TaxTMI 
TaxTMI 
2023 (1) TMI 1499
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....nd completing the assessments within '27 days' from the date of issuance of notices u/s.153C of the Act for calling of returns of income. The facts are exactly identical in all the seven appeals of assessee on this very issue of violation of principles of natural justice as the assessment and consequent appellate order is emanating out of search conducted u/s.132 of the Act on M/s. Dhanalakshmi Srinivasan Charitable and Educational Trust on 15.02.2018. The issue raised is exactly identical in all the seven appeals, hence we will take the facts and grounds of appeal from assessment year 2017-18 in ITA No.1010/CHNY/2022 and will decide the main issue. The relevant ground read as under:- "2. Natural justice violation: 2.1 The CIT(A) has committed a grave error in upholding the order of assessment in spite of the serious violation of natural justice principles committed by the Assessing Officer while passing the same. 2.2 The order of assessment having been completed in a mere "27" days, the CIT(A) has rather erroneously held that the same did not infringe natural justice principles. 2.3 Seeing as how the reasonable opportunity of hearing before the ....
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....time to respond Normally in other cases notices u/ss 153C provides a time of atleast 30 days to respond. Why this AO chose to give only 7 days time to respond to the notice u/s 153C is not known. It is not a case whether an accelerated assessment needs to be made. This appellant company has been in existence for a long time and the there is no necessity to make an accelerated assessment. Even if an accelerated assessment is to be made that requires the approval of the CIT. 3.2. Although no minimum time limit has been specified in Secs. 153A or 153Cfor furnishing a return, Sections 1588C (pan materia with Sections 153A and Sec 153C) stipulated a minimum of15 days' time limit. Section 148 originally prescribed a minimum time limit of 30 days. Vide Finance Act, 1996, the said provision stood amended to read as within the time specified in the notice. These are stated here only to submit that in any event 'a reasonable time' has to be given to file a return of income in pursuance of any notice under the Act. 3.3. The notice us. 153C was followed by another notice us 142 dated 11.12.2019 which gives time of 5 days to respond to it. Even before the said time....
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....sponse to notice u/s 153C on 19th December, 2019 which has been totally ignored or deliberately not taken cognizance of by the AO. This ROI was never processed before completion of the assessment proceedings. 3.7. In this case the files came to be centralised only during November, 2019 although search took place in February, 2018 and the assessment was completed on 25.12.2019. At least in the case before the Madras high court a detailed questionnaire dated 07. 12.2019 issued by the A0 before framing the assessment. However, in this case not even a questionnaire had been issued but the A0 was building castles in the air notice over notice and the show cause notice. Thus, the assessment framed by AO needs to be annulled as observed by the Hon'ble Madras High Court in that case" The CIT(A) rejected the ground of violation of principals of natural justice by observing in para 6.9.3 to 6.9.5 as under:- 6.9.3 The submission made by the Appellant has been carefully examined. While going through the records it can be seen that the A.O. has issued the notice us 153C on 28.11.2019 and completed the assessment for all the Assessment Years under consideration on 25.12.....
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....or ROI to be filed within "5" days. 6. 13.12.2019 Show-cause notice proposing additions issued by the AO. 7. 20.12.2019 ROI filed by Petitioner in response to notice u/s.153C of the Act. 8. 21.12.2019 Objections filed by the Petitioner to the additions proposed. 9. 25.12.2019 Impugned order of assessment u/s.144 r.w.s.153C of the Act passed by the AO. 10. 31.12.2020 Expiry of limitation for passing the above order of assessment. The ld.counsel for the assessee drew our attention to communication received form PCIT rejecting assessee's contention for deferment of assessment proceedings for all the assessment years and he stated in his communication dated 04.12.2019 issued vide letter No.ITBA/COM/F/17/2019-20/1021610491(1) and the relevant para 7 reads as under:- "7. Though the 153C assessment is a separate proceeding technically, for all practical purposes, it is very much part and parcel of the 153A proceedings which is getting time barred shortly, on 31.12.2019. As far as the request for postponement of assessment is concerned, the same cannot be entertained at this point of time." 4.1 The ld.counsel for the assessee stat....
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.... needs to record satisfaction. 3.10 The learned Commissioner (Appeals) may kindly call for the records of the AO. In the absence of any satisfaction note the assessment is liable to be quashed as ab initio void. We place reliance on the decision of the Supreme Court in the case of CIT vs. Calcutta Knitwears 362 ITR 673 and in the light of the CBDT Circular No.24/2015 dated 31-12-2015. If there is one, the AO may be directed to furnish a copy of the satisfaction note along with enclosures if any to complete our submissions. 4.2 The ld.counsel stated that exactly on identical facts, Hon'ble High Court of Madras in the case of B.Kubendran vs. DCIT [2021] 126 taxmann.com 107 (Madras) wherein the Hon'ble High Court has discussed the facts that the time allowed in this case was two months and this fact is recorded by Hon'ble High Court in para 25 & 26 as under:- 25. On the question of adherence to the principles of natural justice, the relevant sequence of dates and events is that a notice under Section 153C was issued on 25.10.2019 in regard to a search conducted in 2017. Unfortunately neither the affidavit filed in support of the writ petitions nor the impugned ord....
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.... -132(9D) The authorised officer may, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, make a reference to a Valuation Officer referred to in section 142A, who shall estimate the fair market value of the property in the manner provided under that section and submit a report of the estimate to the said officer within a period of sixty days from the date of receipt of such reference.- 34. The Investigating officer is thus, empowered to refer an issue to valuation even during the process of search. However, such report has to be put to the assessee and his full and complete response sought prior to using the same against him. This has not been done in the present case. Thus, while the reference to valuation is in order, the decision making process is flawed and in violation of the principles of natural justice. 35. There is no explanation set forth in counter or at the time of hearing to explain why the assessment had been taken up for completion, at the very fag end of limitation and for this reason, I believe I would have been justified, ha....
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....viting additional objections, if any, which the appellant-assessee may desire to submit, the assessment may be done afresh and in accordance with law. No costs. Consequently, connected Miscellaneous Petition is closed. In view of the above, the ld.counsel stated that in the present appeals also opportunity of being heard was violated by AO and agreed by appellate authority. The CIT(A) cannot be substituted to that of the opportunity that will be provided by the AO at the first instance. The ld.counsel stated that the adjudicating authority is the first authority before him entire facts are to be narrated and to be verified, which is the starting point where the principles of natural justice are clearly violated. Hence, he requested that the assessment orders and the orders of CIT(A) be set aside and matter be remanded back to the file of the AO for fresh adjudication in term of law. 6. After hearing rival contentions and going through the facts of the case, first of all we have gone through the communication received from PCIT dated 04.12.2019, wherein PCIT informed assessee that the assessment proceedings is getting time barred on 31.12.2019 and he informed the AO also. Once....