment and determine the tax payable by him on the basis of such assessment; (d) the assets seized under Section 132 or requisitioned under Section 132-A shall be dealt with in accordance with the provisions of Section 132-B. *** 158-BD. Undisclosed income of any other person.-Where the assessing officer is satisfied that any undisclosed income belongs to any person other than the person with respect to whom search was made under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132-A, then, the books of account, other 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 under Section 15....
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.... [(1939-40) 67 IA 239 : (1940) 52 LW 234 : (1940) 8 ITR 442] , Indian United Mills Ltd. v. Commr. of Excess Profits Tax [(1955) 27 ITR 20 (SC)] and Gursahai Saigal v. CIT [(1963) 48 ITR 1 (SC)] ; CWT v. Sharvan Kumar Swarup & Sons [(1994) 6 SCC 623] ; CIT v. National Taj Traders [(1980) 1 SCC 370 : 1980 SCC (Tax) 124] ; Associated Cement Co. Ltd. v. CTO [(1981) 4 SCC 578 : 1982 SCC (Tax) 3 : (1981) 48 STC 466] ). Francis Bennion in Bennion on Statutory Interpretation, 5th Edn., Lexis Nexis in support of the aforesaid proposition put forth as an illustration that since charge made by the legislator in procedural provisions is excepted to be for the general benefit of litigants and others, it is presumed that it applies to pending as well as future proceedings. 35. Having said that, let us revert to the discussion of Section 158-BD of the Act. The said provision is a machinery provision and inserted in the statute book for the purpose of carrying out assessments of a person other than the searched person under Sections 132 or 132-A of the Act. Under Section 158-BD of the Act, if an officer is satisfied that there exists any undisclosed income which may belong to any other pe....
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....sessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158-BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts was made under Section 132-A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. xxxx xxxx xxxx 41. In the result, we hold that for the purpose of Section 158-BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: ....
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.... of any rational purpose in giving the definitions a retrospective effect. It follows that "he was a joint tenant and has become the sole tenant" in section 88(1)(b) means that he was a joint tenant under a secure tenancy and has become the sole tenant under a secure tenancy. When Mrs Betty Walker became sole tenant, it was not of a secure tenancy and she was therefore not a successor. I would therefore dismiss the appeal." 45. It was further urged that Sections 153A and 153C must be interpreted in a manner that the object and purpose of search assessment is not frustrated. It was in this respect contended that by the time the impugned notices came to be issued, Section 153C existed in its amended avatar and it was the provision as it stood then which would apply. It was further submitted that the decisions in S.S. Gadgil, Brahm Dutt and C.B. Richards Ellis are clearly distinguishable since those pertained to Section 149 and not Section 153C. It was sought to be emphasized that since both the provisions stand couched in language which is clearly distinct and distinguishable, the aforenoted judgments would have no application. 46. It was then argued that a calculation of the p....
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....mitted that public interest requires that the right of the Department to tax income basis the seized material be preserved in the case of the searched person. 49. The respondents asserted that the submission of the writ petitioners that the six or the ten year block period is liable to be calculated from the date of handing over of documents to the AO of the non-searched person fails to take into consideration various practical difficulties which would necessarily arise. It was submitted that there would always be a time lag between examination of the seized material and recording of satisfaction in the case of the "other person" by the AO of the searched person and the handing over of the seized material to the jurisdictional AO of the "other person". According to learned counsels, resultantly the period of six AYs' as well as of the "relevant assessment year" of the searched person would never coincide with those in the case of the "other person", even though in both scenarios the trigger for assessment is the material seized in the course of search. According to learned counsels, the inevitable consequence of the above would be that the number of years which would effectively....
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....ped assessment. Learned counsels also underlined the words "in aggregate" as occurring in the Fourth Proviso to submit that even if the prescription of INR 50 lakhs or more was satisfied on a cumulative computation of the six or the ten AYs' period, the precondition as placed by virtue of the Fourth Proviso would stand satisfied. E. ANALYSIS OF THE STATUTORY FRAMEWORK 51. Having noticed the rival submissions which were addressed, we now proceed with our analysis of the questions which stand posited. Prior to the insertion of Sections 153A, 153B, and 153C in the Chapter pertaining to procedure for assessment, an assessment in respect of search cases was governed and regulated by Chapter XIVB of the Act. The said Chapter comprising of Sections 158B to 158BH set out the procedure for assessment or reassessment proceedings being undertaken as a fallout of a search which may have been conducted. Chapter XIVB spoke of assessments being undertaken for a block period comprising of six AYs' preceding the previous year in which the search may have been conducted or a requisition made. In terms of Section 158BA, the total undisclosed income relating to the block period as determined was....
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....ular assessment and thereby not contemplating a merger of the two assessment proceedings or abatement of pending assessments. Section 158BI came to be incorporated in Chapter XIVB by virtue of Finance Act 2003 with effect from 01 June 2003 and reads as under:- "158BI. Chapter not to apply after certain date.- The provisions of this Chapter shall not apply where a search is initiated under section 132, or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003." 54. Sections 153A, 153B and 153C were introduced by virtue of Finance Act, 2003. The trinity provisions constituted a paradigm change in the manner in which search assessments were liable to be conducted. They set up a procedure clearly distinct from that which was envisaged under Chapter XIVB and were ordained to apply in respect of all searches or requisitions made after 31 May 2003. The fact that these provisions were envisaged to now govern and regulate all search assessments came to be reinforced by virtue of the introduction of Section 158BI and thus bringing the curtains down on the block period assessment procedure set out in Chapter XIVB and wh....
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....his section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. The proposed sub-section (1) of the new section 153B provides for the time-limit for completion of assessment in case of a person where a search is initiated under section 132 or books of account, other documents or assets are requisitioned under section 132A.It provides that the Assessing Officer shall make an order of assessment or reassessment in respect of each assessment year falling within six assessment years referred to in clause (b) of section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed. The Assessing Officer shall make an order of assessment or reassessment in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was....
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....isdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A.These amendments will take effect from 1st June, 2003." 56. Section 153A, when finally introduced, commenced with a non- obstante clause giving it overriding effect over Sections 139,147 to 149, 151 and 153 in case of a person where a search may have been initiated or a requisition made after 31 May 2003. It provided that where a search comes to be initiated or where books of accounts or other documents or assets come to be requisitioned, the AO would require the searched person to furnish a return of income in respect of each AY falling within six AYs' immediately preceding the AY relevant to the previous year in which search may have been conducted or requisition made. The First Proviso further stipulated that the AO would assess or reassess the total income in respect of each AY falling within the block of six AYs'. Of equal significance was the Second Proviso and which prescribed that if any proceedings relating to assessment or reassessm....
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....bate. It is proposed to amend the said section so as to provide that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having the jurisdiction over such other person. It is further proposed to insert a new sub-section (2) so as to provide that for assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A in case of other person, where (a) no return of income has been furnished by such person and no notice under sub-section (1) of section 142 has been issued to him, or (b) are turn of income has been furnished by such person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized....
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....aving 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 notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A." 60. Thereafter, vide the 2014 Finance Act, Section 153C was further amended to provide that the jurisdictional AO of the "other person" was....
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....or the relevant assessment year or years referred to in sub-section (1) of section 153A . The amendment will take effect from 1st October, 2014." 62. Clause 53 of the Notes on clauses explaining the amendment to Section 153C introduced vide the 2014 Finance Act is reproduced hereinbelow: "Clause 53 of the Bill seeks to amend section 153C of the Income-tax Act relating to assessment of income of any other person. The existing provisions contained in sub-section (1) of the aforesaid section provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong 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 such other person notice and assess or reassess in....
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....ided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub- section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: Provided further that the Central Government may by rules made by it and published 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 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 a....
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....s of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this[sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso),specify the class 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 pre....
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.... or reassess the total income in respect of each assessment year falling within such six assessment years [and for the relevant assessment year or years]: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment year or years] referred to in this[sub- section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate: [Provided also that the Central Government may by rules made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso),specify the class 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 asse....
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....t out hereinbelow: Income-Tax Act, 1961 - As Amended by Finance Act 2015 Income-Tax Act, 1961 - As Amended by Finance Act 2017 Assessment of income of any other person: Assessment of income of any other person.: 153C. [(1)] [Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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 provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or r....
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....ection 148, section 149, section 151 and section 153, 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 provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person [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 referred to in sub-sec....
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....t as it existed on the date of issuance of the impugned notices, regulates assessments pertaining to searches conducted between 31 May 2003 and up to 31 March 2021. The latter terminal point governing the applicability of that provision came to be inserted by virtue of Finance Act, 2021, with effect from 01 April 2021. A similar sunset clause came to be introduced in Section 153C with the addition of sub-section (3) and which prescribed that nothing contained in the aforesaid provision would apply in respect of any search conducted or assets requisitioned on or after 01 April 2021. The aforesaid amendments appear to have been triggered by the schematic amendments which came to be introduced in Sections 145 to 151 and the procedure for reassessment inquiry being radically amended consequent to the introduction of Section 148A. The time limit for initiation of action also came to be amended with Section 149 being recast. For purposes which may be germane to the present batch, we also take note of the addition of the First and Second Provisos to Section 149 and which are extracted hereunder:- "149. Time limit for notice.- xxxx xxxx xxxx Provided that no noti....
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.... or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person." 68. Although Section 148A made specific provisions for the assessee being placed on notice and being provided with the opportunity to explain why reassessment should not be initiated and any objections connected therewith being liable to be decided before reassessment was undertaken, reassessments triggered by a search were excluded from the ambit of that provision as would be manifest from a reading of the Proviso to Section 148A and which is couched in the following terms:- "148-A. Conducting inquiry, providing opportunity before issue of notice under Section 148. xxxx xxxx xxxx Provided that the provisions of this section....
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....Act also introduced the following salient provisions relevant to search assessments:- "153. Time limit for completion of assessment, reassessment and recomputation xxxx xxxx xxxx (3A) Notwithstanding anything contained in sub-sections (1), (1A), (2) and 93), where an assessment or reassessment is pending on the date of initiation of search under section 132 or making of requisition under section 132A, the period available for completion of assessment or reassessment, as the case may be, under the said sub-sections shall, - (a) in a case where such search is initiated under section 132 or such requisition is made under section 132A; (b) in the case of an assessee, to whom any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; (c) in the case of an assessee, to whom any books of a account or documents seized or requisitioned pertains or pertain to, or any information contained therein, relates to, be extended by twelve months." 71. Of equal significance is Section 153(8) and which makes the following provisions:- "153. Time limit for completion of assessment, reass....
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....er 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." The Fourth Proviso thus puts in place certain preconditions which regulate assessment or reassessment for the four additional AYs' which would fall within the meaning of the expression "relevant assessment year" and fall beyond the six AYs' immediately preceding the AY relevant to the previous year which stands covered by Section 153A(1)(b). 74. Section 153C, as it stood on the date when the impugned notices came to be issued, proceeding along similar lines is statutorily proclaimed to override the provisions of Section 139, 147, 148, 14....
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....ssue which is no longer res integra. This aspect came to be duly noticed and lucidly explained by our Court in the matter of SSP Aviation Ltd. v. Deputy CIT 2012 SCC Online Del 1898. The relevant extracts of SSP Aviation Ltd are set out hereinunder: "14. Now, there can be a situation when during the search conducted on one person under section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under section 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or document belongs to the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the Assessing Officer having jurisdiction over the other person. Thereafter, the Assessing Officer having jurisdiction over the other person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the manner contemplate....
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....t. Ltd., which decision is pending consideration in ITA No. 585 of 2013 in this Court, in which a question of law has been framed, the decision in SSP Aviation Ltd. (supra) puts the matter beyond all doubt. In addition, the Court has been shown by learned counsel for the Respondent a circular dated 31st March 2014 issued by the CBDT, containing the guidelines regarding Section 153C of the Act. Para 2.5 of the said circular clarifies as under: "The AO of the other person assumes jurisdiction under Section 153C with the receipt of the relevant seized material from the AO of the searched person. Also, a copy of the satisfaction received from the AO of the searched person in this regard would enable him to proceed further in the case of the other person under Section 153C. Though there is no statutory requirement for the AO of such other person to record any satisfaction/reason before issuing notice under Section 153C and proceeding further, considering the above aspects, it is advisable for maintaining institutional memory that the AO records receipt of the seized material and the satisfaction from the AO of the searched person and such recording/noting may be kept in the ass....
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....gs for assessment or reassessment of any assessment year within a period of six assessment years shall abate, is the date of initiation of the search under section 132 or requisition under section 132A. .. However, in the case of other person. .. such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of 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" xxxx xxxx xxxx 17. In Pepsi Foods Pvt. Ltd. v. Asst. CIT (2014) 367 ITR 112 (Delhi), this court had explained that on a plain reading of section 153C of the Act, a notice under that section could be issued only after two preceding conditions had been met. First of all, the Assessing Officer of the searched person would have to arrive at a satisfaction that document or asset seized does not belong to the person searched but to some other person and, secondly, the seized documents/assets are handed over to the Assessing Officer having jurisdiction over that person,....
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....ent from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word 'satisfaction' or the words 'I am satisfied' in the order or the note would not meet the requirement of the concept of satisfaction as used in section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid that going through the contents of the satisfaction note, we are unable to discern any 'satisfaction' of the kind required under section 153C of the said Act." xxxx xxxx xxxx 19. The Allahabad High Court in the case of CIT v. Gopi Apartment (2014) 365 ITR 411 (All) has expressed a similar view in the following words (page 419): ....
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.... proceedings against the 'searched person', or even during the assessment proceedings against him or even after completion of the same, but before issuance of notice to the 'such other person' under section 153C. Even in a case, where the Assessing Officer of both the persons is the same and assuming that no handing over of documents is required, the recording of 'satisfaction' is a must, as, that is the foundation, upon which the subsequent proceedings against the 'other person' are initiated. The handing over of documents, etc., in such a case may or may not be of much relevance but the recording of satisfaction is still required and in fact it is mandatory." xxxx xxxx xxxx 24. As discussed hereinbefore, in terms of the 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 Assessing Officer having jurisdiction to assess the said assessee. Further proceedings, by virtue of section 153C(1) of the Act would h....
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....ficer 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 the assessment year 2003-04 and the assessment year 2004-05 were outside the scope of section 153C of the Act and the Assessing Officer had no jurisdiction to make an assessment of the assessee's income for that year." 78. In the appeal which was taken to the Supreme Court against the judgment rendered by this Court in Jasjit Singh, the view as expressed by our Court in that decision came to be affirmed with the following significant observations being entered:- "8. In SSP Aviation (supra) the High Court inter alia reasoned as follows:- "14. Now there can be a situation when during the search conducted on one person under Section 132, some documents or valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under Section 153C, which provides for the assessment of income of a....
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....on which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under Section 132 - would take his own time to forward the papers and materials belonging to the third party, to the concerned A.O. In that event if the date would virtually "relate back" as is sought to be contended by the revenue, (to the date of the seizure), the prejudice caused to the third party, who would be drawn into proceedings as it were unwittingly (and in many cases have no concern with it at all), is dis-proportionate. For instance, if the papers are in fact assigned under Section 153-C after a period of four years, the third party assessee's prejudice is writ large as it would have to virtually preserve the records for at latest 10 years which is not the requirement in law. Such disastrous and harsh consequences cannot be attributed to Parliament. On the other hand, a plain reading of Section 153-C supports the interpretation which this Court adopts." 79. The fact that in the case of a Section 153C assessment, the starting point is ordained to be the handing over of books of account or documents or assets seized and that event constituting the point from which the preceding ....
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....e computed. They had in this connection referred to the judgement rendered by our Court in Sarwar Agency and where an identical submission was addressed as would be evident from a reading of paragraph 6 of the report and which reads as follows: "6. The case of the Revenue is that the first proviso to section 153C refers only to the second proviso to section 153A(1) of the Act, which only indicates that any assessment relating to any assessment year falling within the period of six assessment years which is pending as of the initiation of search shall abate. Therefore, the second proviso to section 153C is also concerned only with the aspect of abatement of pending assessments. According to the Revenue, this makes no difference to the computation of the block of six years preceding the assessment year relevant to the previous year in which the search was conducted. In other words, according to the Revenue, the block period for both the searched person and the "other person" would remain the same notwithstanding that there may be some delay in transmitting the documents recovered during the search which belong or pertain to the "other person" to the Assessing Officer of such....
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.... 12. I am of the considered view that the proviso has no application in the construction of the block period. Section 153C deals with the assessment of income of any other person in relation to the searched person and section 153C(1) reads as under: Assessment of income of any other person. 153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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 provisions of section 153A, if, that Assessing Office....
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....uestion of identifying the point of origin for the purposes of computation of the six AYs' and the "relevant assessment year" as defined by Section 153A. As is manifest from a plain reading of Section 153C, the six AYs' are ordained to be those which immediately precede the AY relevant to the previous year in which the search may have been conducted or requisition made. The block of six AYs' would thus have to be identified bearing in mind the AY pertaining to the FY in which the search had been conducted or requisition made. The aforesaid AY would thus constitute the anchor point for the purposes of identification of the six AYs'. The statute envisages a similar process to be adopted for the purposes of computation of the "relevant assessment year" and where applicable constructs a block of ten AYs'. The significant difference between the two however is that while the six AYs' hinge upon the phrase "immediately preceding" the AY pertaining to the search year, the ten AYs' are liable to be computed or reckoned from the end of the AY relevant to the year of search. In our considered opinion, the petitioners have correctly identified the aforesaid distinction as being crucial and det....
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.... 2019-20 3 AY 2018-19 4 AY 2017-18 5 AY 2016-17 6 Consequently, AY 2021-22 would become the first of the six preceding AYs' and would as per the table set out hereinabove terminate at AY 2016-17. 88. Section 153A replicates the basis on which the six AYs' are to be identified and computed with the solitary distinction being that in the case of the searched person, the six AYs' are liable to be computed from the AY pertaining to the FY in which the search was conducted. The starting point for the purposes of identifying the six AYs' in the case of Section 153A would thus turn upon the year of search as opposed to the handover of material which is spoken of in the First Proviso to Section 153C. If one were to therefore assume that a search took place on a person between 01 April 2021 to 31 March 2022, the pertinent AY would become AY 2022-23 and the corresponding six AYs' would be as follows:- Computation of the six-year block period as provided under Section 153C of the Act No. of years AY 2021-22 1 AY 2020-21 2 AY 2019-20 3 AY 2018-19 4 AY 2017-18 5 AY 2016-17 6 89. That takes us then to the issue of identifyin....
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.... assessment year itself. In that event, the ten assessment years will be as follows : 1st Year 2019-20 2nd Year 2018-19 3rd Year 2017-18 4th Year 2016-17 5th Year 2015-16 6th Year 2014-15 7th Year 2013-14 8th Year 2012-13 9th Year 2011-12 10th Year 2010-11 The case on hand pertains to AY 2009-10. It is obviously beyond the ten year outer ceiling limit prescribed by the statute. The terminal point is the tenth year calculated from the end of the assessment year relevant to the previous year in which search is conducted. The long arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department. 10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previou....
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.... AY 2019-20 4 AY 2018-19 5 AY 2017-18 6 93. The relevant block of six AYs' when computed for the period of 01 April 2023 to 31 March 2024 would be the following: Computation of the six-year block period as provided under Section 153C of the Act No. of years AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 94. Similarly, and in light of what has been held by us hereinabove, the relevant block of ten AYs' when computed for the period 01 April 2022 - 31 March 2023, and where the Satisfaction Note was drawn by the AO of the non-searched person between those two dates, would be as under:- Computation of the ten-year block period as provided under Section 153C read with Section 153A of the Act No. of years AY 2023-24 1 AY 2022-23 2 AY 2021-22 3 AY 2020-21 4 AY 2019-20 5 AY 2018-19 6 AY 2017-18 7 AY 2016-17 8 AY 2015-16 9 AY 2014-15 10 95. The relevant block of ten AYs' when computed for the period 01 April 2023 - 31 March 2024, with the date of the Satisfaction Note drawn by the AO of the non-searched person falling within that p....
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....ons comprised in the Fourth Proviso to Section 153A. It must at the outset be noted that the amount of INR 50 lakhs which is spoken of in clause (a) of the Fourth Proviso merely constitutes a threshold. Regard must also be had to the fact that at the stage when the AO is issuing notice, it has yet not had the opportunity to undertake a detailed or in-depth examination of the evidence collected or come to a conclusive opinion with respect to the total income which may have escaped assessment. The computation and assessment of the income that is likely to have escaped assessment is at this particular stage clearly tentative and nebulous. It would therefore and in our considered opinion be incorrect to strike down initiation of action merely because the notice may on an ex facie examination refer or allude to the value of an asset as being less than INR 50 lakhs. This more so when the petitioners call upon the Court to render a verdict based on a mere facial perusal of the Section 153C notice. We are also of the view that it would also perhaps be imprudent to accord a judicial imprimatur to the test as proposed by the petitioners and elevate it to attain the status of an inviolable ru....
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....ail the reopening of ten assessment years if the prerequisites are not shown to have been met. 102. We are also of the firm opinion that the figure of INR 50 lakhs is not meant to be the qualifying criteria for each of the "relevant assessment year" independently. Clause (a) in unambiguous terms uses the expression "in aggregate in the relevant assessment years". Consequently, even if the income likely to have escaped assessment on a cumulative computation be in excess of INR 50 lakhs, the same would qualify the statutory requirements as placed by the Fourth Proviso. I. ISSUE OF FINALITY/CLOSURE FOR AYs' 2010-11 AND 2011-12 AND THE APPLICABILTY OF THE 2017 AMENDING ACT 103. We then lastly proceed to deal with the challenge which stood raised to the impugned notices, with it being contended that for AYs' 2010-11 and 2011-12, the period for assessment or reassessment when computed in accordance with the permissible period prescribed in Sections 143 and 153 of the Act as well as Sections 148 and 149 having come to an end prior to 01 April 2017, the respondents would stand legally deprived of the authority to invoke Section 153C for the said AYs'. In the alternative, it was al....
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....tante clause and thus being representative of the legislative intent of those two provisions overriding Sections 139, 147, 148, 149, 151 and 153 of the Act. The non obstante clause which accompanies both those provisions are a manifestation of the clear intent of the Legislature of those provisions and the powers comprised therein being available to be invoked and exercised notwithstanding the fetters and controls placed upon the powers of assessment or reassessment that may otherwise be available to be exercised by virtue of Sections 139, 147, 148, 149, 151 and 153 of the Act. Sections 153A and 153C thus stand unshackled from the rigours of Sections 147, 148, 149, 151 or 153 of the Act. 106. The fact that Sections 153A and 153C would thus be freed from the restrictive timeframes which are erected by the aforenoted set of provisions would also appeal to logic bearing in mind the undisputed position that assessments or reassessments under Sections 153A and 153C are predicated upon a search. A search by its very nature would be an event unpredictable and unforeseen. It would therefore be wholly illogical to tie down assessments resting upon a search which may be undertaken to the ....
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....r conclusion that the finality which is spoken of cannot be a ground which would warrant the amplitude of Sections 153A and 153C being abridged. As was noticed hereinbefore, a search would be an event which would be inherently unfathomable and clearly defy prediction. It would thus be wholly incorrect to conceive of a connection between statutory timeframes which are otherwise embodied in the Act to search assessments. 108. We also find ourselves unable to countenance the submissions based upon the two Proviso's placed in Section 149 for the following reasons. It must at the outset be noted that Section 149 regulates the time within which a notice under Section 148 may be issued. It thus neither ventures nor attempts to regulate the search assessment powers that are available to be invoked in terms of Sections 153A or 153C. Secondly, although the First Proviso (and to the extent that it included a reference to Sections 153A and 153C), came to be introduced by virtue of Finance Act, 2022 [Act 6 of 2022] with retrospective effect from 01 April 2021, the non obstante clause in Sections 153A and 153C was left untouched. Of equal significance is the fact that that Sections 153A and 1....
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.... clearer expression of the legislative will for those provisions having a retroactive application. 111. Although the petitioners sought to draw sustenance from the decision of this Court in C.B. Richards Ellis, we find that the reliance placed on the said decision as well as the others cited in its company is clearly misplaced. C.B. Richards Ellis in fact holds that the period within which reassessment may be initiated is a matter of procedure and that it is the time period prescribed and prevalent on the date of issuance of notice which would be applicable. We deem it appropriate to notice the lucid explanation of the legal position which appears in the decision of the Supreme Court in S.C. Prashar, Income Tax Officer Vs. Vasantsen Dwarkadas AIR 1963 SC 1356 and where the aspect of finality attached to assessments was explained in the following terms:- "93. The amending Act of 1948 was passed on September 8, 1948, and came into force from March 30, 1948. In some cases it has been hold that its retrospectivity cannot be carried further than March 30, 1948. That is true in one sense but not in the sense how its provisions were to work in relation to the assessees. The se....
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.... section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time limit is created retrospectively, there is no reason why the liability should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced. This aspect was admirably summed up by Chakravarti, C.J. (Sarkar, J. concurring) in Income tax Officer v. Calcutta Discount Co. Ltd. as follows: "The plain effect of the substitution of the new Section 34 with effect from 30th March, 1948, is that from that date the Income Tax Act is to be read as including the new section as a part thereof and if it is to be so read, the further effect of the express language of the section is that so far as cases coming within clause (a) of sub-section (1) are concerned, all assessment years ending within eight years from 30th March, 1948, and from subsequent dates, are within it....
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....the section is constitutionally enacted then it also means what it says. It is hardly possible to imagine clearer language then the one used. It says that the limit of time mentioned in Section 34 is removed in certain cases that is to say, action can be taken at any time in these cases. In our judgment, each case of a notice must be judged according to the law existing on the date the notice was issued or served, as the law may require. So long as the notice where the notice is in question, and the assessment, where the assessment is in question, are within the time limited by the law, as it exists when the respective actions are taken, the actions cannot be questioned provided the law is clearly retrospective. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its operation is retrospective. All other cases are covered by the law in force at the time action is taken. It is from these viewpoints that these appeals, in our opinion, should be judged." 112. As is manifest from the aforesaid passages, the Supreme Cour....
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.... assessment year, but this is not the issue or question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re-assessment proceedings can be initiated. Thus the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee." 114. C.B. Richards Ellis thus constitutes a precedent which had clearly recognised that while the liability to tax may continue to exist, if the statutory period within which it could be enforced had come to lapse, the assessment would be conferred finality. The core question which arose for the consideration of the Court was with respect to a matter of procedure and the stipulations of time within w....
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....nifest legislative intent for it applying to the "relevant assessment year" computed in accordance with Explanation 1 placed in Section 153A. The statutory scheme so put in place is representative of the intent of the Legislature to overcome conclusiveness that may attach to a particular assessment when tested on the anvil of the period prescriptions contained in Section 149 of the Act. We also bear in mind the pertinent observations of the Supreme Court when it had observed that finality which may ordinarily come to imbue an order of assessment does not result in the creation of a corresponding vested right in the assessee. In any case and for reasons aforenoted, we are of the firm opinion that the judgements rendered in the context of Sections 145-151 would not constitute a prudent basis to interpret Sections 153A and 153C insofar as the argument of closure as canvassed by the writ petitioners is concerned. We consequently find ourselves unable to hold in favour of the writ petitioners insofar as this aspect is concerned. J. DECISION ON ITA 52/2024 117. Turning then to ITA 52/2024 filed by the Department we find that the impugned order dated 29 July 2022 is assailed on the ....
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.... a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs' immediately preceding the AY relevant to the year of search as also in respect of the "relevant assessment year", an expression which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of abatement of all pending assessments as a consequence of which curtains come down on regular assessments. B. Both Sections 153A and 153C embody non-obstante clauses and are in express terms ordained to override Sections 139, 147 to 149, 151 and 153 of the Act. By virtue of the 2017 Amending Act, significant amendments came to be introduced in Section 153A. These included, inter alia, the search ass....
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....(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under ....
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....d not on mere ipse dixit but reflective of a fair assessment of the quantum of income likely to have escaped assessment as distinct from mere speculation and conjecture. I. We further hold that since the precondition of INR 50 lakhs or more constitutes a sine qua non for initiating action for the extended ten year block, the aforesaid satisfaction and the reasons in support thereof would have to borne out from the Satisfaction Note itself. We are also of the opinion that the precondition of INR 50 lakhs is not liable to be viewed as being the qualifying criteria for each "relevant assessment year" that may be thrown open and that the said condition would stand satisfied if the escaped income cumulatively or in the aggregate meets the minimum benchmark of INR 50 lakhs. J. The contention of finality and closure addressed with respect to AYs' 2010-11 and 2011-12 on the basis of the statutory timeframes prescribed for assessment or reassessment and as those provisions stood prior to 01 April 2017 is misconceived, since it proceeds on the assumption that once the period of assessment or reassessment were to come to an end, it would inevitably lead to the creation of a ....