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TMI Blog2025 (3) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... arly show that three groups were acting as a consortium and the assessee is part of one of the groups. 4. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition merely on the basis that the assessee's name was not appearing on the document, when the document reflected the name of the recipient of ICD and the assessee is admittedly one of the lenders to that recipient and receiving interest from them. 5. On the facts and circumstances of the case, the CIT(A) has erred in deleting the disallowance u/s 14A of the Act amounting to Rs. 59,89,921/. 6. The appellant craves leave to add, amend any/all the ground of appeal before or during the course of hearing of the appeal." 3. The assessee has also filed C.O. wherein the assessee has taken following cross objection: "That approval, as granted by Addl./Joint Commr. of Income Tax u/s 153D of the Income Tax Act, 1961, approving the order of the Assessing officer, in a mechanical manner and without application of mind and consequently the order as passed by the Assessing order in furtherance a such alleged mechanical approval is invalid and bad in law." Thereafter, vide letter dated 25/09/2024 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for initiation of the proceedings u/s 153C of the Act for Asst. Year 2007-08 to 2012-13. Further, the AO proceeded to complete the assessment proceedings for AY 2013-14 pending before him u/s 143(3) vide order dt. 27/03/2015 wherein the documents so found in possession of M/s K.S. Dhingra, G.S. Dhingra & Ors. group were considered and additions were made on the basis of entries found noted in those documents. The Ld. AR submitted that since in the case of assessee, the satisfaction was recorded for initiation of proceedings u/s 153C on 10/10/2014, the assessment years covered under the block period of six years would be from Assessment Years 2009-10 to Assessment Year 2014-15 and the search year would be the Asst. Year 2015-16 during which the document found from the possession of third party were received by the AO of the assessee and the AO of the assessee has recorded his satisfaction, and, accordingly, the order passed u/s 143(3) for Asst. Year 2013-14 instead of u/s 153C deserves to be stuck down. He further submitted that after recording the satisfaction on 10/10/2014, for issue of notice u/s 153C, all the pending proceedings stood abated which inter-alia includes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Income Tax, Central Circle-8, New Delhi 11. From the said satisfaction note, it is seen that the AO has recorded the satisfaction on 10/10/2014. Further, the above satisfaction note refer the search carried out in the case of the Vatika Group, Span India Group and other on 16/01/2023 and based on the documents found during the search on these group, AO of the assessee recorded satisfaction that these papers are belonging to assessee and therefore, proceedings u/s 153C were initiated for Asst. Year 2007-08 to 2012-13. Here it is relevant to state that for the impugned year, AO has made two additions, first of Rs. 4,71,29,722/- towards undisclosed /unaccounted interest received/receivable and other of Rs. 59,89,921/- by invoking provisions of section 14A of the Act. Further perusal of assessment order, we found that addition of Rs. 4,71,29,722/- is made solely on the basis of documents/loose papers found and seized during the search and seizure operation carried out in the case of "S.K. Dhingra, G.S. Dhingra & Ors. on 16/09/2011 and no paper whatsoever was referred or relied upon with respect to search carried out in the case of Vatika group, Span India Group and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of person searched to the AO of the assesse. Therefore, date of search would be substituted to 10/10/2014 which falls under Assessment Year 2015-16 and, accordingly, six immediate preceeding assessment years fallen under the block period and for which, assessment proceedings u/s 153C could be initiated were AY 2009-10 to AY 2014-15 which inter alia includes the impugned Assessment Year 2013-14 also. However, in the instant case, the Assessing Officer has instead of issue of notice u/s 153C for AY 2013-14, has completed the assessment u/s 143(3) wherein as observed above, the additions have been made on the basis of the documents seized from the possession of the persons search in whose case no satisfaction is recorded that those papers belong to the assessee. The Co-ordinate Bench of Tribunal in the case of Akansha Gupta (supra) has held the order passed u/s 143(3) as bad in law. The relevant observations of the tribunal are as under: "8.1. On perusal of the satisfaction note, it is seen that the same was recorded on 30.06.2022 by the AO after giving a finding that the clone data of Pravin Kumar Jain‟s Mobile marked as Annexure-5 belongs to the assessee, which has bearing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 u/s 139; (b) Assess or reassess the total income or six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made : Provided that the AO shall assess or reassess the total income in respect of each assessment year falling with insuch six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this [sub- section)pending on the date of initiation of the search u/s 132 or making of requisition u/s 132A, as the case may be, shall abate." 21. From the above, it is evident that as per clause ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.3.2009 2009-10 1.4.2007 to 31.3.2008 2008-09 1.4.2006 to 31.3.2007 2007-08 1.4.2005 to 31.3.2006 2006-07 1.4.2004 to 31.3.2005 2005-06 22. The Assessing Officer has issued notice u/s 153C for A.Y.2004-05 which is clearly barred by limitation. Therefore, issue of notice u/s 153C issued by the Revenue cannot be sustained on both the above counts, i.e., it is legally not valid as conditions laid down u/s 153C has not been fulfilled and it is barred by limitation. In view of the above, we quash the notice issued u/s153C and consequently, the assessment completed in pursuance to such notice, is also quashed. 23. Since we have quashed the assessment order itself, the additions challenged by the assessee by way of other grounds of appeal do not survive, and, therefore, do not require any adjudication." 16. We thus, find that the issue raised in the additional ground has-been answered in favour of the assessee, by the Coordinate Delhi Bench of the Tribunal in the case of DSL Properties (supra). 17. So far as decision of Hon'ble Delhi High Court in the case of SSP Aviation Ltd. vs. DCIT (supra) relied upon by the Id. CIT(DR) is concerned, we find that it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Since in the above finding on the issue raised in additional ground no. 4 we have quashed the assessment order itself, the additions questioned by the assessee by way of other grounds of the appeal do not survive and, therefore, do not require any adjudication. 20. In the result, the appeal of the assessee is allowed." 9. Therefore, in view of the above decision, the date of recording of the satisfaction will be the deemed date for the possession of the seized documents, which is 30.06.2022 in the present case and the date of search and six years period would be reckoned from this date i.e.30.06.2022. Therefore, there is merit in the submission of the assessee that the assessment year relevant for previous year in which search was conducted in the case of the assessee will be AY 2023-24 and the six assessment years immediately preceding the assessment year relevant for the previous year in which search was conducted for initiating proceeding u/s 153C of the Act will be AY 2018-19 to 2022-23. Therefore, respectfully following the decision of the cited case, it is held that in the present case, the assessment for AY 2021-22 should have been carried out by issuing notice u/s 153C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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