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TMI Blog2022 (2) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... tely misplaced. This is so, because, once the amended provisions of sections 153A and 153C are applicable in respect of search and seizure operation initiated under section 132 or requisition made under Section 132A of the Act post 01.04.2017, the provisions of sections 153A and 153C would be applicable to the same set of assessment years, both in case of the searched person and the person other than the searched person. 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 - As further held 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 in this case is prior to amendment unaffected by the amendment made by way of Finance Act 2017. As respectfully following the decision of the coordinate bench in assessee s own case [ 2021 (6) TMI 368 - ITAT DELHI] we hold that the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in law, the assessment order passed by the assessing officer is liable to be quashed as approval u/s 153D of the Act by the JCIT/Addl CIT is not in accordance with the provisions of Act and CIT(A) erred in not holding so. 5. On the facts and circumstances of the case and in law, the assessment order passed by the assessing Officer is liable to be quashed as no documents identification number (DIN) was generated and CIT(A) erred in not holding so. 3. As could be seen from the issues raised in ground no. 1 and 2 the assessee has challenged the validity of the assessment order passed under Section 153C of the Act. 4. Briefly stated facts relating to this issue are, the assessee is a resident company. For the assessment year under dispute, the assessee has originally filed its return of income on 26.09.2011 declaring loss of Rs.98,95,241/-. Subsequently, a search and seizure operation under section 132 of the Income-tax Act, 1961 (in short the Act ) was carried out in case of Sh. Harvansh Chawla on 07.04.2016. In course of such search and seizure operation, certain incriminating material was found which allegedly had a bearing on the taxable income of the present asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the anomaly and make the provisions contained under section 153A and 153C harmonious, the legislature has amended both the aforesaid provisions by Finance Act, 2017 by providing for assessment of the same assessment years both for the searched person as well as the person other than the searched person. While drawing our attention to the Explanatory Memorandum to Finance Bill, 2017, he submitted, since, the amendments were brought by the legislature as a major to rationalize the provisions contained under section 153A and 153C of the Act, they are clarificatory in nature, hence, would apply retrospectively. Without prejudice, he submitted, even if the amendment made would apply prospectively, still, they would be applicable to the assessee as the satisfaction recorded for initiation of proceeding under section 153C was in 2019 post the amendment made under section 153C w.e.f. 01.04.2017. 8. We have considered rival submissions and perused the materials on record. For deciding the issue, following dates and events would have a crucial bearing: 1. 07.04.2016 - search and seizure operation under section 132 of the Act was conducted in case of Sh. Harvansh Chawla. 2. 29.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2019, the amendment would be applicable. Therefore, the same set of assessment years for which assessment proceeding was initiated in case of searched person has to be initiated against the assessee. However, we do not find merit in the aforesaid submissions. The Explanatory Notes to the provisions of the Finance Act, 2017 issued by the Central Board of Direct Taxes (CBDT) through Circular No. 2/2018, dated 15th February, 2018 explains the amendment made to the provisions of sections 153A and 153C of the Act as under: 80.4 However, in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including section 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A of the Income-tax Act relating to search assessments has been amended to provide that notice under the said section can be issued for an assessment year or years beyond the sixth assessment year already provided up to the tenth assessment year if- (i) the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income which has escaped as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of sections 153A and 153C would be applicable to the same set of assessment years, both in case of the searched person and the person other than the searched person. It is relevant to observe, while considering identical issue in assessee s own case in assessment year 2012-13 (supra) the coordinate bench, after taking note of more or less similar argument made by the Revenue, has held as under: 9. We have gone through the record in the light of the submissions made on either side. Insofar as the facts are concerned there is no dispute. Search in the case of Harvesh Chawla took place on 7/4/2016, the satisfaction by the learned Assessing Officer of the searched person was recorded on 29/3/2019 and the seized material was handed over to the learned Assessing Officer of the assessee who had recorded his satisfaction on 15/9/2019. It is clear that the date of search had fallen in the A.Y. 2017-18 which is relevant for the case of the person searched; whereas the satisfaction recorded by the learned Assessing Officer of the searched person on 29/3/2019 had fallen in the assessment year 2019-20 in which case the immediately preceding 6 assessment years would be assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act would also have to be construed with reference to the date of handing over of 8 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 years 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 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of six years has to be reckoned from the date of recording of satisfaction note or from the date of search carried out in a case of a person provided in Section 153A. This precise issue has been dealt by the Hon ble Delhi High Court in the case of CIT vs. RRJ Securities Ltd. as reported in 380 ITR 612 in the context of Section 153C of the Act, wherein it was laid down as under: Further, the period of six years would also have to be reckoned with respect to the date of recording of satisfaction note - that is. 8th September. 2010 -and not the date of search. 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153 A of the Act has to be 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 153 A of the Act and the reference to the date of search would have to be construed as the reference to the date of 10 recording of satisfaction. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope 11 of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year. This principle was further reiterated in the case of ARN Infrastructure India Ltd. v. ACIT as reported in 394 ITR 569, wherein it has been held as under: 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 May, 2014 and the notice under Section I53C of the Act was issued on 23rd July, 2014, The previous six AYs would therefore be from AY 2009-10 to AY 2014-15. This would therefore not include AYs 2007- 08 and 2008-09. 8. If we apply the ratio laid down by the Hon ble Jurisdictional High Court, in the present case, then the date of satisfaction, i.e., 25.09.2018 has to be reckoned as the date of reference from where six assessment years immediately preceding assessment years has to be construed and therefore, six pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch. The said amendment is prospective. 12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed. 9. Further, Hon ble Gujarat High Court in the case of Anil Kumar Gopikishan Arawal v. CIT as reported in 418 ITR 25 has also clarified that such an amendment is prospective after observing as under:- 19.19 It may be pertinent to note that vide CBDT Circular No. 2/2018 / dated 15.2.2018, it has been clarified that the amended provisions of section 153A of the Act shall apply where search under section 132 of the Act is initiated or requisition under section 132A of the Act is made on or after 1st day of April, 2017. It is further stated therein that section 153C of the Act has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A of the Income-tax Act. It is also stated therein that the amendment will take effect from 1st April, 2017. Therefore, even the CBDT, in the context of the amended provisions of section 153A of the Act, has clarified that it would apply when search or requisition is made after the date of the 13 amendment. Evidently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. This was long prior to 1st June, 2015 and, therefore, Section 153C of the Act as it stood at the relevant time applied. In other words, the change brought about prospectively with effect from 1st June. 2015 by the amended Section 153C (11 of the Act did not apply to the search in the instant case. Therefore, the onus was on the Revenue to show that the incriminating material/documents recovered at the time of search 'belongs' to the Assessee, In other words, it is not enough for the Revenue to show that the documents either 'pertain' to the Assessee or contains information that 'relates to' the Assessee. 15. In the circumstances, we are of the considered opinion that since the date of search is 07.04.2016, the amendment brought by the Finance Act, 2017 would not be applicable and consequently the order of assessment dated 31.12.2019 passed u/s 153C r.w.s. 144 of the Act is bad and is liable to be quashed. We order accordingly. In view of our finding that the very assessment itself is bad being barred by limitation, adjudication of other grounds will only be academic and need not be resorted to. 13. In our view, facts being identical, the afo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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