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TMI Blog2019 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessments made by the A.O. under section 153C of the I.T. Act for A.Ys. 2003- 2004 and 2004-2005 are beyond the scope of Section 153C and the same being void abinitio, deserves to be quashed. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... r Dated 16.11.2016. The Hon'ble Delhi High Court has held that the findings and conclusions of the ITAT cannot be sustained. The Learned Counsel for the Assessee submitted before the Hon'ble Delhi High Court that having regard to these facts, the ITAT's findings with respect to no proper recording of the satisfaction under section 153C of the I.T. Act may be set aside and matter may be remanded for reconsideration on merits of the assessee's appeal. The Hon'ble Delhi High Court accordingly, set aside the ITAT's findings with regard to absence of any satisfaction under section 153C and as a consequence, remit the appeals for reconsideration of the ITAT on merits. It was directed that all the rights and contentions of the parties are kept open. The Departmental Appeals were accordingly allowed. In view of the above Judgment of the Hon'ble Delhi High Court, the appeals of the assessee were re-fixed for hearing on merits. 5. The assessee in all the above appeals, challenged the Orders passed by the A.O. under section 153C/143(3) of the I.T. Act, 1961, as illegal, time barred, bad in law as well as the additions on merits were challenged as reproduced above. 6. We have heard the Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as the month of receiving the books/seized material, therefore, assessment u/s 153C could be undertaken up to 6 financial years prior to September 2010, which would include financial years relevant to assessment years 2005-06 to 2010-11. It was, therefore, submitted that A. Yrs. 2003-04 and 2004-05 were outside the purview of section 153C. The assessee has, inter alia, relied on the decision in one of the group cases, i.e., CIT vs. RRJ Securities Ltd., 380 ITR 612(Delhi), rendered by Hon'ble jurisdictional High Court. 13. On the other hand, the ld. DR, reiterated the findings reached by the ld. CIT(A) on this count in the impugned order and relied on some decisions, which are placed on record. 14. Having considered the rival submissions and gone through the entire material available on record, we find that this issue involved in cross objections of assessee for A.Yrs. 2003-04 and 2004-05 is covered in favour of the assessee and against the Revenue by the decision of Hon'ble jurisdictional High Court rendered in one of the assessee's group cases, RRJ Securities Ltd. (supra), wherein after considering the provisos to sections 153A and 153C of the Act, the Hon'ble jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the 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 200304 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". Therefore, respectfully following the principle of law laid down by Hon'ble jurisdictional High court in the above decision, we have no hesitation to conclude that the assessments made by the Assessing Officer u/s. 153C of the Act for A.Yrs. 2003-04 and 2004-05 are beyond the scope of section 153C and the same being void ab initio deserve to be quashed. Accordingly, the cross objections of the assessee for A.Yrs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n support of its case. Ld. Counsel of the assessee also submitted that the view taken by the Hon'ble High Court is fortified by the Legislative amendment made by the Finance Act, 2014 in section 153C of the Income tax Act, 1961. Accordingly, Ld. Counsel of the assessee requested that the issues involve in the assessee's cross objections and in the Revenue's appeals may be set aside to the Assessing Officer to verify whether the seized documents mentioned in the Satisfaction Note dated 5.7.2010 relating to the assessee on which notice u/s. 153C has been issued to the assessee and if these documents namely the cheques have already been accounted for in the books of accounts of the assessee and are not relating to the period i.e. asstt. year 2003-04 to 2008-09, then the proceedings u/s. 153C may be cancelled, otherwise, the Assessing Officer may take action, as per law. 8. On the other hand, Ld. Department Representative relied upon the order of the Assessing Officer and she oppose the request of the assessee's counsel. 9. We have heard both the counsel and perused the records. We have also gone through the orders of the lower authorities, Paper Book filed by the assessee and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties to investigate into the contents of the document seized, which belongs to a person other than the person searched so that it can be ascertained whether the transaction or the income embedded in the document has been accounted for in the case of the appropriate person. It is aimed at ensuring that income does not escape assessment in the hands of any other person merely because he has not been searched under section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has searched the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document to the Assessing Officer having jurisdiction over the other person and thereafter it is for the Assessing Officer having jurisdiction over the other person to follow the procedure prescribed by section 153A in an attempt to ensure that the income reflected by the document has been accounted for by such other person. If he is so satisfied after obtaining the returns from such other person for the six assessment years, the proceedings will have to be closed. If the returns filed by the other person for the period of six years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of DCIT vs. M/s. Devi Dayal Petro Chemicals Pvt. Ltd. (supra) at para No. 9.2 of the order dated 10.09.2014 (Relied by the ld. AR) as reproduced above. Accordingly, all the appeals of the Revenue and cross objections of the assessee for A.Yrs. 2005-06 to 2008-09 deserve to be allowed for statistical purposes. 16. In the result, the appeals of the Revenue for A.Yrs. 2003-04 and 2004-05 are dismissed whereas the cross objections of the assessee for these years are allowed. The remaining appeals of the Revenue and cross objections of the assessee for A.Yrs. 2005-06 to 2008-09 are allowed for statistical purposes." 7.1. He has submitted that in this case the decision of the group cases decided by the Hon'ble jurisdictional Delhi Court in the case of RRJ Securities Limited have been considered and reproduced. Therefore, the issue is covered in favour of the assessee by the above decisions. Learned Counsel for the Assessee submitted that the documents found during the course of search could be handedover by the A.O. of the searched person to the A.O. of the assessee only after recording the satisfaction note under section 153C of the I.T. Act. He has, therefore, submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irected in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd.,, (supra). 9. We have considered the rival submissions and perused the material available on record, It is not in dispute that search was conducted in the cases of Shri B.K. Dhingra and Others on 20.10.2008 and during the course of search certain documents belonging to assessee were seized. Accordingly proceedings under section 153C of the I.T. Act, 1961, were initiated by recording the satisfaction note Dated 08.09.2010 for assessment year under appeals i.e., 2003- 2004 to 2008-2009 (PB-1). It is also not in dispute that the search in the cases of Shri B.K. Dhingra and Others connected to cases were of M/s. RRJ Securities Ltd., and M/s. Sanchit Consultants Pvt. Ltd., (supra). The ITAT, Delhi G-Bench, in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra), following the decision of the Hon'ble jurisdictional Delhi High Court in the case of RRJ Securities Ltd., (supra), on identical facts concluded that the assessments made by the A.O. under section 153C of the I.T. Act for A.Ys. 2003- 2004 and 2004-2005 are beyond the scope of Section 153C of the I.T. Act, 1961 and the same being void abinitio, deserves to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been decided in the in the group case of M/s. Sanchit Consultants Pvt. Ltd., (supra). In this order, the Tribunal following the decision in the group of M/s. Devi Dayal Petro Chemicals Pvt. Ltd., (supra) restored the matter back to the file of A.O. with certain directions to re-frame the assessments. We, following the Order in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra), set aside the assessments on the above additions and restore the issue of additions on merits back to the file of A.O. with a direction to re-decide the same afresh in the light of observations/ directions of the Tribunal in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra). The A.O. shall frame the assessments by giving reasonable, sufficient opportunity of being heard to the assessee and shall frame the assessments in the light of directions given in the group cases above. The appeals of the assessee for A.Ys. 2005- 2006 to 2008-2009 in ITA.Nos.1527/Del./2014 to ITA.No. 1530/Del,./2014 are allowed for statistical purposes. 12. To sum-up, appeals of the Assessee for the A.Y. 2003-2004 and 2004-2005 are allowed and for the A.Ys. 2005-2006 to 2008-2009 are allowed for statistical purposes. Order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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