2024 (7) TMI 22 - AT - Income Tax

Validity of Assessment u/s 153C - assessment for impugned A.Y is beyond the block of six A.Ys, as per provisions of the Act - HELD THAT - It is a settled proposition of law that as per provisions of section 153C of the Act, for taking action u/s 153C of the Act, date of search in the case of the other person would be date of receiving books of account or documents or assets allegedly belonging to the other person and seized in the course of search of the searched person. Date of recording of the satisfaction in the case of the searched person qua the other person becomes date of search in the case of other person the assessee in the present case . Hon'ble Supreme Court in the case of CIT Vs. Jasjit Singh 2023 (10) TMI 572 - SUPREME COURT date of search would be 22.02.2021 and the impugned A.Y 2014-15 is beyond the block of six A.Ys starting from A.Y 2015-16. Thus, we have no hesitation in quashing the impugned assessment order. Ground No. 1 is allowed.

Summary

Issues:
1. Validity of jurisdiction under section 153C of the Act and framing of assessment.
2. Validity of assessment order under section 153C of the Act.
3. Addition of alleged unexplained money under section 69A of the Act.
4. Levy of interest under sections 234A, 234B, and 234D of the Act.

Analysis:

Issue 1: Validity of jurisdiction under section 153C of the Act and framing of assessment.
The assessee challenged the assumption of jurisdiction under section 153C of the Act and the framing of the assessment. The contention was that the jurisdiction under section 153C was assumed without satisfying the statutory preconditions, as no assets belonging to the appellant were seized during the search. The appellant argued that the assumption of jurisdiction was illegal and unsustainable due to the lack of valid satisfaction recorded in the case of the searched person. The Tribunal noted that for action under section 153C, the date of search in the case of the other person is crucial, and in this case, it was beyond the block of six assessment years. Citing the Supreme Court ruling in CIT Vs. Jasjit Singh, the Tribunal quashed the assessment order, holding that the impugned assessment was invalid due to being beyond the prescribed timeframe.

Issue 2: Validity of assessment order under section 153C of the Act.
The assessment order under section 153C of the Act was challenged on the grounds of invalidity due to being beyond the block of six assessment years. The Tribunal, relying on the Supreme Court ruling, held that the assessment order for the assessment year 2014-15 was beyond the prescribed timeframe. Consequently, the Tribunal quashed the assessment order, allowing the appeal of the assessee.

Issue 3: Addition of alleged unexplained money under section 69A of the Act.
The assessee contested the addition of Rs. 1,60,00,000 as alleged unexplained money under section 69A of the Act. The Tribunal observed that the addition was based on a cancelled copy of a collaboration agreement, where both parties denied any cash payment. The Tribunal noted that the burden of proof under section 69 had not been discharged by the revenue. Consequently, the Tribunal held that the addition was misconceived, arbitrary, and unjustified, leading to the deletion of the addition.

Issue 4: Levy of interest under sections 234A, 234B, and 234D of the Act.
The assessee challenged the levy of interest under sections 234A, 234B, and 234D of the Act. The Tribunal found that the interest levied was not sustainable on the facts of the case. Therefore, the Tribunal held that the interest levied under these sections was not applicable to the appellant, leading to the deletion of the interest amounts.

In conclusion, the Tribunal allowed the appeal of the assessee, quashed the assessment order under section 153C of the Act, deleted the addition of alleged unexplained money, and removed the levied interest amounts under sections 234A, 234B, and 234D of the Act.