TMI Blog2018 (8) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ments/ 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. Therefore, the six assessment years under section 153C of the Act in the case of the assessee-firm would be A.Ys. 2001-2002 to 2006-2007. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has not done so and passed the order under section 143(3) of the I.T. Act. Therefore, the issue of notice under section 153C and recording of satisfaction being mandatory have not been complied by the A.O. Therefore, conditions of Section 153C are not satisfied in the present case - ITA.Nos.1614, 1615, 1616, 1617, 1618 & 1619/Del./2011 And ITA.Nos.484/Del./2014, 760/Del./2016 And 485/Del./2014 - - - Dated:- 30-7-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI O.P. KANT, ACCOUNTANT MEMBER For The Assessee : Dr. Rakesh Gupta, Shri Somil Agarwal And Shri Deepesh Garg, Advocates For The Revenue : Ms. Parmita Tripathi, CIT-(DR) ORDER PER BENCH : This Order shall dispose of all the appeals filed by the same assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esponse to the notice under section 153C, the assessee-firm, filed its return of income on 16.06.2006 declaring a total income of ₹ 4,26,750/- from house property and business. The A.O. issued statutory notices time to time. The A.O. on the basis of the seized paper noted that assessee-firm has earned commission and profit from sale of the plots. It was noted that assessee-firm entered into an agreement with M/s. Indo American Electricals Ltd., for sale of the land at village- Jharsentli at a commission of ₹ 2% of the sale consideration. This commission has been received partly by cheque and partly through cash. The assessee-firm explained before A.O. that entries in the seized paper are tentative projection which were not accepted by the A.O. The A.O. noted that commission received through cheque is recorded by the assessee-firm in its books of account, but cash payment of ₹ 1,23,136/- have not been disclosed in the books of account, therefore, it remain undisclosed commission. Similarly, it was found that documents disclosed that an amount of ₹ 22,60,800/- was earned as profit on sale of the plot, which have not been reflected in the books of account. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is no question of earning any profit. The assessee-firm relied upon several decisions in support of this contention. The Ld. CIT(A), however, confirmed the additions and dismissed the appeal of assessee-firm. 7. The assessee in the present appeal has similarly challenged the assumption of jurisdiction by A.O. under section 153C of the I.T. Act and additions on merit. Learned Counsel for the Assessee reiterated the submissions made before the authorities below and submitted that A.O. has wrongly recorded in the assessment order that notice under section 153C was issued on 08.05.2006 because the satisfaction note was recorded in the case of the assessee on 22.02.2007. He has submitted that since no satisfaction note have been recorded by the A.O. of the person searched, therefore, assumption of jurisdiction under section 153C is illegal and void abinitio. He has filed copy of the satisfaction note dated 22.02.2007 which reads as under : Name and address of the Assessee : M/s. Reliance Estate Agency, Neelam Chowk, NIT, Faridabad. Assessment years 2000-01 to 2005-06 Status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e RTI reply dated 10.04.2017 by DCIT, CC-1, Faridabad, in which, it was intimated that no satisfaction under section 153C have been recorded in the case of the person searched Shri S.D.Kathuria. He has relied upon Circular No.24/2015 dated 31.12.2015, in which, the Board has accepted the view of several High Courts, in which, it was held that provisions of Section 153C of the I.T. Act are substantially similar/paramateria to the provisions of Section 158BD of the I.T. Act. Therefore, the above guidelines of the Hon ble Supreme Court applied to proceedings under section 153C of the I.T. Act for the purpose of assessment of income of other than searched person. It was clarified that even if the A.O. of the searched person and the other person is one and the same, then also he is required to record his satisfaction as has been held by the Courts. Learned Counsel for the Assessee relied upon the decision of the Hon ble Delhi High Court in the case of Pr. CIT vs. N.S. Software (Firm) 403 ITR 259 in which in para-23 it was held as under : 23. This court concurs with the impugned order. In the present case, the Ld. AO has not explained steps taken by him to determine that the seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 153C by the A.O. of the searched persons i.e., Shri Navneet Jhamb and Shri Shri S.D.Kathuria, therefore, assumption of jurisdiction under section 153C is illegal and bad in law. Learned Counsel for the Assessee also relied upon the following decisions. 7.5. Order of Delhi ITAT in the case of DSL Properties Pvt. Ltd., vs. DCIT (2013) 60 SOT 88 Delhi) (URO), in which it was held as under : Recording of satisfaction by A.O. of person searched that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized belong to person other than person searched is a prerequisite for initiating action under section 153C. 7.6. Judgment of Hon ble A.P. High Court in the case of CIT-III, Hyderabad vs. Settys Pharmaceuticals Biologicals Ltd., (2015) 57 taxmann.com 282 (A.P.) in which it was held as under : Recording of satisfaction of A.O. is a pre-condition for invoking jurisdiction under section 153C. 7.7. Judgment of Hon ble Allahabad High Court in the case of CIT (Central) vs. Gopi Apartment (2014) 365 ITR 411 (All.) in which it was held as under : Recording of satisfaction by AO of person searched is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Assessee is only satisfaction available on record in the case of the assessee-firm. The Ld. CIT-D.R. submitted that no other satisfaction under section 153C have been recorded or placed in the assessment records of the persons searched i.e., Shri Navneet Jhamb and Shri Shri S.D.Kathuria. The Ld. CITD. R. filed copies of the order sheet of the A.O. from the assessment records produced in the Court from the record of both the persons searched and the assessee-firm which are taken on record. The Ld. CIT-D.R. submitted that A.O. of the assessee-firm and the persons searched are the same. He, as a A.O. of the searched persons, recorded satisfaction qua the other person (assessee) for issuing notice under section 153C of the I.T. Act to the assessee-firm on 22.02.2007 for A.Ys. 2001- 2002 to 2005-2006 and issued notices under section 153C of the I.T. Act to the assessee-firm on 22.02.2007. The A.O. also mentioned in the order sheet that reasons to issue notice under section 153C was placed on record. The action of the A.O. as above, is correct as per Section 153C of the I.T. Act and the CBDT Circular No.24/2015 which stipulates the basic requirements for initiating proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n bare perusal and despite of being given several opportunities no submission on merits of case was made by assessee, assessment order passed under said section to make additions was justified. 8.4. Judgment of Hon ble Delhi High Court in the case of PCIT vs. Super Malls Pvt. Ltd., (2017) 393 ITR 557 (Del.), in which it was held as under : Where Hon ble Delhi High Court held that where Assessing Officer had issued satisfaction note under section 153C after satisfying himself with contents of documents seized, Tribunal could not declare it as invalid on hyper technical ground of incorrect terminology used in said note. Satisfaction note recorded u/s 153C in respect of the assessee, being the third party, could not be said to be invalid on a hyper technical ground by interpreting the expression belonging to too literally 8.5. Judgment of Hon ble Delhi High Court in the case of PCIT vs. M/s. Nau Nidh Overseas Pvt. Ltd., in ITA.No.58 of 2017 Dated 03.02.2017, in which it was held as under : Where Hon ble Delhi High Court held that satisfaction recorded by the Officer issuing notice u/s 153C is sufficient if the AO of the searched person and third party are th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able article or thing or books of account or document, and thereafter, the Assessing Officer of such other person shall proceed against the said person to assess or reassess his income in accordance with the provisions of section 153A of the I.T. Act, 1961. Therefore, recording of satisfaction by the Assessing Officer of the person searched is a condition precedent for initiating action under section 153C of the I.T. Act. The Ld. CIT-D.R. during the course of arguments heavily relied upon the decisions of Hon ble jurisdictional Delhi High Court in the case of Ganpati Fincap Services Pvt. Ltd., Sheetal International Pvt. Ltd., (supra) and CBDT Circular No.24/2015. Learned Counsel for the Assessee also relied upon the same Circular of the Board and decisions of Hon ble Supreme Court in the case of Manish Maheshwari vs. ACIT (supra) and CIT vs. Calcutta Knitwears (supra) and decision of Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (supra). We may note that on the identical issue involved in the present appeal and the decisions relied upon by both the parties have been considered by ITAT, Delhi-D Bench in the case of ACIT, Central Circle-9, New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onducted by the Department on the assessee s business premises on 14.09.2010. The case of the assesseecompany was centralized and notice under section 153A of the I.T. Act was issued which was objected on the ground that no action under section 132 was initiated against the assessee. The Assessing Officer on finding this contention as correct, withdrew the notice dated 04.11.2011 issued u/s 153A of the I.T. Act, 1961. The Assessing Officer observed that during the course of the assessment proceedings u/s 153A in the case Shri Pramod Goel, it was noticed that a search and seizure operation under section 132 was conducted on 14.09.2010 at the residential premises of Shri Pramod Goel, Smt. Savita Goel and Sh. Ashish Goel at BN-33, East Shalimar Bagh, Delhi, wherefrom the documents belonging to the assesseecompany were found and seized which is Page No. 102 and 103 of Annexure A-l of Party V-2 is a copy of the Balance Sheet, Profit Loss account, pertaining to M/s Victory Accommodations Pvt Ltd. for the financial year ending 31.03.2010. On the basis of the above documents found during the course of search, the Assessing Officer recorded a satisfaction note on 27.02.2013 and issued a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances, the Assessing Officer shall handover to the Assessing Officer of such other person money, jewellery, bullion or other valuable article or thing or books of account or document, and thereafter, the Assessing Officer of such other person shall proceed against the said person to assess or re-assess his income in accordance with the provisions of section 153A of the I.T. Act, 1961. Therefore, recording of satisfaction by the Assessing Officer of the person searched that any money bullion, jewellery or other valuable article or thing or books of account or documents seized belonged to the person other than the person searched is a sine-qua-non for initiating action under section 153C of the I.T. Act, 1961. The Ld. CIT(A) in support of this interpretation of section 153C, relied upon the decision of Hon'ble Apex Court in the case of Manish Maheswari vs. ACIT another (2007) 289 ITR 341 (SC). He has also noted that the language of section 158BD and section 153C has similarity. Therefore, it is evident that the condition for recording satisfaction by the Assessing Officer of the person searched is present in both the Sections. To this extent, decision of Hon ble Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led for the assessment record of Shri Pramod Goel who was searched under section 132 on 14.09.2010. The A.O. of the searched person Shri Pramod Goel and A.O. of the other person i.e., assessee-company may be same, but, the above two entities are two different persons, therefore, A.O. is bound to carry-out such exercise and the A.O. of the person searched should have recorded satisfaction note during the course of assessment proceedings under section 153A in the case of Shri Pramod Goel in his file and after recording such satisfaction note in the file of Shri Pramod Goel that is the person searched, the same should be placed in the file of the assessee-company i.e., other person. The Ld. CIT(A) on perusal of the assessment record of Shri Pramod Goel found that such exercise of recording satisfaction note in the case under section 153A was not carried-out and no such satisfaction note was found recorded in the case of the person searched. It is, therefore, clear that no satisfaction note was found recorded in the file of Shri Pramod Goel, the person searched under section 132 and assessed under section 153A of the I.T. Act. Therefore, satisfaction note recorded in the case of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some other cases and not connected with the assesseecompany. The Ld. CIT(A) noted that A.O. did not issue notice under section 133(6) and no further enquiry was made. Therefore, addition on merit was also deleted. The appeal of assessee-company was accordingly allowed. 4. The Ld. D.R. relied upon the order of the A.O. He has submitted that Ld. CIT(A) has reproduced satisfaction note at page No.11 of the order. The balance-sheet and profit and loss account was seized during the course of search, which led to survey under section 133A in the case of the assessee-company. If the A.O. has used the material/evidence collected under section 133A and during the course of search in the case of Shri Tarun Goel, there is no restriction to use it under sections 153A and 153C regarding the same. Ld. D.R. relied upon decision of Hon ble Supreme Court in the case of CIT vs. Mukundray K. Shah 290 ITR 433. The Ld. D.R. relied upon Judgment of the Hon ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sheetal International Pvt. Ltd., dated 10.07.2017 in which decision of Hon ble jurisdictional Delhi High Court in the case of Ganapati Fincap Services Pvt. Ltd., vs. CIT dated 25.05 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, the Ld. D.R. submitted that the name of the parties tally with the additions. The entries were arranged by Shri Tarun Goel, Entry Operator, in whose case, addition have been confirmed. In case, A.O. has not conducted proper enquiry, the Ld. CIT(A) having co-terminus powers, should have exercised the same power by conducting further investigation into the matter and relied upon the decision of Hon ble jurisdictional Delhi High Court in the case of CIT-II vs. M/s. Jansampark Advertising And Marketing (P) Ltd., 375 ITR 373 (Del.) (HC). 5. On the other hand, Learned Counsel for the Assessee reiterated the submissions made before the authorities below. He has submitted that initially the A.O. initiated the proceedings against the assessee under section 153A of the I.T. Act and when it was found that no search have been conducted in the case of assessee, therefore, action under section 153A was dropped. The A.O, in the case of assessee-company recorded satisfaction under section 153C of the I.T. Act, which is illegal and bad in law and is not in conformity with Section 153C of the I.T. Act because no satisfaction note have been recorded in the case of the person searched i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h other person money, jewellery, bullion or other valuable article or thing or books of account or document, and thereafter, the Assessing Officer of such other person shall proceed against the said person to assess or re-assess his income in accordance with the provisions of Section 153A of the I.T. Act, 1961. Therefore, recording of satisfaction by the Assessing Officer of the person searched is a condition precedent for initiating action under section 153C of the I.T. Act. The Hon ble Supreme Court in the case of Manish Maheshwari vs. ACIT (2007) 289 ITR 341 (SC) in para-11 held as under : Condition precedent for invoking a block assessment is that a search has been conducted under Section 132, or documents or assets have been requisitioned under Section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under Section 132A or documents or assets have been requisitioned under Section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of Section 158BC in respect of any other person, the conditions precedents wherefor are : (i) Satisfaction must be recorded by the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that the satisfaction note could be prepared at any of the following stages : ( a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or ( b) in the course of the assessment proceedings under section 158BC of the Act; or ( c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/parimateria to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, may be brought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omponent was, therefore, collected over and above the sanctioned fees were matters which ought to have been gone into and there could, not be a general or vague satisfaction. The Tribunal was justified in setting aside the assessments. 6.5. The Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) held as under : Held, dismissing the appeals, (i) that the Tribunal permitted the assessee to raise the additional ground on the ground that it was a jurisdictional issue taken up on the basis of facts already on record, that under section 153C of the Act, incriminating material which was seized had to pertain to the assessment years in question, and that the documents which were seized did not establish any co-relation, document-wise, with these four assessment years. The Tribunal found that the material disclosed in the satisfaction note belonged to assessment year 2004-05 or thereafter. The Tribunal rightly permitted this additional ground to be raised and correctly dealt with the ground on the merits as well. The High Court was right in affirming this view of the Tribunal. Decision of the Bombay High Court in CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or books of account or documents seized or requisitioned belongs to or belong to a person other than the person referred to in section 153A. No material is produced before to show if any satisfaction was recorded by the Assessing Officer in that case that the material belongs to any person other than the person with respect to whom search was made under section 132. Department did not produce any material to show if any such satisfaction as required under section 153C was recorded by the Assessing Officer in the case of person searched. No material is produced in reference to above requirement. No material is also produced before to show that books of account or documents or assets seized had been handed over to the Assessing Officer having jurisdiction over such other person. In the absence of any adequate material produced by the department contention of the assessee was justified that in this case, the Assessing Officer had not recorded any satisfaction that any seized document or material belongs to any person other person searched. Since the revenue is in appeal, therefore, burden was upon them to prove that necessary ingredients of section 153C h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) (HC) (supra) observed that the two seized documents referred to in the satisfaction note in the case of each assessee are the trial balance and balance-sheet for a period of 05 months in 2010. In the first place, they do not relate to the assessment years for which the assessments were reopened in the case of both assessee s. Secondly, they cannot be said to be incriminating . Consequently, it was found that even the second essential requirement for assumption of jurisdiction under section 153C of the I.T. Act, was not met in the case of the two assessee s . 7. Considering the facts of the case in the light of submissions made by both the parties and finding of fact arrived by the Ld. CIT(A), we do not find any merit in the Departmental Appeal. The Ld. CIT(A) called for the assessment record of the assessee-company and found that A.O. has recorded the satisfaction note in the file of the assessee- company which is reproduced above in which the A.O. has referred to the seized paper i.e., balance sheet and P L A/c of the assessee-company ending 31.03.2010. The notice was issued on the same day when satisfaction note was recorded by the A.O. of the assessee i.e., other pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y so as to record any satisfaction note against the assessee-company. Thus, there is no reason to believe that A.O. of the searched person would have recorded any satisfaction note that any money, bullion, jewellery, or other valuable article or thing or books of account seized or requisitioned belongs or belonged to a person other than the person searched under section 153A. Therefore, conditions of Section 153C of the I.T. Act are not satisfied in this case. The issue is covered against the Revenue by Judgment of the Hon ble Supreme Court in the case of CIT vs. Sinhgad Technical Education Society (supra) and Order of the Tribunal in the case of assessee-company for A.Ys. 2009- 2010 and 2010-2011 (supra). The decisions relied upon by the Ld. D.R. are, therefore, not applicable to the facts and circumstances of the case as the same are clearly distinguishable. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) in holding that initiation of proceedings under section 153C of the I.T. Act are improper and bad in law. No interference is called for. Ground Nos. 1 and 2 of the appeal of the Revenue are accordingly dismissed. 8. As regards giving of no opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the person searched i.e., Shri S.D.Kathuria. The order sheets in the case of person searched i.e., Shri Navneet Jhamb and Shri Shri S.D.Kathuria are also placed on record by the CIT-D.R. in which the A.O. has nowhere recorded any fact of recording any satisfaction under section 153C on 22.02.2007. The order sheet in the case of the assessee-firm is also filed on record which, however, contains the entry on 22.02.2007 by the A.O. of the assessee-firm that notice under section 153C have been issued and reasons to issue notice under section 153C is placed on record. These facts clearly support our findings that no satisfaction note have been recorded under section 153C by the A.O. of the searched person. The identical issue have been considered by the Tribunal in the case of M/s. Victory Accommodations Pvt. Ltd., Delhi (supra), which squarely apply to the facts and circumstances of the case and the issue is covered in favour of the assessee-firm and against the Revenue by the aforesaid decision. It may also be noted here that in the satisfaction note it is nowhere recorded as to how the documents found during the course of search were incriminating in nature and to which assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on only. 10. In the result, ITA.No.1614/Del./2011 of Assessee is allowed. ITA.No.1615/Del./2011 to ITA.No.1618/Del./2011 A.Ys. 2002-2003 to 2005-2006. 11. These appeals of the assessee-firm are directed against the different Orders of the Ld. CIT(A)-1, Ludhiana, Dated 28.01.2011 for above assessment years. In these appeals also the assessee-firm similarly challenged the assumption of jurisdiction under section 153C of the I.T. Act. The Learned Representatives of both the parties submitted that the issue is same as have been considered and decided in A.Y. 2001-2002. The reasoning given in A.Y. 2001-2002 squarely apply to these assessment years as well. Following the same, we set aside the orders of the authorities below and quash the proceedings under section 153C of the I.T. Act. There is no need to decide the addition on merit. 12. In the result, ITA.No.1615/Del./2011 to ITA.No.1618/Del./2011 of the Assessee are allowed. ITA.No.1619/Del./2011 A.Y. 2006-2007 13. This appeal of Assessee has been directed against the Order of the Ld. CIT(A)-1, Ludhiana, Dated 28.01.2011, for the A.Y. 2006-2007. 14. The assessee-firm made a prayer for adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst Proviso to Section 153C of the I.T. Act provides that six assessment years for which assessments/reassessments could be made under Section 153C of the Act shall have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. Therefore, the six assessment years under section 153C of the Act in the case of the assessee-firm would be A.Ys. 2001-2002 to 2006-2007. He has submitted that the issue is covered in favour of the assessee-firm by the Judgments of Hon ble Delhi High Court in the case of CIT vs. RRJ Securities Ltd., (2016) 380 ITR 612 (Del.) (HC) and Pr. CIT vs.Sarwar Agency P. ltd., (2017) 397 ITR 400 (Del.) (HC). He has, therefore, submitted that assessment order is illegal and bad in law and liable to be quashed. 15. On the other hand, Ld. D.R. relied upon the orders of the authorities below and submitted that A.Y. 2006-2007 is an year of search, therefore, assessment order under section 143(3) have been correctly passed in this case. 16. We have considered the rival submissions. An identical issue was considered by ITAT, Delhi-A Bench in the case of M/s. BNB Investment Properties Ltd., Gurgaon vs. DCIT, Central Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- ( a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or ( b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under subsection (2) of section 143 has expired, or ( c) assessment or reassessment, if any, has been made, before 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, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 7.1. The Hon ble Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (2017) 397 ITR 400 (Delhi.) (HC) (supra), considering the identical issue held as under : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961 took place on November 11,2010 in the T group of cases. The documents pertaining to the assessee were forwarded along with a satisfaction note by the Assessing Officer of the party in respect of which the search was conducted to the Assessing Officer of the*assessee on January 3, 2013. The Assessing Officer of the assessee issued notice to the assessee under section 153C of the Act on January 4,2013 for the assessment year 2006-07. The Tribunal held that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07, was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision under section 153C of the Act. On appeal: Held accordingly, dismissing the appeal, that the Tribunal was justified in holding that the notice issued to the assessee under section 153C of the Act for the assessment year 2006-07 was without jurisdiction since the assessment year was beyond the purview of issuance of notice in terms of the provision. 7.2. The ITAT, Delhi, B-Bench in the case of ACIT, C.C.-2, New Delhi vs. Empire Casting Pvt. Ltd., New Delhi (supra), held in paras 5 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year. 5.1. The fact that satisfaction u/s 153C of the Act in the case was recorded on 2nd November, 2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 143(3) is for assessment year 2011-12. This year falls within the period of six years when counted from the date of recording of satisfaction note u/s 153/153C of the I.T. Act which is deemed date of search. The Act has been amended recently by the Finance Act, 2017 with prospective effect i.e., from assessment year 2018-19. Thus, the period is same now only for the searched parties as well as the other person as per the amended provisions of the said section. In view of the above, we hold that the assessment completed u/s 143(3) is invalid. 8. It is not in dispute that search was conducted on Krrish Group of cases on 09.11.2011. The impounded documents have been received by the A.O. on 29.08.2013. The satisfaction under section 153C have been recorded on 03.10.2013. The A.O. passed the assessment order under section 153B(1)(b) of the I.T. Act, considering the assessment year under appeal i.e., A.Y. 2012-2013 to be the year of search. However, the First Proviso to Section 153C of the I.T. Act provides that the 06 assessment years for which assessments or re-assessments could be made under section 153C of the I.T. Act, would also have to be construed with reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, Central Circle-1, Faridabad (supra), in which the Judgments of the Hon ble Delhi High Court relied upon by Learned Counsel for the Assessee have been considered and issue have been decided in favour of the assessee, therefore, following the same decision, we admit the additional grounds of appeal which are purely legal in nature, which do not require fresh facts to be investigated and go to the root of the matter. It is also an admitted fact that no satisfaction note have been recorded under section 153C of the I.T. Act and no notice under section 153C have been issued against the assessee-firm. The A.O. misunderstood it to be a year of search. However, the Proviso to Section 153C of the I.T. Act provides that 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. Therefore, the six assessment years under section 153C of the Act in the case of the assessee-firm would be A.Ys. 2001-2002 to 2006-2007. The A.O, therefore, shall have to pass the assessment order under section 153C of the I.T. Act. However, A.O. has n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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