TaxTMI 
TaxTMI 
2024 (10) TMI 927
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....(a) The Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, amend any / all grounds of appeal before or during the course of hearing of appeal. 2. Briefly stated facts are that the assessee filed his original return of income for the year under consideration on 26.09.2021 disclosing total income of Rs. 3,57,68,335/-. Later, the case of the assessee was reopened by issuing notice u/s. 148 of the Act dated 30.3.2018. In response thereto, the assessee filed his return of income on 08.10.2018 declaring the income of Rs. 3,57,68,340/-. In this case, a search operation was carried out u/s. 132 of the Act at the premises of the assessee on 26.07.2017. The reasons recorded before issue of notice u/s. 148 of the Act to the assessee on 17.10.2018 and notice u/s. 143(2) was also issued on 4.12.2018. It transpires from the reasons recorded before issue of notice u/s. 148 of the Act by the AO for assuming jurisdiction u/s. 147/148 of the Act and the assessment made is based upon the evidences found during search operation u/s. 132 of the Act. The said reasons were based on a statement recorded u/s. 132(4) during search operation. The A....
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....s the notice issued u/s 148 and the impugned assessment order passed are bad-in-law, without jurisdiction and non-est. 6.4 By a reference to the provisions of 2nd proviso to section 153A of the Act, it has been argued that once search has taken place, even the pending proceedings as on date of search for any of the ten assessment years specified in section 153A of the Act stand abated, leave alone the question of issuing fresh notice for assessment/reassessment for any of the aforesaid ten assessment years covered u/s 153A under any other section of the Act other than section 153A itself. 6.5 The appellant has placed reliance on the following judicial pronouncements - 1. STATE BANK OF INDIA VERSUS DEPUTY COMMISSIONER OF INCOME- TAX 2013 (12) TMI 187 - ITAT MUMBAI 2. VASHDEV G. ADNANI VERSUS ACIT 2015 (1) TMI 1387 - ITAT MUMBAI 3. Ramballabh Gupta (MP) 288 ITR 347 4. Rajat Shubra Chatterji vs. ACIT (2016 (7) TMI 258 - ITAT DELHI) 5. Shri NAVRATTAN KOTHARI VERSUS THE ACIT2017 (12) TMI 860 - ITAT JAIPUR 6. G. KOTESWARA RAO AND OTHERS VERSUS DCIT 2015 (12) TMI 1280 - ITAT VISAKHAPATNAM 7. SRI MOTI PANJABI,....
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....nder section 143(3) r.w.s 147 of the Act. The AO instead of complying with the requirement of section 153A proceeded with the provisions of section 147/148 which are not applicable in the assessment under section 153A of the Act, therefore, the assessment completed under section 143(3) read with section 147 of the Act is a nullity and as such the assessment order passed u/s 143(3) read with section 147 of the Act is illegal, arbitrary, wholly without jurisdiction and, hence, the same is quashed. 6.9 Hon'ble ITAT, Mumbai in the case of in the case of Vashdev G. Adnani versus ACIT (supra) held that both the sections (section 148 and section 153A) deal with different situations and notice issued under one section cannot be treated notice under another section nor can be assessment made under a particular section can be treated as finalized under another section. Section 147-148 deal with reassessing of income for a particular AY that escapes taxation because of the failure of the assessee or otherwise. Section 153A deals with the matters where action has been taken u/s. 132 or 132A of the Act. Each and every section of the Act has been included in the statue with a specif....
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....o be quashed. He further submitted that search u/s 132 of the Income Tax Act, 1961, was carried out in the case of assessee on 26/07/2017 and as per provisions of law, notice, if any, could have been issued u/s 153A of the Act only and not under section 148 of the Act. Hence, the notice u/s 148 of the Act issued in this case is bad-in-law and without jurisdiction. To support his contention, he referred the provisions of section 153A of the Act. He further submitted that prior to amendment by Finance Act 2017 w.e.f 1.4.2017, the six assessment years covered for assessment in the case of search used to be the six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made. However, in the present case of assessee, the date of search was 26.7.2017 and accordingly, the six assessment years covered are from A.Y 2012-13 to A.Y 2017-18. It was further submitted that by virtue of amendment by Finance Act 2017 w.e.f 1.4.2017, in section 153A the words and for the relevant assessment year or years referred to in clause (b), has been further inserted to include additional 4 years for assessment u/s 153A beyond th....
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....the assessment order passed are bad-in-law, without jurisdiction and non-est. He further submitted that it is a settled law that once a search has taken place u/s 132 of the Act or requisition is made u/s 132A of the Act, then assessment proceedings in respect of the assessment years (earlier six years, now ten years) specified in section 153A has to be mandatorily initiated and completed u/s 153A of the Act. The assessment proceedings cannot be initiated u/s 148/147 of the Act in respect of the assessment years covered u/s 153A of the Act. To support his aforesaid contentions, he relied upon the following decisions:- i) Hon'ble Delhi High Court decision in the case of PCIT v. OJJUS Medicare Private Limited and others (20241(4) TMI 268. ii) The Hon'ble Rajasthan High Court in the case of Shyam Sunder Khandelwal V. ACIT 12024114) TMI 196 iii). The Hon'ble Bombay High Court in the case of Aditi Constructions V. DCIT (2023) (5) TMI 281. iv). The Hon'ble Karnataka High Court in the case of Sri Dinakara Suvarna V. DCIT (2022) (7) TMI 800. v) Hon'ble Madhya Pradesh High Court in the case of Ramballabh Gupta V ACIT (2005) 149 Taxman 451 (MP) ....
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....003-04 and therefore, the Hon'ble High Court held that invocation of section 153 A was not justified. The addition for AY 2000-01 to AY 2003-04was made by the AO on the basis of disclosure made for AY 2006-07 in the statement recorded u/s 133 A of the Act. It was held by Hon'ble Court that addition for AY 2000-01 to AY 2003-04 could not be made based on the disclosure in the statement u/s 133 A for AY 2000-01 to AY 2003-04. In the case of the assessee, the facts are entirely different. The AO has himself mentioned that during the course of search share transfer document of Unnati Vinimoy Pvt Ltd were found and in the statement recorded u/s 132(4) of the Act, the assessee has made disclosure/surrender for the year under consideration i.e AY 2011-12. In view of the above, it was submitted that the CIT(A) has rightly allowed the appeal, which does not need any interference, therefore, the action of the Ld. CIT(A) may be affirmed by dismissing the appeal of the Revenue. 7. We have heard the rival contentions and perused the relevant records. Upon careful consideration, it is noted that the reasons recorded before issue of notice u/s 148 of the Act by the AO for assuming jurisdiction....
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.... under consideration, the AO was justified in initiating the reassessment proceedings and pass the reassessment order, then such reassessment proceedings/reassessment order could have been u/s 153A of the Act alone and not u/s 148/147 of the Act. Thus in our considered view the notice issued u/s 148 and the assessment order passed are bad-in-law. 7.2 We find considerable cogency in the contention of the Ld. AR that it is settled law that once a search has taken place u/s 132 of the Act or requisition is made u/s 132A of the Act, then assessment proceedings in respect of the assessment years (earlier six years, now ten years) specified in section 153A has to be mandatorily initiated and completed u/s 153A of the Act. The assessment proceedings cannot be initiated u/s 148/147 of the Act in respect of the assessment years covered u/s 153 A of the Act. 7.3 The Hon'ble Delhi High Court in the case of PCIT v. OJJUS Medicare Private Limited and others (20241(4) TMI 268 held that "Sections 153A and 153C are provisions which are triggered by material that may be fortuitously recovered in the course of a search. Both those provisions override and are ordained to operate above and beyon....
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....sment year 2001-02 was completed under section 143(3) on February 13, 2004 determining the total income at Rs. 26,35,49,42,360. Thereafter, a search and seizure action was initiated in the assessee's case by the Department on July 2, 2005 on which date the assessment for the assessment year 2001-02 was not pending. Therefore, in view of the non obstante clause with which sub-section (1) of section 153A opens, the Assessing Officer has no jurisdiction to issue notice under section 148 of the Act in respect of those six assessment years which falls within the exclusive jurisdiction of section 153A of the Act and accordingly the Assessing Officer was not justified in issuing notice under section 148 on August 28, 2006 and in completing the impugned assessment under section 143(3) read with section 147 of the Act on October 31, 2006. The Assessing Officer instead of complying with the requirement of section 153A proceeded with the provisions of section 147/148 which are not applicable in the assessment under section 153A of the Act, therefore, the impugned assessment completed under section 143(3) read with section 147 of the Act is a nullity and as such the assessment order dated ....
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....Each section, each phrase and each word of the Act has its own place and importance. If an AO commits a mistake while passing assessment orders, it cannot be cured by reiving upon any other section, because such a mistake is not a clerical mistake- it relates to jurisdiction. The mistake/defect or omission "in notices issued by the AO u/s. 148 instead of section 153A of the Act is not 'in conformity with /according' to the intent and purpose of the Act. Jurisdictional issues cannot fall in the category of clerical mistakes-they go the roots of the assessment. In these circumstances, we are of the opinion that orders passed by the AO for the AY.1999-2000.2001-01,2001-02 are not valid. 7.10 In the case of SHRI NAVRATTAN KOTHARI VERSUS THE ACIT 2017 (12) TMI 860 - ITAT, JAIPUR has held that "Therefore, in conjoint reading of provisions of section 153A, 153C and 147/148 of the Act as well as a consistent view taken by this Tribunal in a series of decision cited (supra) we hold that the assessment or reassessment of income of the person other than search persons based on seized material can be only be made u/s 153C r.w.s. 153A and the provisions of section 147/148 of the Act are not ....