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TMI Blog2024 (7) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... AN, HON BLE ACCOUNTANT MEMBER For the Assessee : Sri GVN Hari, AR Revenue : Dr. Satyasai Rath, CIT-DR ORDER PER S. BALAKRISHNAN, Accountant Member : This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-3, Visakhapatnam in appeal No. 657/ 10551/ 2019-20/ CIT(A)-3/ VSP/ 2020-21, dated 11/ 03/ 2021 arising out of the order passed U/ s. 143(3) r.w.s 153A of the Income Tax Act, 1961 [the Act] for the AY 2008-09. 2. Brief facts of the case are that the assessee filed its original return of income U/ s 139(1) of the Act for the Assessment Year 2008-09 admitting a total income of Rs. 6,406/ - on 26/ 09/ 2008. Subsequently, a search operation U/ s. 132 of the Act was conducted on 15/ 09/ 2017 in the case of the assessee company at its registered office premises at Kolkata in connection with the seizure operations in the group cases of Sri Alakaram Satyanandam. On verification of the seized material and books of accounts and evidences, the Ld. AO found that the income represented in the form of asset which has escaped assessment is likely to amount to Rs. 50 lakhs or more for the AYs 2008-09 to 2011-12. Accordingly, the Ld. AO issued a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations and seized and subsequent enquiries caused by the AO lead to the conclusion that the share applicants were bogus. 2. Any other ground of appeal that may arise at the time of hearing. 3. Further, by invoking the provisions of Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, the assessee filed a petition by raising the following grounds: 1. Assessment in the case of the petitioner / respondent was completed U/ s. 143(3) r.w.s 153A of the Act vide order dated 30/ 12/ 2019. The Assessing Officer made one addition of Rs. 9,27,50,000/- U/ s. 68 of the Act towards unexplained share capital. 2. Being aggrieved, the petitioner f iled an appeal before the Ld. CIT(A)-3, Visakhapatnam vide ITA No. 10551/ 2019-20. In this appeal, the petitioner contested the assessment order not only on merits but also on various legal objections. The following legal issues were raised before the Ld. CIT(A). a. The addition made without reference to incriminating material found during the search is outside the scope of assessment U/ s. 153A of the Act [Ground No.3]. b. The impugned assessment does not qualify for invoking the fourth proviso to section 153A of the Act and therefore the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Order wherein the Ld. AO has clearly established about the bogus investments. The Ld. DR fully relied on the order of the Ld. AO. Per contra, the Ld. AR argued that the Ld. AO has not referred to any incriminating materials but has made additions only on enquiries. The Ld. AR also further submitted that there were no incriminating materials except documents relating to Share Application Money received by the assessee company. The Ld. AR also further submitted that Sri Alakram Satyanandam has become a share-holder in the Financial Year 2011-12 only and hence he was not a Related Party during the impugned assessment year. The Ld. AR further submitted that the he has raised grounds by invoking Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 and pleaded that before adjudicating the issues on merits, these grounds raised may be taken up for adjudication. Countering the arguments of the Ld. AR, the Ld. DR placed reliance on the decision of the Hon ble High Court of Kerala in the case of E.N. Gopakumar vs. CIT (Central) reported in [2016] 75 taxmann.com 215 (Kerala). Further, the Ld. DR also placed reliance on the decision of the Hon ble Karnataka High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity: Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless - (a) The Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years: (b) (c) . Explanation 1. For the purposes of this sub-section, the expression relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. From the bare reading of the above provisions we find that the Statute has prescribed a different yardstick for the computation of six years in the case of search assessments for the purpose of section 153A(1)(b) and a different yardstick in the computation of Ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arm of the law can go up to this terminal point and not one day beyond. When the statute is clear and admits of no ambiguity, it has to be strictly construed and there is no scope for looking to the explanatory notes appended to statute or circular issued by the department. 10. In the case on hand, the statute has prescribed one mode of computing the six years and another mode for computing the ten years. Section 153 A(1)(b) states that the assessing officer shall assess or reassess the total income of six years immediately preceding the assessment year relevant to the previous year in which search is conducted. Applying this yardstick, the six years would go up to 2013-14. The search assessment year, namely, 2019-20 has to be excluded. This is because, the statute talks of the six years preceding the search assessment year. But, while computing the ten assessment years, the starting point has to be the end of the search assessment year. In other words, search assessment year has to be including in the latter case. It is not for me to fathom the wisdom of the parliament. I cannot assume that the amendment introduced by the Finance Act, 2017 intended to bring in four more years ove ..... X X X X Extracts X X X X X X X X Extracts X X X X
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