TMI Blog2015 (10) TMI 1760X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 months period ends on 31.12.2008. Therefore, the assessment was required to be framed u/s 153A of the Act on or before 31.12.2008. However, in the present case, the assessment has been framed on 24.12.2009, therefore the assessment framed was barred by limitation and deserves to be quashed as invalid - Decided in favour of assessee. - ITA Nos. 3158 to 3162/Del/2011, CO Nos. 265 to 269/Del/2011 ITA No s. 3167 to 3170 /Del/2011 - - - Dated:- 6-10-2015 - Sh. N. K. Saini, AM And Sh. A. T. Varkey, JM ITA Nos. 3167 to 3170/Del/2011, CO Nos. 270 to 273/Del/2011, ITA Nos. 3173 to 3177/Del/2011, CO Nos. 282 to 286/Del/2011, ITA No. 5325/Del/2013 , CO No. 1/Del/2015, ITA No. 4753/Del/2011, CO No. 227/Del/2012, ITA Nos. 1682 1683/Del/2012, ITA Nos. 5024 5025/Del/2011 For the Petitioner : Sh. Rajive Saxena Smt. Sumangla Saxena, Advs. For the Respondent : Sh. Ramesh Chandra, CIT DR ORDER Per Bench: These appeals by the department and the appeals cross objections by the assessee are directed against the orders of the ld. CIT(A)-I, New Delhi as per following details: Appeals filed by Department Cross Objections filed by Assessee Date of CIT(A) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attributable to such trading income is whether justifiable and permissible by law. 5. Because the ld. Lower authorities have ignored the facts and evidences supplied to them and made the addition of ₹ 1,41,068/- being the interest income that was derived from deposits made for obtaining bank guarantees in favour of government authorities, is whether permissible not to be included in making computation of exemption u/s 80IA of the Act as the lower authorities as well as Hon ble CIT(A) has erred in appreciating the facts. 6. The respondent craves leave for addition, modification, alteration, amendment of any of the cross objection. 4. The assessee also raised an additional ground which reads as under: That assessment made u/s 153A is barred by limitation as they were required to be completed by 31.12.2008 as per section 153B of the Income-tax Act while the same was made in December 2009. 5. During the course of hearing the ld. Counsel for the assessee requested for admission of the additional ground by stating that it is a purely legal ground and no fresh investigation is required, therefore, the same is to be admitted. The reliance was placed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes crossobjection and an appeal shall be treated at par and so there is no difference in so far as raising additional ground is concerned-to be taken in the appeal or in the crossobjection. In this regard he cited following decisions.- CIT Vs. New India Assurance Company Ltd 141 ITR 367 (Bom.) CIT Vs. Purvanchal Baribahan Goshti 234 ITR 663 (Cal.) 4.1 The Ld. AR submitted further that when question of law arises even though the same was not raised before the authorities below and for the first time it was raised before the Tribunal, the Tribunal is empowered and have jurisdictional to examine the same. In support, he placed reliance on the following decisions:- NTPC Ltd. Vs. CIT 229 ITR 383 (SC) Jute Corporation of India Vs. 187 ITR 688(SC) 4.2 The Ld. AR submitted that in the present case an additional ground has been raised in the cross-objections on the plea of limitation as the assessments are barred by limitation. He submitted that the issue pertaining to limitation is a question which can be taken at any point of time before the Bench during the pendency of the litigation in this regard. He placed reliance on the following decisions:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at question before the Tribunal for the first time, so long as the relevant facts are on record on respect of that item. We do not see any reason to restrict the power of the Tribunal u/s 254 only to decide the ground which arise from the order of the Commissioner of Incometax (Appeals). Both the assessee as well as the department have a right to file an appeal/crossobjections before the Tribunal. We fail to see why the Tribunal should be prevented from considering questions of law arising in assessment proceedings although not raised earlier. 6.1 In its earlier decision in the case of Jute Corporation of India Ltd vs. CIT(Supra), the Hon'ble Supreme Court has been pleased to hold as under:- The view that the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) takes too narrow a view of the powers of the Appellate Tribunal (vide, e.g., CIT Vs. Anand Prasad [1981] 128 ITR 388 (Delhi), CIT Vs. Karamchand Permchand P. Ltd. [1969] 74 ITR 254 (Guj) and CIT Vs. Cellulose Products of India Ltd. [1985] 151 ITR 499 (Guj) [FB]). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court and the decision of the Coordinate Bench in the aforesaid referred to order, admit the additional ground vide which the assessee contended that the assessment made u/s 153A is barred by limitation as it was required to be completed by 31.12.2008 as per Section 153B of the Income Tax Act, 1961 (hereinafter referred to as the Act) while the same was framed in December 2009. 9. Facts of the case in brief are that the assessee filed the return of income on 31.03.2003 declaring an income of ₹ 12,14,301/- which was processed u/s 143(1) of the Act at the returned income. Later on, search seizure operation was conducted u/s 132 of the Act on 21.03.2007 in Suyra Vinayak Group of cases and the assessee is one of the Group Companies which is headed by Sh. Sanjay Jain and his brother Sh. Rajiv Jain, resident of I-42, Ashok Vihar, Phase- I, New Delhi. The main allegation against this group was that they have taken a large number of accommodation entries in various group companies by paying cash to the various entry operators. The AO issued the notice u/s 153Aof the Act on 16.01.2008 to the assessee requiring it to file the return of income in the prescribed form. In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... search action took place on 15.05.2007, no material was seized rather the jewellary already seized on 22.03.2007 was released. It was submitted that the issue is covered in favour of the assessee vide order dated 30.05.2014 of this Bench of the Tribunal in ITA Nos. 1291 to 1297/Del/2011 and CO Nos. 131 to 137/Del/2011 for the assessment years 2001-02 to 2007-08 in the case of M/s J. H. Finvest Pvt. Ltd. which belongs to the same group to which the assessee belongs. Copy of the said order was furnished which is placed on record. It was emphasized that on 15.05.2007 practically no fresh search took place because nothing was seized except one part of jewellary of Smt. Neena Jain which was valued on 21.03.2007 and all other jewellaries which were earlier seized were released. Therefore, practically the search was concluded on 22.03.2007 when the Panchnama was drawn. As regards to the objection of the ld. CIT DR that the Cross Objections were not filed within stipulated time. It was submitted that as per the provision contained in sub-Section 4 of Section 253 of the Act. It is specifically provided that the Cross Objection can be filed within 30 days after receiving the memo of appeal f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The ld. CIT DR further submitted that the issue relating to the jurisdiction is based on the factual aspect and it is not a legal issue. He pointed out that in earlier decision of the ITAT, the provisions of Section 124(3) were not considered, which provides that after the finalization of the assessment proceedings it is not open to the assessee to challenge the jurisdiction of the AO to assess it. Therefore, the case relied by the ld. Counsel for the assessee is distinguishable on facts. The ld. CIT DR vehemently argued that the issue relating to limitation was neither raised before the AO or before the ld. CIT(A). Therefore, it cannot be raised by way of additional ground particularly when the ground was not taken during the course of First Appellate proceedings before the ld. CIT(A). The reliance was placed on the following case laws: Sardara Singh Vs Gulwant Kaur AIR 1991 (NOC) I P H DCIT Vs Sandip M. Patel (2012) 22 Taxman.com 288 (Ahd.) Jute Corporation of India Vs CIT 187 ITR 688 (SC) CIT Vs Kanpur Coal Syndicate 53 ITR 225 (SC) Adl. CIT Vs Gurjargravures P. Ltd. 111 ITR (SC) Smt. Sohani Devi Jain Vs ITO 109 ITR 130 (FB Gau) UOI Vs M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch concluded on 22.03.2007 because on 15.05.2007 nothing was found when restraint order was revoked and panchnama was drawn. As regards to the time limit for completion of assessment u/s 153A of the Act, the relevant provisions contained u/s 153B are relevant which read as under: 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 [sub-section (1) of] Section 153A, within a period of two years from the end of the financial year in which the last of the authorisations for search under Section 132 or for requisition under Section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under Section 132 or requisition is made under Section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under Section 132 or for requisition under Section 132A was executed : [Provided that in case of other person referred to in Section 153C, the period of limitation for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l/2011 for the assessment years 2001-02 to 2006-07 in the case of J. H. Finvest Pvt. Ltd. Vs ACIT. The said company also belongs to the same group to which the assessee belongs. In the said order dated 30.05.2014. The relevant findings have been given in paras 10 to 10.5 which read as under: Considering the above submission if the date 23/3/2007 is taken as the date of authorization, executed as per Section 153B of the Act then the AO was required to frame the assessment within 21 months from the date from the end of the financial year in which last of the authorization was executed as per Section 153B. As per this provision, the AO had to complete the assessment by 31/12/2008 in the present case, however, the assessment u/s 153A/153C have been completed on 24-12-2009/ 31/12/2009. It is thus apparent that the assessment U/S 153A or 153C on 24/12/2009 or 31/12/2009 have been framed beyond 21 months from the date from the end of the financial year in which last of the authorization was executed as per Section 153B. 10.1. Having gone through the relevant provisions of the I.T Act, it is pertinent to mention over here that assessment/reassessment in search cases is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er such other person, whichever is later. 10.3. The 'authorization' mentioned in Section 153B shall be deemed to have been executed when the last panchnama is drawn in the case of search or on the date when the books of accounts/ other documents/ assets are actually received in the case of requisite u/s 132A as per Explanation (2) to Section 153B. The provisions of Section 153B are more or less similar to the provisions of Section 158 BE of the Act. Therefore, the decisions rendered with reference to the provisions of Section 158 BE would be relevant while deciding the issue of limitation u/s 153B. It would be also important to understand the scope of the expression Panchnama . Panchnama has not been defined in the Act. The provisions of the Code of Criminal Procedure, 1973 ('Cr. PC') relating to search and seizure have been made applicable to the searches and seizure under sub-section (1) and sub-section (1A) of Section 132 of the Act by virtue of sub-section (13) of section 132. Even the relevant provisions relating to searches and seizure in Cr.P.C do not define the word Panchnama . Only a format is provided in which panchnama is to be prepared. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1/7/1995, that a restraint order does not amount to seizure. Therefore, by passing a restraint order, the time-limit available for framing of the order cannot be extended. In the case of B. K. Nowlakha ors Vs. UOI 192 ITR 436 (Del), the search was conducted on 11/2/91 in the course of which certain unexplained assets including antique pieces were found. No seizure was made on that date but order of restraint was passed u/s 132(3) of the Act which was lifted on 9/4/91. The question before the court was whether such order was valid one so that period of limitation could be extended for the purpose of section 132(5) of the Act. The Hon'ble Court answered the question in favour of the assessee by observing as under: Coming to the facts of the present case, we find that the restraint orders which have been issued u/s 132(3), from time to time, suffer from two infirmities, firstly, for the reasons stated in the reply affidavit, which are also borne out from the Department' record, it cannot be said that it was not practicable to effect seizure. In other words, the conditions necessary for the exercise of the jurisdiction u/s 132(3) did not exist. Secondly, we fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except lifting the order. Therefore, the order u/s 132(3) was invalid in view of Bombay High Court judgment in the case of Sandhya Naik (supra). Similar view has been taken by the tribunal in the case of DCIT vs. Adolf Patric Pinto 100 ITD 191 (Mum), Sarb Consulate Marine Products 97 ITD 333(Del). In the case of V. L. S. Finance Ltd. Vs CIT 289 ITR 286 (Del), a search warrant was issued and search was conducted on 22/6/98. However, due to voluminous record, search had to be conducted again and again till 5/8/98 when the last panchnama was prepared. The block assessment remained pending till 29/6/2000 when order for special audit u/s 142(2A) was passed which was allegedly not received by the assessee by 30/6/2000. The assessee challenged the said order in the writ petition before the Hon'ble Delhi High Court. Later on, the petition was amended to contend that assessment proceedings had become time barred u/s 158BE of the Act since period of limitation should be counted from the end of the month of June 98 in as much as search could not be validly continued till 5/8/98 on the basis of single authorization. The court found that the said authorization was revalidated from ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rch, as there could be more than one panchnamas in respect of same authorization. The crux of the matter remains that the limitation shall start from the end of the month in which last of the authorization is executed. We do not agree with the contentions of the Ld. CIT DR that all the authorizations are to be treated as common kitty and the last date of any of the authorizations should be taken as starting point for the purpose of limitation. The section 158BE clearly stated that the limitation will start from the end of the month in which last of the authorizations was executed. It pre-supposes that there can be a situation where more than one authorizations for search U/S 132 are issued and the execution of the last of the such authorizations is to be considered as the starting point for the purpose of limitation. It dearly refers to the last authorization in case where more than one authorizations are issued. As such it cannot be held that all the authorizations issued should be treated as a common kitty and anyone of the authorization which is executed at the end should be considered for the purpose of limitation. 10.4 It would, thus, be clear that where various a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, in view of the aforesaid discussion and respectfully following the order dated 30.05.2014 in the case of J. H. Finevest Pvt. Ltd. Vs ACIT (supra) allow the additional ground of the Cross Objection in assessee s favour. Since we have allowed the legal issue in favour of the assessee and quashed the assessment framed by the AO. Therefore, no findings are being given on other issues raised by the department or by the assessee on merit. In other CO s i.e. CO Nos. 266 to 269/Del/2011, the facts are similar therefore our finding given in CO No. 265/Del/2011 shall apply with the same force. Accordingly, the appeals of the department in ITA Nos. 3158 to 3162/Del/2011 are dismissed and the CO Nos. 265 to 269/Del/2011 filed by the assessee are allowed. 19. In the case of M/s Surya Vinayak Industries Ltd. (Amalgamated Company of amalgamating company M/s Rim Zim Valley Products Pvt. Ltd. in ITA Nos. 3167 to 3170/Del/2011 preferred by the department and CO Nos. 270 to 272/Del/2011 by the assessee, the facts are similar, the assessee also moved appeal in ITA No. 1682/Del/2012 for the assessment year 2002-03 and raised the additional ground in the similar manner as in the CO s, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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