TMI Blog2018 (8) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The issue of notice u/s 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. The assessment order, therefore, vitiate, void, illegal and bad in law and cannot be sustained. Decided in favor of assessee. - ITA.No.504/Del./2015, ITA.No.503/Del./2015 - - - Dated:- 27-6-2018 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For the Assessee: - Shri Raj Kumar Gupta, C.A. For the Revenue: - Shri Ravi Kant Gupta, Sr. D.R. ORDER PER BHAVNESH SAINI, J.M. Both the appeals by different assessees are directed against the different orders of the Ld. CIT(A)-3, Gurgaon, dated 09th December, 2014, for the A.Y. 2012-2013. 1.1. Both the parties mainly argued in ITA.No.504/Del./2015 in the case of M/s. BNB Investments Properties Ltd., and submitted that the issue is same in the remaining appeal. 1.2. We have heard the learned Representatives of both the parties and perused the material on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has never been issued as admitted by AO in RT1 reply. 2. That both the above grounds are pure legal grounds which goes to the root of the matter which can be taken at any stage of proceedings before Hon ble ITAT. 3. That, further, no new facts are required to be investigated or place on records for adjudicating these grounds which are already available on records. 4. That under above mentioned facts and circumstances and as per the following authorities, these additional grounds deserves to be admitted: - NATIONAL THERMAL POWER COMPANY LTD. 229 ITR 383 (SC) GEDORE TOOLS PVT. LTD., 238 ITR 268 (DEL.) 5. That without prejudice, the issues covered in these additional grounds are covered in G.N. 1 and G. N. 2, as taken initially in Form - 36 also, however, these have been taken specifically only as a matter of abundant precaution and to meet out the situation in case the Hon ble Court is of the opinion that the same are not covered in Ground Nos. 1 2 as initially taken. 3.1. Learned Counsel for the Assessee submitted that additional grounds are legal in nature and no new facts shall have to be considered. He, therefore, submitted that additional grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 195 are the notices issued under section 153A r.w.s.153C of the I.T. Act in the case of the assessee for A.Ys. 2006-2007 to 2011-2012. He has submitted that no notice under section 153C have been issued for assessment year under appeal i.e., 2012-2013. He has referred to PB-160 which is a reply filed under RTI Act dated 01.11.2016 by DCIT, CC-1, Gurgaon, in which, A.O.hasreported that no notice under section 153C was issued for A.Y. 2012-2013 as it was a search year. Hence, notice under section 143(2)/142(1) were issued. Learned Counsel for the Assessee submitted that the A.O. accordingly did not pass anyassessment order under section 153C of the I.T. Act and passed the assessment order under section 153B(1)(b) of the I.T. Act being a search year. He has submitted that First Proviso to Section 153C is applicable in the case of the assesseebecauseno search was conducted in the case of the assessee. The Amendment in Section 153C came w.e.f. 01.04.2017 which is prospective in nature. Assessment in A.Y. 2012-2013 under appeal should have been completed under section 153C being5th year in the Block of 06th year. The First Proviso to Section 153C(1) provides that in case of Section 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys referred to abatement of proceedings as mentioned in the second proviso Section 153A(1) of the I.T. Act, otherwise, the current 153C shall have major incongruity as to whether six years would be reckoned from the date of search as mentioned in the amended Section 153C(1) or from the date of handing over of the documents as mentioned in the First Proviso of Section 153C which remained unamended. He has, therefore, submitted that assessment have been rightly framed under section 153A(1)(b) of the I.T. Act, 1961. 7. We have considered the rival submissions. Section 153C of the I.T. Act, 1961, as is applicable to assessment year under appeal reads as under : 153C. Assessment of income of any other person.- (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 Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 : Sub-section (1) of section 153C of the Income-tax Act, 1961 provides that the assessment or reassessment of the income of the other person would be in accordance with the provisions of section 153A. The first proviso to sub- section (1) of section 153C further states that, in case of such other person, the reference to the date of initiation of search in the second proviso to section 153A(l) shall 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 . In terms of section 153A(1)(b) of the Act. 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 the search was conducted. The second proviso to sub-section(1) of section 153A of the Act states that assessment or reassessment relating to any assessment yearfalling within the period of six assessment years referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms 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 5.1 as under : 5. We have heard the rival submission on this issue and also perused the judgment dated 30th October, 2015 of the Hon'ble jurisdictional High Court in the case of CIT Vs RRJ Securities in ITA No. 164/2015 and ITA No. 175 to 177/2015. For ready reference, the relevant Para of the judgment is reproduced as under: 24. As discussedhereinbefore,intermsofproviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/ reassessments co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, is not disputed by both the parties. In the judgment cited above, the Hon'ble High Court has held that when the Assessing Officer of searched person and such other person in whose case proceedings undersection 153C are initiated, is the same officer, then the date of recording of satisfaction would be construed as the date of handing over of the seized records by the Assessing Officer of searched person to the Assessing Officer of such other person in whose case proceedings under section 153C are initiated. Since the Hon'ble High Court has already construed the relevant provisions, we do not concur with the arguments advanced by the ld. CIT DR on this count. Respectfully following the above judgment of the Hon'ble High Court in RRJ Securities (supra) the date of handing over of seized material/ record by the Assessing Officer of searched party to the Assessing Officer of the assessee would be 2nd November, 2009. Further, following the judgment, the six assessment years for which assessment/re-assessment could be made u/s 153 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich 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 date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section153C of I.T. Act in the case of assessee would be A.Y. 2008-2009 to 2013-2014. The A.O, therefore, shall have to pass the assessment order under section 153CoftheI.T. Act. However, A.O. has not issued any notice under section 153C of the I.T. Act before initiating the proceedings against the assessee which is also admitted by the A.O. in reply to the assessee under RTI Act. The Amendment in Section 153C of the I.T. Act by the Finance Act, 2017, w.e.f. 01.04.2017 to the effect that block period for the person in respect of whom the search was conducted as well as the other person would be the same six assessment year immediately preceding the year of search is prospective in nature. The issue have been dealt in detail by the Hon ble jurisdictional Delhi High Court in the case of Pr. CIT vs. Sarwar Agency P. Ltd., (supra) and by ITAT, Delhi, B-Bench, in the case of Empire Casting Pvt. Ltd., New Delhi vs. ACIT, C.C.2, New D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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