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TMI Blog2023 (11) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... IVIL APPLICATION NO. 12071 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12069 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12068 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12066 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12010 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12011 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12006 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12008 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12004 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12003 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12076 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12077 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12078 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12080 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12079 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12062 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12060 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12059 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12046 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12048 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12049 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12053 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12054 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 12045 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2023 With R/SPECIAL CIVIL APPLICATION NO. 16109 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16361 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16373 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16388 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16386 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16385 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 16389 of 2023 Appearance: For the Petitioner(s) No. 1 : Mr. Varun K.Patel, Ld. Senior Standing Counsel With Mr.Dev D. Patel, Advocate (3802) For the Respondent(s) No. 1 : Mr. Tushar Hemani, Ld. Senior Advocate With Parimalsinh Parmar(7296) COMMON CAV JUDGMENT (PER : HONOURABLE MR. JUSTICE BIREN VAISHNAV) 1. All these petitions, 94 in number, under Articles 226 and 227 of the Constitution of India, challenge the order dated 24.08.2022 passed by the Income Tax Appellate Tribunal in respective Misc. Applications filed by the Revenue under Section 254(2) of the Income Tax Act, 1961 (hereinafter to be referred to as 'the Act' for short). 2. These Misc. Applications were filed by the Revenue, aggrieved by the order dated 12.11.2020 passed by the Income Tax Tribunal in the Tax Appeals, 107 in number by the assessees which, the Tribunal na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to 01.06.2015 could be invoked only if the material seized during the course of search in case of third parties 'belongs to' some persons other than the searched person. Subsequent to 01.06.2015, the information embedded in the document is sufficient for taking action under Section 153C. On appreciation of the satisfaction recorded by the Assessing Officer of the searched person as well as the AO of the present assessees, the Tribunal found that the satisfaction indicated that the AO no where observed that the documents belonged to the assessee. Therefore, the Tribunal held that since the search was prior to 01.06.2015, the appeals of the assessees were allowed. 3.6 In Category-2 issue pertaining to Section 153A of the Act, the Tribunal relying on the decision of the Delhi High Court in the case of CIT v. Kabul Chawla reported in 380 ITR 573 (Del), opined that simultaneous search was carried out at the premises of Venus Infrastructure and Ashok Sundardas Vaswani and if any incriminating material belonging to the assessee is found at the premises of some other person, then the assessment has to be made under the provisions of Section 153A of the Act. 3.7 On due consideration, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to" has been eliminated and in its place expression "pertains to" or any information wherein relates to, has been used. The finding of the Tribunal that in the satisfaction note, the Assessing Officer had nowhere recorded a finding that the documents belonged to the assessee and that it had recorded that the documents contained information which related to the assessee could not have been made applicable as the amended provision had only come into effect from 01.06.2015 and since the search was prior thereto, proceedings under Sec. 153(C) were bad. The Assessing Officer and in turn the Tribunal committed an error in quashing the 153(C) proceedings. 4.2 Mr. Varun Patel, learned Senior Standing Counsel, would submit that the Tribunal committed an error in holding that there was an essential jurisdictional error in assumption of jurisdiction. He would rely on a decision of the Hon'ble Supreme Court in the case of Income Tax Officer vs. Vikram Sujitkumar Bhatia reported in [2023] 453 ITR 417. He would submit that in accordance with this decision, the change of law would not affect the proceedings though the search was conducted prior to 01.06.2015. The Apex Court had held that even th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of search carried out at their premises, is bad. He would invite the Court's attention to paras 10 to 18 of the order passed in the miscellaneous applications, particularly para 13 of the order, whereby, the Tribunal while rejecting the application for rectification held that the Appellate Tribunal had analyzed the facts available on record and if the revenue was aggrieved by the order, the only remedy was to challenge the same at a higher forum. He would rely on the memo of the Miscellaneous Application annexed to the papers of Special Civil Application No. 12062 of 2023. He would submit that a specific ground was raised in the miscellaneous application and the Tribunal therefore clearly fell in error in dismissing the miscellaneous applications in context of Category 2. With regard to Category 3:- 4.7 Mr. Patel, learned Senior Standing Counsel, would submit that in context of the assessments under Sec. 153(A), the Tribunal in the orders passed in the Misc. Applications failed to appreciate that a clear mistake was pointed out. The Appellate Tribunal had decided the appeals in favour of the assessee holding that the assessment is barred by law of limitation as no justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategory wise. With regard to Category 1:- 5.3 In respect of the controversy revolving around Sec. 153(C), Mr. Hemani, learned Senior Counsel, would submit that the issue has been elaborately dealt with by the Income Tax Appellate Tribunal. He would submit that the search was commenced on 10.03.2015 and concluded on 13.3.2015 i.e. prior to 01.06.2015 being the date with effect from which Sec. 153 (C) was amended and its scope was enlarged. 5.4 Mr. Hemani, learned Senior Counsel, would invite the Court's attention to the Satisfaction Note annexed to the petition and submit that the Assessing Officer assumed jurisdiction based on this Satisfaction Note. The Satisfaction Note recorded that during the course of search, various documents were found which relates to / pertains to the assessee for the various assessment years. The Income Tax Appellate Tribunal decided the issue after considering the scheme of the Act viz-a-viz Sec. 153(C). The argument of the assessee before the Tribunal was that since the search was prior to 01.06.2015, it can only be initiated if the documents "belonged to" the assessee. It was the specific contention of the assessee that the Satisfaction Note nowhere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed on 24.08.2022. The six months from the MA order would expire on 23.02.2023, whereas, the judgement of the Supreme Court in case of Vikram Sujit Kumar Bhatia (supra), was delivered on 06.04.2023, later than the period of six months. The decision therefore would have no bearing on the Misc. Applications under Section 264(2) of the Act. Regarding Category 2: 5.8 In this regard, in respect of controversy revolved around Section 153A, Mr.Hemani would submit as under: I. That it was the case of the Revenue that the Tribunal has erred in not considering that authorizations were issued under Section 132 where assessments have been framed under Section 153A of the Act. The Revenue in the Misc. Application contended that the Tribunal erred in accepting the contention that the assessment under Section 153A has to be made on the basis of the material found during the search carried out in the case of the assessee concerned. II. Relying on the findings of the Tribunal, Mr. Hemani would submit that though search was carried out in the group case simultaneously, there were separate authorization for search under Section 132 of the Act for all the respective 'assessees and premises'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit that the Tribunal has on the basis of the material on record come to the conclusion that reassessment proceedings under Section 147 was based on borrowed satisfaction and therefore, there was no reason for the Tribunal while exercising powers under Section 254(2) of the Act to rectify the mistakes when there were none. ANALYSIS 6. As is evident from the proceedings before the Income Tax Appellate Tribunal and in the MA proceedings before it and the arguments canvassed by the respective counsels, the decision that follows would also be based category-wise. A. CATEGORY-1: WHETHER THE ASSESSMENT PROCEEDINGS UNDERTAKEN UNDER SECTION 153C ARE SUSTAINABLE IN THE EYE OF LAW ? 6.1 The case of the assessees - respondents herein before the Appellate Tribunal was that the search proceedings in the case were initiated on 10.3.2015 and concluded on 13.3.2015. The satisfaction note recorded that the seized material referred to/related to/pertained to the concerned assessee. The case of the assessees before the Tribunal therefore was that prior to the amendment, Section 153C action thereunder can only be initiated if the documents "belongs to" the person other than the searched person r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in subsection (1) of section 153A]:] 2.2.3 WITH EFFECT FROM 01.06.2015: 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,-- (a) any money, bullion, jewellery or other valuablearticle or thing, seized or requisitioned, belongs to; or (b) any books of account or documents, seized orrequisitioned, or any information contained therein, 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 again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a clear distinction between both the conditions. Subsequent to 1.6.2015, the information embedded in the document is sufficient for taking action under section 153C, but prior to 1.6.2015 action under section 153C could be taken if documents belong to the person other than the searched person was found during the course of search. 16. Hon'ble Gujarat High Court in its decision rendered in the case of Anil Kumar Gopikrishna Agrawal Vs. ACIT (supra) considered an issue, whether post-amended section could be applicable on the pending assessments, meaning thereby, if search was conducted prior to 1.6.2015, but assessments were not concluded, whether postamended section is to be applied in such cases or not; because that would change the very nature of the disputes. 17. Hon'ble Gujarat High Court has formulated thefollowing question "whether section 153C of the Act as amended w.e.f. 1.6.2015 would be applicable to cases where search initiated prior to that date ?" After an elaborate discussion, Hon'ble court arrived at the conclusion that this section would be applicable prospectively only on the search conducted after 1.6.2015. We would like to take note of the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized material belongs or belong to the other person. In the present case, the hard-disc containing in the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C of the Act in case of the petitioners, did not exist. It was only on 1st June, 2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners. 19.10 In this backdrop, to test the stage of applicability of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal group on 4.9.2013. If the Assessing Officer of the searched person had recorded satisfaction that some of the seized/requisitioned material belongs to a person other than the searched person and forwarded the material to the Assessing Officer of the other person, had issued notice under section 153C of the Act prior to the coming into force ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17] 394 ITR 758/248 Taxman 172/82 taxmann.com 153 (Delhi), the Delhi High Court has held that, at the outset, it requires to be noticed that the search in the present case took place on 19th June, 2009, i.e., prior to the amendment in section 153C(1) of the Act with effect from 1st June, 2015. Therefore, it is not open to the Revenue to seek to point out that the document in question 'pertains to' or 'relates to' the assessee. Against this decision the revenue filed a special leave petition before the Supreme Court being Pr. CIT v. Vinita Chaurasia [2018] 98 taxmann.com 414/259 Taxman 88 (SC) condoned the delay and dismissed the special leave petition. 19.13 In Pr. CIT v. Index Securities (P.) Ltd., [2017] 86 taxmann.com 84 (Delhi), on which reliance had been placed on behalf of the petitioners, the Delhi High Court has held thus: "28.4 The Supreme Court also agreed with the decision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of account or documents seized or requisitioned should belong to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 153C(1) of the Act. 19.15 This court is of the considered view that the trigger for initiating action whether under section 153A or 153C of the Act is the search under section 132 or requisition under section 132A of the Act and the statutory provisions as existing on the date of the search would be applicable. The mere fact that there is no limitation for the Assessing Officer of the searched person to record satisfaction will not change the trigger point, namely, the date of the search. The satisfaction of the Assessing Officer of the searched person would be based on the material seized during the course of the search or requisition and not the assessment made in the case of the searched person, though he may notice such fact during the course of assessment proceedings. Therefore, whether the satisfaction is recorded immediately after the search, after initiation of proceedings under section 153A of the Act or after assessment is framed under section 153A of the Act in the case of the searched person, the trigger point remains the same, viz., the search and, therefore, the statutory provision as prevailing on that day would be applicable. While it is true that sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee Shri Dilip Kumar Lalwani as per the provisions of Section 153C of the Income Tax Act, 1961. Therefore, it is fit case for initiation of proceeding u/s 153C of the I.T.Act . 8. Assessment years involved A.Y. 2009-10 to A.Y.2014-15. 20. Thereafter, we find that the AO has annexed annexure-A which contained the details of documents considered by him. Annexure-B is the satisfaction in the capacity of the AO of the searched person. It is a very exhaustive note, and with the assistance of the ld. representativs, we have gone through all these pages. We would like to take note of relevant part of the satisfaction viz. para- 7.3, which reads as under: 7.3 On the basis of discussion in the preceding paragraphs, it is noticed that XXX account mentioned in various documents seized during the course of search in the Venus Group refers to Shri Dilip Kumar Lalwani and the information contained therein relates to Shri Dilip Kumar Lalwani. There are various transaction recorded in the cash book and related cash vouchers." In view of above facts (as mentioned above), I am satisfied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. The case of appellant was subsequently transferred to the ACIT, Central Circle -1(1), Ahmedabad. The appellant had raised objection before the new Assessing Officer against the earlier notice issued by DCIT, Circle -50(1), New Delhi, u/s. 153C of the I. T. Act, 1961. The AO who was also AO of M/s. Venus Infrastructure and Developer Pvt. Ltd. has withdrawn the earlier notice and issued fresh notice duly recording the satisfaction. The appellant has contended that the notice issued u/s. 153C of the Act was not valid as the seized material on the basis of which notice u/s. 153C was issued did not belong to the appellant. The appellant has also contended that there is no provision in the Income Tax Act either to drop the proceedings u/s. 153C or to issue second set of notices. The appellant has also relied upon the case laws in the case of Pepsico India Holding Pvt. Ltd. Vs. ACIT, RRJ Securities Ltd. [62 Taxmann.com 391] (2015) & Sinhgad Technical Education Society [84 Taxmann.com 290]. The AO has dealt with the argument raised by the appellant in Para 4.9, 4.10 & Para 5 of assessment order. The provision of Section 153C has been amended with effect from 01/06/2015 where if the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t concern filed an SCA No.19647 of 2018. This was lead case, and notice issued under section 153C of the Act was quashed. The above facts are contained in paragraph-2.4 of the Hon'ble High Court's decision. For ready reference, we take note of this fact from there. It reads as under: "2.4 By an order dated 23.7.2018, the Assessing Officer rejected the objections filed by the petitioner." Being aggrieved, the petitioner has approached this court by way of present petition challenging the impugned notice dated 8.2.2018 issued by the Assessing Officer under section 153C of the Act for assessment year 2012-13." 2A In case of Venus Group, reference is made to the facts as appearing in Special Civil Application No. 19647 of 2018. 2A.1 The petitioner, who is an individual and proprietor of M/s. Ocean Valves Mfg. Co. filed his return of income for assessment year 201213 on 14.3.2013 declaring total income of Rs.7,27,700/-. A search came to be conducted on various premises of Shri Ashok Sundardas Vaswani, M/s. Venus Infrastructure and Developers P. Ltd. On 13.3.2015. During the course of search various documents were seized in which information about transactions relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be embedded in these documents, but prior to 1.6.2015, jurisdiction under section 153C cannot be invoked on the basis of such information. Therefore, we allow this preliminary ground of appeal raised by these 43 appellants (assessees) and quash all these assessment orders passed in the appeals mentioned at serial no.1 to 43 of the cause title of this order. Thus all the appeals of the assessee are partly allowed whereas the Revenue's appeal are dismissed." 6.4 When the Misc. Applications in respect of this category was filed in the order passed under the concerned Misc. Applications, the Tribunal in the MA Order impugned in these petitions held as under: "21. The Revenue in these miscellaneous applications have pointed out certain errors in the order of the ITAT which are apparent from record as detailed below: It was submitted by the Revenue that the ITAT has erred in holding that the documents seized from the search premises were not belonging to the assessee. On the contrary, the satisfaction note clearly records that the seized documents show the payment against the purchase of the land. In fact the land was purchased by the assessee and the payment for the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction note. The ITAT further erred in not directly applying the order of tribunal in case of Anilkumar Gopikisan Aggarwal against which department is in appeal and not considering the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra) where the term undisclosed income is defined 23.2 In this regard, we note that the ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra). 23.3 It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... note will have to be seen with reference to the seized material. 7.3 Reading of the satisfaction note which has been reproduced in the relevant paras of the Appellate Order indicates that the note has brought in the wider concept of correlating the documents seized pertain to/or related to the assessees. When the revenue's case itself as per the satisfaction note wanted the scope to be considering the seized documents in "relation to/pertain to" now it is not open for them to apply for rectification on the ground that the Appellate Tribunal committed an error in not considering the fact that the seized material "belongs" to the assessees, when it was never the case of of the Revenue. 8. Coming to the second limb of the argument of the Revenue whether the Tribunal failed to consider the jurisdictional decision or failed to consider that the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra) was pending in Appeal before the Supreme Court and whether the Tribunal ought to have considered that in view of the decision in the case of Vikram Bhatia (supra) the amendment would apply retrospectively too and therefore the Appellate Tribunal fell in error may deserve our attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recent decision of the Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society (supra) is a complete answer to both points urged by the Revenue. The said decision, therefore, requires to be discussed in some detail. 28.1 The Supreme Court noted that the Assesseehad raised a challenge to the validity of the assumption of jurisdiction by the AO under Section 153C of the Act for the first time before the ITAT. It was urged on behalf of the Revenue that the ITAT erred in allowing the said challenge by the Assessee by way of additional grounds. A reference was made by the Revenue to the decision of this Court in SSP Aviation Limited v. Deputy Commissioner of Income Tax [2012] 346 ITR 177 (Del) and that of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel v. Commissioner of Income Tax-III (2013) 263 CTR (Guj) 362 which according to the Revenue held to the contrary. 28.2 The Supreme Court noted that the appeals relating to four of the AYs i.e. 2000-01 to 2003-04 were covered by the notice under Section 153C of the Act. In dealing with the question as to whether the ITAT was right in permitting the Assessee to raise this additional ground fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st time. 28.4 The Supreme Court also agreed with thedecision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act." The Supreme Court observed: "This proposition of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well." 28.5 The above categorical pronouncement of theSupreme Court cannot, by any stretch of imagination, be termed as obiter as has been suggested by Mr. Manchanda. Even the obiter dicta of the Supreme Court is binding on this Court. 29. The search in the case before the Supreme Court was prior to 1st June 2015. Apart from the fact the Supreme Court approved the above decision of the Gujarat High Court holding that the seized documents should 'belong' to the other person, the legal position in this regard where the search has taken place prior to 1st June 2015 has been settled by the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain the Rectification Application on this count cannot be faulted. 9. Now coming to the argument of the learned Counsel for the Revenue that the decision of Vikram Bhatia (supra) of the Supreme Court would squarely apply and when read in light to the decision in the case of Saurashtra Kutch Stock Exchange Ltd.(supra) which said that failure to consider subsequent decision would be a good ground to rectify an order, some dates need to be mentioned. 9.1 The order of the Tribunal in Appeal is dated 12.11.2020. The date of the Tribunal order in MA was of 24.08.2022 whereas the judgement of the Supreme Court in the case of Vikram Bhatia (supra) was dated 6.4.2023 which was not available when the Tribunal decided the main appeals. The law on that date was governed by the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra) which held the field. 9.2 Alternatively, even the submission of the learned Senior Counsel Shri Hemani for the assessee with regard to the provisions of Section 254(2) post 2016 merit consideration. Section 254(2) prior to its amendment permitted rectification of a mistake within a period of four years from the date of the order. This period with effec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f material found during the course of the search or requisitioned under Section 132A of the Act. Material found during the search of the third person cannot be used for the purposes of Section 153A. The submission of the assessees was that the assessment orders under Section 143 (3) read with Section 153A have to be framed strictly on the basis of incriminating material found during the course of search carried out in the case of the assessee and no cognizance can be taken on any material which was not found during the course of search action. Material collected during the course of search action carried out in cases of third parties cannot be considered. 10.1 The Tribunal while deciding the Appeals held as under: "29. We have duly considered rival contentions and gone through the record carefully. Before adverting to the facts and alleged seized material considered by the ld.AO for making the addition in the hands of the present three assessees, we deem it appropriate to bear in mind the position of law propounded in various authoritative judgments recording scope of section 153A of the Act. We are of the view that in this regard, there were large numbers of decisions. First we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment." 30. ITAT, Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No. 5585/Del/2015 (copy of the decision placed on record) has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153A of the Act has to be specifically made on the basis of seized material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. Like in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380 ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so-called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not under Section 153A. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of subsection (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs. 11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwiths ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as Hon'ble jurisdictional high Court, then the decision of non-jurisdictional High Court is to be followed. Therefore, we do not deem it necessary to recapitulate the decisions of Hon'ble Kerala High Court and make discussion on them. Ld.CIT-DR was unable to bring any authoritative decision from the Hon'ble Supreme Court or from the Hon'ble jurisdictional High Court to support the case of the Revenue. He made reference to para-18 of the Pr.CIT Vs. Saumya Construction (supra), which we have considered; but paragraph nowhere buttress the case of the ld. CIT-DR. On a detailed analysis of these case laws, it is pertinent to observe that scheme of the Income Tax Act would provide that a regular assessment of the income is to be made under section 143(3)/144. In the case of an escaped income, then a notice under section 148 should be issued and the assessment is to be made under section 147 r.w. section 143(3). In case a search is carried out on an assessee, then that search could give rise to a proceedings viz. under section 153A qua the person who has been searched. The income has to be assessed on the basis of material found during the course of search. The second category of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme of the Income Tax Act in case a search is carried out on an assessee then the search would give rise to proceedings under Section 153A qua the person searched. The income has to be assessed on the basis of the material found during the course of the search. 10.3 The Tribunal as is evident from the findings discussed had extensively considered various decisions including that of Kabul Chawla (supra). It had reproduced para 37 of the said decision and discussed it in the context of facts. The Tribunal discussed the issues and found that the revenue had framed assessments based on material seized from the premises of other persons. The only ground on which the rectification was sought was that the Tribunal had misinterpreted the judgement in the case of PCIT vs Saumya Construction P. Ltd - 387 ITR 529 (Guj) and that of CIT vs Kabul Chawla -380 ITR 573 (Del). 10.4 While dismissing the Misc. Applications pertaining to this category, the Tribunal in the MA order held as under: "11. In all these M.A's identical issues were raised by the Revenue. Therefore, we take up M.A. No. 13/ AHD/2021 in IT(SS)A No. 111/AHD/2019 as lead case and proceed to decide the same. However, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der in detail after analysing all the issues raised in the impugned appeals. Furthermore, the revenue has not pointed out in its miscellaneous application any specific error in the order of the ITAT which is apparent on record. Likewise, the revenue has already preferred respective appeals before the Hon'ble Gujarat High Court which has been admitted for adjudication. Accordingly, there cannot be any apparent mistake in the given facts and circumstances. The learned AR vehemently supported the order of the ITAT. 13. We have duly considered the rival contentions and gone through the records carefully. It is settled position of law that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. In this regard, an elaborate discussion has been made in previous paragraph of this order while adjudicating first set of M.A's. & Ors. (Shri Deepak Kumar Vasvani & Ors.) 13.1 In the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (R) 18/2022 10. 12056/2023 2012- 13 60/Ahd/2021 237/Ahd/2019 (R) 40/2022 11. 12027/2023 2013- 14 61/Ahd/2021 238/Ahd/2019 (R) 17/2022 12. 12028/2023 2014- 15 62/Ahd/2021 239/Ahd/2019 (R) 36/2022 13. 12024/2023 2015- 16 63/Ahd/2021 240/Ahd/2019 (R) 19/2022 14. Sanjeet Motors Finance P Ltd. 12023/2023 2012- 13 81/Ahd/2021 95/Ahd/2019 (A) LTE 15. 12021/2023 2013- 14 82/Ahd/2021 95/Ahd/2019 (A) LTE 16. Deepak Budharmal Vaswani 12020/2023 2009 -10 13/Ahd/2021 111/Ahd/2019(A) 23/2022 Lead MA 17. 12017/2023 2010- 11 14/Ahd/2021 112/Ahd/2019 (A) 61/2022 18. 12016/2023 2011- 12 15/Ahd/2021 113/Ahd/2019 (A) 56/2022 19. 12014/2023 2012- 13 16/Ahd/2021 114/Ahd/2019 (A) 55/2022 20. 12081/2023 2013- 14 17/Ahd/2021 115/Ahd/2019 (A) 60/2022 21. 12082/2023 2014- 15 18/Ahd/2021 116/Ahd/2019 (A) 26/2022 22. 12083/2023 2015-16 19/Ahd/2021 117/Ahd/2019 (A) 51/2022 23. 12084/2023 2009- 10 21/Ahd/2021 248/Ahd/2019 (R) 69/2022 24. 12085/2023 2010- 11 22/Ahd/2021 249/Ahd/2019 (R) 65/2022 & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revious year in which search is conducted under Section 132 or requisition is made under Section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under Section 132 or for requisition under Section 132A was executed : (2) The authorisation referred to in clause (a) and clause (b) of sub-Section (1) shall be deemed to have been executed,- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. 51. A bare perusal of Section would reveal that it start with a non obstinate clause " - notwithstanding anything contained in Section 153......" An assessment order has to be passed within two years from the end of the FY in which the last of the authorization for and each under s.132 of the Act was executed or requisition under s.132A is executed. The expression " last of the authorization" has been explained in sub Section (2). The explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be seized. When there is no such practical difficulty the officer is left with no other alternative but to seize the item, if he is of the view that it represented undisclosed income. Power under Section 132(1)(iii) of the Income-tax Act thus cannot be exercised, so as to circumvent the provisions 3 Section 132(1)(iii) read with Section 132(1)(v) of the Income-tax Act. It is open for the authorised officer to visit the place for the purpose of investigation securing further particulars. Under the scheme, the law provides for such procedure. But not when he visits the premises for further investigation for the materials already secured. It does not amount to search as the materials to be looked into and investigated is already known and is the subject-matter of a prohibitory order or a restraint order. Though it is not seizure or deemed seizure, it amounts to deemed possession. What is in your possession is to be looked into to find out, is there any incriminating material. It does not amount to search as understood under Section 132 of the Act. It is only because of paucity of time he has gone back and wants to come back and look into the matter leisurely. There is no provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter took cognizance of Explanation (2) inserted by Finance Act, 1997 and we deem it appropriate to take note of the discussion made by the Hon'ble Court from paragraph nos. 78 to 82 which reads as under: "78. The law expressly provides for more than one authorisation. A search authorisation could specify only one building/place/vessel/vehicle/aircraft. This is clear from the use of the building, etc., in the singular sense. Section 132(1) uses building/place/vessel/vehicle/aircraft in singular sense. Further, clause (a) in Form 45 uses the word, "to enter and search, the said building/place/vessel/vehicle/aircraft. When there are multiple places to search and such places are far off, it is impractical to have a single authorisation. Different persons will be carrying out search and each one of them is required to be authorised through the search authorisation. In other words, search authorisation should authorise a particular official for executing the search. Therefore, when there are different places to be searched, , separate search authorisation should be drawn with reference to each place of search. The said authorisations may be issued on different dates in which case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Finance (No. 2) Act, 1998. This Explanation reads as follows 'Explanation 2.-For the removal of doubts, it is hereby declared that the authorisation referred to in sub-Section (1) shall be deemed to have been executed,- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued ; (b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.' According to this Explanation, limitation is to be counted with reference to the last panchnama drawn on execution of a warrant of authorisation as referred to in Section 158BE. The main attribute of the panchnama is stated to be that it should record the conclusion of search." 80. The law does not contemplate the authorised officer to set out in any of the panchnama that he has finally concluded the search. If for any reason the authorised officer wants to search the premises again, it could be done by obtaining a fresh authorisation. There is no prohibition in respect of the same premises. It is open to the empowered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. "127. Execution of last of the authorisation or requisition The word 'execute' is defined in Black's Law Dictionary, fifth edition, page 509 as follows: 'to complete ; to make ; to sign ; to perform ; to do ; to carry out according to its terms ; to follow up ;to fulfil the command or purpose of ; to perform all necessary formalities ; to make and sign a contract; to sign and deliver a notes.' The word 'execution' is defined at page 510 of the said Law Dictionary as follows : Carry out some act or course of conduct to its completion. Northwest Steel Rolling Mills v. Commissioner of Internal Revenue, C.C.A. Wash., 110 F.2d 286, 290 : completion of an act : putting into force : completion fulfilment : perfecting of anything or carrying it into operation and effect "Execution" a process in action to carry into effect the directions in a decree or judgment -Foust v. Foust, 47 Cal. 2d 121, 302 p.2d 11, 13.' In the light of the above definition of the words 'execute' and 'execution', one may argue that until and unless the final act is performed, the warrant of authorisation should not be treated as executed and it order or for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said provision, the legislative intention is clear and plain and the interpretation to be placed by the courts should be in harmony with such an intention. Therefore, one authorisation is to be issued in respect of one premises in pursuance of which there can be only one search and such a search is concluded, when the searching party comes out of the premises, which is evidenced by drawing up a panchnama. When there are multiple places to search and when multiple authorisations are issued, on different dates or on the same date or in respect of the same premises more than one authorisation is issued on different dates, the last panchnama drawn in proof of conclusion of search in respect of the authorisation is to be taken into consideration for the purpose of limitation for block assessment. Conclusions (1) The Tribunal has got powers to look into all aspects of search and a valid search is sine qua non for initiating block assessment. (2) Materials seized during an invalid search cannot be used in block assessment proceeding but can be used in other assessment proceedings under the Act. (3) The power to put prohibitory order under Section 132(3) is under law but the reasons f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance placed by the learned CITDR on the judgment of the Hon'ble Supreme Court in the case of VLS Finance Ltd. We deem it appropriate to take note of the following observations of the Hon'ble Supreme Court from this judgment on which emphasizes was put by the learned CITDR. "27. We may point out that the appellants never challenged subsequent visits and searches of their premises by the respondents on the ground that in the absence of a fresh authorisation those searches were illegal, null and void. Notwithstanding the same, it was argued that at least for the purpose of limitation the subsequent searches could not be taken into consideration, as according to the learned counsel, the legal position was that the authorisation dated 19th June, 1998, was executed on 22nd June, 1998 and the search came to an end with that when the search party left the premises on 23rd June, 1998 after making seizure of certain documents etc and issuing restraint order under Section 132(3) of the Act in respect of certain items which they allegedly could not seize due to impracticability on that day. Some judgments of various High Courts are relied upon to support this proposition. It was also argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure operations commenced on 22.06.1998 and continued till 05.08.1998. As many as 16 panchnamas were drawn upon in respect of the visits made to the assessee's premises. There was a mass of documents which were searched and seized from time to time. The court found that the search concluded on 05.08.1998 and not on 22.06.1998. The court also found that the search was also not unduly prolonged. The court held:- "Consequently, we are of the opinion that the respondents did not complete the search on 22-6-1998, as alleged by the petitioners, nor did they unduly prolong it. The search concluded on 5-8-1998, and so in terms of Explanation 2 to Section 158BE of the Act the period of limitation would begin from the end of August, 1998, that is, 31-8-1998 onwards..." (p. 297) 31. The factual basis of the decision in VLS Finance (supra) is entirely different to that of the present case. On law, there is nothing in VLS Finance (supra) which contradicts what we have explained above. If the search concluded on 5-81998, as held by the court, and the panchnama of that date was the last of the string of 16 panchnamas, obviously this would be the date on which the search was concluded and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o other comments/remarks were recorded therein. The dispute arose whether it is to be construed that search was concluded on 28th July 1997 or it was concluded on 08th September, 1997. The period of two years from the end of the month in which warrant of authorization of search was executed was required to be computed. The bench who heard the matter had divided in its opinion. The Hon'ble Judicial Member has assigned four reasons for concluding that the subsequent panchnama is not a valid panchnama for computing the limitation because there is no search carried out in September 1997 but the panchnama is prepared and this panchnama cannot be treated as a panchnama for the purpose of Section 158BE read with Explanation (2). The Hon'ble Accountant Member did not concur with and treated the second panchnama valid for computing the limitation. The dispute referred to the third member for his opinion and the question formulated 602 the third member was; "Whether in the facts and circumstances of the case, the order under s.158BC made by the AO is time barred within the meaning of Section 158BE of the Act.?" 59. The third member has taken into consideration the judgment of Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irah and sealed it. In the absence of any satisfactory explanation as to why the books of account, pass book and the documents were not practicable to be seized on 27-10-1995 itself, it is a case of contravention of sub-Section (3) of Section 132. The number of documents, pass book and the jewellery found and ultimately seized were few in number and the statement that the scrutiny could not be completed, nor practicable to seize, is impossible to accept on the face of it. It is in this context the allegation made against the second respondent that he carried away certain documents in his bag unauthorisedly on 27-10-1995 and brought them back on 10-111995 assumes significance. However, the action of the search party headed by the second respondent in collecting the documents and various items from different parts of the premises and again putting them in the almirah in the bedroom of the first floor of the residential premises is unreasonable and no provision is relied on for such a cause of action. Rule 112(4C) of the Income-tax Rules, 1962 empowers the authorised officer to serve an order on the owner that he shall not remove, part with or otherwise deal with it except with the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "13. Admittedly, the name of Mr. Abrol does not figure here. So also admittedly, there was only one search warrant, which was issued on October 16, 1996, and executed between October 16, 1996, and October 20, 1996, and which expired thus on October 20, 1996. The warrant was issued on October 7, 1996, and the search was conducted continuously between October 16, 1996, and October 20, 1996. In between, the search was suspended only during the late hours of the night. On October 20, 1996, having seized all the relevant materials and valuables, the search party obviously had come to the conclusion that there was no further material to be seized and no more search operation to continue. The search comes to an end when the search party leaves the premises after carrying with it the seized material and thus authorisation for search is fully implemented and execution is complete. For this proposition, the Income-tax Appellate Tribunal Bench, Pune, took support of the decision of the Bangalore Bench in the case of Kirloskar Investments and Finance Ltd. v. Asst. CIT [1998] 67 ITD 504. In the present case at hand, the cupboard in which 45 kgs. of silver articles were kept was sealed by mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes not amount to seizure. Therefore, by passing a restraint order, the time limit available for framing of the order cannot be extended. 14. The Income-tax Appellate Tribunal after perusing the search warrant in original noted that Mr. Amol Kamat, ACIT, Panaji, who was one of the authorised officers, had put the word "executed" and below it put his signature and date as October 16, 1996. It was further noted by the Income-tax Appellate Tribunal, that on October 20, 1996, at about 2.30 a.m. the authorised officer seized and removed while leaving the premises, all the materials (gold, silver, books of account, etc. as mentioned above), on the same day, i.e., October 20, 1996, after completion of the search and thereafter order was passed under Section 132(3) covering one cupboard in which all the silver articles were placed and sealed. 15. It is also very obvious that there was no warrant of authorisation for search in the name of Ashish Abrol. In his own affidavit, so also in his statement when he appeared before the Income-tax Appellate Tribunal, Mr. Abrol categorically stated that he had a very limited role in this entire episode and that he had no locus standi in the matter. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the only remedy available to the aggrieved party is to prefer an appeal before Hon'ble High Court. The relevant observation of the Hon'ble Supreme Court (supra) extracted as under: "Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case." 16. It is also not out of place to mention that the Revenue against the order of the ITAT has already preferred an appeal before the Hon'ble High Court which has been admitted. This argument of the ld. AR was not controverted by the ld. DR appearing on behalf of the Revenue. 17. In view of the above, we hold that there is no apparent mistake in the order of ITAT as alleged by the Revenue in its miscellaneous application as discussed above. Therefore we do not find any merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 (A) LTE 27 16088/2023 2014-15 88/Ahd/2021 107/Ahd/2019 (A) 67/2022 28 16115/2023 2015-16 89/Ahd/2021 108/Ahd/2019 (A) 47/2022 Below Sr. No. 16 to 29 of Deepak Vaswani forming part of the Category 2 are also forming part of Category 3 Cases 16 12020 /2023 2009-10 13/Ahd/ 2021 111/Ahd/2019 (A) 23/2022 Lead MA 17 12017/ 2023 2010-11 14/Ahd/2021 112/Ahd/2019 (A) 61/2022 18 Deepak Budharmal Vaswani 12016/2023 2011-12 202115/Ahd/2021 113/Ahd/2019 (A) 56/2022 19 12014/2023 2012-13 16/Ahd/2021 114/Ahd/2019 (A) 55/2022 20 12081/2023 2013-14 17/Ahd/2021 115/Ahd/2019 (A) 60/2022 21 12082/2023 2014-15 18/Ahd/2021 116/Ahd/2019 (A) 26/2022 22 12083/2023 2015-16 19/Ahd/2021 117/Ahd/2019 (A) 51/2022 23 12084/2023 2009-10 21/Ahd/2021 248/Ahd/2019 (R) 69/2022 24 12085/2023 2010-11 22/Ahd/2021 249/Ahd/2019 (R) 65/2022 25 12086/2023 2011-12 23/Ahd/2021 250/Ahd/2019 (R) 71/2022 26 12087/2023 2012-13 24/Ahd/2021 251/Ahd/2019 (R) 63/2022 27 12089/2023 2013-14 25/Ahd/2021 252/Ahd/2019 (R) 50/2022 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132A after the 31st day of May, 2003, the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years: The above provisions begins with the non obstante clause overriding the provisions of Section 147 of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it was held as under: In order to decide the legality and validity of notice issued under Section 148, it is necessary to see as to whether conditions precedent provided in Section 148 are satisfied or not. Once the conditions prescribed under Section 148 are found present in the notice issued then, in that event, the notice has to be upheld being issued in conformity with the requirement of Section 148. [Para 9] While deciding the legality of notice issued under Section 148, it is not necessary to look to the provisions of Section 153A because both Sections operate in different field and sphere. [Para 10] The Assessing Officer does not have jurisdiction to issue notice under Section 148 in respect of those six assessment years which fall within the exclusive jurisdiction of Section 153A. Such was not the case in the instant case. [Para 11] Admittedly, the Assessing Officer had not issued notice of reassessment under Section 153A in respect of six assessment years, i.e., 2003-04 to 1998-99 whereas he had issued impugned notice of reassessment for the assessment year 1997-98 under Section 148 which was the subject-matter of the instant writ. [Para 12] The submission of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case. In view of the above and after considering the facts in totality, we are not inclined to disturb the finding of the authorities below. Hence the contention raised i.e. the provisions of Section 147 of the Act cannot be invoked in view of the fact that there was special proceedings under Section 153A of the Act in case of search, by the assessee is dismissed. Thus the contention of the assessee is hereby dismissed." 12.1 On the rectification application, the Tribunal has held as under: 8.3 In this regard, we note that the ITAT after elaborate discussion on the issue of reason to believe has taken a view that reason recorded by the AO was nothing but borrowed satisfaction. In holding so the ITAT analyzed the facts available on record, given various reasoning and also referred several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only reme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act. As observed hereinabove, the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case." 12.2 In this category of cases, the list of SCAs and relevant Tax Appeals are as under: DETAILS OF PETITIONS FILED IN VENUS GROUP OF MATTERS CATEGORY 4 CASES Sr. no. Assessee / Respondent SCA No. A.Y. M.A. No. IT(SS)A No. (Assessee (A) / Revenue (R)) T.A. No. Remarks 1 Rajesh Sundardas Vaswani 16361/2023 2008 -09 90/Ahd/2021 457/Ahd/2019 42/2022 Lead ITA/ Appeal 2 16373/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of. As observed by the Supreme Court in Master Construction Co. (P) Ltd. v. State of Orissa (1966) 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde vs. Mallikarjun Bhavanappa Tirumale [AIR 1960 SC 137]. 12 Significantly, the language used in Order 47, Rule 1 of the CPC, 1908, is different from the language used in Section 254(2) of the Act. Power is conferred upon various authorities to rectify any "mistake apparent from the record". Though the expression "mistake" is of indefinite content and has a large subjective area of operation, yet, to attract the jurisdiction to rectify (an order) under Section 254(2), it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact, is not a mistake apparent from the record. 13 The contours of the jurisdiction under Section 254 (2) were examined by the Delhi High Court in Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be rectified. Power to recall an order is prescribed in terms or Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessed shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT . Judged in the above background the order passed by the Tribunal is indefensible." 7. That being the legal position, the Tribunal was not in our opinion justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing. Just because a pronouncement made on the subject either by the Tribunal or by any other Court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may however fall short of constituting a mistake apparent from the record within the meaning of Section 254(2) of the Act. More importantly just because a point is debatable (which is one of the reasons given by the Tribunal in the instant case) wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been said above, it is clear that the question whether Section 17(1) of the Indian Income tax Act, 1922 was applicable to the case of the first respondent is not free from doubt. Therefore the Income tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Millikarjun Bhavanappa Tirumale [1960] 1 SCR 890 this Court while spelling out the scope of the power of a High Court under Article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground No. 3, which the writ applicant is talking about, has not been dealt with at all by the Appellate Tribunal. The Appellate Tribunal, in its own way, has discussed the said issue and recorded a particular finding. If the writ applicant is dissatisfied, then it is always open for him to prefer an appeal under Section 260A of the Act before this High Court and in the course of the appeal, it can be pointed out to the Court as regards the ground No. 3 and if the Court is convinced, then it may remit the matter to the Tribunal for fresh consideration of the ground No. 3, which the writ applicant is talking about. The power to rectify an order under Section 254(2) of the Act is extremely limited, as observed by the Delhi High Court in the case of Maruti Insurance (supra). It does not extend to correcting the errors of law or reappreciating the factual findings. Those properly fall within the appellate review of an order of Court of first instance. What legitimately falls for consideration are errors (mistakes) apparent from the record." 13.3 The Delhi High Court in the case of Commissioner of Income Tax-II v. Maruti Insurance Distribution Services Ltd. [(2012) 26 taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly necessitates re-hearing and re-adjudication of the entire subject-matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms or Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessed shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex-parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT. Judged in the above background the order passed by the Tribunal is indefensible." 7. That being the legal position, the Tribunal was not in our opinion justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing. Just because a pronouncement made on the subject either by the Tribunal or by any other Court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may however fall short of constituting a mistake apparent from the record within the meaning of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a view to rectifying any mistake apparent from the record" - an expression common in section 254(2) and section 154 of the Act, holding: From what has been said above, it is clear that the question whether Section 17(1) of the Indian Income-tax Act, 1922 was applicable to the case of the first respondent is not free from doubt. Therefore the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Millikarjun Bhavanappa Tirumale [1960] 1 SCR 890 this Court while spelling out the scope of the power of a High Court under Article 226 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h according to the Revenue has been decided by misinterpretation of facts and law, the same cannot be a subject matter of rectification. 14. In some of the cases before us in the each of the 4 Categories set out herein above, the Revenue has also filed Tax Appeals challenging the order of the Tribunal dated 12.11.2020 in various Tax Appeals under Section 260A of the Income Tax Act, 1960. We have set out against each Special Civil Application numbers category wise in which Tax Appeals have been filed. 15. In light of the decisions in the case of R.C.Sabharwal v. CIT reported in (2010) 2 taxmann.com 289 (Delhi) and in the case of CIT vs Muni Seva Ashram reported in (2013) 221 Taxman 27 (Guj), in such petitions where Tax Appeals are filed by the Revenue in the respective categories, the petitions so filed are not entertained while reserving the right of the Revenue to urge the grounds raised in these petitions while arguing the Appeals. The following petitions in which the Revenue has filed Tax Appeals and are pending are not entertained reserving the liberty to urge the grounds raised in the respective Tax Appeal. These petitions are accordingly disposed-off without assigning any f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(SS)A 239/Ahd/2019 22 Rajesh Sunderdas Vaswani 12024 of 2023 19 of 2022 2015-16 MA 63/Ahd/2021 IT(SS)A 240/Ahd/2019 23 Deepak Budharmal Vaswani 12020 of 2023 23 of 2022 2009-10 MA 13/Ahd/2021 IT(SS)A 111/Ahd/2019 24 Deepak Budharmal Vaswani 12017 of 2023 61 of 2022 2010-11 MA 14/Ahd/2021 IT(SS)A 112/Ahd/2019 25 Deepak Budharmal Vaswani 12016 of 2023 56 of 2022 2011-12 MA 15/Ahd/2021 IT(SS)A 113/Ahd/2019 26 Deepak Budharmal Vaswani 12014 of 2023 55 of 2022 2012-13 MA 16/Ahd/2021 IT(SS)A 114/Ahd/2019 27 Deepak Budharmal Vaswani 12081 of 2023 60 of 2022 2013-14 MA 17/Ahd/2021 IT(SS)A 115/Ahd/2019 28 Deepak Budharmal Vaswani 12082 of 2023 26 of 2022 2014-15 MA 18/Ahd/2021 IT(SS)A 116/Ahd/2019 29 Deepak Budharmal Vaswani 12083 of 2023 51 of 2022 2015-16 MA 19/Ahd/2021 IT(SS)A 117/Ahd/2019 30 Deepak Budharmal Vaswani 12084 of 2023 69 of 2022 2009-10 MA 21/Ahd/2021 IT(SS)A 248/Ahd/2019 31 Deepak Budharmal Vaswani 12085 of 2023 65 of 2022 2010-11 MA 22/Ahd/2021 IT(SS)A 249/Ahd/2019 32 Deepak Budharmal Vaswani 12086 of 2023 71 of 2022 2011-12 MA 23/Ahd/2021 IT(SS)A 250/Ahd/2019 33 Deepak Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 41 of 2022 2014-15 MA 79/Ahd/2021 IT(SS)A 233/Ahd/2019 56 Venus Infrastructure & Dev. P. Ltd. 16109 of 2023 44 of 2022 2015-16 MA 80/Ahd/2021 IT(SS)A 234/Ahd/2019 57 Venus Infrastructure & Dev. P. Ltd. 16177 of 2023 12 of 2022 2009-10 MA 83/Ahd/2021 IT(SS)A 102/Ahd/2019 58 Venus Infrastructure & Dev. P. Ltd. 16117 of 2023 57 of 2022 2010-11 MA 84/Ahd/2021 IT(SS)A 103/Ahd/2019 59 Venus Infrastructure & Dev. P. Ltd. 16171 of 2023 72 of 2022 2011-12 MA 85/Ahd/2021 IT(SS)A 104/Ahd/2019 60 Venus Infrastructure & Dev. P. Ltd. 16355 of 2023 59 of 2022 2012-13 MA 86/Ahd/2021 IT(SS)A 105/Ahd/2019 61 Venus Infrastructure & Dev. P. Ltd. 16088 of 2023 67 of 2022 2014-15 MA88/Ahd/2021 IT(SS)A107/Ahd/2019 62 Venus Infrastructure & Dev. P. Ltd. 16115 of 2023 47 of 2022 2015-16 MA 89/Ahd/2021 IT(SS)A 108/Ahd/2019 63 Rajesh Sunderdas Vaswani 16361 of 2023 29 of 2022 2008-09 MA 90/Ahd/2021 ITA 457/Ahd/2019 64 Rajesh Sunderdas Vaswani 16373 of 2023 42 of 2022 2008-09 MA 57/Ahd/2021 ITA 805/Ahd/2019 65 Ashok Sunderdas Vaswani 16388 of 2023 32 of 2022 2008-09 MA 98/Ahd/2021 ITA 456/Ahd/2019 66 Ashok Sunderd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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