2022 (7) TMI 1522 - HC - Income Tax

Assessment u/s 153C - date of receiving documents is to be taken as date of search or not - HELD THAT - This Court is of the view that the proposed question of law, namely, whether in a case where Section 153C is applicable, date of receiving documents is to be taken as date of search or not has been answered by RRJ Securities Ltd. 2015 (11) TMI 19 - DELHI HIGH COURT as held proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made u/s 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction u/s153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment year 2003-04 and 2004- 05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. The date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004- 05 were outside the scope of Section 153C and the AO had no jurisdiction to make an assessment of the Assessee's income for that year.

Summary

Issues:
Challenge to Order by Income Tax Appellate Tribunal for Assessment Year 2008-09 under Section 143(3) - Interpretation of Section 153C - Date of search or date of receiving documents for assessment years under Section 153C.

Analysis:
The appeal challenged the Order by the Income Tax Appellate Tribunal for the Assessment Year 2008-09 under Section 143(3). The appellant argued that for the said assessment year, a regular scrutiny assessment was conducted as it was not part of the six years preceding the year of search. The appellant contended that the ITAT erred in not recognizing the significance of a Special Leave Petition filed by the Revenue before the Supreme Court on a similar issue related to Section 153C. The Supreme Court, in a related case, dismissed the appeal by the Revenue on the question of whether the date of receiving documents should be considered as the date of search. The appellant cited a judgment by a Coordinate Division Bench of the High Court, Commissioner of Income-tax-7 Vs. RRJ Securities Ltd., which clarified the interpretation of Section 153C. The judgment emphasized that the date of handing over assets/documents to the Assessing Officer (AO) of the Assessee is crucial, and assessments under Section 153C should be based on this date. It highlighted that assessments beyond the six-year period from the date of recording satisfaction by the AO of the searched person would be invalid. The judgment rejected the Revenue's argument of considering assessments based on the year of search, emphasizing the importance of the date when the AO of the person other than the searched person assumes possession of seized assets. Consequently, the Court concluded that the proposed legal question was no longer open for debate, leading to the dismissal of the appeal and application.