TaxTMI 
TaxTMI 
2026 (6) TMI 1511
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....n of Warrant of authorization u/s 132 of the Act is essential for a Search. 2. Whether on the facts and in circumstances of the case & in law. Ld. CIT(A) erred in appreciating that statement u/s 132(4) can be recorded for any person who is present at the searched premises as such person is deemed to be in control of affairs at the premises. 3. Whether on the facts and in circumstances of the case & in law, Ld. CIT(A) erred in not appreciating that assumption of jurisdiction u/s 153A is governed by execution of warrant u/s 132 and not by valuation report by OR the questions asked during search. 4. Whether on the facts and in circumstances of the case & in law, L.d. CIT(A) erred in not appreciating that gold bars belonging to a third person found in the possession of the assessee during search operation at a premise were enough to assume jurisdiction u/s 153C of the Act in the case of the assessee? 5. Whether on the facts and in circumstances of the case and in law, Ld. CIT(A) is correct in holding that the warrant of authorization was issued in the name of Ajay Jain, Saurabh Jain, Mahesh Sehgal, Fakir Chand only and not in the name of ....
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....object to the condonation of delay in opposing appeals. Delay of 5 days in filing of Revenue's appeal and of 102 days the assessee's appeal are condoned in larger interest of justice and in light of Hon'ble Apex court decision in the case of Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC). CO No.29/Del/2026 4. As the Cross Objection of the assessee including the additional ground raised strikes at the very root of the assessment order, we take up the cross objection first for adjudication. The assessee has raised following additional ground in pursuance of its cross objection; 1. That the notice dated 17.11.2022 issued under section 153C of the Income-tax Act, 1961 ("the Act"), by the Deputy Commissioner of Income Tax, Central Circle-14, Delhi ("the Assessing Officer"), initiating the impugned proceedings, is bad in law, illegal, void ab initio, without jurisdiction, and barred by limitation. Consequently, the proceedings initiated and the order passed pursuant thereto are liable to be quashed as being unsustainable in law. 2. That the satisfaction note dated 14.11.2022 recorded by the Assessing Officer is contrary to the manda....
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....53C become inapplicable and alternatively claimed that the satisfaction note is not in accordance with law. 12. Before us, Ld.AR for the assessee submits that proceedings u/s 153C of the Act were initiated in the case of the assessee on the basis of the documents found and seized during the course of search on third person. Ld.AR further submits that based on the entries found noted in one diary seized during the search on third person, a satisfaction note was recorded on 03.12.2021 by the AO of person searched that some entries in the said diary pertained to the assessee. Accordingly, proceedings u/s 153C were initiated in the case of the assessee and additions were made. Ld.AR submits that from 01.04.2021, law has been amended and as per the order of Hon'ble Jurisdictional High Court in the case of PCIT Vs. Ojjus Medicare Pvt. Ltd. reported in (2024) 465 ITR 101(Delhi), the date of search should be the date when the AO of the assessee has recorded his satisfaction which in the present case is 03.12.2021 relevant to AY 2022-23. However, since the law has been amended w.e.f. 01.04.2021, according to which no proceedings could be initiated u/s 153C of the Act for the search....
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....ct, the date of search in the case of Kuldeep Bishnoi is to be considered. Ld. CIT DR thus submits that the AO has rightly initiated the proceedings u/s 153C of the Act which deserves to be held as valid proceedings. Regarding the common satisfaction and invalid satisfaction ld. CIT DR submits that the AO has recorded the clear satisfaction based on the admission of the person who has written the diary and the assessee has failed to controvert the same thus she prayed for the confirmation of the initiation of proceedings u/s 153C of the Act in the present case. 15. Heard the parties at length and perused the material available on record. Claim of the assessee is that the AO has recorded his satisfaction on 03.12.2021 thus the date of search should be reckoned from that date only. Assessee further claimed that the law was amended w.e.f. 1.4.2021 by Finance Act, 2021, and as per the amended law, no action u/s 153C of the Act could be taken on the search carried out on or after 01.04.2021 and the assessment should have been completed u/s 148 of the Act as per the amended provisions. Before going further, we examine the provisions of section 153C of the Act, which reads as und....
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....books of account or documents or assets seized or requisitioned as referred to in subsection (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (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 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section ....
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....riod of ten assessment years as provided under section 153C read with section 153A - Held, yes [Paras 85, 86, 96 and 97] [In favour of assessee]." 17. Now coming to the sub-section (3) of section 153C of the Act which provides that provisions of section 153C are not applicable to the search initiated on or after 1st day of April,2021. Since in the present case, date of search is to be taken as 03.12.2021 i.e. the date when the satisfaction note was recorded by the AO of the assessee and, such date (03.12.2021) is fallen after 01.04.2021, therefore, as per sub-section (3) of section 153C, provisions of section 153C would not be applicable and the initiation of proceedings u/s 153C and subsequent assessment order passed us/ 153C of the Act is invalid and without jurisdiction. The hon'ble Madras High court after considering these facts under identical circumstances, in the case of Harigovind v ACIT (supra) has held as under: 35. "A reading of the second proviso to Section 153A(1) would show that the assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referr....
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....over to the JAO of the other person and this date would be considered as the date of initiation of search for other person for all purposes. Thus, there cannot be two different date of initiation of search, either for the searched person or for the other person. 41. The provisions of Sub-Section (3) of Section 153C states that "153C(3).nothing contained in this Section shall apply in relation to a search initiated under Section 132 or books of account, other documents or any assets requisition under Section 132A on or after the 1st day of April, 2021" which means, if the search is initiated subsequent to 01.04.2021, the provision of Section 153C will not apply and accordingly, no proceedings can be initiated against the other person." 42. According to the petitioner, the date of handing over of the seized materials, i.e., 25.11.2022, is the date of initiation of search. If the said contention of the petitioner is accepted, obviously, the issuance of impugned notices dated 07.02.2023 by the 2nd respondent is without any authority and contrary to Sub-Section (3) of Section 153C of the Act and thus, the same is liable to be quashed. 43. In terms of ....
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....ich means, as per the law laid down by the Hon'ble Apex Court, the said provision is not only for the purpose of abatement but also for all the other practical purposes. 46. For ready reference, the relevant portion of the judgement rendered in the case of Jasjit Singh (supra) is extracted hereunder: "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 abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of abatement. 10. This Court is of the opinion that the revenue's argument is insubstantial and without merit. It is quite plausible that without the kind of interpretation which SSP Aviation adopted, the A.O. seized of the materials - of the search party, under Section 132 - would take his own time to forward the papers and....