9911796707
TMI Blog2016 (7) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... to make lump sum disallowance of Rs. 5,00,000/- out of business expenses incurred by the appellant which were duly supported with Audited Accounts. (ii) That even otherwise such disallowance is not called for under section 153A of the Income Tax Act in the absence of any incriminating material. That the assessee craves the right to add, amend, delete or substitute any ground of appeal 4. That the order framed is against the facts of the case and bad in law." 1.1 The 1st ground of appeal is purely legal ground and the assessee challenged the action of Assessing Officer who passed order u/s 153C/143(3) of the I.T. Act, 1961. The 2nd ground of appeal is also on legal issue as well as on merits also. 2. The brief facts of the case are that the assessee filed its return of income on 10.08.2004 u/s 139(1) declaring an income of Rs. 3,51,430/-. A search and seizure operation was carried out u/s 132 of the Act on 19.06.2009 at Lalit Modi group. During the course of search at the residence cum business premises at D-20, NDSE-II, New Delhi, certain documents belonging to the assessee were seized. On the basis of seized documents, proceedings were initiated in the case of assessee u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 153A of the IT Act which are parallel to provision u/s 153C of IT Act are to be considered in the context of purpose, object and scheme of IT Act. This legal proposition is also held in various decided cases on the subject. The assessment in this case may kindly be made keeping in view these provisions. iii) That as per provisions of section 153A of the IT Act which are parallel to provisions of section 153C, only pending assessment at the time of search shall abate. This legal proposition has been upheld in numerous decided cases. Since the assessment year under question was not pending on the date of recording of satisfaction on 1807.2011, the assessment proceedings in this case shall not abate in proceedings u/s 153A read with section 153C of the IT Act. The assessment In this case may kindly be made keeping In view these provisions. Your above objections have been considered but have not been found to be satisfactory and acceptable for the reasons given hereunder:- From the objections raised above at 1 (i), 1 (ii) and 1 (iii) by the assessee company, it is noted that in these objections the assessee company has raised issue that proceedings u/s 153C initiated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is no legal requirement that initiation of proceedings should only be with respect to such years in respect of which there is some material. The requirement of the section 153C with reference to satisfaction seems to be only the prima facie satisfaction and not a conclusive satisfaction. Thus the AO must be prima facie satisfied that the documents etc. belong to the other persons than the person searched. Further as regard to your contention that assessment under section 153C cannot be equated to regular and normal assessments and need to be based on incriminating and seized documents, your attention is invited to the decision of ITAT in the case of Shyam Lata Kaushik Vs ACIT(2008) 4 DTR(Del:G) ITAT G Bench & Shivnath Rai Harnarain India (P) Ltd, Vs DCIT(2009) 117 ITD 74 whereas it has been held that there is no requirement for an assessment made u/s 153A to be based on any material seized in the course of search. There is nothing contained in section 153A which depicts that addition u/s 153A can be made only on the basis of documents/material found or seized during the course of search. Hence, in view of the facts stated above, your above said objection is hereby rejec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 153C, the date of search is to be substituted by the date of receiving the books of accounts and documents and assets seized by the A.O. having jurisdiction over such other person. He relied upon the following judgements: i) CIT Vs Aakash Arogya Mandir Pvt. Ltd. ITA 509/2015,(H.C.), wherein Hon'ble Jurisdictional High Court held that "even if the A.O. were the same, satisfaction would have to be recorded separately qua the searched person and the assessee." ii) R. L. Allied Industries Vs ITO ITA 567/Del/2011 dated 18.11.2014, wherein ITAT held as under: "8. Thus, as per Section 153A(l)(b)' the Assessing Officer is empowered to assess or reassess the total income of the six assessment years immediately preceding the assessment year relevant to the assessment year in which search is conducted. Thus, in other words, he has to assess the search year and six preceding years. As per proviso to Section 153C, for the purpose of Section 153C, the date of receiving the books of account or documents shall be considered the date of search. Therefore, with the combined reading of proviso to Section 153C and Section 153A(I)(b), it is clear that in the case of the person in whose case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against such 'other person'. The initiation or proceedings against 'such other person' are dependent upon a satisfaction being recorded. Such satisfaction may be during the search or at the time of initiation of assessment proceedings against the 'searched person', or even during the assessment proceedings against him or even after completion of the same, but before issuance of notice to the 'such other person' under Section 153. 26. Even in a case, where the Assessing Officer of both the persons is the same and assuming that no handing over of documents is required, the recording of 'satisfaction' is a must, as, that is the foundation, upon which the subsequent proceedings against the 'other person' are initiated. The handing over of documents etc. in such a case may or may not be of much relevance but the recording of satisfaction is still required and in fact it is mandatory." As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. In our view, the concluded assessments cannot be interfered with mechanically and solely for the reason that a document belonging to the Assessee, which has no bearing on the assessments of the Assessee for the years preceding the search, was seized from the possession of the searched persons." If' the seized money, bullion, jewellery or other valuable article or thing seized as handed over to the AO of the Assessee, are duly disclosed and reflected in the returns filed by the Assessee, no further interference would be called for. Similarly, if the books of accounts/documents seized do not reflect any undisclosed income, the assessments already made cannot be interfered with. Merely because valuable articles and/or documents belonging to the Assessee have been seized and handed over to the AO of the Assessee would not necessarily require the AO to reopen the concluded assessments and reassess the income of the Assessee. 36. The decision in SSP Aviation (supra) cannot be understood to mean that the AO has the jurisdiction to make a reassement in every case, where seized assets or documents are handed over to the AO. The question whether the documents/assets seized coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "in case of the searched person, the date with reference to which proceedings for assessment or reassessment of any assessment year within a period of six assessment years shall abate, is the date of initiation of search under Section l32 or requisition under Section 132A. However, in case of other person .. 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 other person, 0-e question of pendency and abatement of proceedings of assessment or reassessment to the six assessment years would have to be examined with reference to such date." 5.1 The case is barred by limitation as six year period is calculated as under: Period of assessment Assessment year 1.4.2010 to 31.3.2011 2011-12 1.4.2009 to 31.3.2010 2010-11 1.4.2008 to 31.3.2009 2009-10 1.4.2007 to 31.3.2008 2008-09 1.4.2006 to 31.3.2007 2006-07 1.4.2005 to 31.3.2006 2005-06 5.2 It is observed that the A.O. has issued notices on 18.07.2011 i.e. after expiry of six years and hence the case is time barred. 6. Respectfully following the judgement of Hon'ble Jurisdictional High ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
