TMI Blog2020 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year. Instead notice u/s 143(2) of the Act was issued and assessment order was passed u/s 143(3) of the Act. Therefore merely mentioning that order as been passed u/s 153A of that without issuing any notice u/s 153C of the act we are not in a position to hold that the learned assessing officer has passed the assessment order u/s 153A of the act. - Decided in favour of assessee. - ITA No. 1824 & 1826/Del/2013 - - - Dated:- 30-9-2020 - SHRI H. S. SIDHU , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI , ACCOUNTANT MEMBER Assessee by : Shri Ajay Bhagwani , FCA Revenue by : Ms. Nidhi Srivastava , CIT DR ORDER PER PRASHANT MAHARISHI , A. M. 1. ITA No. 1824/Del/2013 is filed by the assessee against the order of the ld CIT(A)-33, New Delhi dated 18.12.2012 for AY 2006-07. The assessee has challenged this order on the following grounds of appeal:- 1. That on the facts and circumstances of the case and in law, the CIT(A) erredin rejecting the appellant's contention that the assumption of jurisdiction by Assessing Officer for making assessment u/s 153C of the IT Act was badon facts and in law, thereby rendering the assessment also as bad in lawand void a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s BPTP Ltd on 15.11.2007, of which the assessee is a group company. No search was carried on the assessee. In the documents seized u/s 132(1) in the search on BPTP Ltd, certain documents belonged to the assessee. This resulted in taking action u/s 153C of the Act. The order passed u/s 153C is the subject matter of present appeal. 2.2 One of the objections taken by the assessee before the CIT(A) was against the assumption of jurisdiction for making assessment u/s 153C of the Act. This objection was taken in grounds of Appeal no.3 and 3.1. The thrust of the objection by the assesse was that the AO of the searched person (i.e. BPTP Ltd) had not recorded satisfaction note in the file of M/s BPTP Ltd by identifying the documents belonging to M/s Dynasty Construction Pvt. Ltd (the other person in the present case) and transmitting them to AO of the other person for taking action u/s 153C. 2.3 The CIT(A) rejected the contention in para 5.2(ii) by observing that BPTP (searched person) and Dynasty Construction Pvt. Ltd (the other person) being assessed by the same AO the above requirement was not necessary. 3. Aggrieved by the aforesaid order, a specific ground was take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts are required to be investigated on this ground. Hence, same are admitted. As the additional ground of appeal goes to the jurisdiction of the assessment made we proceed to decide the same first. 6. The brief facts of the case shows that on 15.11.2007, search u/s 132(1) of the Act was carried out on M/s. BPTP Ltd. The assessee is a group concern. However, no search was carried out on the assessee. Further, in the search of BPTP Ltd certain documents belonging to the assessee were found. Therefore, the proceedings are required to be undertaken for determination of undisclosed income in the hands of the assessee by invoking the provisions of section 153C of the Act. Accordingly, notice under that section was issued on 26.08.2009 requiring the assessee to furnish return of income for AY 2002-03 to AY 2007-08. For AY 2006-07 impugned AY , assessee filed its return of income on 08.10.2009 showing income of ₹ 340110/-. The assessment was made on 30.12.2009 determining total income of the assessee at ₹ 12425415/- u/s 153A/ 153C of the Act on 30.12.2009. The ld AO made additions on account of interest of PDC of ₹ 2540792/-, addition on account of additional payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some incriminating material found during the course of search. When an assessment is initiated u/s 153C of the Act it is necessary that already assessed income can be tempered only when there is some incriminating material which has a capacity of upward assessment of already assessed income. Such is the mandate of the decision of the Hon ble Supreme Court in 397 ITR 344 in CIT Vs Sinhgadh Technical Education Society as well the decision of the Hon ble Delhi High Court in CIT Vs. Kabul Chawla 380 ITR 573. In view of this, it is apparent that addition on account of disallowance of additional payment of ₹ 8107570/- is made without any incriminating material found during the course of search. Same is the case of disallowance u/s 40A(3) of the Act amounting to ₹ 661943/-. Thus, both the disallowances challenged before us are not based on any incriminating material found during the course of search. Thus we direct the ld AO to delete both the disallowances. Accordingly, ground Nos. 3 and 4 of the appeal along with additional grounds are allowed. 10. Ground Nos. 1, 2, 5 and 6 are not pressed before us hence, same are dismissed. 11. Accordingly, ITA No. 1824/Del/2013 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was claimed by the appellant. 5.1 That even on merits the disallowance was not justified. 6. That the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals)-XXXIII, New Delhi are bad in law and void ab-initio. 14. In this appeal also assessee has made an application for admission of the additional ground which are placed in the paper book. The assessee seeks to raise the following additional ground:- That on the facts and circumstances of the case and in law, the impugned assessment order dated 31 December 2009 passed by the assessing officer u/s 143 (3) of the income tax act, 1961 is bad in law and void ab initio inasmuch as it ought to have been passed u/s 153C of the income tax act, 1961. 15. The assessee submitted that the additional ground taken is purely a legal ground and this being so be taken before the tribunal for the first time. He submitted that the facts are already on record for deciding the additional ground in the omission to take the additional ground cannot be said to be either wilful or unreasonable. He further stated that it goes to the basic jurisdictional issue of the assessment order and therefore shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground No. 1 the assessee challenged the jurisdiction of the ld AO. It is submitted that satisfaction was recorded by issue of notice u/s 153C of the Act on 26.08.2009 for issue of notice for AY 2002-03 to 2007-08. He submitted that as per the decision of the Hon ble Delhi High Court in case of CIT v. RRJ Securities Ltd. [2015] 62 taxmann.com 391/380 ITR 612 (Delhi) date of recording of satisfaction is the date of search and therefore, the assessment should have been passed for this assessment year u/s 153C of the Act which has been passed by the ld AO u/s 143(3) of the Act. He submitted that merely because the ld AO has mentioned one of the section under which order is passed as 153A cannot cure the defect for the reason that no notice u/s 153C was ever issued to the assessee. He therefore, submitted that issue is squarely covered in favour of the assessee by the decision of the Hon ble Delhi High Court in CIT Vs. RRJ Securties Ltd (supra) . He also referred to the several group cases of the assessee where the identical view has been taken by the coordinate benches. He also referred to the decision of the honourable Delhi High Court in case of CIT versus Jasjit singh in ITA numbe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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