TaxTMI 
TaxTMI 
2026 (2) TMI 1233
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.... 2022-23 is bad in law and also notice u/s. 143(2) issued is without Jurisdiction. 4. On the facts and circumstance of the case, the learned CIT(A) is not justified in sustaining the addition of Rs. 2,00,00,000/-. 5. Any other legal and factual ground or grounds that may be urged at the time of hearing of the appeal." 3. The brief facts of the case are that the assessee is an individual and filed his return of income for the A.Y 2022-23 on 25.07.2022, admitting total income of Rs. 58,23,078/-. A search & seizure operation under section 132 of the Income Tax Act, 1961 was carried out on 4.1.2023, in the case of M/s Excel Rubber Group of entities. As part of this search, the case of the assessee, a shareholder in the group entities had covered under section 132 of the Act. During the course of search in the case of the assessee, an agreement of sale dated 31.10.2021 was found in his residence and seized and marked as page No.14 to 10 of Annexure: A/YSR/01. As per the agreement, the assessee had entered into an agreement for purchase of an agricultural land admeasuring 5 Acre and 01 Guntas situated at Rangapur Village, Gramapanchayat, Parigi Mandal, Vikaramad Dist....
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..... CIT (A). Before the Ld. CIT (A), the assessee made detailed written submissions on this issue which have been reproduced at para 5.1 on pages 8 to 11 of the Ld. CIT (A)'s order. The sub and substance of arguments of the assessee before Ld. CIT (A) is that the A.O has erred in making addition towards the alleged cash payment of Rs. 2,00,00,000/- crore under section 69A of the Act on the basis an agreement of sale dated 31/10/2021 and attached cash receipts without appreciating fact that sale agreement was not signed by the assessee. The assessee had also challenged the additions made towards disallowance of deductions claimed under section 80D and 80EE of the I.T. Act, 1961. 6. The Ld. CIT (A), after considering the relevant submissions of the assessee and also taking note of the reasons given by the A.O, sustained the additions made by the A.O on the ground that, as per the agreement of sale dated 31/10/2021, the assessee has agreed to purchase the land @ Rs. 1.51 crores per acre, whereas argues that he has purchased only 2 acre 20 guntas for a consideration of Rs. 4,68,582/- only @ Rs. 1,87,433/- per acre. However, the evidence found during the search clearly shows that the a....
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....ssment is 21 months from the end of the A.Y. in which the income was first assessable. Further, as per the 4th proviso to section 153 of the Act, which was inserted by the Finance Act, 2021 in respect of an order of assessment relating to A.Y commencing on or after 1st day of April 2022, the provisions of this sub-section shall have effect, as if for the words twenty-one months, the words "twelve" months have been substituted. From the provisions of section 153 and 4th proviso provide thereon, it is undisputedly clear that the assessment for the year is under consideration i.e. A.Y 2022-23 should be completed within 12 months from the end of the relevant A.Y, in which the income was first assessable and therefore, the A.O should have passed the assessment order on or before 31/03/2024. Further, the A.O issued a letter dated 22/03/2024 and claimed that in view of clause (xii) of Explanation (1) of section 153 of the Act, the time limit for completion of the assessment is hereby extended from 31/03/2024 to 27/09/2024. However, as per clause (xii) of Explanation (1) to section 153, the period (not exceeding 180 days) commencing from the date on which a search is initiated under sectio....
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....lled. 9. The Ld. Sr. AR for the Revenue, on the other hand, supporting the orders of the Ld. CIT (A) submitted that, there is no merit in the argument of the learned Counsel for the assessee because, the assessment order passed by the A.O on 27/09/2024 is well within the limitation period provided under section 153 of the Act for passing the assessment order which is evident from clause (xii) of Explanation (1) to section 153 of the Act, where the period not exceeding 180 days commencing from the date on which a search is initiated under section 132 of the Act and ending on the date on which the books of account are handed over to the A.O having jurisdiction of the assessee shall be excluded. In the present case, the search was conducted on 4/1/2023 and the A.O has handed over the seized material on 22/08/2023. Although the A.O has taken 231 days for handing over the seized material to the A.O of the assessee but, as per clause (xii) of Explanation (1), it should not exceed 180 days and if we add 180 days to the normal time limit provided under section 153(1) of the I.T. act, then the time limit available for the A.O to complete the assessment was up to 27/09/2024 and the A.O ha....
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....ched person is more than 180 days. If we carefully read clause (xii) of Exp.(1) to section 153 of the Act, it is not an extension of limitation provided for completion of assessment, but it is only exclusion of time taken by the A.O of the searched person which was lost by the A.O of the assessee for assessing the income of the assessee up to a maximum of 180 days. Therefore, while computing the limitation period, the period of 180 days starting from the date of search to ending on the date of handing over books of accounts should be excluded for computing period of limitation. Therefore, in our considered view, if the time taken by the A.O of the searched person covered during the limitation period, then the entire time taken by the A.O for handing over the books of account not exceeding 180 days can be excluded. In case, the time taken by the A.O for handing over the seized material partially goes under the limitation period and partially goes under the other financial year or non-limitation period, then only the time lapsed by the A.O during the limitation period alone should be excluded, because clause (xii) of explanation (1) to section 153 of the Act is only excludes the peri....
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....uestion of excluding the period not exceeding 180 days shall not arise. Suppose if the search is conducted on 25/03/2023 and the books of account are handed over on 30/09/2023, then the period not exceeding 180 days shall be excluded, because the entire period is covered under limitation period for the Assessment. Year 2022-23. However, in a situation like in the present case, if search is initiated on 4/1/2023 and the books of accounts are handed over on 22/08/2023, although the A.O had taken more than 180 days for handing over the books of accounts, but in view of clause (xii) of explanation (1) of section 153, the period not exceeding 180 days shall be excluded for the purpose of computing the limitation period. However, the fact remains that, in the present case, the period taken by the AO for handing over books of account is covered in two financial years, i.e. (1) from 4-1-2023 to 31-03-2023 in financial year 2022-23 and (ii) the period from 1-4-2023 to 22-08-2023 in financial year 2023-24. Further, in the present case, for the Assessment. Year 2022- 23, limitation period starts from 1-4-2023. The time taken by the AO for handing over books of accounts to the AO of the assess....