9911796707
TMI Blog2024 (7) TMI 129X X X X Extracts X X X X X X X X Extracts X X X X ..... for A.Ys. 2011-12 2012-13 since had not fall in the previous 6 years, the assumption of jurisdiction in reopening of assessment under Section 153C of the Act for A.Ys. 2011-12 and 2012- 13, therefore, found to be not maintainable. The same is void ab initio and thus, quashed. Validity of the satisfaction note recorded by AO - In the case in hand the satisfaction note simply referred the seized material i.e. Annexure A-3 seized during the search and seizure operation carried out, whereas from the plain reading of the language of Section 153C of the Act and judicial pronouncement cited hereinabove it is abundantly clear that in order to reopen assessment of the other person under Section 153C of the Act for the Assessment Year earlier to the year of search, direct co relation must exist between existence of incriminating material and relevant Assessment Year. Therefore, the reasoning should be logical while recorded satisfaction; the same must be valid having regard to the provision of Section 153C of the Act. It is an undisputed fact that these documents did not establish co relation, document wise with these six Assessment Years. The very essential element for invoking the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the seized documents/materials in the group was received by the Circle from the DDIT (Inv.)-1 Gurugram. The satisfaction note was therefore, recorded by the ACIT, Central Circle-2, Faridabad i.e. the AO of the assessee on 31.10.2018 and notice under Section 153C of the Act was finally issued to the assessee on 22.11.2018 directing the assessee to file its return of income in respect of Assessment Year commencing from 2011-12 to 2017-18 i.e. the six Assessment Years immediately preceding the Assessment Year relevant to the previous year in which search was conducted in this case. The block years were reopened for the period of A.Ys. 2011-12 to 2017-18 considering the amendment brought to Section 153C of the Act by and under the Finance Act, 2017 w.e.f. 01.04.2017. Relevant to note that, the satisfaction note was recorded subsequent to that amendment only on 31.10.2018. 4. At the time of hearing of the instant appeal the representative of the assessee submitted before us that the notice under Section 153C of the Act will be valid for a period of six years from the end of the financial year preceding the date on which the satisfaction was recorded. Further that as the amendment m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and the reassessment proceedings for assessment years 2011-12 and 2012-13 is, therefore, beyond jurisdiction, not maintainable and void ab initio. 7. We note that the Learned DR has not been able to controvert such submissions made by the Assessee s Counsel. 8. We have further considered the CBDT Circular being No.2/2018 dated 15.02.2018 annexed at page 2 of the paper book filed before us, the relevant portion thereof is as follows: 80.1 The provisions of clause (c) of the section 197 of the Finance Act, 2016 provide that where any income has accrued, arisen or been received or any asset has been acquired out of such income prior to commencement of the Income Declaration Scheme, 2016 (the Scheme), and no declaration in respect of such income is made under the Scheme, then, such income shall be deemed to have accrued, arisen or received, as the case may be, in the year in which a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or section 148 or section 153A or section 153C of the Income-tax Act is issued by the Assessing Officer, and provisions of the said Act shall apply accordingly. 80.2 In view of the various representations received from st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the assessee. For this proposition, the assessee has shown the order sheet of BPTP Ltd as well as letter dated 04.01.2016 of the ld AO, wherein, in response to RTI Query, it was stated that since the ld AO of BPTP Ltd and the assessee was same, therefore, no separate satisfaction was recorded in the file of BPTP Ltd before assuming jurisdiction in case of assessee u/s 153C of the Act. Further satisfaction was recorded in the case of the assessee on 19.08.2009 by the ld AO which is placed at page No. 17 to 20 of the PB. However, on 19.08.2009 itself, notice u/s 153C of the Act were issued to the assessee for Assessment Years 2005-06, 2006-07 and 2007-08. Admittedly, no notice u/s 153C was issued for Assessment Year 2009-10 and assessment was concluded on 15.12.2011 u/s 143(3) of the Act. In case of Shri Jasjit Singh (supra) the revenue challenged the order of the coordinate bench dated 05.11.2014 wherein, it was held that in case of the assessee the date of receipt of the seized material would be the date of search and six year period would be reckoned from that date. The coordinate bench in that case quashed the assessment framed u/s 143(3) of the Act for Assessment Year 2009- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer in the case of Sh Harvansh Chawla was empowered to initiate the proceedings u/s 153A for immediately preceding six years from A.Y. 2011-12 to A.Y. 2016-17. He, however, submits that in case of the assessee who happens to be the person other than the searched person , provisions of section 153C are applicable and in such case, the date of search or date of requisition as referred to in section 153A issubstituted by the date of handing over of documents by the assessing officer of searched person to the assessing officer of other person . 6. On this premise, he continues to submit that, the assessing officer in his capacity as A.O. of the searched person has recorded satisfaction on 29.03.2019, which establishes that, at the earliest, it is the date of 29.03.2019, when the assessing officer can be presumed to have got the documents in his capacity as assessing officer of the appellant, on the basis of which proceedings u/s 153C have been initiated. Since the date of such recording of satisfaction on 29.03.2019 falls in previous year 2018-19 relevant to A.Y. 2019-20, the immediately preceding six years are A.Y. 2013-14 to A.Y. 2018-19, and, therefore, the notice u/s 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of search had fallen in the A.Y. 2017-18 which is relevant for the case of the person searched; whereas the satisfaction recorded by the learned Assessing Officer of the searched person on 29/3/2019 had fallen in the assessment year 2019-20 in which case the immediately preceding 6 assessment years would be assessment years 2013-14 to 2018-19; and the date of satisfaction recorded by the learned Assessing Officer of the assessee on 15/5/2019 falls in the assessment year 2020-21 in which case the immediately preceding 6 assessment years would be the assessment years from 2014- 15 to 2019-20. 10. It is, therefore, clear that when we reckon the 6 assessment years with reference to the recording of satisfaction by the learned Assessing Officer of the searched person or with reference to the recording of satisfaction by the learned Assessing Officer of the other person, in either case the assessment year 2012-13 is well beyond such period. So far as this factual position is concerned, it remains unassailable. 11. In respect of the starting point for computation of the block period, the Hon ble Delhi High Court in the case of Pr. CIT v Sarwar Agency (P.)Ltd. [2017)185 taxmann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under Section 153C of the Act for A.Ys. 2011-12 2012-13 since had not fall in the previous 6 years, the assumption of jurisdiction in reopening of assessment under Section 153C of the Act for A.Ys. 2011-12 and 2012- 13, therefore, found to be not maintainable. The same is void ab initio and thus, quashed. 15. In the result, the assessee s appeals for A.Ys. 2011-12 and 2012-13 are allowed. 16. Apart from the above fact, the Learned Counsel appearing for the assessee submitted before us that the Learned CIT(A) erred in law and also in fact in upholding the assumption of jurisdiction in the absence of a valid satisfaction note recorded in the case of searched person and the appellant under Section 153C of the Act. Rather the same is issued in access of jurisdiction. In this regard, he has taken us to the satisfaction note recorded by the ACIT, Central Circle II, Faridabad dated 30.10.2018 in respect of the entire block period commencing from A.Ys. 2011-12 to 2017-18 appearing at page 88 of the paper book filed by the assessee before us. The contest whereof is as follows: Reasons/Satisfaction note for taking up the case of M/s. Marconi Infratech Pvt. Ltd. under section 153C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ety [2017] taxmann.com 146 (Delhi) as relied upon by the Learned AO already settled the issue and held this to be an essential requirements as submitted by Learned AR. The relevant para of the same are reproduced as under: (18) The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co-relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplained and addition thereon could be made. It is an undisputed fact that these documents did not establish co relation, document wise with these six Assessment Years. The very essential element for invoking the provision of Section 153C is therefore, found to be missing. In that view of the matter, the reason assigned by the Learned AO while recording satisfaction is not found to be logical one rather vague; the material seized does not properly disclosed how the same belongs to be appellant; neither has it established any co relation document wise with these Assessment Years sought to be reopened and finalized upon making addition thereon. We, thus, respectfully relying upon the judgment passed by the Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (supra) do not find any force in such satisfaction note recorded by the Learned AO as the said is recorded not in terms of the provision of Section 153C of the Act and thus, found to be invalid. The entire reassessment proceedings under Section 153C of the Act are, therefore, quashed. 21. In the result, assessee s all appeals are allowed. This Order pronounced in Open Court on 21/06/2024 - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
