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2024 (1) TMI 204 - AT - Income TaxValidity of assessment order u/s 153C/143(3) - period of limitation - assessment within block of six assessment years - HELD THAT - As the present AY 2011-12 does not fall within the block of six assessment years therefore the Assessing Officer had no valid jurisdiction to issue notice u/s. 153C of the Act and to frame assessment order for AY 2011-12. Thus, respectfully following judgment of Hon ble jurisdictional High Court of Delhi in the case of Server Agency 2017 (8) TMI 733 - DELHI HIGH COURT and the order of the coordinate Bench, as noted above, we are inclined to hold that the impugned assessment order passed u/s 153C r.w.s. 143(3) of the Act, dated 30.12.2018, for AY 2011-12 is invalid being passed by the Assessing Officer without having valid jurisdiction as per mandate of section 253C of the Act. Accordingly, we quash the same along with all consequent proceedings and orders - Decided in favour of assessee. Assessment u/s 153C - validity of incriminating material noted by the AO in the satisfaction note - recording requisite satisfaction as per law - HELD THAT - We are inclined to hold that the alleged incriminating material noted by the Assessing Officer in the satisfaction note had to pertain to assessment year under consideration and when the documentary evidence seized and relied by the Assessing Officer did not establish any co-relation, document wise with the any of assessment year under consideration then the notice u/s. 153C of the Act, and consequent assessment order passed u/s. 143(3) r.w.s. 153C of the Act deserve to be quashed. Therefore respectfully following the preposition rendered in the case of PCIT vs. Singhad Technical Education Society ( 2011 (4) TMI 871 - ITAT, PUNE ) notice u/s. 153C of the Act and all consequent proceedings and orders including impugned assessment order 30.12.2018 for AY 2012-13 are quashed. Accordingly, grounds no. 1 to 3 of assessee are allowed.
Issues Involved:
1. Jurisdictional validity of assessment orders under Section 153C/143(3). 2. Compliance with mandatory conditions for initiating proceedings under Section 153C. 3. Non-supply of alleged seized material to the assessee. 4. Validity of additions made without incriminating material. 5. Procedural lapses and violation of principles of natural justice. Summary: Issue 1: Jurisdictional Validity of Assessment Orders The assessee contended that the assessment orders framed under Section 153C/143(3) were without assuming valid jurisdiction as per law, without recording requisite satisfaction, and without complying with mandatory conditions. The Tribunal noted that the search was conducted on 23.07.2015, and satisfaction was recorded on 23.03.2018. The Tribunal held that the year of search would be AY 2018-19, and the block of six preceding assessment years would be AYs 2012-13 to 2017-18. Therefore, the assessment for AY 2011-12 was outside the block of six years, making the assessment order invalid. The Tribunal quashed the assessment order for AY 2011-12 along with all consequent proceedings and orders. Issue 2: Compliance with Mandatory Conditions The Tribunal observed that the satisfaction note did not correlate the seized documents year-wise and did not lead to the additions made. The Tribunal emphasized that the jurisdictional conditions for initiating proceedings under Section 153C were not complied with, as the seized material did not pertain to the assessment years under consideration. Consequently, the assessment orders were held to be invalid. Issue 3: Non-Supply of Alleged Seized Material The assessee argued that the alleged seized material, based on which action under Section 153C was initiated, was not supplied despite specific requests. The Tribunal noted that the Assessing Officer did not provide copies of the seized material and that it was the CIT(A) who supplied the material to the assessee. This procedural lapse contributed to the invalidity of the assessment orders. Issue 4: Validity of Additions Made Without Incriminating Material The Tribunal found that the additions made by the Assessing Officer were not based on the seized material mentioned in the satisfaction note. The additions were on account of commission income and disallowance of bogus expenses, which were not supported by the seized material. The Tribunal held that the additions could not be made under Section 153C without incriminating material, rendering the assessment orders invalid. Issue 5: Procedural Lapses and Violation of Principles of Natural Justice The Tribunal noted several procedural lapses, including the issuance of a show-cause notice with insufficient time for compliance and reliance on statements without confronting the assessee. These lapses violated the principles of natural justice, further invalidating the assessment orders. Conclusion: The Tribunal quashed the assessment orders for AY 2011-12 to 2016-17, holding that the Assessing Officer did not have valid jurisdiction to issue notices under Section 153C and frame assessments. The Tribunal emphasized the importance of complying with mandatory conditions and procedural fairness in assessment proceedings. The appeals of the assessee were allowed, and all consequent proceedings and orders were quashed.
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