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TMI Blog2023 (6) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... y notice was issued on 18.10.2016. Decided against the Revenue. - Sh. G.S. Pannu, Hon ble President And Sh. Anubhav Sharma, Judicial Member For the Assessee : Sh. K.C. Singhal, Adv. For the Revenue : Sh. N.C. Swain, CIT-DR Sh. Anuj Garg, Sr. DR. ORDER PER ANUBHAV SHARMA, JM: The appeal has been filed by the assessee against order dated 30.12.2018 in appeal no. 223/2017-18 in assessment year 2010-11 passed by Commissioner of Income Tax (Appeal)-23 (hereinafter referred to as the First Appellate Authority in short Ld. F.A.A. ) in regard to the appeal before it arising out of assessment order dated 30.12.2017 u/s 153C r.w.s. 153A of the Income Tax Act, 1961 (herein after referred to as the Act ) passed by ACIT, Central Circle-2, New Delhi (hereinafter referred to as the Assessing Officer AO ). 2. The facts in brief are the appellant filed its return of income for A.Y. 2010-11 on 15.10.2010 declaring income of Rs. 2,81,421/- which was processed u/s 143(1) of the Act. Subsequently, the assessment has been reopened u/s 153C of the Act vide notice dated 18.10.2016 on the allegation that certain documents/papers belonging to the appellant were found during the course of search u/s 132 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective. 4.5 Respectfully following the judgment of the Hon ble Delhi High Court, it is held that in the present case, the date of writing satisfaction note/ handing over of the relevant material being 14.10.2016, the AY in which the date of handing over of the relevant material falls would be AY 2017-18. Therefore, the. (block) period for issuing notices u/s 153C (r.w.s 153A) would be from AY 2011-12 to AY 2016-17(six AYs immediately preceding the A.Y. 2017-2018). Consequently, it is held that the notices issued (u/s 153C) for AY 2009-10 and 2010-11 were beyond mandate of the law. 3. Now in appeal Revenue is raising following grounds : 1. The order of Ld. CIT (A) is not correct in law and facts. 2. That on facts and circumstances of the case, the Ld. CIT (A) has erred in holding that the assessing officer could not issue notice u/s 153C of the I. T. Act, 1961 for the A.Y. 2010-11 in view of the amendment u/s 153C and quashing the assessment order passed by assessing officer u/s 153C r.w.s. 143(3) of the Act. 3. That on facts and circumstances of the case, the Ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of this section. It was accordingly submitted that Ld. CIT (A) has rightly relied the judgment of Hon ble Jurisdictional High Court in RRJ Securities Ltd. (supra) which has been further reiterated in Serwer Agency (P) Ltd. 397 ITR 400 and even request to reconsider the ratio in RRJ Securities Ltd. (Supra) was rejected. 6. Appreciating the matter on record it can be observed that the grounds raised are connected to the question if by virtue of Section 153C of the Act, Assessing Officer was having jurisdiction to issue notices for assessment year 2009-10 and 2010-11. In this context, the crucial dates relevant for giving findings are provided as below :- 1. 10.03.2015 search and seizure operation u/s 132 of the act was conducted in the group of cases. 2. 18.07.2016 - The Assessing Officer of the searched person who was also assessing officer of the assessee issued notice u/s 153C 7. In regard to this controversy, reliance is placed on the judgment of Co-ordinate Bench in ITA No. 204/Del/2021 M/s. Karina Airlines International Limited vs. ACIT dated 28.02.2022 in which Hon ble President was also in the coram and where in para no. 9 onwards to para no. 13 following relevant find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry Notes to the provisions of the Finance Act, 2017 issued by the Central Board of Direct Taxes (CBDT) through Circular No. 2/2018, dated 15th February, 2018 explains the amendment made to the provisions of sections 153A and 153C of the Act as under: 80.4 However, in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including section 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A of the Income-tax Act relating to search assessments has been amended to provide that notice under the said section can be issued for an assessment year or years beyond the sixth assessment year already provided up to the tenth assessment year if (i) the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in one year or in aggregate in the relevant four assessment years(falling beyond the sixth year); (ii) such income escaping assessment is represented in the form of asset; (iii) the income escaping assessment or par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking note of more or less similar argument made by the Revenue, has held as under: 9. We have gone through the record in the light of the submissions made on either side. Insofar as the facts are concerned there is no dispute. Search in the case of Harvesh Chawla took place on 7/4/2016, the satisfaction by the learned Assessing Officer of the searched person was recorded on 29/3/2019 and the seized material was handed over to the learned Assessing Officer of the assessee who had recorded his satisfaction on 15/9/2019. It is clear that the 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other 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 appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: Further, the period of six years would also have to be reckoned with respect to the date of recording of satisfaction note - that is. 8th September. 2010 -and not the date of search. 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153 A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings by virtue of Section 153C(1) of the Act would have to be in accordance with Section 153 A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recordings of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of six years as regards the person other than the searched person would commence only from the year in which the satisfaction not is prepared by the AO of the searched person and a notice is issued pursuant thereto. The date of the Satisfaction Note is 21st My, 2014 and the notice under Section 153C of the Act was issued on 23rd July, 2014, The previous six AYs would therefore be from AY 2009- 10 to AY 2014-15. This would therefore not include AYs 2007- 08 and 2008-09. 8. If we apply the ratio laid down by the Hon ble Jurisdictional High Court, in the present case, then the date of satisfaction, i.e., 25.09.2018 has to be reckoned as the date of reference from where six assessment years immediately preceding assessment years has to be construed and therefore, six preceding assessment years in this case shall be from Assessment Year 2012-13 to Assessment Year 2018-19. The instant Assessment Year, i.e., Assessment Year 2017-18 ergo would be covered in the earlier six assessment years where the assessments have to be framed u/s. 153C only, whereby the Assessing Officer was required to issue a notice u/s. 153C, and frame the assessment u/s. 153C/143(3). Contra to the law as int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar No. 2/2018 / dated 15.2.2018, it has been clarified that the amended provisions of section 153A of the Act shall apply where search under section 132 of the Act is initiated or requisition under section 132A of the Act is made on or after 1st day of April, 2017. It is further stated therein that section 153C of the Act has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A of the Income-tax Act. It is also stated therein that the amendment will take effect from 1st April, 2017. Therefore, even the CBDT, in the context of the amended provisions of section 153A of the Act, has clarified that it would apply when search or requisition is made after the date of the 13 amendment. Evidently, therefore, even the amended provisions of section 153C of the Act would apply when search or requisition is made after the amendment. 10. Similar amendments have been made from time to time in Section 153C and one of such amendment was in the Finance Act, 2015 brought in the statute from 01.06.2015, whereby the statute extended the scope of Section 153C by holding that not only the specified items belonging to other person would trigger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her words, it is not enough for the Revenue to show that the documents either 'pertain' to the Assessee or contains information that 'relates to' the Assessee. 15. In the circumstances, we are of the considered opinion that since the date of search is 07.04.2016, the amendment brought by the Finance Act, 2017 would not be applicable and consequently the order of assessment dated 31.12.2019 passed u/s 153C r.w.s. 144 of the Act is bad and is liable to be quashed. We order accordingly. In view of our finding that the very assessment itself is bad being barred by limitation, adjudication of other grounds will only be academic and need not be resorted to. 13. In our view, facts being identical, the aforesaid decision of the coordinate bench will squarely apply to the present appeal as well. Thus, respectfully following the decision of the coordinate bench in assessee s own case, as referred to above, we hold that the impugned assessment order passed under section 153C of the Act, is wholly without jurisdiction, hence, invalid. Accordingly, we quash the same. Consequently, the order of learned Commissioner (Appeals) is set aside. In view of our decision in ground 1 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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