2018 (9) TMI 886 - AT - Income Tax

Validity of proceedings u/s 153C - period of limitation - completion of proceedings against the assessee, who is other person than searched person - Held that - As relying on RRJ Securities Ltd. case 2015 (11) TMI 19 - DELHI HIGH COURT we hold that assessment proceedings initiated for assessment years 1999-2000 to 2001-02 are beyond the period of available under the proviso to section 153C read with proviso to section 153A of the Act and hence, the Assessing Officer had no jurisdiction to take up proceedings for the captioned assessment years. We hold that initiation and completion of proceedings against the assessee, who is other person than searched person, is both invalid and bad in law. - decided in favour of assessee

Summary

Issues:
Jurisdictional issue regarding time-barred assessment under section 153C of the Income Tax Act 1961.

Detailed Analysis:

1. Background:
The appeals relate to a consolidated order of CIT(A)-2, Pune, dated 03.03.2016 concerning assessment years 1999-2000 to 2001-02 under section 143(3) r.w.s. 153C of the Income Tax Act 1961.

2. Jurisdictional Issue Raised by Assessee:
The assessee contended that the assessment for AY 1999-00 was time-barred as the information received by the Assessing Officer was beyond the six-year limit starting from AY 2002-03.

3. Facts of the Case:
The search operation under section 132 of the Act was conducted in 2003, and documents related to the assessee were seized and forwarded to the Assessing Officer in 2007. The Assessing Officer initiated proceedings for AY 1998-99 to 2004-05, including AY 1999-00 to 2001-02.

4. Proceedings Before CIT(A):
The assessee challenged the initiation and conduct of proceedings under section 153C, citing the six-year limitation period from the date of information received. However, the CIT(A) dismissed these contentions and proceeded with the assessment on merits.

5. Tribunal's Analysis:
The Tribunal considered the provisions of section 153C and 153A of the Act, emphasizing the date of receiving documents as crucial for determining the assessment/re-assessment period. The Tribunal referred to a Delhi High Court judgment regarding the computation of the block period preceding the year of search.

6. High Court's Decision:
The High Court's judgment clarified that the block period for both the searched person and other person (assessee) would be the same six years preceding the year of search. The Court held that this amendment was prospective, and the Revenue's appeal challenging this decision was dismissed.

7. Tribunal's Ruling:
Based on the High Court's precedent, the Tribunal held that the assessment proceedings for AY 1999-00 to 2001-02 were beyond the permissible period as per section 153C read with section 153A. Consequently, the proceedings against the assessee were deemed invalid and lacking jurisdiction.

8. Conclusion:
The Tribunal allowed all the appeals of the assessee, ruling in favor of the jurisdictional issue raised and declaring the assessment proceedings as invalid. The decision was pronounced on August 30, 2018.

This detailed analysis of the judgment highlights the jurisdictional issue regarding the time-barred assessment under section 153C of the Income Tax Act 1961, providing a comprehensive understanding of the legal reasoning and precedents considered by the Tribunal in reaching its decision.