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TMI Blog2022 (1) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... iled by the assessee against the order of ld. CIT(A)-IV, Kanpur dated 29.11.2018 for Assessment Year 2016-17. 2. The assessee has originally filed 13 grounds of appeal. However, vide petition dated 08.07.2021, the assessee has filed Grounds 14 and 15 as additional grounds of appeal, which the ld. AR stated are purely legal in nature and are coming out from the facts already existing on the record. Therefore, in view of the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd. vs. CIT, [1998] 229 ITR 383 (SC), it was prayed that the same may be admitted and be adjudicated first. 3. The ld. CIT (DR) did not raise any objection against admission of additional grounds of appeal and finding the same to be purely legal, the same were admitted and ld. AR was asked to proceed with his arguments. 4. The ld. AR at the outset submitted that there are certain typographical errors in the additional grounds of appeal and filed a chart and in this respect invited our attention to corrigendum to the petition for additional grounds, wherein it has been submitted that in Ground No. 14 forth line the word 'or' may be read as for and in Ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .12.2017. It was submitted that Assessing Officer took the year of search in the case of searched person as the year of search in the case of other person i.e. the present assessee and completed the assessment in the year consideration u/s. 143(3) of the Act and without issuing notice u/s. 153C of the Act. It was submitted that in view of first proviso to Section 153C(1), the search year in the case of assessee should have been 2018-19 and not the impugned A.Y. 2016-17 and the assessment in the present case was required to be made u/s. 153C of the Act and not u/s. 143(3) of the Act. The ld. AR submitted that the in the case of other person the year of search is considered when the documents belonging to other person are handed over to the Assessing Officer of other person and in this respect our attention was invited to the provisions of Section 153C of the Act. It was submitted that the earliest date when the documents can be deemed to have been received by the Assessing Officer of other person is on or after the date of recording of satisfaction by the Assessing Officer of the searched person which happens to be 01.12.2017 and therefore the search year in the case of assessee wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not done treating this year as the year of search which is not in accordance with law, which has been held by ITAT, Delhi Benches in the case of M/s. Bina Fashions N. Foods (P) Ltd. (Supra) and which has been followed by Delhi benches in the case of M/s. N.S. Software (Supra) vide order dated 5.2.2020. For the sake of convenience the findings of the Tribunal in ITA No. 610 are reproduced below: 6. We have considered the rival submissions. In A.Y. 2007-2008 assessee contended before the Tribunal that assessment is barred by limitation since the satisfaction contemplated under section 153C of the I.T. Act was recorded by A.O. on 29.01.2014. Accordingly, the date of search i.e., 09.11.2011 gets substituted by the date of recording of the satisfaction i.e., 29.01.2014 and the six preceding assessment years in the case of the assessee become A.Ys. 2008-2009 to 2013-2014. Accordingly, A.Y. 2007-2008 gets excluded. The contention of assessee has been accepted by the Tribunal and appeal of assessee has been allowed. The ITAT, Delhi A-Bench in the case of M/s. BNB Investments and Properties Ltd., (supra) in paras 7 to 10 considered the identical issue in the light of Judgment of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before 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, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 7.1. The Hon'ble Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (2017) 397 ITR 400 (Delhi.) (HC) (supra), considering the identical issue held as under: Sub-section (1) of section 153C of the Income-tax Act, 1961 provides that the assessment or reassessment of the income of the other person would be in accordance with the provisions of section 153A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... party in respect of which the search was conducted to the Assessing Officer of the assessee on January 3, 2013. The Assessing Officer of the assessee issued notice to the assessee under section 153C of the Act on January 4, 2013 for the assessment year 2006-07. The Tribunal held that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07, was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision under section 153C of the Act. On appeal: Held accordingly, dismissing the appeal, that the Tribunal was justified in holding that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07 was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision. 7.2. The ITAT, Delhi, B-Bench in the case of ACIT, C.C.-2, New Delhi vs. Empire Casting Pvt. Ltd., New Delhi. Ltd., New Delhi (supra), held in paras 5 and 5.1 as under: 5. We have heard the rival submission on this issue and also perused the judgment dated 30th October, 2015 of the Hon'ble jurisdictional High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 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 A.Y. 2003-04 and A.Y. 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. 5.1. The fact that satisfaction u/s. 153C of the Act in the case was recorded on 2nd November, 2009, is not disputed by both the parties. In the judgment cited above, the Hon'ble High Court has held that when the Assessing Officer of searched person and such other person in whos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is deemed date of search. The Act has been amended recently by the Finance Act, 2017 with prospective effect i.e., from assessment year 2018-19. Thus, the period is same now only for the searched parties as well as the other person as per the amended provisions of the said section. In view of the above, we hold that the assessment completed u/s. 143(3) is invalid. 8. It is not in dispute that search was conducted on Krrish Group of cases on 09.11.2011. The impounded documents have been received by the A.O. on 29.08.2013. The satisfaction under section 153C have been recorded on 03.10.2013. The A.O. passed the assessment order under section 153B(1)(b) of the I.T. Act, considering the assessment year under appeal i.e., A.Y. 2012-2013 to be the year of search. However, the First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or re- assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the case of assessee would be A.Y. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be made under section 153C of the I.T. Act would also have to be considered with reference to the date of handing over of the assets or documents to the A.O. of the assessee. Therefore, the six assessment years under section 153C of the I.T. Act in the case of assessee would be A.Ys. 2008-2009 to 2013-2014. The A.O., therefore, shall have to pass the assessment order under section 153C of the I.T. Act. Further, the A.O. has not issued any notice under section 153C of the I.T. Act, therefore, the issue is covered by the above decision in favour of the assessee. The A.O. in the satisfaction note initiated the proceedings under section 153C only for A.Ys. 2006-2007 to 2011-2012 instead of A.Ys. 2008-2009 to 2013-2014. In view of the above, we are of the view that assessment order is illegal and bad in law and cannot be sustained in Law. We, accordingly, set aside the Orders of the authorities below and quash the assessment order passed under section 143(3) of the I.T. Act. Resultantly, the additions stand deleted. 9. The above order of the Tribunal has been further followed by ITAT, Delhi Benches in ITA No. 3161 where the Hon'ble Tribunal vide order dated 5.2.2020 has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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