TMI Blog2018 (12) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee and at the time of initiating the proceeding against the assessee, should have issued notice u/s 153C which have not been done in this case. The issue of notice under section 153C is mandatory and a condition precedent for taking action against the assessee under section 153C of the I.T. Act. - Decided in favour of assessee. - ITA No. 3560/Del/2015 - - - Dated:- 4-12-2018 - Shri Bhavnesh Saini, Judicial Member And Shri L.P. Sahu, Accountant Member For the Appellant : Sh. Kapil Goel, Advocate For the Respondent : Sh. Surender Pal, Sr. DR ORDER PER L.P. SAHU, A.M.: This is an appeal filed by the assessee against the order of ld. CIT(A), Ghaziabad dated 31.03.2015 for the assessment year 2011-12 on the following grounds : 1. That the impugned order as passed by the Ld. AO u/s 143(3) of the I.T. Act on 31/03/2013 ought to have been cancelled/annulled by the Id. CIT(A) inter alia because: a) The impugned assessment order as passed is barred by limitation as the impugned order passed u/s 143(3) has been antedated as if it was passed on 31/03/2013 as against the actual fact that it was not passed on 31/03/2013. b). Principles of natura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cks jurisdiction as it should have been framed u/s 153C, accordingly the orders passed by AO and First Appellate Authority deserves to be quashed. That assessment framed u/s 143(3) for the period under consideration is ultra vires to section 153C, in as much as no document is referred in satisfaction note, much less incriminating document, much less belonging to assesseee herein, much less seized during search action u/s 132 much less for the subject period, so as to give rise to any undisclosed income and therefore satisfaction note is completely inchoate and non starter and therefore orders passed by AO and First Appellate Authority deserves to be quashed. . That impugned assessment framed u/s 143(3) on basis of notice u/s 143(2) dated 21/01/2013 is invalid and void ab initio being made on basis of non est return filed u/s 153A/153C on 17/01/2013 as no return was there u/s 139/142 filed on 17/01/2013 to validly issue notice u/s 143(2) and even otherwise the assessment is invalid and void ab initio in as much as the original return filed u/s 139 which could be the basis to issue notice u/s 143(2) was filed as early as on 13/03/2012 for which outer date to issue notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were made before the authorities below nor do these grounds carry any weight on merits. It is submitted that the decisions relied by assessee are not applicable to the present case. 5. We have considered the rival submissions and have gone through the entire material available on record. It is notable that the additional grounds raised by the assessee pertain to a purely legal in nature, challenging the jurisdiction of the Assessing Officer to make the assessment u/s. 143(3) instead of section 153C of the Act, and all the material facts, necessary for its disposal, are already on record. As held by Hon ble Supreme Court in the case of NTPC Vs CIT, 229 ITR 383, the powers of the Tribunal are not confined only to the issues arising out of order of the CIT(A) but also questions of law arising from facts which are available on record. We are, therefore, inclined to admit the additional grounds of appeal, having a pure question of law challenging the assumption of jurisdiction to pass impugned assessment order u/s. 143(3) in place of sec. 153C. Therefore, the additional grounds raised by the assessee deserve to be admitted on record. We, further observe that the issue raised in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 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 sub-section (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 : 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 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, 2 013. 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 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 H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earched) 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, 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 oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153/153C of the I.T. Act which is deemed date of search. The Act ha s 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 date of handing-over of the assets or documents to the A.O. of the assessee. Therefore, the 06 assessment years under section 153C of I.T. Act in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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