TaxTMI 
TaxTMI 
2022 (6) TMI 1497
X X X X Extracts X X X X
X X X X Extracts X X X X
.... much as the Ld. Commissioner of Income Tax (Appeals), Bathinda was not justified to arbitrarily uphold the addition of Rs. 535697/- on account of purchase of land. 3. That the Ld. CIT(A) failed to adjudicate on the ground that the assessment deserved to be quashed as while framing assessment, principles of natural justice were grossly violated. 4. That the Ld. CIT(A) was not justified to pass an order without allowing the appellant an opportunity to cross-examine the persons, Sh. Rajan Satia, Bawa Yadwinder Singh, S. Surjit Singh, Sh. Baldev Raj and Sh. Kishore Chand, on the basis of statement of whom the impugned order of assessment has been framed." 3. During the course of hearing, the Ld. counsel has also taken the additional legal ground on legal issue which is reproduced as under: "That very initiation of proceedings u/s 148 is bad in law in as much as action has been taken on the basis of a document found at the premises of a third party, thus proceedings if at all, were required to be initiated under the provisions of Section 153C of the Act." 4. The facts giving rise to the present appeal are that the case of the assessee was reopened u/s 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l (HUF) v. The DCIT (supra) para 17.1 to 18 held as under: "17.1 Similarly, the Hon'ble Gujarat High court in the case of Cargo Cleaning Agency (Gujarat) Vs. JCIT (supra) held as under: 'The entire scheme for bringing to tax income which has escaped assessment under sections 147 to 153 of the Act specifically relates to a specific assessment year and different time limits are provided at different stages which are all interlinked and commence from the end of the relevant assessment year. The definition of "assessment year" as provided in section 2(9) of the Act means the period of 12 months commencing on the first day of April every year. This definition cannot be made applicable to the term "block period" which has been defined by section 158B(a) of the Act. On a plain reading the concept of block period could not take within its fold the meaning of an assess-year. Similarly, the term "assessment year" by its very definition, could not be read to mean "block period". The entire scheme under Chapter XIV of the Act, more particularly from sections 147 to 153 of the Act, pertaining to reassessment and the special procedure for assessing the undisclosed incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iated against him. Therefore, the agreement in question have been transferred by A.O. of the person searched to the A.O. of the assessee for the purpose of taking remedial action in the matter. It is well settled Law that in the case of assessment made on assessee consequent to the search in another case, A.O. is bound to issue notice under section 153C and thereafter proceed to assess the income under section 153C and if A.O. had proceeded with re-assessment under section 147/148 of the I.T. Act and passed the Order under section 143(3)/148 of the I.T. Act, the same would be illegal and arbitrary and without jurisdiction. We rely upon the Order of ITAT, Visakhapatnam Bench in the case of G. Koteswara Rao (supra). In the case of ITO vs., Arun Kumar Kapoor [2011] 140 TTJ 249 (ASR-ITAT) [Paper Book at Page71], the ITAT, Amritsar Bench held as under: "On a perusal of section 153C, it would be clear that the provisions of this section are applicable which supersedes the applicability of provisions of sections 147 and 148. In the instant case, the documents were seized during the search under section 132 and the same were sent to the Assessing Officer of the assessee and, thus,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 18. In the present case also if any material was found relating to the assessee during the course of search on third parties then the correct course of action would have been to proceed against the assessee under section 153C of the Act and there was no justification for the A.O. to initiate the proceedings under section 147 r.w.s 148 of the Act. So respectfully following the aforesaid referred to orders of the Coordinate Benches of ITAT, we are of the view that there was no justification on the part of the A.O. to initiate the reassessment proceedings under section 147 r.w.s 148 of the Act against the assessee. Accordingly the said order of the A.O. is set aside and quashed." Further the Division Bench in the case of Income Tax Officer v. Arun Kumar Kapoor held as under: "7.2 The undisputed facts are that a search was conducted under section 132 of the Act in the case of M/s. Today Homes & Infrastructure Pvt. Ltd. on 28-3-2006, during the course of which certain incriminating documents were allegedly seized. It is also a matter of record that the DCIT, Central Circle-22, New Delhi intimated the AO of the assessee about seizure of certain documents pertaining to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and ousted. In the instant case, the procedure laid down under section 153C has not been followed by the A.O. and, therefore, assessment has become invalid. We also observe that the CIT(A) was justified in following the ratio laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari Vs. ACIT and another, reported in (2007) 289 ITR 341, wherein it has been held that if the procedure laid down in section 158BD is not followed, block assessment proceedings would be illegal. The CIT(A) has correctly observed that the provisions of section 153C are exactly similar to the provisions of section 158BD of the Act in block assessment proceedings. Thus, considering the entire facts and the circumstances of the present case, we hold that the CIT(A) was fully justified in quashing the reassessment order. We also do not find any merit in the submissions of the learned DR that during the course of search, it was found at premises of M/s. Today Homes & Infrastructure Pvt. Ltd. pertaining to M/s. P.R. Infrastructure Ltd. and not the assessee. In this regard, we may point out that the contention raised by the learned D.R. is factually incorrect 11 and contrary to the available records ....