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2016 (8) TMI 731 - ITAT BANGALORE

2016 (8) TMI 731 - ITAT BANGALORE - TMI - Validity of proceedings u/s. 153C - Held that:- In the instant case, the AO has categorically recorded that during the course of search, the seized material relating to the assessee was found. Therefore, it cannot be said that no incriminating material was found during the course of search to initiate proceedings u/s. 153C of the Act. During the course of hearing, the ld. counsel for the assessee could not establish that there is no relevant incriminatin .....

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A NOs. 117/Bang/2015, 118/Bang/2015, 119/Bang/2015, 120/Bang/2015, 121/Bang/2015, 122/Bang/2015, 123/Bang/2015, 124/Bang/2015, 125/Bang/2015 - Dated:- 4-7-2016 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER For The Appellants : Shri S. Muthukrishnan, CA For The Respondent : Shri Jahanzeb Akhtar, CIT(DR) ORDER These are appeals preferred by the assessees against the respective order of the CIT(Appeals)-VI, Bangalore on the common grounds. I, however, for the sake of reference extract the grounds raise .....

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h in the case of the searched person i.e., M/s. PRATHIBHA JEWELLERY HOUSE, wherefrom the impugned proceedings resulting in the impugned order is made is bad in law as it is ultra-vires the provisions of Section 132[1][a], [b] and [c] of the Act and any seized material or asset alleged to have been seized, if any, belonging to the appellant during the course of the said search even for argument's sake would not clothe the learned A.O. the necessary jurisdiction to invoke the provisions of sec .....

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g absent, the invocation of the jurisdiction u/s.153C of the Act, by issuance of notice u/s.153C of the Act, is illegal and misconceived and therefore, is bad in law and requires to be annulled. 5. Without prejudice to the above, the learned A.O. not having furnished the basis or the reasons for the satisfaction derived by him to exercise the jurisdiction u/s.153C of the Act, for assumption of jurisdiction u/s.153C of the Act, the mere observation in the order that he recorded the satisfaction w .....

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on by the learned A.O. that it belonged to the appellant and it revealed escapement of income for initiation of action u/s.153C of the Act, having regard to the parity of the ratio of the decision of the Hon'ble Supreme Court in the case of CIT V. CALCUTTA KNITWEARS reported in 362 ITR 673. 7. Without prejudice to the above, when the appellant sought for the basis or the reasons for issuing the notice u/s.153C of the Act, and the learned A.O. not having furnished the reasons before he procee .....

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to obviate the cumbersome procedure before a notice u/s.148 of the Act, is issued to assess the income escaping assessment. The assessment made is violation to the principles of natural justice and requires to be annulled. 8. The learned CIT[A] is not justified in sustaining the addition made of ₹ 5,23,985/- as interest received u/s.244A of the Act on the refunds due for the year under appeal under the facts and in the circumstances of the appellant's case. 9. The authorities below fa .....

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to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234-A, 234-B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case and the levy deserves to be cancelled. 11. Without prejudice to the above, the learned A.O. ought to have given credit to the TDS, Advance-tax and taxes paid u/s.140A of the Act, if any, and after giving credit only to such payment, he ought to have calculated the interest if .....

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order for the refund of the institution fees as part of the costs. 2. In ITA No.117/Bang/2015, the assessee has raised on more additional ground that the assessment passed u/s. 153C r.w.s. 143(3) of the Income-tax Act, 1961 [ the Act ] is barred by limitation in terms of proviso to section 153C of the Act under the facts and circumstances of the appellant s case. Since the additional ground is legal in nature and goes to the root of the case, I admit the same and prefer to adjudicate it at the .....

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unt or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. 4. As per the provisions of section 153A(1), the Assessing Officer shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Meaning thereby the AO has jurisdiction to frame the assessment only with respect to the six assessment years immedia .....

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AO having jurisdiction over the assessee has received the material is 2011-12 and the relevant assessment year is 2012-13. Therefore, the relevant six assessment years preceding to the assessment year 2012-13 are upto A.Y. 2006-07. Therefore, the AO has no jurisdiction to frame the assessment for the AY 2005-06. 6. Per contra, the ld. DR contended that the AO has jurisdiction to frame the assessment over the impugned assessment year 2005-06. 7. Having carefully examined the relevant provisions .....

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is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer 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 othe .....

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with such six assessment years: 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 o .....

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ll be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person: 8. On a careful perusal of the aforesaid provisions of section 153A and section 153C, I find that the AO u/s. 153A or sec. 153C issued a notice to the assessee on account of search for framing assessment for six assessment years preceding to the assessment year relevant to previous year in which such search .....

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to previous year 2011-12 and the A.Y. 2012-13. Therefore, the assessment years for which the AO has jurisdiction to frame the assessments are from AY 2011-12 to AY 2006-07. Since in the impugned AY 2005-06 the AO has no jurisdiction to frame the assessment in terms of the aforesaid discussion, I hold that the assessment framed for AY 2005-06 over the assessee on account of search is not valid and I therefore quash the assessment framed consequent to the search u/s. 153C of the Act. 9. In the rem .....

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hich the CIT(Appeals) has categorically held that satisfaction was recorded by the AO having jurisdiction over the searched person. In response thereto, the ld. counsel for the assessee has agreed that satisfaction was recorded, but it was not confronted to the assessee. On this issue, a specific query was also raised to the ld. counsel for the assessee with regard to the obligation of the Revenue to confront or supply a copy of the satisfaction note recorded by the AO having jurisdiction over t .....

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search belongs to the third person. But there is no requirement under law that the copy of the said satisfaction is to be supplied to the assessee for his comments. 11. In the instant case, nothing is placed on record to establish that satisfaction was never recorded. Therefore, I am of the view that since satisfaction has been recorded by the AO having jurisdiction over the searched person, there is no infirmity in the initiation of the proceedings u/s. 153C of the Act. 12. The ld. counsel for .....

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he course of search. In order to substantiate these facts, the ld. DR has invited my attention to the order of the AO in which he has recorded that during the course of search, books of account and documents marked A/SNS, A/PJH and A1/SNM were seized u/s. 132(8) of the Income-tax Act and the seized material contained documents belonging to the assessees. In the seized material, the facts relating to receipt of interest on refund of income tax was found and during the course of assessment proceed .....

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t the satisfactory note of the AO having jurisdiction over the searched person is required to be supplied to the assessee and that without the incriminating evidence found during the course of search, assessment proceedings u/s. 153C cannot be initiated. On a careful perusal of this judgment, I do not find any such type of findings of the Hon ble High Court. The Hon ble High Court has reiterated the legal position that before initiating the proceedings u/s. 153C of the Act, the AO having jurisdi .....

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