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2017 (7) TMI 619 - HC - Income TaxValidity of assessment u/s 153A - Held that - Merely visiting the premises on the pretext of concluding the search but not actually finding anything new for being seized cannot give rise to a second panchnama. In such event there would be no occasion to draw up a panchnama at all. In the present case the Court is satisfied that the second visit by the search party to the Ashok Vihar premises on 15th May 2007 did not result in anything new being found that belonged to any of the searched parties. The second visit and the panchnama drawn up on that date cannot lead to postponement of the period for completion of assessment with reference to Section 153B (2) (a) of the Act.
Issues Involved:
1. Whether the ITAT erred in law and on facts in holding that the assessment framed by the AO under Section 153A is barred by limitation. 2. Whether the order passed by the ITAT is perverse and not sustainable under law. 3. Whether the ITAT erred in law and on facts in holding that the assessment framed by AO under Section 153C read with Section 143(3) is barred by limitation as per Section 153B of the Act. 4. Whether learned ITAT erred in allowing the additional ground as raised by the Assessee in regard to the limitation of Assessment made under Section 153C ignoring the fact that same has not been raised before the Appellate Authority. 5. Whether the ITAT erred in allowing the additional ground raised by the Assessee in regard to limitation of assessment made under Section 153C of the Act by following its own finding in the case of ACIT v. J.H. Invest P. Ltd. Detailed Analysis: Issue 1: Whether the ITAT erred in law and on facts in holding that the assessment framed by the AO under Section 153A is barred by limitation. The Court examined the facts and determined that the search concluded on 22nd March 2007, despite a second visit on 15th May 2007. The second visit did not result in any new findings or seizures. The Court referred to the decision in CIT v. S.K. Katyal, emphasizing that merely drawing a panchnama on a later date without any new findings does not extend the limitation period. Consequently, the assessment should have been completed by 31st December 2008, making the assessment framed by the AO under Section 153A barred by limitation. Issue 2: Whether the order passed by the ITAT is perverse and not sustainable under law. The Court found that the ITAT's decision was consistent with the earlier decisions of the Court, including CIT v. S.K. Katyal and C. Ramaiah Reddy v. Assistant Commissioner of Income Tax. The Court upheld the ITAT's findings, stating that the second visit on 15th May 2007 did not extend the limitation period. Thus, the order passed by the ITAT was neither perverse nor unsustainable under law. Issue 3: Whether the ITAT erred in law and on facts in holding that the assessment framed by AO under Section 153C read with Section 143(3) is barred by limitation as per Section 153B of the Act. The Court applied the same reasoning as in Issue 1 and concluded that the search concluded on 22nd March 2007. Therefore, the assessment framed by the AO under Section 153C read with Section 143(3) was barred by limitation. The Court referred to the decision in C. Ramaiah Reddy and emphasized that merely visiting the premises again without finding anything new does not extend the limitation period. Issue 4: Whether learned ITAT erred in allowing the additional ground as raised by the Assessee in regard to the limitation of Assessment made under Section 153C ignoring the fact that same has not been raised before the Appellate Authority. The Court did not find any legal infirmity in the ITAT allowing the additional ground raised by the Assessee regarding the limitation of assessment made under Section 153C. The ITAT's decision was based on the consistent application of earlier Court decisions, and no substantial question of law arose from the impugned order. Issue 5: Whether the ITAT erred in allowing the additional ground raised by the Assessee in regard to limitation of assessment made under Section 153C of the Act by following its own finding in the case of ACIT v. J.H. Invest P. Ltd. The Court upheld the ITAT's decision, stating that the search concluded on 22nd March 2007, and the limitation period for completing the assessment did not extend beyond 31st December 2008. The ITAT correctly applied its findings from the case of ACIT v. J.H. Invest P. Ltd., and the assessment framed under Section 153C was barred by limitation. Conclusion: The Court dismissed all the appeals, finding no legal infirmity in the ITAT's decisions. The assessments framed by the AO under Sections 153A and 153C were barred by limitation, and the ITAT's orders were consistent with earlier Court decisions. The appeals were dismissed with no orders as to costs.
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