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2025 (11) TMI 1854
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....edings getting time-barred. As a consequence, the petitioner also challenges notices under Section 143(2) and show cause notices issued by Respondent No.2 for completion of the assessment. 3. Number of contentions have been raised in the petition. Mr. Jain, the learned Counsel for the Petitioner, however, submits that if the proceedings under Section 153C are held as time-barred, the other contentions would be merely academic and need not be gone into. 4. Mr. Jain, the learned Advocate of Petitioner, submits that a search and seizure operation under Section 132 of the IT Act was carried out on 21.08.2019 in the case of Oberoi Realty Limited & others. In the course of the aforementioned search, it is alleged by Respondent No. 2 that some incriminating documents and information concerning the petitioner were discovered and seized by the Income Tax Department. Because of the same, proceedings under Section 153C were initiated against the petitioner, resulting in the issuance of the impugned notices under Section 153C for A.Y. 2014-15 to 2019-20. Mr. Jain further submits that the time limit for completion of the assessment as per Section 153B of the IT Act, read with the Taxation....
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....there are 2 limbs of the time limit provided by the third proviso to Section 153B(1), which is applicable for the present assessment under Section 153C. The first limb of clause (ii) of the said proviso provides a time limit for completion of the assessment under Section 153C within 12 months from the end of the financial year in which the search was conducted. However, the second limb of the same clause provides a further time limit of 12 months from the end of the Financial Year in which the records found in the search relating to a third party are transferred under Section 153C to the jurisdictional Assessing Officer of the third party. According to Mr. Sharma, the second limb of the time limit provided by the clause (ii) of the third proviso to Section 153B(1) should be applicable in the present case, as the Investigation Wing of the Income Tax Department has transferred the seized records concerning the petitioner on 21.08.2020, though the search was conducted on 21.08.2019. In such a scenario, Mr. Sharma contends that the time to complete the assessment proceedings was till 31.03.2022. 6. We have heard the parties. Section 153C of the IT Act reads as under:- "1....
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.... within six assessment years 68[and for the relevant assessment year or years] referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed: Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or nine months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later: Provided further that in....
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.... of the said proviso provides the time limit for completion of the assessment to be 12 months from the end of the Financial Year in which the last authorisation of search under Section 132 is executed. As per this time limit, the assessment under Section 153C should have been completed by 31.03.2021 in the present case, as the date of search under Section 132 is 21.08.2019. The second limb of clause (ii) of the said proviso provides the time limit as 12 months from the end of the Financial Year in which the Books of Account or documents seized are handed over under Section 153C to the Assessing Officer of a third party. As per Mr. Sharma, the second limb to the above provision should be applicable in the present case as the investigation wing of the Income Tax Department has handed over the documents to the Assessing Officer of the third party on 21.08.2020. Therefore, according to Mr. Sharma, the time limit should be counted from the date of handing over of documents by the Investigation Wing to the Assessing Officer of the third party, namely, the Petitioner. 11. Under Section 153C, the handing over of documents takes place when the Assessing Officer of the searched party, aft....
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....d hereinabove that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall forward his satisfaction note to the Assessing Officer of the other person and is also required to make a note in the file of a searched person that he has done so. However, as rightly observed and held by the Delhi High Court in the case of Ganpati Fincap (supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings under Section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc. so seized during the search and seizure from the searched person belonged to the other person and transmitting such material to the Assessing Officer of the other person is mandat....
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....pra) has categorically stated and clarified the same. In that situation, the second limb of the clause(ii) of the third proviso to 153B(1) time limit cannot be made applicable. 13. Mr. Sharma's contention that transfer of records from the officer of the Investigation Wing to the common Assessing Officer of the searched party as well as the third party, should trigger the application of the second limb of clause (ii) of the third proviso, cannot be accepted as there is no reference of such transfer in the third proviso to Section 153B(1). The fresh time given in the second limb is applicable only if the Assessing Officer of the searched party transfers the record from himself to the assessing officer of the third party, in case where both the Assessing Officers are different. There is no provision of granting time for completion of the assessment with reference to the transfer of records from the Investigation Wing to the Assessing Officer. In such a case, the cumulative time taken by all the wings of the Income Tax Department, including the Investigation Wing, is covered in the first limb of the proviso, which provides the time limit for completion of assessment as 12 months fro....
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.... of handing over of the books of account or documents or assets seized or requisitioned for the purpose of computation of limitation. The judgment further states that twelve months from the end of the Financial Year, from the date on which the documents were handed over or deemed to have been handed over to the Assessing Officer of the other person, would start running for computation of limitation. 17. Firstly, the aforesaid judgment will not be applicable because in the facts of the present case, the satisfaction note is undated. This is admitted by Mr. Sharma. Even otherwise, we are unable to agree with the learned Single Judge of the Madras High Court that the date of the satisfaction note is to be the deemed date for handing over the books of account or documents or assets seized or requisitioned for the purpose of computation of limitation. We find no such stipulation in clause (ii) of the third proviso to Section 153B(1)(b). 18. We also find, with the greatest respect to the learned Single Judge of the Madras High Court, that the decision of the Hon'ble Supreme Court in the case of Super Malls Pvt. Ltd. (supra) has not been distinguished and read in the correct perspec....