2018 (6) TMI 1380 - AT - Income Tax

Assessment u/s 153C - Addition to income - period of limitation - Held that - There is no doubt that the notice u/s 153C of the Act was issued to the assessee on 08.11.2012. The Hon ble High Court of Delhi in the case of RRJ Securities Pvt. Ltd 2015 (11) TMI 19 - DELHI HIGH COURT has held that limitation will start on the date of recording of satisfaction that incriminating material belonged to third person. Since the date of notice in the case in hand is 08.11.2012, assessment framed u/s 153C of the Act for assessment year 2005-06 is beyond the scope of provisions of section 153A/153C of the Act, in the light of ratio laid down by the Hon ble Delhi High Court Assessing Officer himself admitted that the additions have been made on the basis of same documents which were considered while farming earlier assessment order u/s 153C of the Act. As mentioned elsewhere, that assessment order has been set aside by the Tribunal while allowing the appeal of the assessee, therefore, addition is based upon the very same documents cannot be sustained in any case. - Decided against revenue

Summary

Issues:
Jurisdiction under section 153C of the Income-tax Act, 1961.

Analysis:
The appeal by the Revenue challenged the deletion of an addition by the ld. CIT(A) under section 153C of the Income-tax Act, 1961 for the assessment year 2005-06. The Revenue contended that the jurisdiction under section 153C was not properly assumed and that the ld. CIT(A) allowed the appeal without delving into the case's merits. The case stemmed from a search and seizure operation in the Amtek Group, where documents related to the assessee were found and seized. The Assessing Officer discovered advance payments made by the assessee to farmers for land purchase, leading to scrutiny of the transactions.

The Assessing Officer observed that certain cash payments made by the assessee were already accounted for in a previous assessment under section 153C, and no double addition was required based on the same seized documents. The ld. CIT(A) agreed that the Assessing Officer had not properly assumed jurisdiction under section 153C, citing precedents and quashed the assessment order. The ld. CIT(A) did not delve into the case's merits after annulling the assessment due to incorrect jurisdiction assumption.

The Revenue, represented by the ld. DR, supported the Assessing Officer's findings, while the assessee's counsel argued that the assessment order exceeded the scope of section 153C as the notice was issued beyond the permissible timeline. The Tribunal noted that the notice under section 153C was issued after the prescribed period, rendering the assessment for the relevant year beyond the Act's provisions. Citing a Delhi High Court ruling, the Tribunal emphasized the importance of the date of recording of satisfaction under section 153C.

The Tribunal concluded that since the additions were based on the same documents considered in a previous assessment that was overturned on appeal, the current addition could not be sustained. Therefore, the appeal of the Revenue was dismissed, affirming the quashing of the assessment order due to improper jurisdiction assumption under section 153C of the Income-tax Act, 1961.