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TMI Blog2023 (2) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... stituting the proceedings u/s 153C is missing. It has been held by ITAT, Chennai in the case of ACIT vs M.N. Rajaraman [ 2010 (4) TMI 922 - ITAT CHENNAI] and Meghmani Organics Ltd. [ 2013 (7) TMI 228 - GUJARAT HIGH COURT] that where the very foundation for instituting the proceedings by A.O. was missing, the consequential actions and orders must fail and that assessment made pursuant to such proceedings would have to be annulled. Since in the present cases there is no proper assumption of jurisdiction, the assessments made pursuant to such proceedings are annulled herewith. No submissions have been filed on other grounds. However, since the assessment is being treated as null and void - Decided in favour of assessee. - ITA No. 6211, 6212, 6213, 6214/DEL/2015 - - - Dated:- 23-1-2023 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER For the Assessee : Dr. Rakesh Gupta, Adv Shri Somil Agarwal, Adv Shri Deepesh Garg, Adv For the Department : Shri H.K. Choudhary, CIT-DR ORDER PER N. K. BILLAIYA , ACCOUNTANT MEMBER : - The above captioned bunch of appeals by the Revenue and Cross Objections by the assessee are preferred agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That having regard to the facts and circumstances of the case, the ld. CIT(A) has erred in law and on facts in confirming the action of the Assessing Officer in framing impugned reassessment order and that too without assuming jurisdiction as per law and without complying the mandatory conditions of section 147 to 151 of the Act. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in framing impugned reassessment order u/s 147/143(3) is beyond jurisdiction, bad in law and against the facts and circumstances of the case. 3. In any view of the matter and in any case, impugned assessment order could not have been passed under the law, more so when original assessment was annulled. 4. That the cross objector craves the leave to add, amend, modify, delete any of the ground(s) of cross objection before or at the time of hearing. 4. Since the issues raised in the cross objections go to the root of the matter, therefore, we will first adjudicate the cross objections of the assessee. 5. The representatives of both the sides were heard at length, the case records carefully perused. We have carefully perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee filed revision application u/s 264 of the Income Tax Act, 1961 before CIT, (Central)-II, New Delhi. The assessee challenged assumption of jurisdiction u/s 153C on the grounds, that the satisfaction arrived by the AO is not based on documents found and seized from the premises of other person in whom action u/s 132 is initiated. The CIT, (Central)-II, New Delhi annulled the assessment order on the ground of incorrect assumption of jurisdiction u/s 153C. However, the L CIT(Central)-II, has not adjudicated the ground on which the additions were made. Though, the assessee challenged the additions but not submissions were filed before the Ld CIT(Central)-II, New Delhi as to why additions be deleted. In view of the fact, whereas no submission is made by the assessee in respect of the merits on which additions were made, it clearly shows that the assessee had nothing to say on these grounds. However, after perusal of the assessment records of the case following issues are found- A) Expenditure of Rs.1,05,654/- is required to be disallowed (except the statutory and obligatory expenses of ROC filing Fee Audit Fees) as the assessee hasn t submitted any evidence to support its clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. A careful reading of the aforesaid notice and the reasons for the belief that the income has escaped assessment clearly show that the AO wanted to proceed in the light of the provisions of section 151(1) of the Act. The provision of Section 151(1) of the Act at the relevant point of time read as under: 151. Sanction for issue of notice.- (1) In a case where an assessment under sub-section (3) of section 143 or section 147 has been made for the relevant assessment year, no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice: Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice. 11. XXX 12 XXX 13. Moreover, the same reasons have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hyay and not treating the interest on fixed deposit income as business income. The remaining additions were deleted by ld. CIT(A). 12. The department is in appeal against deleting the additions by ld. CIT(A) and assessee is challenging confirming the reopening the assessment and addition on account of applying n.p. rate of 10.5% and addition made in the name of Sh. S.K. Upadhyay at Rs.3,25,000/-. 14.1 Once an assessment has been completed and the same was subject matter of appeal, therefore, in our considered view on the same issue reassessment cannot be framed after issuing notice u/s 148. Notice u/s 143(2) was not issued in time, therefore, the assessment was annulled and this action of the ld. CIT(A) has been accepted by the department as no second appeal has been preferred against the order of ld. CIT(A). Now taking a recourse of reopening of the assessment cannot be permitted either in the eyes of law or in the facts of the present case. Language of provisions of section 147 which provides:- If the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of Section 148 to 153, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the ratio of this decision is also not applicable on the facts of the present case. 24. Few more cases on which reliance has been placed by ld. D/R i.e. in case of Raymond Woollen Mills Ltd. Vs. ITO 236 ITR 34 (SC), Claggat Brachi Co. Ltd. Vs. CIT 177 ITR 409 (SC) and Kalyan Mavji and Co. Vs. CIT 102 ITR 287 (SC). In all these cases certain information was received during the assessment proceedings and, therefore, notice u/s was issued and held as valid. However, in the present case no such facts are involved as no information was received during the assessment proceedings. We have also seen various other case laws on which reliance has been placed by ld. D/R and found that these cases are also distinguishable. 25. In view of the above facts and circumstances and in view of the direct decision of Mumbai Bench of the Tribunal in the case of Babu Lal Lath (supra), we hold that reassessment completed was ab initio void and liable to be annulled. Accordingly the same is annulled. 6. We have heard both the sides. 7. Before proceeding with the matter, it will not be out of place to mention that the judgment which sought to be relied upon by the tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich says that for the purpose of the section, a case where a return of income has been furnished by the assessee, but no assessment has been made, is to be deemed as a case where income chargeable to tax has escaped assessment, but only if it is noticed by the AO that the assessee has understated the income or claimed excessive loss, deduction, etc. in the return. Thus, though under the new s. 147, the AO can issue a notice of reassessment, even where a valid return filed by the assessee has not been disposed of, the power is hedged in by a condition that there should be a finding that income has been understated in the return or the assessee has claimed excessive loss, deduction, etc. therein. There is no such finding in the present case. On the other hand, by framing an illegal assessment under s. 143(3), which was quashed by CIT(A), it cannot be said that the AO has unearthed understatement of income or excessive claim, etc. in the return. In fact, it is not the case of the AO that Expln. 2(b) is invoked. In the absence of any such finding, the pendency of the return filed by the assessee places a fetter upon the power of the AO to reopen the assessment. The intimation under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Gujarat High Court in the case of Krishna Developers Pvt Ltd 400 ITR 260 and contended that on similar facts, reopening was upheld by the Hon'ble High Court. 12. We have carefully perused the judgment of the Hon'ble High Court of Gujarat [supra] and we do not agree with the contention of the ld. DR. Facts aer different, in as much as, in the judgment relied upon by the ld. DR, for non service of valid notice, resulted into the setting aside of the assessment order whereas, the facts the case in hand show that search and seizure operation u/s 132 of the Act alongwith survey operations u/s 133A of the Act were undertaken at various residential and business premises of Aseem Kumar Gupta and Group and other beneficiary group of cases on 26.03.2010. 13. On the basis of documents seized and impounded at various premises of Aseem Kumar Gupta, notice u/s 153C of the Act was issued for the captioned Assessment Years and assessment in these cases were completed by the Assessing Officer and on these facts, the ld. CIT(A), Central-2, New Delhi by his order dated 20.03.2014, treated the impugned assessment as null and void by holding as under: 3.3 I have carefully consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r initiating proceedings u/s 153C. Party SG-6 had in fact conducted survey, u/s 133A at the office premises of Agarwal Vishwanath Associates, Shushre Securities Pvt. Ltd., Shrey Infradevelopers Pvt. Ltd. and others situated at 2-D, MIG DDA Flat, Gulabi Bagh, Delhi. The documents were impounded u/s 133A and were not seized u/s 132. At this stage, a reference is made to the provisions of section 153C which are reproduced below:- Assessment of income of any other person. 153C. [(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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisitioned u/s 132A. It cannot be invoked in the case of impounding of documents u/s 133A. The very foundation for instituting the proceedings u/s 153C is missing. It has been held by ITAT, Chennai in the case of ACIT vs M.N. Rajaraman (2010) 5 ITR (TRIB) 261 Chennai and High Court of Gujarat in the case of C1T vs Meghmani Organics Ltd. (2014) 221 Taxmann 25 (Guj.) that where the very foundation for instituting the proceedings by A.O. was missing, the consequential actions and orders must fail and that assessment made pursuant to such proceedings would have to be annulled. Since in the present cases there is no proper assumption of jurisdiction, the assessments made pursuant to such proceedings are annulled herewith. No submissions have been filed on other grounds. However, since the assessment is being treated as null and void. I do not find it necessary to examine other issues by the assessee as these grounds have become infructuous raised by by the assessee as these grounds have become infructuous. (A.D. Mehrotra Commissioner of Income tax Central-II, New Delhi 14. The above facts speak for themselves as they are clearly distinguishable from the facts consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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