2022 (10) TMI 840 - AT - Income Tax

Assessment u/s 153A - assessment barred by limitation - HELD THAT - We find that the Hon ble Delhi High Court in the case of RRJ Securities 2015 (11) TMI 19 - DELHI HIGH COURT has held that by virtue of Section 153C(1) of the I.T. Act, 1961 proceedings would have to be in accordance with Section 153A of the I.T. Act, 1961 and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. Before us, D.R. has stated that the decision in the case of RRJ Securities 2015 (11) TMI 19 - DELHI HIGH COURT would not be applicable for the reason that in the present case the A.O. of the searched person and the assessee are one and the same. We do not find merit in the aforesaid arguments of the Ld. D.R. for the reason that the Hon ble High Court at para-16 of the order has observed that the distinction made by Commissioner of Income Tax(A) by observing that the A.O. of the searched person who was to handover the documents and the A.O. of the assessee were one and same person was not relevant in terms of Section 153C of the I.T. Act, 1961 and that Ld. CIT(A) had erred in proceeding on the basis that period of 06 years was to be reckoned from the end of the financial year preceding the financial year in which the search was conducted. Revenue has not placed on record any contrary binding decision in its support nor has placed any material to demonstrate that the aforesaid decision rendered by Hon ble Delhi High Court in the case of RRJ Securities Ltd., (supra) has been set aside, overruled or stayed by any higher judicial forum. In view of the aforesaid facts, we find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds raised by the Revenue are dismissed.

Summary

Issues:
1. Validity of assessment framed under section 153C of the I.T. Act, 1961.
2. Application of limitation period in assessment proceedings.

Analysis:
1. The appeal concerns the validity of the assessment framed under section 153C of the I.T. Act, 1961 for the A.Y. 2010-11. The assessee, engaged in brokers/marketing activities, had a search operation conducted on its premises, leading to an addition of share application money under section 68 of the I.T. Act, 1961. The Ld. CIT(A) annulled the assessment under section 153C, deeming it invalid, and the Revenue appealed to the Tribunal.

2. The main issue before the Tribunal was the annulment of the assessment order by the Ld. CIT(A) under section 153C of the I.T. Act, 1961 on grounds of limitation. The Revenue contended that the decision in RRJ Securities case was not applicable as the A.O. of the searched person and the assessee were the same. However, the Tribunal found no merit in this argument, citing the High Court's observation that such a distinction was irrelevant under Section 153C.

3. The Ld. CIT(A) had held that the notice issued under section 153C for the A.Y. 2010-11 was barred by limitation as it was issued in F.Y. 2016-17. The Tribunal referred to the RRJ Securities case, which emphasized that proceedings under section 153C must align with Section 153A and the date of search should be construed as the date of recording of satisfaction.

4. The Tribunal noted that the Revenue failed to provide any contrary binding decision or evidence that the RRJ Securities case had been overruled or stayed by a higher judicial forum. Consequently, the Tribunal upheld the Ld. CIT(A)'s order annulling the assessment under section 153C, dismissing the grounds raised by the Revenue.

5. In conclusion, the Tribunal dismissed the appeal of the Revenue, upholding the decision of the Ld. CIT(A) regarding the annulment of the assessment order under section 153C of the I.T. Act, 1961. The order was pronounced in open court on 18.10.2022.