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TMI Blog2020 (2) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... current AY 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 the year in question. - Decided in favour of assessee. - I.T.A Nos.1216 & 1217/Del/2017 - - - Dated:- 21-2-2020 - Shri Bhavnesh Saini, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri C.S. Aggarwal, Sr. Adv., Shri Gautam Jain, Adv. For the Revenue : Ms. Pramita M. Biswas, CIT DR ORDER PER BHAVNESH SAINI, J.M. 1. Both the appeals by Revenue are directed against the order of Ld. CIT(Appeals)-28, New Delhi dated 15.12.2016 for AYs 2008-09 and 2009-10 on the following grounds: 1) That the Ld. CIT(A) erred in law and on facts in annulling order passed by the Assessing Officer and is held to be null and void, without property appreciating the facts and circumstances of the case. 2) Assessment year in respect of proceedings u/s 153C of the Act to be same 6 years in the case of other person, for which the proceedings u/s 153A is initiated in the case of connected searched person. 3) (a) the order of the CIT(A) is erroneous and not tenable in law and on facts. (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sa Logistics Pvt. Ltd., M/s Mapsa Infra Pvt. Ltd. Sri Pyare Lal Gupta and Mrs. Veena Gupta recorder his satisfaction on 23.02.2016 that certain document pertaining to the assessee M/s Mapsa Tapes Pvt. Ltd. has been seized during the search and seizure operation carried out in the premises of M/s Mapsa Logistics Pvt. Ltd., M/s Mapsa Infra Pvt. Ltd. at C1-3 Netaji Subhash Place, Pritampura, Delhi, and in the case of Shri Pyare Lal Gupta, Mrs. Veena Gupta at D-28, Model Town, Delhi. Subsequently, the Assessing Officer of the appellant M/s Mapsa Tapes Pvt. Ltd. also recorded his satisfaction note on 23.02.2016 for initiating proceeding u/s 153C r.w.s. 153A of the Act and, accordingly, notice u/s 153C dated 23.02.2016 was issued. 3.1 There is no ambiguity that for initiation of proceedings u/s 153C of the Act, the AO of the searched person to be satisfied that the assets or documents seized belong to other person (being a person other than the searched person) and accordingly the same has to be handed over to the AO of the other person. Subsequently, the AO of the other person, on receiving the documents and the assets seized, would have jurisdiction to commence proceedings u/s 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... six years. In view of the above, assessment for AY 2008-09 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 the year in question. Hence, respectively following the decision of the jurisdiction High court, it is held that the order in question passed by the AO is not in accordance with the provision of the Income Tax Act, 1961. Accordingly, the order passed by the Assessing Officer is held to be null and void and, accordingly, it is annulled. 3.4 Since the order under consideration has been held to be null and void, the other ground taken by the appellant become academic. In result, the appeal is allowed. 5. Ld. DR relied upon the order of the AO and submitted that view of the CIT(A) have not been accepted by the Department. On the other hand, Ld. Counsel for assessee reiterated the submissions made before authorities below. 6. We have considered the rival submissions. It is not in dispute that search was conducted on 20.01.2014 in the cases of M/s Mapsa Logistics Pvt. Ltd. Ors. and satisfaction u/s 153C was recorded on 23.02.2016 that the documents pertaining to assessee have been sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgaon, dated 09th December, 2014, for the A.Y. 2012-2013. 1.1. Both the parties mainly argued in ITA.No.504/Del./2015 in the case of M/s. BNB Investments Properties Ltd., and submitted that the issue is same in the remaining appeal. 1.2. We have heard the learned Representatives of both the parties and perused the material on record and gone through the findings of the authorities below. For the purpose of disposal of both the appeals, we decide the appeal in the case of M/s. BNB Investments Properties Ltd., as under. ITA.No.504/Del./2015 M/s. BNB Investments Properties Ltd., A.Y. 2012- 2013 : 2. Briefly, the facts of the case are that in this case, a search and seizure operation was conducted on M/s Krrish Group of cases on 09.11.2011. A survey u/s 133A of the Act was also carried out on the business premises of the assessee. Assessee earned income from business and other sources. The assessee filed its original return declaring total income of ₹ 2,08,95,242/- on 28.09.2012. In response to notice under section 153A(1) (a] r.w.s 153C, assessee filed revised return declaring total income of ₹ 2,22,43,593/-. Assessment was framed at & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 and G. N. 2, as taken initially in Form - 36 also, however, these have been taken specifically only as a matter of abundant precaution and to meet out the situation in case the Hon ble Court is of the opinion that the same are not covered in Ground Nos. 1 2 as initially taken. 3.1. Learned Counsel for the Assessee submitted that additional grounds are legal in nature and no new facts shall have to be considered. He, therefore, submitted that additional grounds may be admitted. He has relied upon the decision of the Hon ble Supreme Court in the case of National Thermal Power Co. Ltd., (1998) 229 ITR 383 (SC) and Gedore Tools Pvt. Ltd., 238 ITR 268 (Del.). 4. On the other hand, Ld. D.R. submitted that additional grounds have no merit and the same may be rejected. The assessment has been rightly framed under section 153A(1)(b) of the I.T. Act, 1961. 5. After considering the rival submissions, we are of the view that the additional grounds are legal in nature and no new facts shall have to be considered. The additional grounds go to the validity of the assessment proceedings under section 153C of the I.T. Act, therefore, the same should be admitted for deciding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 153B(1)(b) of the I.T. Act being a search year. He has submitted that First Proviso to Section 153C is applicable in the case of the assessee because no search was conducted in the case of the assessee. The Amendment in Section 153C came w.e.f. 01.04.2017 which is prospective in nature. Assessment in A.Y. 2012-2013 under appeal should have been completed under section 153C being 5th year in the Block of 06th year. The First Proviso to Section 153C(1) provides that in case of Section 153C, the date of receiving of books of account by the jurisdictional A.O. shall have to be construe as date of initiation of search. Since the books of account/impounded documents have been received by the A.O. on 29.08.2013, therefore, A.Y. 2014-2015 will be the year of search and assessments under section 153C of the I.T. Act should have been computed for A.Ys. 2008-2009 to 2013-2014. Since, no notice under section 153C have been issued for assessment year in appeal, therefore, the assessment order is illegal, void and bad in law. He has relied upon the Judgment of Hon ble Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (2017) 397 ITR 400 (Del.), Order of ITAT, Delhi, B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any other person.- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. [Provided furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Assessing Officer having jurisdiction over such other person . In terms of section 153A(1)(b) of the Act. the Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. The second proviso to sub-section (1) of section 153A of the Act states that assessment or reassessment relating to any assessment year falling within the period of six assessment years referred to in the said sub-section pending on the date of initiation of the search under section 132, would abate. In CIT v. RRJ Securities Ltd. [2016] 380 ITR 612 (Delhi), the court held that in the context of proceedings under section 153C of the Act, the reference to the date of initiation of the search in the second proviso to section 153A has to be construed as the date on which the Assessing Officer receives the documents or assets from the Assessing Officer of the searched person, that further proceedings, by virtue of section 153(1) of the Act, would have to be in accordance with section 153A of the Act and the reference to the date of search would have to be construed as the reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment year 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the prev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this count. Respectfully following the above judgment of the Hon'ble High Court in RRJ Securities (supra) the date of handing over of seized material/ record by the Assessing Officer of searched party to the Assessing Officer of the assessee would be 2nd November, 2009. Further, following the judgment, the six assessment years for which assessment/re-assessment could be made u/s 153C of the Act would also have to be construed as from the reference date of handing over of assets/documents to the Assessing Officer of the assessee. In the case in hand, it would be the date of recording satisfaction under section 153 of the Act i.e. 2nd November, 2009, and therefore, six assessment years which would eligible for assessment/reassessment would commence from assessment year 2004-05 to assessment year 2009-10. The assessment/re-assessment in respect of assessment year 2003-04 would, thus, be beyond the period of six assessment year as reckoned with reference to the date of satisfaction recorded by the Assessing Officer of the searched person. We, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the other person would be the same six assessment year immediately preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New Delhi and Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra). The A.O, therefore, should have framed the assessment under section 153C of the I.T. Act in the case of the assessee and at the time of initiating the proceeding against the assessee, should have issued notice under section 153C of the I.T. Act which have not been done in this case. The issue of notice under section 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. The assessment order, therefore, vitiate, void, illegal and bad in law and cannot be sustained. The contentions of the Ld. D.R. have already taken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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