TaxTMI 
TaxTMI 
2026 (6) TMI 975
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....he Id. AO in the case of the assessee, under Section 153C the Income Tax Act, 1961 ("ITA"). The action confirmed by ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire order, being illegal and void-ab-initio. 2. In the facts and circumstances of the case and in law, Id. CIT(A) has erred in confirming jurisdiction, in the case of the assessee, under Section 153C of the ITA, for the year under consideration, even though the case of the assessee was barred by limitation as per law, for proceedings initiated under Section 153C. The action confirmed by Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief, please be granted by quashing the entire order, passed under Section 153C, being illegal, void-ab-initio and barred by limitation. 3. In the facts and circumstances of the case and in law, Id. CIT(A) has erred in confirming the issuance of notice, in the case of the assessee, under Section 153C of the ITA, for the year under consideration, without recording proper satisfaction as required under the law. The action confirmed by Id. CIT(A) is illegal, unju....
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....T(A) has erred in confirming the addition of Rs. 3,16,00,000 without providing the requisite material used against the assessee. The action confirmed by Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire proceedings being illegal and against the principles of natural justice and thereby deleting the entire addition of Rs. 3,16,00,000. 9. In the facts and circumstances of the case and law, Id. CIT(A) has erred in confirming that no opportunity was provided to the assessee to cross-examine the persons whose statements were relied upon by the Id. AO. The action confirmed by Id. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire proceedings being illegal and against the principles of natural justice and thereby deleting the entire addition of Rs. 3,16,00,000. 10. In the facts and circumstances of the case and law, Id. CIT(A) has erred in confirming the invocation of provisions of Section 115BBE. The action confirmed by Id. CIT(A) is illegal, unjustified, arbitrary, and against the facts of the case. Relief may ....
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....ALANI", to initiate reassessment proceedings for AY 2013-14 under Section 147 of the Act against a completely different individual bearing the same name, i.e., Shri Anand Jhalani holding PAN: AFOPJ6851R. In those earlier proceedings, the Assessing Officer issued a notice under Section 148 on 24.03.2020 and a subsequent show-cause notice under Section 142(1) on 06.09.2021. In that show-cause notice, the AO specifically alleged that the said namesake of the assessee `Anand Jhalani' had advanced Rs. 3,00,00,000/- in cash through RMG based on the same dates and code words, which was further advanced on interest by the RMG to other borrowers. In the assessment order dated 24.09.2021 passed u/s 147 r.w.s. 144 of the Act, the AO made the addition of Rs. 3 crores on account of unaccounted cash given into the income of the assessee's namesake 'Anand Jhalani' and further of Rs.16 lakhs on account of interest income earned. However, in the appellate proceedings before the Ld. CIT(A), the Revenue stated that his case was of mistaken identity, the Ld. CIT(A), therefore, vide order dated 21.08.2023 deleted the additions so made by the Assessing Officer in the case of namesake of the assessee. ....
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.... Inv.-II, Jaipur) rather than being formally handed over by the AO of the searched person. The Ld. AR vehemently argued that under the scheme of Section 153C, the jurisdictional AO of the searched person must gather material and consciously pass it on to the jurisdictional AO of the other person. It was contended that when information is received solely from the Investigation Wing, the proper recourse is to reopen the assessment u/s 147/148 of the Act and not u/s 153C of the Act, and thus the assumption of jurisdiction by the AO u/s 153C of the Act was not valid. 9. We have heard and considered the rival submissions of the Ld. Representatives of the parties on this issue. The undisputed factual position is that the AO of the searched person (RMG) and the AO of the "other person" (the assessee herein) were one and the same officer, i.e., DCIT, Central Circle-4, Jaipur. It is a well-settled judicial principle that when the Assessing Officer holds concurrent jurisdiction over both the searched person and the other person, the act of "handing over" and "receiving" the documents is a notional and mental exercise. The AO is not required to physically transmit files from one desk to th....
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....zed or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of accounts or documents or assessed seized or requisitioned have a bearing on the determination of the total income of such other person for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted for requisition is made and for the relevant assessment year or years referred to in sub-section (1) of section 153A." 12. Further, the relevant part of the provisions of Section 153A of the Act is reproduced as under:- Assessment in case of search or requisition. 153A (1) Notwithstanding anything contained in section 139, section 147, section ....
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....ny conceivable interpretation of the law, the assessments are hopelessly time-barred. To properly appreciate the contentions of the Ld. AR, we deem it appropriate to reproduce the relevant statutory provisions governing searches, though at the cost of repetition: Section 153C(1) of the Act dictates the substantive framework for the 'other person': "Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provis....
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....e the facts of the present case in the light of the afore reproduced statutory provisions: Scenario A: If the Date of Search of RMG is taken as the Base Date. 17. If the date of the search in the case of the searched person (RMG) on 07.01.2016 is taken as the relevant date, Section 153B(1)(a) mandates that the assessment must be completed within 21 months from the end of the financial year in which the search was executed. The financial year of the search is FY 2015-16, ending on 31.03.2016. Twenty-one months from 31.03.2016 expired in December 2017. The present assessment orders were passed on 27.03.2024. Therefore, if the original search date is taken as the relevant date for the purpose of counting of limitation period in the case of the assessee, the assessment orders are time-barred by over six years. Scenario B: If the Date of Handing Over of the seized material is taken as the Base Date. 18. Now, in this case, the AO of the searched person being also the Jurisdictional AO of the assessee, hence, as observed above, the act of "handing over" and "receiving" the documents is a notional and mental exercise. The AO was not required to physically transmit files from on....
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....n (HUF) vs. ACIT (485 ITR 509) extensively clarified that for the "other person", the effective date of search initiation is the date the seized material is handed over. Since 18.10.2023 falls well after the cut-off date of 01.04.2021, the entire mechanism of Section 153C is extinguished and barred by the strict sunset clause of Section 153C(3). The invocation of Section 153C thus would be void ab initio by operation of law. The issue also came for consideration before the Hon'ble Delhi High Court in the case of "ATS Township Pvt Ltd v. ACIT" (Supra). The Hon'ble Delhi High Court addressed situations where the search (or the handover acting as the deemed search) occurred after the 31.03.2021 i.e. after the sunset clause of Section 153C. The Revenue tried to argue that since 153C was no longer applicable, they should revert to the date of the actual search to save the limitation, however, the Hon'ble High Court rejected the said contention, observing as under: "While in the case of a search initiated after 31 March 2021 there would be no actual hand over of material to the jurisdictional AO, that does not convince us to revert to section 153A and hold that the block period ....
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.... (61 taxmann.com 89) and the Gujarat High Court in Jitendra H. Modi v. ITO (403 ITR 110), satisfaction recorded after an inordinate delay without reasonable explanation makes the assumption of jurisdiction invalid and the consequent assessment void. The AO cannot keep the sword of Section 153C hanging over an assessee's head indefinitely. (B) Date of Recording Satisfaction as date of search - Assessment of Six Preceding Years: 26. If we strictly apply the legal fiction contained in the first proviso to Section 153C(1), the date of initiation of the search for the assessee is the date on which the AO received the seized documents. The Hon'ble Supreme Court in the case "Jasjit Singh vs. CIT" (458 ITR 437) has held that the block period of six assessment years must be computed backward from the date of receipt of the seized material by the AO of the other person, and strictly not from the date of the original search. The Hon'ble Delhi High Court in Ojjus Medicare P. Ltd. v. ACIT (465 ITR 101) endorsed this view, explicitly rejecting the Revenue's contention that block periods should be reckoned with reference to the date of search. 27. Now, in cases of a commo....
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....ced the Rs. 3,00,00,000/- in cash. The AO subsequently dropped those proceedings, admitting mistaken identity, and then conveniently shifted to the present assessee (Anand Jhalani, PAN: ADHPJ3900C). This, in itself, creates suspicion about the identity of the actual person mentioned in the alleged seized material from the third parties. Such an action also demonstrates a casual approach by the Department, attempting to tax different individuals based on the same vague code without any corroborative concrete verification. Therefore, additions based on such doubtful identity of the person whose name was allegedly mentioned in the seized material, cannot be legally held to be sustainable. 30. The searched person (Shri Ramesh Manihar) never explicitly named the present assessee in his statements. The AO completely failed to identify, trace, or examine the alleged borrowers to verify the "second leg" of the transactions. The Ld. AR rightly relied upon the decisions in RRJ Securities Ltd. (380 ITR 612 Del) and Sinhgad Technical Education Society (397 ITR 344 SC), which firmly establish that uncorroborated "dumb" documents, loose sheets, and electronic extracts hold no evidentiary valu....
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....xes have been paid, the same should by default form the basis for determining the nature and character of transactions by way of cash loans in the hands of the assessee routed through Ramesh Manihar Group as the said admission is a unilateral admission on part of Ramesh Chand Maheshwari and the assessee cannot be compelled to accept the same in absence of any clinching and irrefutable evidence that the money has infact been paid by the assessee and routed through Ramesh Manihar Group for onward lending and without providing an opportunity of cross-examination... mere admission by one person before the Settlement Commission cannot bind the another person in absence of any nexus between the person admitting and the other person."....... "85. We therefore find that the Assessing officer has merely relied upon extracts of certain uncorroborated excel sheets, found during the course of search in case of Ramesh Manihar Group. Such excel-sheets do not point out to the fact of assessee having given loans, in cash, to different persons through Ramesh Manihar Group. Nothing concrete is discernible from these excel sheets. The Assessing officer has failed to corroborate the excel she....