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TMI Blog2012 (6) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... 1), Amritsar, having jurisdiction upon Shri Arun Kumar Kapoor, the assessee to proceed against him by issue of notice under s. 153C. 3. On the facts and in the circumstances of the case the learned CIT(A) has erred in not appreciating the fact that the only requirement for initiating proceedings under s. 148 was to record reasons to believe on the basis of material available before him in the form of the report of the Dy. CIT, CC-22, New Delhi, supported by other documents. This requirement has been fulfilled and has been upheld by learned CIT(A), Amritsar, vide para 6 of the order. 4. On the facts and in the circumstances of the case the learned CIT(A) has erred in not appreciating the fact that the seized documents relied (upon) by the Dy. CIT, CC-22, New Delhi, in his report forwarded to ITO, Ward 1(1), Amritsar which is the plank of reasons under s. 148 were pertaining to the deal of land belonging to M/s. P.R. Infrastructure Ltd. by Shri Arun Kumar Kapoor. Therefore, the seized documents as referred to in the report of Dy. CIT, CC-22, New Delhi were in no way containing any direct information regarding transfer of shares of the assessee and suppression of capital gain thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, recorded the reason and issued notice under s. 148 which was served on the assessee on 24th Feb., 2008. The assessee was one of the directors in M/s. P.R. Infrastructure Ltd. holding 10,000 shares. This company was incorporated on 5th April, 2005 and purchased an agricultural land measuring 10,618 sq. yards at Batala Road, Amritsar for a total consideration of Rs. 79,63,350 on 14 July, 2005. The assessee sold 10,000 shares of M/s. P.R. Infrastrucure Ltd., an unlisted company and the face value of Rs. 10 each to M/s. Today Homes & Infrastructure (P.) Ltd. for a total consideration of Rs. 1,00,000 on 6th Sept., 2005. These shares had been acquired earlier by the assessee at the face value only. As per the report of Dy. CIT, Central Circle-22, New Delhi, M/s. P.R. Infrastructure Ltd. has transferred its total shareholding of 60,000 shares at the face value of Rs. 10 to M/s. Today Homes & Infrastructure Ltd. and its group family members and the company was taken over by M/s. Today Homes & Infrastructure (P.) Ltd. for Rs. 6 lacs only though the value of land owned by the company was of Rs. 12.25 crores as per papers seized during search and seizure action. Thus, the market value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed, the assessment would not be valid and such defect was jurisdictional in nature and would not be cured by s. 292B of IT Act. The Hon'ble Supreme Court in this case of Manish Maheshwari v. Asstt. CIT [2007] 208 CTR (SC) 97 : [2007] 289 ITR 341 (SC) has held that if procedure laid own in s. 158BD is not followed, the block assessment proceedings would be illegal. The provisions of s. 153C are exactly similar to the provisions of s. 158BD under block assessment proceedings. As such the decision of the Supreme Court referred to above shall apply mutatis mutandis to the provisions of s. 153C of the Act as well. Keeping in view the decision of Supreme Court in the case of Manish Maheshwari (supra) the assessment order passed by the AO by resorting to the provisions of s. 148 of the Act is invalid and without jurisdiction. The AO has grossly erred in not issuing notice under s. 153C and in not making assessment under s. 153C r/w s. 153A of the Act. The provisions of s. 153C specifically exclude the applicability of provisions of s. 148 of the Act. Accordingly, the order passed by AO is quashed. The additional ground taken up by the appellant on the issue of not initiating the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re initiated on the basis of the information received from Dy. CIT, Central Circle II, New Delhi. He, therefore, submitted that quashing of the assessment is perverse. It was also submitted by Shri Tarsem Lal, the learned Departmental Representative that in the case of Dr. Balwinder Singh (supra), relief had been allowed by the Tribunal in ITA No. 381/Asr/2007 qua being a shareholder and not a director. It skipped the notice of the Tribunal that Dr. Balwinder Singh is a director. Therefore, the ratio of the Tribunal's order in the case of Dr. Balwinder Singh (supra) cannot be applied to the case of the assessee. 6. Shri Padam Behl, chartered accountant, the learned counsel for the assessee, reiterated the submissions made before the lower authorities. 7. We have heard the rival submissions and have perused the relevant material available on record. 7.1 The contention of the learned Departmental Representative is contrary to the facts narrated in the assessment records. From paras 2.1, 3.1.1(a) and (b) and 3.1.3 of the assessment order, it is crystal clear that incriminating documents relating to the assessee were found during the course of search. Paras 2.1, 3.1.1(a) and (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized. It is also a matter of record that the Dy. CIT, Central Circle-22, New Delhi intimated the AO of the assessee about seizure of certain documents pertaining to the assessee during search and enclosed copy of those documents requesting him to take appropriate action under s. 153C/148 of the Act. It is after that that during the course of appellate proceedings before the CIT(A) the assessee took an additional ground of appeal to the effect that the reassessment proceedings initiated by the AO under s. 148 are illegal and void ab initio. In the instant case, the learned CIT(A) has correctly observed that the AO should have issued notice under s. 153C of the Act and should have framed the assessment under s. 153C r/w s. 153A of the Act. Sec. 153C of the Act reads as under : "153C. Notwithstanding anything contained in s. 139, s. 147, s. 148, s. 149, s. 151 and s. 153, where the AO is satisfied that any money, bullion or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in s. 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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