TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 881
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....o- -Do- -Do- 6. 3519/Del/2023 [AY 2017-18] -Do- -Do- 153B(1)(b) r.w.s. 143(3) of the Income Tax Act, 1961 2. Briefly stated, the assessee filed return of income for captioned assessment years 2011-12 to 2015-16 & 2017-18 under s. 139(1) of the Act. A search and seizure operation under s. 132 of the Act was carried out on M3M Group of cases on 21.07.2016. Consequently, a 'satisfaction note' was prepared by the AO of the searched person under s. 153C of the Act. Based on the receipt of documents etc. from the AO of the searched person, the AO of the third person i.e. the assessee herein also proceeded to draw 'satisfaction note' dated 25.09.2018 alleging undisclosed income. 3. Pursuant to the 'satisfaction note' prepared under s. 153C of the Act, the proceedings under s. 153C were set in motion by issuance of notice dated 26.09.2018 under s. 153C. In consequence of s. 153C proceedings, certain additions were made by the AO on estimated basis by applying the rate of 10% representing alleged income from commission on total credits and debits reflected in the bank statement of the assessee company. 4. Aggrieved by the additions made, the assessee prefer....
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....rder dated 21.06.2024 and DCIT vs Manglam Multiplex Pvt.Ltd. in ITA No.1093/Del/2024 & CO.No.75/Del./2024 order dated 30.09.2024 were referred to support the case of assessee towards exclusion on A.Y. 2011-12 & AY 2012-13 from the ambit of limitation. 9. Identical issue of bar of limitation arose in the same set of facts out of same search in the DCIT vs Manglam Multiplex Pvt.Ltd. (supra) from where it can be deduced that the assessment framed under s. 153C of the Act for AY 2011-12 & AY 2012-13 are barred by limitation. The relevant para dealing with the issue is extracted hereunder for ready-reference :- 10. "We shall first address the Cross Objection raised by the assessee seeking to challenge the propriety and legality of assessment for the A.Y. 2011-12 in question having regard to the embargo of limitation placed under Section 153C of the Act. It is the case of the assessee that the limitation period of 6 years has to be counted with reference to the date of requisition of books and other documents etc. seized from the custody of searched person. The date of search is not relevant for the purposes of limitation in Section 153C. What is relevant is the date of receipt of sei....
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.... 132 of the Income Tax Act carried out at Chamber No. Paras Twin Towers, Tower-B, 6th Floor, Golf Course Road, Sector-54, Gurgaon-122002 belonging to MBM Group seized material i.e. Annexure A-3 was seized from the aforementioned premises. 3. In view of the above and as per the provisions of sub section (1) of the section 153C of the Act, I am satisfied that the document seized as mentioned above contains information relating to the assessee M/s Shaan Realcon Pvt. Ltd. and will have bearing on the determination of total income for the A.Y. 2011-12 to 2017-18 of M/s Shaan Realcon Pvt. Ltd. Accordingly, after consideration, it is decided to issue such other person (M/s Shaan Realcon Pvt. Ltd.) notice as per provisions of section 153C read with section 153A of the Act. Date 25.09.2018 Sd/- Asst. Commissioner of Income Tax, Central Circle-II, Faridabad 26.09.2018 Notice u/s 153C read with section 153A of the Act issued. Sd/- ACIT 13. Section 153C of the Act pertains to the assessment of income in the hands of person other than searched person, in cases where certain documents, assets or books of accounts etc. found to be pertained to or related to such third person (oth....
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....rial of a particular Assessment Year and without taking note of commencement of activities of assessee; [iii] the act of the AO making sweeping averment in the 'satisfaction note' that documents in the form of Annexure-A-3 have bearing on determination of total income of Shaan Realcom (P.) Ltd. for AYs 2011-12 to 2017-18, is without legal foundation and without application of mind, as the AO has even failed to name the alleged documents and further failed to mention as to how it is related/pertained to a given AY covered in the 'satisfaction note'; [iv] the AO on receipt of material/documents from the AO of the searched person must necessarily apply his mind on the material received and ascertain precisely the specific year to which incriminating material relates. It is only when this determination/ascertainment is complete that the flood gates of an assessment would open qua those particular years. The issuance of notice cannot be an automated function unconnected to this exercise of analysis and ascertainment by the AO in the light of judgement rendered in the case of Agni Vishnu Feature Pvt.Ltd. vs DCIT [2023] 157 taxmann.com 242 (Madras); and [v] the '....
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....sons that material is likely to be incriminating for more than one AY and thus, warranting the action under section 153C of the Act for years in addition to those to which material may be directly relatable. Thus, a nuanced application of mind and recording of reasons for drawing satisfaction as contemplated under section 153C of the Act qua different AYs is paramount. The Hon'ble Delhi High Court noticeably held that issuance of a notice under section 153C of the Act is clearly not intended to be an inevitable consequence to the receipt of material by the Jurisdictional AO and that the initiation of action under section 153C of the Act will have to be founded on a formation of opinion by the Jurisdictional AO that the material handed over and received pursuant to a search is likely to influence the determination of total income and would be relevant for the purposes of assessment/re-assessment in terms of section 153C of the Act. 16. The observation of the Hon'ble Delhi High Court noted above, clearly provides vehement support to the plea taken by the assessee on aspects of jurisdiction flowing from 'satisfaction note'. The 'satisfaction note' under scruti....