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2024 (1) TMI 1072 - AT - Income TaxValidity of assessment u/s 153C - Period of limitation - Date of recording of satisfaction - calculation of six assessment years - whether CIT(A) is correct in holding that assessment made for assessment year 2013-14 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 or when the satisfaction was recorded? HELD THAT - We are guided by the judgment of RRJ Securities Ltd. 2015 (11) TMI 19 - DELHI HIGH COURT proviso to Section 153C(1) of the Act expressly indicates that reference to the date of initiation of search for the purposes of second proviso to Section 153A shall be construed as a reference to the date on which valuable assets or documents are received by the AO of an Assessee (other than a searched person). Thus, by virtue of the second proviso to section 153A of the Act, the assessments/reassessments that were pending on the date of receiving such assets, books of accounts or documents would abate - date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year. Also see Jasjit Singh case 2023 (10) TMI 572 - SUPREME COURT as held that in the case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by the Assessing Officer having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be examined with reference to such date Thus we have no hesitation to hold that the Assessments made for A.Y. 2013-14 u/s. 153C consequent to the satisfaction note recorded on 26.03.2021 (A.Y. 2021-22) is beyond the time limit prescribed and hence, treated as void ab initio. Appeal of the Revenue is dismissed.
Issues Involved:
1. Quashing of the assessment order due to limitation. 2. Validity of assessment for AY 2013-14 based on the date of satisfaction. 3. Interpretation of Section 153C(1) and its provisos. 4. Reference to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd. 5. General validity and tenability of the CIT(A)'s order. Summary: 1. Quashing of the assessment order due to limitation: The Revenue questioned whether the CIT(A) was correct in quashing the assessment order by the AO as barred by limitation without discussing the merits, despite the alleged use of unaccounted cash by the assessee to get accommodation entries from M/s Faith Jewellers. 2. Validity of assessment for AY 2013-14 based on the date of satisfaction: The CIT(A) held that the assessment for AY 2013-14 was invalid since the six previous assessment years should be reckoned from the date when the books of accounts or seized documents were handed over to the AO or when the satisfaction was recorded. The Tribunal referred to the Delhi High Court's judgment in CIT-7 Vs. RRJ Securities Ltd., which clarified the procedure under Section 153C, emphasizing that the date of receiving the documents by the AO is crucial for determining the relevant assessment years. 3. Interpretation of Section 153C(1) and its provisos: The Tribunal discussed the interpretation of Section 153C(1) and its provisos, stating that the period of six assessment years should be reckoned from the date of receiving the seized documents by the AO of the other person. The Tribunal cited several judgments, including SSP Aviation Ltd. and Pepsi Foods Pvt. Ltd., to support this interpretation. 4. Reference to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd: The Tribunal noted that the CIT(A) referred to the Supreme Court's decision in PCIT vs. Raj Buildworth Pvt Ltd, where the SLP was dismissed on the ground of delay, and the case was not heard on merit. The Tribunal emphasized that the recording of satisfaction and the date of receiving documents are crucial for initiating proceedings under Section 153C. 5. General validity and tenability of the CIT(A)'s order: The Tribunal, guided by the Supreme Court's judgment in Commissioner of Income Tax-14 Vs. Jasjit Singh, reiterated that the assessments made for AY 2013-14 u/s. 153C, based on the satisfaction note recorded on 26.03.2021 (AY 2021-22), were beyond the prescribed time limit and hence, void ab initio. The appeal of the Revenue was dismissed. Conclusion: The Tribunal upheld the CIT(A)'s decision to quash the assessment order for AY 2013-14 as barred by limitation, emphasizing the importance of the date of recording satisfaction and the transfer of documents in determining the validity of assessments under Section 153C. The appeal of the Revenue was dismissed.
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