2019 (8) TMI 622 - HC - Income Tax

Assessment u/s 153A - period of limitation - scope of amended provisions of Section 153C - effective and efficacious appeal remedy - THAT - With regard to the first question 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 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 by virtue of such amendment 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. While answering the last question the Court held in case any notices u/s 153C 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 u/s 153A. The impugned notices issued u/s 153C in each of the petitions are hereby quashed and set aside. In cases where the assessment orders are subject matter of challenge the impugned assessment orders are hereby quashed and set aside on the ground that the very initiation of proceedings u/s 153C was without jurisdiction. See ANILKUMAR GOPIKISHAN AGRAWAL VERSUS ACIT 2019 (6) TMI 746 - GUJARAT HIGH COURT

Summary

Issues:
1. Maintainability of 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 writ-applications
The court found the writ-applications to be maintainable, allowing the petitions to proceed.

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 specified date 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 alternative periods of limitation provided by the statute must be considered. The court ruled that the mere expiration of the period under the first part does not render the notices time-barred.

Issue 4: Relevant Assessment Years under Section 153A
The court analyzed Section 153A of the Act concerning the trigger point for issuing notices. It determined the assessment years preceding the relevant year based on the search date. The court specified the assessment years applicable to different search dates for various groups, emphasizing adherence to the statutory provisions.

Final Order:
The court allowed the petitions, quashing and setting aside the impugned notices under Section 153C of the Income Tax Act, 1961. Assessment orders challenged were also quashed, ruling the initiation of proceedings under Section 153C as without jurisdiction. The court made the rule absolute in each petition, with no order as to costs.

Conclusion:
The court's judgment addressed the maintainability of writ-applications, the prospective applicability of Section 153C, the limitation period for notices, and the determination of relevant assessment years under Section 153A. The court's decision to quash notices and assessment orders under Section 153C highlighted the importance of adhering to statutory provisions and ensuring jurisdictional validity in tax proceedings.