TMI Blog2017 (12) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... rch. Here in this case, return was filed on 27/9/2008 and time limit in terms of proviso to section 143(2) was on or before 30/9/2009, up to which notice under section 143(2) was mandatorily required to be served upon the assessee, in case the Assessing Officer wanted to vary the returned of income filed under section 139. It is trite proposition of law that if no notice has been issued in accordance to provisions of section 143(2), then no addition over and above the returned income can be made and this law has been well settled by various judgments including that of Hon'ble Supreme Court in the case of ACIT vs. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA] . We hold that addition made by the Assessing Officer in the impugned order is unsustainable being beyond the scope of assessment framed under section 143(3). Thus, on legal grounds, the appeal of the assessee is allowed - I.T.A. No.3179/DEL/2013 - - - Dated:- 28-11-2017 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER For The Appellant : Shri Salil Kapoor, Advocate For The Respondent : Shri Rachna Singh, CIT (DR) ORDER PER AMIT SHUKLA, J.M.: The aforesa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2008-09 after recording the satisfaction on 20/11/2009. The Assessing Officer in the impugned assessment order also mentions that notice under section 143(2) was issued on 20/11/2009 requiring the assessee to file its return of income. In response to the said notice, assessee vide reply/ letter dated 1/12/2009 stated that the return of income for assessment year 2008-09 has already been filed electronically on 27/9/2008. The copy of the acknowledgment of return of income was also filed before the Assessing Officer along with the said reply. From the events as noted by the Assessing Officer in the assessment order, following chronology of events can be culled out, which is relevant for the adjudication for legal grounds raised before us by the assessee:- Sl.No. Particulars Date 1. Date of search on B.L. Kashyap Sons Ltd, group companies (no search on Assessee) 19.02.2008 2. Return of income filed by the assessee u/s 139 27.09.2008 3. Order u/s 127 for transfer of case from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as 28/11/2009 and if that is the reference date, then the assessment order cannot pertain to the year of search and in that case such an assessment could have been passed only under section 153C. Once assessment itself has not been completed under section 153C, then the entire assessment gets vitiated. In support, he strongly referred and relied upon the judgment on the Hon'ble jurisdictional High Court in the case of CIT vs. RRJ Securities Ltd. In I.T.A. No 164, 175 to 177/2015, judgment dated 30/10/2015, wherein the Hon'ble High Court held that in the case of other persons covered under section 153C in terms of proviso therein, the reference date has to be construed as date of handing over of assets/documents belonging to the assessee to the Assessing Officer having jurisdiction over the assessee. In the absence of such date, then the recording of satisfaction under section 153C should be considered as reference date. The assessment for the period of six years has to be seen with reference to the date of recording of satisfaction by the Assessing Officer. He drew our specific attention to the finding and observation of the Hon'ble Court appearing in paragraphs 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... she relied upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Kapil Jain reported in 50 DTR 342 (Delhi), wherein the Hon'ble High Court has taken note of section 124(3) on such matters. On the issue of assessee s submission with respect to the contention that assessment year 2008-09 will fall within six assessment years pertaining to assessment covered under section 153C r.w.s. 153A and not to be reckoned as year of search whereby regular assessment under section 143(3) is to be made, she submitted that six assessment years pertaining to assessment under section 153C have to be reckoned in the same assessment years which is in respect of assessments to be made under section 153A. The reason being that, the concept of six assessment years are covered both in respect of section 153A and 153C by the same clause (b) of sub-section (1) of section 153A. The reference of the date of initiation of search in first proviso to sub-section (1) of section 153C is only limited and restricted to the purpose of abatement and not for any other purpose. In sum and substance, the contentions of the ld. D.R. as summarized by her in her written submission are as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue is already emanating not only from the order of ld. CIT (A) but also from the grounds taken by the assessee being ground No.4 before us, wherein the assessee had challenged that the ld. CIT (A) has erred in upholding the addition made by the Assessing Officer since the assessment order has not been passed as per provisions of section 153C. Thus, at the time of hearing itself we have made it clear that we are not entering into the admissibility of additional grounds, as the issue raised therein is already emanating from the original ground taken before us in Form No.36. 10. We have heard the rival submissions, perused the relevant material referred to before us at the time of hearing. The main legal issue which has been raised in the grounds of appeal and which has also been argued at length by both the parties are that:- * Firstly, whether the Assessing Officer under the law could have passed assessment order under section 143(3) by treating the assessment year 2008-09 as year of search; or under section 153C r.w.s. 153A whereby Assessing Officer is required to assess or reassess the total income of six assessment years immediately preceding assessment year in which searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or pertains to the assessee; or any information contained therein relates to a person (i.e. assessee) other than the person referred to in section 153A. If the Assessing Officer of the person searched, records such satisfaction , then the documents or assets seized or requisitioned is handed over to the Assessing Officer having jurisdiction over such other person and then the Assessing Officer has the jurisdiction to proceed to rope in the assessee under the provision of section 153C r.w.s 153A, by issuance of notice under section 153C/153A and will proceed to assess or reassess the income of other person , i.e., the person covered under section 153C in accordance to the provisions of section 153A. Once jurisdiction is assumed under section 153C in the case of other person , then all the provisions of section 153A have been made applicable. However, in terms of first proviso to section 153C, reference date for the purpose of construing the date of initiation of search in terms of second proviso to sub-section (1) of section 153A has been envisaged as reference to the date of receiving the books of account or documents or asset seized or requisitioned by the Assessing Officer hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It would follow that the six assessment years for which assessments /reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment year 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has different consequences. Like for instance in section 153 B the period of limitation for completion of regular assessment for the year of search and for the assessment falling in each of the six assessment years are different. Thus, in our humble opinion, assessment for assessment year 2008-09 should have been completed under section 153A read with 153C and not as regular assessment under section 143(3), by treating the A.Y. 2008-09 as year of search. 13. Now coming to the alternative argument of the ld. counsel for the assessee that in case regular assessment under section 143(3) is to be treated as valid assessment, then such an assessment itself is bad in law for the reason that no notice under section 143(2) has been served upon the assessee within the period of 12 months. The ld. CIT D.R. before us though has argued vehemently that such an issue of jurisdiction and challenge of non-service of notice under section 143(2) cannot be made post-completion of assessment, but could not provide any evidence or document on record that any notice under section 143(2) has been issued prior to 30/9/2009, which was the last date of service of notice under section 143(2). Here i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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