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TMI Blog2021 (6) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... d is liable to be quashed. Appeal of the assessee is allowed. - ITA No.203/Del/2021 - - - Dated:- 9-6-2021 - Shri Prashant Maharishi, Accountant Member And Shri K.Narasimha Chary, Judicial Member For the Assessee : Sh. Amit Goel, CA For the Revenue : Ms. Aashna Paul, CIT/DR ORDER PER K. NARASIMHA CHARY, JM Aggrieved the order dated 10.03.2021 passed by the learned Commissioner of Income Tax (Appeals)-24, New Delhi ( Ld. CIT(A) ) for the assessment year 2012-13, Karina Airlines International Limited ( the assessee ) filed this appeal. 2. Brief facts of the case are that the assessee is a limited company and is engaged in the business of running of helicopters services. They have filed their return of income under section 139(1) of Income Tax Act 1961 (the Act) on 29 September 2012, declaring an income of INR 2,12,19,096/-. It was processed under section 143(1) of the Act. A search seizure action under section 132 of the Act was initiated on 7 April 2016 in the case of Sh. Harvansh Chawla. Satisfaction under section 153A of the Act, by the learned Assessing Officer of the searched person (Sh. Harvansh Chawla) was recorded on 29/3/2019. Learned Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in not reducing the amount of ₹ 2,23,25,000/- from the amount of ₹ 2,49,94,500/- shown as income by the appellant, not appreciating that if the amount of ₹ 2,23,25,000/- was added as income by way of enhancement, then the amount of ₹ 2,23,25,000/- would be consequently required to be reduced from the amount of ₹ 2,49,94,500/- already shown as income by the appellant. 4. On the facts and circumstances of the case and in law, the addition of ₹ 2,50,000/- made by the assessing officer and confirmed by CIT(A) is beyond the scope of provision of Section 153 A r.w.s 153C of the Act, 4.1 On the facts and circumstances of the case and in law, the CIT(A) erred in confirming addition of ₹ 2,50,000/- made by the assessing officer on account of disallowance u/s 40(a)(ia) of the Act, 5. On the facts and circumstances of the case and in law, the addition of ₹ 7,00,000/- confirmed by CIT(A) on account of amount written off is beyond the scope of provision of Section 153 A r.w.s 153C of the Act 5.1 On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition to the extent of ₹ 7,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of which proceedings u/s 153C have been initiated. Since the date of such recording of satisfaction on 29.03.2019 falls in previous year 2018-19 relevant to A.Y. 2019-20, the immediately preceding six years are A.Y. 2013-14 to A.Y. 2018-19, and, therefore, the notice u/s 153C for A.Y. 2012-13 could not have been issued by the learned Assessing Officer, as the same are barred by limitation. 7. Per contra, Ld. DR submits that the implementation provisions have to be interpreted in consonance with the charging provision and there cannot be any anomalous situation created by the interpretation of the implementation provision; that the provisions under sections 153A of the Act and 153C of the Act have to be construed in such a harmonious way that there will not be any different sets of 6 years for reopening of the assessments in case of the person searched and the other person. She also referred to the amendment brought by the Finance Act, 2017 w.e.f. 1/4/2017 to the effect that the 6 assessment years to be reckoned shall be the 6 previous years immediately preceding the assessment year relevant to the previous year in which the search was conducted. The sum and substance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 2012-13 is well beyond such period. So far as this factual position is concerned, it remains unassailable. 11. In respect of the starting point for computation of the block period, the Hon ble Delhi High Court in the case of Pr. CIT v Sarwar Agency (P.)Ltd. [2017)185 taxmann.com 269 (Delhi) clearly held that in case of other person u/s 153C of the Act, the starting point for computation of the block period would be the date from on which based on the seized documents, notice is issued to the other person.It was further held by the Hon ble court that the amendment made in section 153C by Finance Act 2017 w.e.f. 1st April 2017 which states that block period for the searched person as well as the other person would be same six AYs immediately preceding the year of search is only prospective. It makes the things clear that the search that took place on 7/4/2016 in this case is prior to amendment unaffected by the amendment made by way of Finance Act 2017. 12. In CIT v RRJ Securities Ltd. (supra)the Hon ble High Court held as under : 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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, accent the contention that in any view of the matter, assessment for AY 2003-04 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. 13. Further, in the case of ARN Infrastructure India Ltd v ACIT (supra) the Hon ble High Court held that,- 12. The decision in RRJ Securities Ltd. {supra) is categorical that under Section 153C of the Act, the period of six years as regards the person other than the searched person would commence only from the year in which the satisfaction not is prepared by the AO of the searched person and a notice is issued pursuant thereto. The date of the Satisfaction Note is 21st July. 2014 and the notice under Section 153C of the Act was issued on 23rdJuly 2014. The previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 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 previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C (1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year of search. The amendment to clarify this position u/s. 153C (1) was brought in the statute by the Finance Act, 2017 w.e.f. 01.04.2017, wherein it has been provided that the six preceding assessment years for the person covered u/s 153C would be same as that of the searched person covered u/s 153A. In other words, in case of the other person (i.e. person covered u/s 153C), six preceding assessment years has to be reckoned from the year of search. This amendment has been held to be prospective by the Hon ble Jurisdictional High Court in the case of CIT vs. Sarwar Agency P Ltd. as reported in 397 ITR 400, wherein the Hon ble Court observed and held as under: 10. Mr. Salil Aggarwal, learned counsel for the Assessee, has drawn the attention of the Court to the recent amendment made in Section 153 C of the Act by the Finance Act, 2017 with effect from 1st April 2017. This amendment in effect states that the block period for the searched person as well as the 'other person' would be the same six AYs immediately preceding the year of search. This amendment is prospective. 11. Mr. Ashok Manchanda, learned Senior Standing counsel for the Appellant, sought to purs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to other person would also trigger the provisions of section 153C of the Act. This amendment too has been held to be prospective and applicable only to searches conducted after 01.06.2015. This has been held so as Hon ble Jurisdictional High Court in various judgments, some of which are as under: i. 399 ITR 202 (Del) Canyon Financial Services Ltd. vs. ITO 5. The search in the Dalmia Group of Companies took place on 20th January, 2012 and the satisfaction note by the AO of the searched person was dated 13th March, 2014. Therefore, Section 153C as it stood prior to the amendment with effect from 1st June, 2015 applied to the case on hand. In terms of the said provision ie., 153C(1), the AO of the searched person had to be satisfied that the documents seized belongs or belong to a person other than the person referred to in Section 153 A' in order that the AO of the searched person could to hand over such documents to the AO having jurisdiction over such other person . The change brought about by the prospective amendment, with effect from 1st June 2015, is that for initiating proceedings under Section 153 C arising from searches after that date it is enough for the Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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