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2024 (7) TMI 638 - AT - Income TaxAssessment u/s 153C r.w.s. 153A - interpretation of the date of search under section 153C - commencement date for computation of the six assessment years - in search, documents belonging to the assessee were found and seized or not? - HELD THAT - We find that this issue of the date of search for persons covered u/s 153C is no longer res-integra. It has now been well settled in the case of CIT Vs. Jasjit Singh 2023 (10) TMI 572 - SUPREME COURT . The Hon'ble Delhi High Court has further elaborated the legal dictum in the case of Ojjus Medicare Pvt Ltd. 2024 (4) TMI 268 - DELHI HIGH COURT . As per provisions of section 153C, the commencement date for computation of the six assessment years is deemed to be the date of receipt of books of account/materials/asset, belonging/pertaining to non-searched person, by the jurisdictional AO of the non-searched person. Date of recording of the satisfaction in the case of the searched person qua the non-searched person becomes date of search in the case of non-searched person the assessee in the present case . In the instant case of the assessee (non-searched person), the date of search would become the date of recording satisfaction i.e., 23.11.2010. The impugned A.Y 2004-05 would therefore fall beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the assessing officer of the searched person. We have no hesitation in quashing the impugned assessment order being made without jurisdiction.
Issues:
1. Jurisdiction under section 153C of the Income-tax Act, 1961 for A.Y. 2004-05. 2. Legal interpretation of the date of search for persons covered under section 153C. 3. Effect of satisfaction recorded on jurisdiction for assessment. 4. Applicability of recent legal precedents on the case. Issue 1: Jurisdiction under section 153C for A.Y. 2004-05: The appeal addressed the legality of the notice issued under section 153C of the Income-tax Act, 1961 for A.Y. 2004-05. The Assessee contended that the assumption of jurisdiction was illegal and beyond the permissible assessment years. The CIT(A) allowed the grievance related to unexplained cash credit but dismissed the disallowance under section 14A of the Act. The Assessee argued that the assumption of jurisdiction for A.Y. 2004-05 was contrary to legal precedents, including the decision of the Hon'ble Supreme Court in a specific case. The Assessee relied on recent judgments to support their claim. Issue 2: Legal interpretation of the date of search under section 153C: The Tribunal analyzed the legal interpretation of the date of search for persons covered under section 153C. Referring to relevant legal provisions and precedents, including decisions of the Hon'ble Supreme Court and the Delhi High Court, the Tribunal highlighted that the date of recording satisfaction in the case of the searched person determines the date of search for the non-searched person. The Tribunal emphasized that the commencement date for computation of the six assessment years is deemed to be the date of receipt of books of account/materials/asset by the jurisdictional AO of the non-searched person. Issue 3: Effect of satisfaction recorded on jurisdiction for assessment: The Tribunal noted that the satisfaction recorded by the assessing officer of the searched person plays a crucial role in determining the jurisdiction for assessment of the non-searched person. Citing legal dictums, the Tribunal clarified that the date of recording satisfaction becomes the date of search for the non-searched person. Consequently, the assessment for A.Y. 2004-05 was deemed to fall beyond the permissible period of six assessment years, leading to the quashing of the assessment order. Issue 4: Applicability of recent legal precedents on the case: The Tribunal extensively discussed recent legal precedents set by the Hon'ble Supreme Court and the Delhi High Court to interpret the provisions of section 153C. By analyzing the legal positions established in previous judgments, the Tribunal concluded that the assessment order for A.Y. 2004-05 was made without jurisdiction due to the misinterpretation of the date of search and satisfaction. Consequently, the Tribunal quashed the assessment order and dismissed the appeal of the Revenue as infructuous. In conclusion, the Tribunal's detailed analysis of the jurisdiction under section 153C, legal interpretation of the date of search, the impact of satisfaction on assessment jurisdiction, and the application of recent legal precedents resulted in the quashing of the assessment order for A.Y. 2004-05.
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