TaxTMI 
TaxTMI 
2024 (4) TMI 1413
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....be quashed. 3. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action Ld. AO wherein he had erred in initiating, continuing and completing the impugned assessment proceedings and thereby the impugned assessment order is a nullity and deserves to be quashed. 4. That on law, facts and circumstances of the case, the Worthy CIT (A) has erred in confirming the action Ld. AO wherein he had erred in making addition of Rs. 26,35,000/- on account of alleged commission received from Manohar Singh Group by the appellant in the form of plots even when no such amount was received or plots were transferred to the appellant in lieu of such alleged commission. 2. Ground No. 1 is general in nature. 3. Apropos Ground Nos. 2 and 3, the facts are that the Assessee is an individual and Proprietor of M/s Shubh Infra. The said proprietary concern is into the commission business wherein it acted as broker for selling of plots of various builders / contractors. During the year in question, the Assessee received Rs. 10 lacs as commission from the Manohar Singh Group (hereinafter to be referred as 'MSG''). The sa....
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....he provisions of Section 153C, when the entire information and material was gathered during the course of search u/s 132 on 'MSG', the right course of action would have been to invoke the provisions of Section 153C, instead of what has been done u/s 143(3) in the present case. 4.4 It has further been contended that in fact, under the provisions of Section 143(3), based on notice u/s 143(2), the Assessing Officer has to initiate and frame the assessment as per the information in the ITR; that the initiation for framing assessment u/s 143(3) is based on notice u/s 143(2), which, in-turn, is based solely on the data in the ITR; that however, for framing assessment u/s 153C, the initiation is based on material found during search on the searched person; that that material cannot be pushed into ongoing assessment proceedings u/s 143(3) without following the procedure mandated u/s 153C; and that therefore, the impugned assessment framed u/s 143(3), and not u/s 153C, is illegal and deserves to be quashed. 4.5 The ld. Counsel for the Assessee has placed reliance on: i) 'PCIT vs Anand Kumar J....
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.... the Act and under the following circumstances : (a) No return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) A return of income has been furnished by such other person but no notice under sub-section (2) of section 143(2) has been served and limitation of serving the notice under subsection (2) of section 143 has expired or (c) assessment or reassessment, if any, has been made. 5.2 The ld. DR has further contended that in this case, the Assessee filed his return of income on 18.03.2013 and notice u/s 143(2) of the Act was issued on 07.08.2013, and that therefore, notice u/s 153C of the Act was neither called for, nor issued. 5.3 The ld. DR has further contended that in this case, subsequent to the search and seizure in the case of a third party, i.e., Manohar Singh Group of Companies on 08.09.2011, the statement of the assessee was recorded under section 131 (l)(d) on 09.09.2011; that a survey action under section 133A of the Act took place on the premises of the assessee on 23.09.2011; that this action was distinct when compared with the search and seizure action ....
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....lock of assessment years, of AYs 2006-07 to 2011-12, fell u/s 153C and the year in question, i.e., AY 2012-13 fell u/s 143(3). For this, they have relied on the provisions of Section 153C(2). This argument of revenue is incorrect. The first proviso to Section 153C deems the date of search in the case of the 'other person' as the date of handing over of relevant material. In the present case, the date of search on 'MSG' is 08.09.2011, but the Assessing Officer who initiated the assessment, assumed jurisdiction u/s 127, for the first time, only on 01.11.2012. A copy of the relevant order u/s 127 of the Act has been filed. Therefore, the handing over of record could not have been earlier than to 01.11.2012. This date of 01.11.2012 falls in the assessment year 2013-14 and, therefore, the block period for six years for notice u/s 153C was assessment years 2007-08 to 2012-13, as held by the Hon'ble Supreme Court in 'CIT Vs. Jasjit Singh' [[2023] 155 taxmann.com 155 (SC)]. 6.1 Therein it has been held as follows: "9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abate....
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....issued and assessment is to be framed in the manner provided u/s 153A. So, it merely prescribes the manner of framing of the assessment. The basic requirement of handing over the material, recording of satisfaction and issuance of notice as per 153C(1) continues to remain the same and it cannot be just wished away by illegally taking the shelter of 153C(2). In the present case, no such satisfaction has been recorded by the Assessing Officer and the material seized from 'MSG' has been used. This is not in accordance with law, as rightly contended.. 8. Further though a survey u/s 133A was carried out on the Assessee, even in an assessment based on a survey, the Assessing Officer cannot use the material found during the course of search on the searched person. There is no such exception mentioned u/s 153C. Thus, as rightly contended, even factually, the Revenue is incorrect on facts. The case of the assessee always remained tied up with the searched person immediately from the date of search, i.e., 08.09.2011, as is available from the order u/s 127. It is in this same order that the searched person (Sr.No. 1) and the assessee (Sr.No. 15), both were centralised with the same Assessi....