TMI Blog2019 (2) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 153C and the same being void abinitio, deserves to be quashed. - Decided in favour of assessee. - ITA.No.1525, 1526, 1527, 1528, 1529 And 1530/Del./2014 - - - Dated:- 30-1-2019 - SHRI BHAVNESH SAINI, J.M. AND SHRI O.P. KANT, A.M. For The Assessee : Shri Kapil Goel, Advocate For The Revenue : Shri S.S. Rana, CIT-D. R. ORDER PER BHAVNESH SAINI, J.M. This Order shall dispose of all the above appeals filed by the assessee for different assessment years as mentioned above. 1.1. All the appeals by the assessee are directed against the different orders of the Ld. CIT(A)-II, New Delhi, Dated 13.02.2014 for the A.Ys. 2003-2004 and 2004-2005, Order Dated 25.02.2014 for the A.Y. 2005-2006, Order Dated 26.2.2014 for the A.Y. 2006-2007 and Order Dated 27.02.2014 for the A.Ys. 2007-2008 and 2008-2009. 2. Briefly the facts of the case of that a search and seizure action under section 132 of the I.T. Act, 1961 was carried-out in the case of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s. Madhusudhan Buildcon Pvt. Ltd., on 20.10.2008 and during the course of search at the residential premises at F-6/5, Vasant Vihar, New Delhi, certain documents belong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153C is illegal because the satisfaction note was not recorded by the A.O. of the person searched. The proceeding under section 153C was, therefore, found to be null and void and were quashed. The remaining grounds on merit have not been decided accordingly. All the appeals of assessee were accordingly allowed. 4. The Revenue preferred appeals before the Hon ble Delhi High Court which were decided in Income Tax Appeal No. 82 of 2016 etc., vide Order Dated 16.11.2016. The Hon ble Delhi High Court has held that the findings and conclusions of the ITAT cannot be sustained. The Learned Counsel for the Assessee submitted before the Hon ble Delhi High Court that having regard to these facts, the ITAT s findings with respect to no proper recording of the satisfaction under section 153C of the I.T. Act may be set aside and matter may be remanded for reconsideration on merits of the assessee s appeal. The Hon ble Delhi High Court accordingly, set aside the ITAT s findings with regard to absence of any satisfaction under section 153C and as a consequence, remit the appeals for reconsideration of the ITAT on merits. It was directed that all the rights and contentions of the parties ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 153C are barred by limitation. Referring to the first proviso to section 153C, it was submitted that this proviso construes the date of initiation of search as the date of receiving the books of account/document/ seized material in cases of 'such other person'. In the present case, since the satisfaction for initiation of the proceedings u/s 153C was recorded by the AO in the month of September, 2010 on 25.09.2010 (i.e. A.Y. 2011-12), which may be assumed as the month of receiving the books/seized material, therefore, assessment u/s 153C could be undertaken up to 6 financial years prior to September 2010, which would include financial years relevant to assessment years 2005-06 to 2010-11. It was, therefore, submitted that A. Yrs. 2003-04 and 2004-05 were outside the purview of section 153C. The assessee has, inter alia, relied on the decision in one of the group cases, i.e., CIT vs. RRJ Securities Ltd., 380 ITR 612(Delhi), rendered by Hon ble jurisdictional High Court. 13. On the other hand, the ld. DR, reiterated the findings reached by the ld. CIT(A) on this count in the impugned order and relied on some decisions, which are placed on record. 14. Having c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, 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 200304 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 2008-09 and stated that documents at pages 1 to 25 of Annexure A-25 seized by the department are the cheque book which are not related to the assessment year 2003-04 to 2008-09 and also submitted that the same has already been accounted for in the books of accounts by the assessee. He also draw our attention towards the decision dated 29.3.2012 of the Hon ble Delhi High Court delivered in the case of SSP Aviation Ltd. vs. Deputy Commissioner of Income Tax [2012] 346 ITR 177 (Delhi) in support of its case. Ld. Counsel of the assessee also submitted that the view taken by the Hon ble High Court is fortified by the Legislative amendment made by the Finance Act, 2014 in section 153C of the Income tax Act, 1961. Accordingly, Ld. Counsel of the assessee requested that the issues involve in the assessee s cross objections and in the Revenue s appeals may be set aside to the Assessing Officer to verify whether the seized documents mentioned in the Satisfaction Note dated 5.7.2010 relating to the assessee on which notice u/s. 153C has been issued to the assessee and if these documents namely the cheques have already been accounted for in the books of accounts of the assessee and are not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not belong and even after initiating proceedings to the year to which the documents belonged, the Assessing Officer ought to have dropped the proceedings because all transactions reflected by the counterfoils by the cheques is duly accounted for. In support of this contention, he had relied upon the decision of Hon'ble Jurisdictional High Court in the case of SSP Aviation Ltd. 346 ITR 177. At page 189 of the report in paragraph 17, their Lordships held as under:- The section merely enables the Revenue authorities to investigate into the contents of the document seized, which belongs to a person other than the person searched so that it can be ascertained whether the transaction or the income embedded in the document has been accounted for in the case of the appropriate person. It is aimed at ensuring that income does not escape assessment in the hands of any other person merely because he has not been searched under section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has searched the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in the light of the above decision of Hon'ble Jurisdictional High Court. Similar arguments have been advanced by both the parties in the instant cases also and identical additions have been made on the basis of documents seized on the same search. We, therefore, respectfully following the decision of co-ordinate Bench in the above decision, remit the issue of additions on merits back to the file of the Assessing Officer to decide the same afresh in the light of directions/observations given by ITAT, Bench B in the case of DCIT vs. M/s. Devi Dayal Petro Chemicals Pvt. Ltd. (supra) at para No. 9.2 of the order dated 10.09.2014 (Relied by the ld. AR) as reproduced above. Accordingly, all the appeals of the Revenue and cross objections of the assessee for A.Yrs. 2005-06 to 2008-09 deserve to be allowed for statistical purposes. 16. In the result, the appeals of the Revenue for A.Yrs. 2003-04 and 2004-05 are dismissed whereas the cross objections of the assessee for these years are allowed. The remaining appeals of the Revenue and cross objections of the assessee for A.Yrs. 2005-06 to 2008-09 are allowed for statistical purposes. 7.1. He has submitted that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153A of the I.T. Act and as such assessments have been correctly made under section 153C/143(3) for A.Ys. 2003-2004 and 2004-2005. The Ld. D.R. also submitted that the decision in the case of RRJ Securities Ltd., was rendered with respect to whether the initial assessment order would be time barred or not. He has also filed written submissions in support of his contention. However, as regards the remaining assessment years, the Ld. D.R. also suggested that the matter may be remanded to the file of A.O. for verification of the facts as is directed in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd.,, (supra). 9. We have considered the rival submissions and perused the material available on record, It is not in dispute that search was conducted in the cases of Shri B.K. Dhingra and Others on 20.10.2008 and during the course of search certain documents belonging to assessee were seized. Accordingly proceedings under section 153C of the I.T. Act, 1961, were initiated by recording the satisfaction note Dated 08.09.2010 for assessment year under appeals i.e., 2003- 2004 to 2008-2009 (PB-1). It is also not in dispute that the search in the cases of Shri B.K. Dhingra and Others ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 153C of the I.T. Act. We, therefore, set aside the Orders of the authorities below and quash the assessment in the matter. Resultantly, all additions stand deleted. 10. In the result, appeals of the assessee for the A.Ys. 2003-2004 and 2004-2005 (ITA.Nos.1525/Del./2014 and ITA.No.1526/Del./2014) are allowed. 11. In the remaining appeals for A.Ys. 2005-2006 to 2008-2009 (ITA.Nos.1527 to 1530/Del./2014), the assessee challenged the addition on merits only as noted above. It is stated by both the parties that this issue is same as have been decided in the in the group case of M/s. Sanchit Consultants Pvt. Ltd., (supra). In this order, the Tribunal following the decision in the group of M/s. Devi Dayal Petro Chemicals Pvt. Ltd., (supra) restored the matter back to the file of A.O. with certain directions to re-frame the assessments. We, following the Order in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra), set aside the assessments on the above additions and restore the issue of additions on merits back to the file of A.O. with a direction to re-decide the same afresh in the light of observations/ directions of the Tribunal in the case of M/s. Sanchit Consultan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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