2019 (8) TMI 462 - HC - Income Tax

Assessment u/s 153C - maintainability of the petitions - whether Section 153C of the Act as amended with effect from 01.06.2015 would be applicable to the case where search is initiated prior to that date? - Whether the notice u/s.153C of the Act was barred by limitation? - relevant Assessment Years contemplated u/s. 153A of the Act. HELD THAT - The coordinate bench took the view that the writ-applications were maintainable. With regard to the second question, the Court took the view that the Legislature has specifically made the amended provisions of Section 153C of the Act applicable with prospective effect from 01.06.2015. The Court held that if such amended provisions are not made applicable to the searches carried out prior to 01.06.2015, they would affect the substantive rights of the persons who are brought within the ambit of Section 153C of the Act by virtue of such amendment. So far as the third question is concerned with regard to the limitation, the Court took the view that when the statute itself provides for an alternative period of limitation, merely because the period of limitation is provided under the first part has elapsed; it cannot be said that the notices were barred by the limitation on such ground Notices under section 153C of the Act which have been issued for assessment years beyond the six assessment years referred to herein above, such notices would be beyond jurisdiction as the same do not fall within the six assessment years as contemplated under section 153A - See ANILKUMAR GOPIKISHAN AGRAWAL VERSUS ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3 (2) AHMEDABAD 2019 (6) TMI 746 - GUJARAT HIGH COURT -

Summary

Issues:
1. Maintainability of the writ-applications.
2. Applicability of Section 153C of the Act to searches initiated before 01.06.2015.
3. Limitation period for notices under Section 153C of the Act.
4. Relevant Assessment Years under Section 153A of the Act.

Issue 1: Maintainability of the writ-applications
The Court found the writ-applications maintainable, allowing the petitioner to challenge the impugned notices. The petitioner sought various reliefs, including the quashing of the notices and staying further proceedings for assessment.

Issue 2: Applicability of Section 153C of the Act
The Court clarified that the amended provisions of Section 153C of the Act, effective from 01.06.2015, apply prospectively. It emphasized that failure to apply these provisions to searches before the amendment would impact the substantive rights of individuals under Section 153C.

Issue 3: Limitation period for notices under Section 153C
Regarding the limitation period, the Court held that the alternative period of limitation provided by the statute must be considered. Merely because the initial period of limitation had elapsed did not render the notices under Section 153C barred by limitation.

Issue 4: Relevant Assessment Years under Section 153A
The Court analyzed Section 153A, emphasizing that the trigger point for issuing notices is a search under Section 132 or a requisition under Section 132A. It detailed the computation of six assessment years preceding the relevant assessment year, based on the search date. Any notices issued beyond these six assessment years were deemed beyond jurisdiction.

The final order quashed the impugned notices under Section 153C and set aside assessment orders initiated without jurisdiction. The judgment aligned with principles established in previous cases, ensuring consistency in legal interpretation. The Court applied the same legal principles to allow the petition, quash the impugned notice, and set aside any assessment orders made under Section 153C of the Income Tax Act, 1961.