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TMI Blog2019 (8) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... 530/VIZ/2018, Cross Objection No.6/Viz/2019 (Arising out of I.T.A.No.530/Viz/2018) - - - Dated:- 14-8-2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Assessee : Shri G.V.N.Hari, AR For the Revenue : Shri D.K.Sonowal, CIT DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the revenue against the order of the Commissioner of Income Tax [CIT(A)]-3, Visakhapatnam vide ITA No.88/2017-18/CIT(A)-3/VSP/2018-19 dated 29.06.2018 and Cross Objections are filed by the assessee in support of the order of the Ld.CIT(A) for the Assessment Year (A.Y.)2014-15. 2. Brief facts of the case are that a search and seizure operation u/s 132 was conducted in the case of Shri Alla Siva Reddy on 21.12.2015 who is the father of the assessee. During the course of search, incriminating material relating to the assessee was found and seized as Annexure A/ASR/RES/LS/02, wherein it is evidenced that the assessee had purchased gold ornaments worth ₹ 1,83,375/- from M/s Mine Diamonds Limited on 22.08.2013. Some oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, no incriminating material relating to the escapement of income was found, therefore, the notice u/s 153C is invalid, hence required to be quashed. 5. On the other hand, the Ld.DR relied on the grounds of appeal and supported the orders of the lower authorities. 6. We have heard both the parties and perused the material placed on record. In this case, as observed from the assessment order, the assessee has filed the return of income for the assessment year under consideration i.e. 2014-15 on 28.01.2015 declaring total income of ₹ 7,00,910/-. A search u/s 132 was conducted in the case of Alla Siva Reddy on 21.12.2015 and the time limit for issue of notice u/s 143(2) got expired on 30.09.2015. Therefore, the assessment for the A.Y.2014-15 is held to be completed assessment and no notice is permissible to be issued in the case of completed assessments without having incriminating material found and seized during the course of search. It is clear from the language used in section 153C that the assessing officer should satisfy that the seized material has bearing on determination of income of the relevant assessment year. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and law, respectfully following the view taken by the coordinate bench of this Tribunal, we hold that invoking provisions of section 153C of the Act without having incriminating material is bad in law and accordingly we set aside the orders of the lower authorities and allow the appeal of the assessee. 6.1. Similarly the coordinate bench of ITAT, Delhi in the case of Assistant Commissioner of Income-tax, Central Circle-09.v.Anush Finlease Construction (P.) Ltd., [2019] 104 taxmann.com 295 (Delhi - Trib.) has taken the similar view following the order of Hon ble Delhi High court in the case of Index Securities (P.) Ltd. . For the sake of clarity we, extract the relevant part of the decision of coordinate bench which reads as under: 6. Thus, it is not in dispute that the only material on the basis of which proceedings u/s. 153C were initiated was the audited balance sheet and financial statements of the assessee for the year ended on 31st March, 2009. That Hon'ble Jurisdictional High Court has considered identical issue in the case of Index Securities (P.) Ltd. (supra) and held as under :- 30. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional High Court would be squarely applicable. Respectfully following the same, we quash the initiation of proceedings u/s. 153C and consequentially, the impugned assessment order is also quashed. Once the assessment order itself has been quashed, the Revenue's appeal does not survive for adjudication. 6.2. Hon ble apex court has considered the similar issue in Commissioner of Income-tax-III, Pune. v.Sinhgad Technical Education Society, [2017] 84 taxmann.com 290 (SC) held that as per provisions of section 153C, incriminating material which was seized had to pertain to assessment years in question for issue of notice u/s 153C. For the sake of clarity we, also extract the relevant part of the decision of Hon ble Supreme court which reads as under: 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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