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TMI Blog2017 (8) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the issue by common judgment dated March 25, 2015, the correctness whereof is challenged by the Revenue in these appeals. Thus, we propose to club all these appeals and proceed to decide by a singular judgment. 3) The issue pertains to the validity of the proceedings which were initiated by the Assessing Officer (for short, 'AO') under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). It may be mentioned here itself that the assessee is an educational institution registered under the Bombay Public Trusts Act, 1950 and the Societies Registration Act, 1860. It also got itself registered under Section 12AA of the Act since the Assessment Year 1994-95. Because of the said registration under Section 12AA of the Act, Sections 11 and 12 of the Act apply to the assessee as per which income earned by the assessee from property held for charitable or religious purposes (Section 11) and income from contributions are exempt from taxation under certain circumstances. 4) It so happened that a search and seizure operation was carried out under Section 132 of the Act on one Mr. M.N. Navale, President of the assessee Society, and his wife on July 20, 2005 from wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d managing trustees were using the assessee's trust for their own benefits. Thus, the notice under Section 153C of the Act was issued for the Assessment Years 2000-01 to 2005-06. Notice was also issued under Section 143(2) for Assessment Year 2006-07. 8) On receipt of the said notice, the assessee filed its revised return for the Assessment Year 2006-07 and in respect of other Assessment Years, it stuck to its original returns. Thereafter, registration of the trust was cancelled under Section 12AA(3) of the Act on October 09, 2007 and the assessee was treated as AOP. Special audit was ordered, as mentioned above, and after the receipt of the Special Audit Report, assessment order was passed by the AO on August 07, 2008 for Assessment Years 1999-2000 to 2006-07. Assessment Year 1999-2000 was covered under Section 147 of the Act, Assessment Year 2006-07 was covered under Section 143(3) of the Act and Assessment Years 2000-01 to 2005-06 were covered under Section 153C read with Section 143(3) of the Act. AO assessed the income of the assessee in the sum of Rs. 3,54,46,432/-. The concluding portion of the assessment order reads as follows: "16. In view of the totality of facts and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f amounts, creation of assets, all out of the receipts on account of donations, and payment of rent which is not reasonable attract the provisions of Section 13(1)(c). These are the benefits derived by persons referred to in Section 13(3). Subject to the above, the total income and tax for A.Y. under consideration is computed, as below: A Total Income as returned Rs. Nil B Additions I. Revised Income computed as per discussion in Paras 7 & 8 Rs.3,54,46,432/- C Total Income Assessed Rs.3,54,46,432/- D Total Income Assessed Rs.3,54,46,430/- 9) The assessee filed appeal thereagainst, which was partially allowed by the Commissioner of Income Tax (Appeals) {CIT(A)}. He, however, upheld the order the AO, holding that the assessee was not eligible for exemption under Section 11 of the Act and, therefore, donations received were rightly treated as income. Against the aforesaid part of the order, which was against the assessee, it preferred further appeal to the ITAT. In the appeal before the ITAT, the assessee raised additional ground questioning the validity of the notice under Section 153C of the Act on the ground that satisfaction was not properly recorde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Courts. 13) Mr. Jehangir D. Mistri, learned senior counsel appearing for the assessee, countered the aforesaid submissions. He argued that the Tribunal was right in permitting the assessee to raise the issue regarding validity of notice under Section 153C of the Act when it was ex facie found that such a notice was time barred and, therefore, it was a jurisdictional ground which could be raised by the assessee. Coming to the merits of that ground, learned senior counsel submitted that the Satisfaction Note dated April 18, 2007 is ex facie recorded/prepared by the AO in his capacity as the AO of the assessee society and does not set out the date on which the books of accounts or documents or assets seized etc. from the person searched were handed over/dealt with in the capacity of AO of the assessee society, but this cannot be earlier than April 18, 2007, i.e. the date when the Satisfaction Note was prepared. Since the Assessment Order pursuant thereto can be passed under Section 153A(1) of the Act for a period of six Assessment Years, immediately preceding the Assessment Year relevant to the Previous Year in which the books of accounts or documents or assets were received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s improper on the part of the ITAT to allow this ground to be raised, when the assessee had not objected to the jurisdiction under Section 153C of the Act before the AO. Therefore, in the first instance, it needs to be determined as to whether ITAT was right in permitting the assessee to raise this ground for the first time before it, as an additional ground. 18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted in case of SSP Aviation Ltd. Vs. Deputy Commissioner of Income Tax (2012) 346 ITR 177 is misplaced. There, search was carried out in the case of "P" group of companies. It was found that the assessee before the Hon'ble Delhi High Court had acquired certain development rights from "P" group of companies. Based thereon, the satisfaction was recorded by the Assessing Officer and he issued notice in terms of Section 153C. Thereupon the proceedings were initiated under section 153A and the assessee was directed to file returns for the six assessment years commencing from 2003-04 onwards. The assessees filed returns for those years but disclosed Nil taxable income. These returns were accepted by the Assessing Officer, however, in respect of the assessment year 2007-08 there was a significant difference in the pattern of assessment for this year also, the return was filed for Nil income but there were certain documents and which showed that there were transactions of sale of development rights and from which profits were generated and taxable for the assessment year 2007-08. Thus, the receipt of Rs. 44 crores as deposit in the previous year relevant to the assessment year 2008-09 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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