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TMI Blog2023 (4) TMI 943X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(3) of the Act is hereby quashed - Appeal of the assessee is allowed. - ITA No. 4732/Del/2017 - - - Dated:- 20-4-2023 - SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA , JUDICIAL MEMBER For the Assessee : Smt. Sweety Kothari, CA For the Department : Shri P. Praveen Sidharth, CIT-DR ORDER PER ASTHA CHANDRA, JM The appeal filed by the assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals) -29, New Delhi ( CIT(A) ) dated 30.06.2017 pertaining to the Assessment Year ( AY ) 2013-14. 2. The assessee has taken the following grounds of appeal:- 1. The CIT(A) erred in law and on facts in confirming the action of the assessing officer of making assessment u/s 143(3) of the Act instead of section 153A since the satisfaction note was prepared by the Assessing officer on 29/01/2014, which became the substituted date of search u/s 153C of the Act and the AY 2013-14 fell within the six preceding assessment years, i.e., from AY 2008-09 to 2013-14 for the purpose of assessment u/s 153A of the Act. Thus, the assessment framed u/s 143(3) of the Act vide order dated 31/03/2016 is not legally valid and should ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee based thereon. However, on the basis of the original ground No. 1 he restricted the disallowance to 10% of the claim out of foreign travel expenses of the directors following the reasonings of the preceding AY. 4. Aggrieved, the assessee came up in appeal before the Tribunal. 5. At the very outset, the Ld. AR submitted that the case of the assessee is covered by the decision of the Tribunal in its own case for AY 2012-13, a copy of which was placed before us. The Ld. DR however, supported the order of the Ld. CIT(A). 6. We have carefully considered the submissions of the parties. We have gone through the decision of Delhi E Bench of the Tribunal in assessee s own case in ITA No. 610/Del/2016 for AY 2012-13 rendered on 17.01.2020 whereby the orders of the authorities below have been set aside and the assessment order passed under section 143(3) of the Act has been quashed. We reproduce the observations and findings of the Tribunal hereinbelow: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.] [(2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 satisfaction note by the Assessing Officer of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly. 7.3. The ITAT, Delhi, C-Bench, in the case of Pavitra Realcon Pvt. Ltd., New Delhi vs. ACIT, C.C.32, New Delhi (supra) under the same circumstances held that assessment completed under section 143(3) is invalid . The relevant para16 of the order is reproduced as under : 16. We find the year for which the impugned assessment order has been passed u/s 143(3) is for assessment year 2011-12. This year falls within the period of six years when counted from the date of recording of satisfaction note u/s 153/153C of the I.T. Act which 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide on legal grounds, therefore, there is no need to decide the addition on merit which has been left with academic discussion only. 10. In the result, ITA.No.504/Del./2013 of the Assessee is allowed . 6.1. Considering the facts of the case in the light of above decisions, it is clear that the impounded documents have been received by A.O. on 29.01.2014 when satisfaction under section 153C have been recorded. The First Proviso to Section 153C of the I.T. Act provides that six assessment years in which assessment or re-assessments 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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