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TMI Blog2019 (8) TMI 1669X X X X Extracts X X X X X X X X Extracts X X X X ..... viso of section 153C of the Act. a) The AO has erred in assuming and assessing the impugned yearas year of search, ignoring that the year of search for the present assessee would be AY 2014-15, as the documents pertaining to present assessee were received on 29.08.2013, as is evident from the assessment order. b) On the facts and under the circumstances of the case the assessment of the impugned year without following the mandatory provisions of law applicable for cases covered under section 153C is bad in law 3. Without prejudice to the above, On the facts and under the circumstances of the case, the jurisdiction of the AO under section 153C is bad in law as no satisfaction in the file searched person has ever been recorded for assuming the jurisdiction of assessee's case for the present AY." 3. Since the validity and the jurisdiction of the Assessing Officer for passing the order u/s.153B(1)/143(3) has been challenged by the assessee in his cross objection, therefore, this issue is being taken up. The brief facts qua the said legal issue are that assessee is an individual deriving income from salary, house property and other sources. Return of income for the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der: - DATE Sequence of event Page no of PB 09.11.2011 Search and seizure action occurred in the case of Krrish Group. It is alleged that some documents belonging to assessee were found from Krrish Reality Nirman Pvt Ltd located at 406 Tower, Elegance Tower,Jasola Distt. Centre Sarita-Vihar New-Delhi Admitted fact- see Asst Order- Pg-2 16.10.2012 Return of Income filed by assessee declaring Income of Rs. 1,12,01,410/- Admitted fact- See Asst Order- Pq -2 12.08.2013 Jurisdiction of assessee has been transferred from Gurgaon to Faridabad. See Asst Order First Page 29.08.2013 The documents pertaining to assessee had been transferred to the AO of central circle. Admitted fact - See Asst Order- Pg -1 16.10.2013 Detailed questionnaire has been issued Asst order Pg-2 27.12.2013 Effective hearing vis-a-vis the issue involved has taken place Para I at Page NO-3 of the assessment order 03.02.2014 AR of the assessee appeared and filed reply 05.02.2014 Order of assessment has been passed. 6. Based on the aforesaid events, he submitted that documents pertaining to assessee were handed over to the Assessing Officer after 29.08.2013. Accordingly, in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point has been now clarified by amendment brought in the statute of Finance Act, 2017 in Section 153A for decreasing the time limit of completion of assessment and also increasing the period from 6 to 10 years in relevant cases. He also quoted the amended proviso of Section 153C. He further submitted even after this amendment, the first proviso stands as it is and the statute makes it further clear that the first proviso to section 153C always meant to refer to the abatement of the proceedings as mentioned in the second proviso to section 153A (1). Otherwise the current section 153C will have major incongruity as to whether six years would be reckoned from date of search as mentioned in amended 153C (1) or from the date of handing over of the documents as mentioned in the first proviso of 153C which remained unamended. The Decision of RRJ securities (supra) was rendered with respect to, whether the initial assessment year would be time barred or not. Here it is not a dispute of time barring or limitation. Further the amended 153C(1) was not available for the guidance of the Hon'ble Court and hence proper appreciation of law was not done. 9. He further referred to the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also perused the relevant finding given in the impugned order as well as relevant dates and events on the issue of validity of the assessment as challenged by the assessee in the Cross Objection. The Assessing Officer has framed the assessment order by treating the Assessment Year 2012-13 as the year of search on the premise that search and seizure operation was carried on 09.11.2011 in the case of Krrish Group of cases and also consequential survey u/s.133A carried on in the case of the assessee on 15.11.2011. It is an admitted fact that jurisdiction of the assessee has been transferred from Gurgaon to Faridabad on 12.08.2012 and document relating to the assessee has been transferred to the present Assessing Officer of Central Circle-1, Faridabad. 1st proviso to Section 153C reads as under: "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 ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 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, proceedings, by virtue of section 153(1) of the have to be in accordance with section 153A of 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 or 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 or documents to the Assessing Officer of the assessee. The amendment in section 153C of the Act by the Finance Act, 2017 with effect from April 1, 2017 to the effect that the 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 years immediately preceding the year of search is prospective. A search under section 132 of the Income-tax Act,'1961 took place on November 11, 2010 in the T group of cases. The documents pertaining to the assessee were forwarded along with a satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee under RTI Act. The Amendment in Section 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 HonT)le 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 sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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