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2022 (1) TMI 279 - AT - Income TaxValidity of assessment u/s 153A r.w.s.153C - assessment within the-period of preceding six years - Whether search year in the case of the assessee is A.Y. 2018-19 and not impugned A.Y. 2016-17 ? - HELD THAT - In the present case, it is undisputed fact that the document has been handed over to the Assessing Officer of assessee on 01.12.2017 which falls in the A.Y. 2018-19, therefore the search year will be 2018-19 and the year under consideration will be part of preceding six assessment years for which Assessing Officer was required to issue notice u/s. 153C of the Act and which he has not done and assessment order passed by Assessing Officer u/s. 143(3) is not in accordance with law and therefore is null and void and all additions made are liable to be deleted and are ordered to be deleted. - Decided in favour of assessee.
Issues Involved:
1. Admission of additional grounds of appeal. 2. Validity of assessment jurisdiction under Section 153C read with Section 153A of the Income Tax Act. 3. Correct assessment year for search proceedings. 4. Requirement of notice issuance under Section 153C. Detailed Analysis: 1. Admission of Additional Grounds of Appeal: The assessee initially filed 13 grounds of appeal but later added Grounds 14 and 15, which were admitted as they were purely legal and derived from existing facts, following the Supreme Court judgment in National Thermal Power Company Ltd. vs. CIT. The CIT (DR) did not object to the admission. 2. Validity of Assessment Jurisdiction under Section 153C read with Section 153A: The assessee argued that the assessment for AY 2016-17 was invalid due to the absence of issuance and service of notice under Section 153C read with Section 153A. The search was conducted on Mehndipur Balaji Grinding Works (P.) Ltd. on 27.11.2015, and documents belonging to the assessee were handed over on 01.12.2017. The assessment was completed under Section 143(3) instead of Section 153C, which the assessee claimed was incorrect. 3. Correct Assessment Year for Search Proceedings: The assessee contended that the search year should be AY 2018-19, not AY 2016-17, based on the first proviso to Section 153C(1). The Assessing Officer incorrectly treated AY 2016-17 as the search year, which should have been part of the preceding six years. The amendment to Section 153C effective from 01.04.2017, making the search year the same for both searched and other persons, is not retrospective. 4. Requirement of Notice Issuance under Section 153C: The Tribunal found that the Assessing Officer did not issue the necessary notice under Section 153C for AY 2016-17, rendering the assessment order null and void. The Tribunal relied on precedents from ITAT Delhi Benches, which held that the date of receiving documents by the Assessing Officer of the other person is deemed the search date. Therefore, the search year for the assessee should be AY 2018-19, and the assessment for AY 2016-17 should have been under Section 153C, not 143(3). Conclusion: The Tribunal allowed the additional grounds of appeal, quashed the assessment order under Section 143(3) for AY 2016-17, and ordered the deletion of all additions made. The assessment was deemed invalid due to the incorrect application of the search year and the failure to issue notice under Section 153C. The appeal was partly allowed, with no need to adjudicate on the merits.
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