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2022 (2) TMI 1270 - AT - Income TaxValidity of the assessment order passed u/s 153C - date of recording of satisfaction - satisfaction recorded in searched person and the person other than the searched person - Scope of amended provisions of section 153C - HELD THAT - The crucial date that has to be borne in mind is the date of search. Admittedly, in the facts of the present case, the date of search is 07.04.2016, which is prior to the date of amendment made to section 153A and 153C vide Finance Act, 2017. Taking note of the CBDT circular, the Hon ble Gujarat High Court, in case of Anil Kumar Gopikishan Arawal 2019 (6) TMI 746 - GUJARAT HIGH COURT has held that the amended provisions of section 153C of the Act would apply where search and seizure is made after the amendment. Considered in the aforesaid perspective, the apprehension of the Revenue that if the amended provisions are not applied with reference to the date of recording of satisfaction there will be different sets of assessment years for the searched person and the person other than the searched person, in our view, is completely misplaced. This is so, because, once the amended provisions of sections 153A and 153C are applicable in respect of search and seizure operation initiated under section 132 or requisition made under Section 132A of the Act post 01.04.2017, the provisions of sections 153A and 153C would be applicable to the same set of assessment years, both in case of the searched person and the person other than the searched person. In case of other person u/s 153C of the Act, the starting point for computation of the block period would be the date from on which based on the seized documents, notice is issued to the other person - As further held that the amendment made in section 153C by Finance Act 2017 w.e.f. 1st April 2017 which states that block period for the searched person as well as the other person would be same six AYs immediately preceding the year of search is only prospective. It makes the things clear that the search that took place in this case is prior to amendment unaffected by the amendment made by way of Finance Act 2017. As respectfully following the decision of the coordinate bench in assessee s own case 2021 (6) TMI 368 - ITAT DELHI we hold that the impugned assessment order passed under section 153C of the Act, is wholly without jurisdiction, hence, invalid. Accordingly, we quash the same. Consequently, the order of learned Commissioner (Appeals) is set aside. - Decided in favour of assessee.
Issues Involved:
1. Validity of assessment proceedings initiated under Section 153C. 2. Validity of notice issued under Section 153C and recording of satisfaction. 3. Legitimacy of additions made under Section 153A read with Section 153C. 4. Validity of assessment order due to approval under Section 153D. 5. Validity of assessment order due to the absence of a Document Identification Number (DIN). Issue-wise Detailed Analysis: 1. Validity of Assessment Proceedings Initiated under Section 153C: The assessee challenged the validity of the assessment order under Section 153C, arguing that it was barred by limitation and without jurisdiction. The court examined the timeline of events: - The search and seizure operation took place on 07.04.2016. - Satisfaction by the Assessing Officer of the searched person was recorded on 29.03.2019. - Satisfaction by the Assessing Officer of the assessee was recorded on 15.09.2019. The court noted that according to Section 153C, the date of search for the person other than the searched person is the date of recording of satisfaction by the Assessing Officer of the searched person. The amendments made to Sections 153A and 153C by the Finance Act, 2017, which allow the Assessing Officer to assess the same set of assessment years for both the searched person and the person other than the searched person, were held to be prospective, effective from 01.04.2017. Since the search in this case occurred on 07.04.2016, prior to the amendment, the court concluded that the amended provisions did not apply. Consequently, the assessment order was deemed invalid. 2. Validity of Notice Issued under Section 153C and Recording of Satisfaction: The assessee contended that the notice issued under Section 153C and the recording of satisfaction were contrary to the law. The court reiterated that the satisfaction for initiating proceedings under Section 153C must be recorded by the Assessing Officer of the searched person, which in this case was done on 29.03.2019. The court found that the satisfaction recorded was in line with the legal requirements, but since the amendment was not applicable retrospectively, the proceedings were invalid. 3. Legitimacy of Additions Made under Section 153A Read with Section 153C: The assessee argued that the addition of Rs. 22,23,642/- confirmed by the CIT(A) was beyond the scope of Section 153A read with Section 153C. The court did not delve into the merits of the additions due to the invalidity of the assessment proceedings itself. The court quashed the assessment order, rendering the discussion on the additions academic. 4. Validity of Assessment Order Due to Approval under Section 153D: The assessee claimed that the assessment order was invalid as the approval under Section 153D by the JCIT/Addl CIT was not in accordance with the provisions of the Act. The court, having already quashed the assessment order on jurisdictional grounds, did not address this issue separately. 5. Validity of Assessment Order Due to Absence of Document Identification Number (DIN): The assessee contended that the assessment order was invalid as no Document Identification Number (DIN) was generated. The court did not address this issue separately due to the quashing of the assessment order on other grounds. Conclusion: The court quashed the assessment order passed under Section 153C as it was deemed to be without jurisdiction and barred by limitation. Consequently, the court set aside the order of the Commissioner (Appeals) and did not adjudicate on the merits of the additions made by the Assessing Officer. The appeal was allowed in favor of the assessee.
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