TMI Blog2013 (8) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced by DR, the contention of assessee was justified that in this case, the AO has not recorded any satisfaction that any seized document or material belongs to any person other than the person searched - therefore no infirmity in the order of the CIT(A) in quashing the proceedings u/s 153C. The AO did not make any addition against the assessee on the basis of any adverse material. The AO passed the assessment order u/s. 153C making addition on account of determination of Annual Letting Value u/s. 23(4) of the property at 7% of investments only on notional basis and for that, no incriminating material was found against the assessee. Therefore, all the additions made in the assessment orders u/s. 153C would stand deleted. In favour of assessee. - ITA No. 369, 339, 340 & 341/Agra/2012 - - - Dated:- 31-5-2013 - Shri Bhavnesh Saini And Shri A. L. Gehlot,JJ. For the Appellant : Shri Pankaj Gargh, Advocate For the Respondent : Shri Waseem Arshad, Sr. D.R. ORDER Per Bhavnesh Saini, J.M. All the above appeals by the same assessee are directed against the different orders of ld. CIT(A)-I, Agra dated 05.03.2012 30.01.2012 for the assessment years 2004- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income relating to the assessee has been found during the course of search. The action u/s. 153C of the IT Act in the case of another person can only be taken if any incriminating material reflecting undisclosed income is found during the course of search. In the case of assessee since no material found during the course of search, against the assessee, therefore, notice issued u/s. 153C is invalid and consequent assessment made u/s. 153C read with section 143(3) of the IT Act deserves to be quashed. The assessee relied upon certain decisions in support of her contention. The ld. CIT(A), however, rejected the contention of the assessee and decided the issue against the assessee. The appeal of the assessee on merit of determination of Annual Letting Value was also dismissed. 5. The ld. counsel for the assessee reiterated the submissions made before the authorities below and submitted that no search has been conducted in the name of the assessee u/s. 132 of the IT Act, therefore, the proceedings u/s. 153C have been initiated and the assessment orders are also passed u/s. 153C of the IT Act. He has submitted that since no material is found against the assessee during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or requisition is made : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such 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 section pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. Explanation.--For the removal of doubts, it is hereby declared that,-- (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 153B. (1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,-- (a) in respect of each assessment year falling within six assessment years referred to in clause (b) of section 153A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t an order under sub-section (3) of section 92CA has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the provisions of clause (a) or clause (b) of this sub-section shall, notwithstanding anything contained in clause (i) of the second proviso, have effect as if for the words two years , the words thirty three months had been substituted: Provided also that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2005 or any subsequent financial year and during the course of the proceedings for the assessment or reassessment of total income in case of other person referred to in section 153C, a reference under sub-section (1) of section 92CA-- (i) was made before the 1st day of June, 2007 but an order under sub-section (3) of section 92CA has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the period of limitation for making the assessment or reassessment in case of such other person shall, notwithstanding anything contained in clause (ii) of the second pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. (2) The authorisation referred to in clause (a) and clause (b) of sub- section (1) shall be deemed to have been executed,-- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; (b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer. 153C. (1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery 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 section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , provides for taking recourse to a block assessment in terms of section 158BC in respect of any other person, the conditions precedent wherefor are : (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person; and (iii) the Assessing Officer has proceeded under section 158BC against such other person. The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of the Act. It was further held - Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated February 6, 1996, satisfies the requirements of section 158BD of the Act. The said notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the relevant years would get reopened irrespective of whether any incriminating material is found or not in relation to a particular AY. In other words, even if the material found shows the concealment in only one year, all the completed assessments falling in the period of six AYs preceding the year of search will get reopen. There was an identical provision contained in Chapter XIV-B of the Act, which provides that where after 30th June, 1995, a search is initiated u/s 132 or books accounts etc. are requisitioned u/s 132A, the AO shall proceed to assess undisclosed income in accordance with provisions of Chapter XIV-B for making assessment for block period but in the block assessments, the question of assessing an undisclosed income in relation to any AY was restricted to the incriminating material on undisclosed assets discovered during the course of search and seizure or in the post search inquiry the material was relatable to such evidence discovered in search. The income assessed in the regular assessments was not to be considered in the block assessments. However, in the present provisions u/s 153A, there is no such provision provided in the Act. Once warrant of authorizat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, lay down a scheme for assessment in case of search and requisition. Section 153C which is similarly worded to section 158BD of the Act, provides that where the Assessing Officer is satisfied that any money, bullion, jewellery 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 section 153A he shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuation article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under section 158BD if the Assessing Officer was satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he could proceed against such other person under section 158BC. Thus a condition precedent fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or material in the assessment orders on the basis of which, additions on merit have been made. Therefore, the conditions of sec. 153C as noted above are also not satisfied in this case. We, therefore, do not find any infirmity in the order of the ld. CIT(A) in quashing the proceedings u/s 153C of the IT Act. 9.7 Considering the above discussion, it is clear that the ld. CIT(A) on perusal of the record found that the AO has nowhere recorded any satisfaction as required u/s. 153C of the IT Act. Due to the same reason, the same was not communicated to the assessee. The issue is, therefore, squarely covered by the judgments noted above and therefore, the decision in the case of Digvijay Chemicals (supra) cannot be given preference. We, therefore, do not find any infirmity in the order of the ld. CIT(A) in quashing the assessment order u/s. 153C of the IT Act. In the result, ground No. 1 of departmental appeal fails and is dismissed. Since we have confirmed the quashing of proceedings u/s. 153C of the IT Act, therefore, all additions made in the assessment order would stand deleted. However, we find that similar issues are coming up in the subsequent assessment years, therefore, we ..... 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