2023 (5) TMI 1097 - AT - Income Tax

Assessment u/s 153C - Period of limitation - date of recording of satisfaction - satisfaction recorded in searched person and the person other than the searched person - Scope of amended provisions of section 153C - HELD THAT - As decided in own case 2022 (2) TMI 1270 - ITAT DELHI once the amended provisions of sections 153A and 153C are applicable in respect of search and seizure operation initiated u/s 132 or requisition made u/s 132A post 01.04.2017 the provisions of sections 153A and 153C would be applicable to the same set of assessment years both in case of the searched person and the person other than the searched person. In case of other person u/s 153C starting point for computation of the block period would be the date from on which based on the seized documents notice is issued to the other person - As further held that the amendment made in section 153C by Finance Act 2017 w.e.f. 1st April 2017 which states that block period for the searched person as well as the other person would be same six AYs immediately preceding the year of search is only prospective. It makes the things clear that the search that took place in this case is prior to amendment unaffected by the amendment made by way of Finance Act 2017. Impugned assessment order passed u/s 153C is wholly without jurisdiction hence invalid. Accordingly we quash the same. Consequently the order of Commissioner (A) is set aside. - Decided in favour of assessee.

Summary

Issues Involved:
1. Delay in Filing the Appeal
2. Quashing of Assessment Order
3. Applicability of Amendments to Sections 153A and 153C

Summary:

1. Delay in Filing the Appeal:
The Registry noted a delay of 44 days in filing the appeal, which was ignored due to Covid-19 restrictions.

2. Quashing of Assessment Order:
The Tribunal had previously quashed the assessment order for the same assessment year in the assessee's cross appeal, rendering the Revenue's current appeal infructuous. The Departmental Representative accepted this factual position.

3. Applicability of Amendments to Sections 153A and 153C:
The Tribunal analyzed the dates and events:
- 07.04.2016: Search and seizure operation under section 132 conducted.
- 29.03.2019: Satisfaction recorded by the Assessing Officer of the searched person.
- 15.09.2019: Satisfaction recorded by the Assessing Officer of the assessee.

The Tribunal noted that the amendment to sections 153A and 153C by Finance Act, 2017, effective from 01.04.2017, applies prospectively from the assessment year 2017-18. The search in this case occurred on 07.04.2016, before the amendment, making the amended provisions inapplicable. The Tribunal cited various judicial precedents, including the Hon'ble Delhi High Court's decision in PCIT Vs. Sarwar Agency P. Ltd., to support this interpretation.

The Tribunal emphasized that the relevant date for applying the provisions of section 153C is the date of recording of satisfaction by the Assessing Officer of the searched person. Since the search date was prior to the amendment, the assessment order was deemed invalid and quashed.

Conclusion:
The Tribunal dismissed the Revenue's appeal as infructuous, following the quashing of the assessment order and the inapplicability of the amended provisions of sections 153A and 153C. The order was pronounced in the open court on 11th May, 2023.