TaxTMI 
TaxTMI 
2024 (7) TMI 1414
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....ies to beneficiaries. Allegedly, various incriminating papers/documents were found and seized during the course of search and seizure operation in the group cases and the statements recorded during the course of search and seizure operation and pre/post search operation allegedly confirmed the involvement of the group in the accommodation entry practices. Allegedly, in these operations and inquiries, many incriminating papers/documents were found related to the assessee company. Accordingly, after drawing satisfaction note, notice u/s 153C of the Act, was issued to the assessee and addition was made which have been deleted by the CIT(A) for which the Revenue is in appeal raising the following grounds:- "1. That the ld. CIT(A) has erred on facts and law in holding that the assessment years covered u/s 153A and 153C are different. 2. That the ld. CIT(A) has erred in treating the amendment u/s 153C as prospective in nature without appreciating the fact that the same are clarificatory in nature. 3. That the ld. CIT(A) has erred on facts and law in treating the date of handing over of documents as the date of search for deciding the relevant assessment year wi....
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....he contrary that on the same date material has been handed over by the Assessing Officer of the person searched to the A.O of the assessee. Then the year of relevance would be 2018-19 i.e. AY. 2019-20 and six earlier years would be 2013-14 to 201819. The A.O. has issued notice under section 153C for the A.Y. 2010-11 which is clearly barred by limitation. Further assessee has contended the applicability of section 1S3C as per I.T. Act, 1961 for the relevant assessment year. 7. To this the AO has relied the provisions of section 153C of the Act, and was of view that assessment in this case was done with due procedure and issuing statuary notice as per the provision of 153C of the I.T. Act, 1961. Further period covered in this assessment is also in accordance to provision of Section 153C of the Act. 8. The CIT(A) has dealt with the issue with following observations; "Findings 1 have considered the facts of the case, the order by the AO and the arguments of the AR during the appellate proceedings. The decision is as below- i. The appellant has challenged the initiation of proceedings u/s 153C of the Act on the alleged ground that the said provisions are....
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.... requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153 A : Provided 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 153 A 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: Section 153 A is also to be referred to in this context and it reads as under- 153A. (I) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person 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, the Assessing Officer shall- (a) Issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment year....
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....mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.-For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) If any proceeding initiated or any order of assessment or reassessment made under sub¬section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside. Explanation.-for the removal of dou....
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....y preceding the A Y relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of Section 153 A of the Act, states that assessment or re- assessment relating to any AY falling within the period of six A Ys referred to in the said sub-section pending on the date of initiation of the search under Section 132. would abate. 6. The case of the Revenue is that the first proviso to Section 153 C refers only to the second proviso to Section 153 A(l) of the Act, which only indicates that any assessment relating to any A Y falling within the period of six AYs which is pending as of the initiation of search shall abate. Therefore, the second proviso to Section 153 C 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 AY 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 r....
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....the date on which the assets/documents are received by the AO would abate. In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may have remained undisclosed in the relevant assessment years 24. As discussed hereinbefore, in terms of 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 he construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section I53C(I) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be m....
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.... It is seen from the provision that action under Section 153C can be taken in respect of any other person than the person searched if the Assessing Officer of the person searched is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents belong to a person other than the person searched. The appellant had sold the investment in 2012-13 and the search was in July 2015. It was contended that at the time of search, the investment in shares of Mysore Finlease Pvt Ltd were not owned by the appellant. The Ld AR also relied on the judgment of Hon'ble Supreme Court in case of CIT Vs. Sinhgad Technical Educational Society 397 ITR 344 also wherein it was also held that incriminating material had to pertain to the specific person for the specific period. Assessment Year for making the addition. In view of the above facts, it is apparent that if any addition is made to the total income of the assessee u/s 153A/153C of the Act in -concluded assessment then it has to be based on incriminating material, which needs to be correlated with respective Assessment Year in which the addition is made. The Honorable jurisdictional high court bin....