2023 (12) TMI 294 - AT - Income Tax

Assessment u/s 153C - Whether CIT(A) considering block of six assessment years with reference to date of handing over of seized assets/documents to the AO of the assessee i.e. person other than the searched person, instead of the date of initiation of search on searched person and holding that AY 2011-12 to AY 2013-14 are outside the scope of section 153C? - HELD THAT - We find that the first appellate authority has decided the appeal in favour of the assessee following the binding decision in the case of RRJ Securities Limited 2015 (11) TMI 19 - DELHI HIGH COURT and subsequent amendment in the section 153C of the Act w.e.f. 01.04.2017. We do not find any merit in the grievance of the revenue. If the revenue is aggrieved by the binding decision of the Hon ble Jurisdictional High Court of Delhi (supra) the revenue may approach the Hon ble Supreme Court but in no case the revenue can be aggrieved by the binding decision before this Tribunal.

Summary

Issues:
The judgment involves appeals by the revenue against the order of the CIT(A)- 27, New Delhi dated 20.03.2023 pertaining to A.Y. 2011-12, 2012-13, and 2014-15.

Issue 1: Scope of Section 153C of the Act
The common grievance of the revenue was that the CIT(A) erred in relying on the judgment of the Hon'ble Delhi High Court in the case of CIT-7 vs RRJ Securities Limited regarding the scope of section 153C of the Act. The revenue contended that the assessment years 2011-12 to 2013-14 should not be considered outside the scope of section 153C based on the date of handing over of seized assets/documents to the AO of the assessee. The revenue argued that the origin of action under Sections 153A and 153C should remain the same regardless of the date of handing over of material to the AO of the other person or the date of initiation of proceedings under Section 153C.

Issue 2: Interpretation of Legal Judgments
The revenue further contended that the CIT(A) erred in not appreciating the judgment of the Hon'ble Madras High Court in the case of M/s R.K.M. Powergen Private Limited vs ACIT, dated 27.07.2022, which clarified the intention of the legislature in respect of section 153C of the Act. The revenue argued that the block period for a notice under Section 153C should align with the years constituting the block period in the case of the notice under Section 153A. Additionally, the revenue cited the Hon'ble Supreme Court Judgment in the case of Pr. CIT, Central-3 vs M/s Abhisar Buildwell Private Limited dated 24.04.2023, to support their argument that conducting assessments under sections 153A/153C requires incriminating evidence indicating undisclosed income discovered during the search, and that the block of six assessment years can only be possible prior to the date of search.

Judgment Summary:
The Appellate Tribunal dismissed the appeals by the revenue against the order of the CIT(A) based on the grounds that the first appellate authority had correctly decided the appeals in favor of the assessee following the binding decision of the Hon'ble Delhi High Court in the case of RRJ Securities Limited and subsequent amendment in the section 153C of the Act. The Tribunal found no merit in the revenue's grievance and stated that if the revenue is aggrieved by the binding decision of the Hon'ble Jurisdictional High Court of Delhi, they may approach the Hon'ble Supreme Court. The appeals were ultimately dismissed, and the decision was announced in the open court on 29.11.2023.