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2023 (8) TMI 1181 - AT - Income TaxAssessment u/s 153C - assessment in the case of the other person - period of limitation - CIT(A) quashing the assessment order passed by the AO holding it to be barred by limitation holding that assessment made for assessment year 2014-15 is invalid as 6 previous assessment years from the year of search has to be reckoned from the date when the books of accounts or seized documents were handed over to the Assessing Officer has elapsed - HELD THAT - Ld. CIT(A) has merely taken into consideration the settled proposition of law of Jurisdictional High Court in the case of CIT vs. RRJ Securities 2015 (11) TMI 19 - DELHI HIGH COURT to give relief to the assessee and ld. DR could not bring anything to show how there was error in applying the law laid in (Supra). Also in Pr. Commissioner Of Income Tax v. Sarwar Agency Pvt. Ltd. 2017 (8) TMI 733 - DELHI HIGH COURT Hon ble Delhi High Court has reaffirmed the law laid in RRJ Securities Case ( Supra) as held in the case of the other person the AO issues notice only subsequent to the notices issued under Section 153 A to the searched person the starting point for computation of the block period would be the date on which based on the seized documents notice is issued to the other person under Section 153C - Decided in favour of assessee.
Issues:
The judgment involves the assessment order passed by the Commissioner of Income Tax(Appeal)-28, New Delhi, the validity of the assessment made for the assessment year 2014-15, the application of Section 153C of the Income Tax Act, 1961, and the appeal filed by the Revenue against the decision of the Ld. CIT(A). Assessment Order and Background: The appellant, an individual engaged in the business of distribution of bullion and jewellery, filed a return of income for the assessment year 2014-15, which was assessed under section 143(3) of the Income Tax Act, 1961. Subsequently, a notice under section 148 was issued, followed by a notice under section 153C to abate the proceedings under section 148 and merge the earlier proceedings. A search conducted at related premises revealed unaccounted cash transactions with M/s Faith Jewellers, leading to an assessment under section 153C/143(3) resulting in an addition to the total income. Decision of Ld. CIT(A): The Ld. CIT(A) allowed the appeal of the assessee, holding that the assessment for the year 2014-15 was invalid due to limitations on the assessment period. The decision was based on the interpretation of the law as per the Hon'ble High Court and Supreme Court judgments, emphasizing the reckoning of the six previous assessment years from the date when the books of accounts or seized documents were handed over to the Assessing Officer. Grounds Raised by Revenue: The Revenue raised several grounds in the appeal, challenging the decision of the Ld. CIT(A). These grounds included questioning the validity of the assessment order, the interpretation of Section 153C, and the reliance on specific legal precedents. The Revenue contended that the Ld. CIT(A) erred in quashing the assessment order without discussing the merits of the case and in interpreting the provisions of Section 153C. Court's Analysis and Decision: The Court observed that the Ld. CIT(A) had correctly applied the settled legal principles from the Jurisdictional High Court's judgment in the RRJ Securities case to grant relief to the assessee. The Court found no error in the application of law and noted that the Revenue failed to demonstrate any flaws in the decision-making process. Additionally, the Court cited a previous judgment reaffirming the principles established in the RRJ Securities case, further supporting the decision of the Ld. CIT(A). Conclusion: Ultimately, the Court dismissed the appeal of the Revenue, stating that the grounds raised lacked substance. The judgment was pronounced in open court on 23rd August 2023.
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