2020 (2) TMI 570 - AT - Income Tax

Assessment framed u/s 153C - Period of limitation - block period for initiation of proceedings - HELD THAT - AO recorded satisfaction on 29.05.2017 and determined the block period as 2010-11 to 2015-16 taking into consideration the date of search. In our opinion, as in terms of the decision of Hon ble High Court of Delhi in the case of RRJ Securities Ltd. 2015 (11) TMI 19 - DELHI HIGH COURT the date of recording of satisfaction is to be construed as the AO having jurisdiction to assess the searched person u/s 153C of the Act. Hon ble High Court of Delhi in the case of Sarwar Agency Pvt. Ltd. 2017 (8) TMI 733 - DELHI HIGH COURT decline to admit the substantial question of law raised by the Revenue challenging the decision in the case of RRJ Securities Pvt. Ltd. Therefore, we find no infirmity in the order of CIT(A) and it is justified and we completely agree with the reasons recorded by the CIT(A) in his order in para no 6 which is reproduced herein above. Ground nos. 1 and 2 raised by the Revenue are dismissed.

Summary

Issues:
1. Delay in filing the appeal by the Revenue.
2. Justification of the assessment framed under section 153C.
3. Interpretation of the limitation period for issuing notice under section 153C.
4. Admissibility of cross-objection by the assessee.

Issue 1 - Delay in filing the appeal by the Revenue:
The appeal by the Revenue was filed with a delay of 22 days. After hearing both parties and examining the records, the delay was condoned by the Appellate Tribunal.

Issue 2 - Justification of the assessment framed under section 153C:
The case involved the question of whether the assessment framed under section 153C was justified. The assessee, a company deriving income from various sources, was found to have allotted shares at a premium and raised capital during a search operation. The Assessing Officer added the amount under cash credit for failure to explain the source. The CIT(A) held that the assessment for the assessment year 2010-11 was barred by limitation, citing relevant case law and the chronology of events.

Issue 3 - Interpretation of the limitation period for issuing notice under section 153C:
The key contention was the interpretation of the limitation period for issuing notice under section 153C. The CIT(A) based the decision on the date of recording of satisfaction note, holding that the notice issued for the assessment year 2010-11 was barred by limitation. The Appellate Tribunal upheld the decision, citing relevant High Court decisions and the date of recording of satisfaction as crucial for determining the block period.

Issue 4 - Admissibility of cross-objection by the assessee:
The cross-objection raised by the assessee in support of the CIT(A)'s order was deemed academic as the Tribunal upheld the CIT(A)'s decision. Consequently, the cross-objection was allowed, and the appeal by the Revenue was dismissed.

In conclusion, the Appellate Tribunal upheld the CIT(A)'s decision, emphasizing the importance of the date of recording of satisfaction note for determining the limitation period under section 153C. The case highlighted the significance of legal interpretations and precedents in tax assessment matters.