TMI Blog2021 (4) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been recorded in the case of person searched and no notice under section 153C have been issued to the assessee. Mandatory provisions of Section 153C shall have to be followed by the A.O. before proceeding in the matter where A.O. is same in the case of person searched or the third party. The mandatory conditions of Section 153C of the I.T. Act shall have to be complied with by the A.O. which is also subsequently clarified by the CBDT in their Circular issued in this regard. Therefore, the contention of the Ld. D.R. have no merit and are accordingly rejected.See M/S. BNB INVESTMENT PROPERTIES AND SHRI RANJAN GUPTA VERSUS DCIT CENTRAL CIRCLE-1. [ 2018 (8) TMI 597 - ITAT DELHI] - Decided in favour of assessee. - ITA.No.2526/Del./2017 - - - Dated:- 6-4-2021 - Shri Bhavnesh Saini, Judicial Member And Shri N.K. Billaiya, Accountant Member For the Assessee : Shri Prakash Chand Yadav, Advocate. For the Revenue : Shri Prakash Dubey, Sr. D.R. ORDER PER BHAVNESH SAINI, J.M. This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-3, Gurgaon, Dated 28.02.2017, for the A.Y. 2013-2014. 2. We have heard the Learned Representative of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court in the case of National Thermal Power Co. Ltd., vs., CIT 229 ITR 383 (SC) and submitted that identical issue have been considered by ITAT, Delhi G-Bench, Delhi in the case of the same assessee for preceding A.Y. 2012- 2013 vide Order Dated 09.08.2019 and this issue have been considered in favour of the assessee. He has, therefore, submitted that since the additional grounds raised are legal in nature and goes to the root of the matter, therefore, the same may be admitted for disposal of the appeal. 5. The Ld. D.R. on the other hand opposed to the admission of the additional grounds. 6. Considering the facts of the case in the light of Order of the Tribunal Dated 09.08.2019 (supra) and that the additional grounds are legal in nature and goes to the root of the matter, therefore, we admit the additional grounds for the purpose of disposal of the appeal. 7. Learned Counsel for the Assessee submitted that search and seizure action was conducted by the Department on M/s. Krrish Realty Nirman Pvt. Ltd., Group on 09.11.2011. The A.O. made the additions on account of long term capital gains and under section 68 of the I.T. Act, 1961 solely relying upon his assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to assessee were received on 29.08.2013. The Learned Counsel for the Assessee, therefore, submitted that the assessment order is null and void. 8. On the other hand, the Ld. D.R. relied upon the Orders of the authorities below and submitted that the ITO in the case of the person searched and the third person i.e., assessee are the same, therefore, one A.O. cannot handover the documents with another A.O. Thus, it is evident that the instant case of the assessee is not the one where the documents were handed-over to another A.O. holding the jurisdiction over the assessee, but, a case where the case of the assessee was handed-over to the A.O. who completed the assessment in the case of assessee, covered under section 153A. Thus, the First proviso to Section 153C does not get attracted at all in the instant case. The Ld. D.R. submitted that decision in the case of CIT vs., RRJ Securities Pvt. Ltd., 380 ITR 612 (Del.) (HC) the Hon ble Delhi High Court took a view that the years covered under section 153C would be determined from the date of handing-over the documents to the other A.O. considering such date as initiation of the search and same view have been taken by the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appellant) (Respondent) Appellant by: Shri S.S. Rana, CIT-DR Respondent by: Shri P.C. Yadav, Adv. Date of hearing: 22 05 2019 Date of pronouncement: 09 08 2019 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid appeal has been filed by the Revenue and Cross Objection by the assessee against the impugned order dated 24.02.2015 passed by Pr. CIT (OSD), Gurgaon u/s.153B(1)/143(3) for the Assessment Year 2012-13. 2. Though, the Revenue has challenged the addition of ₹ 38,61,24,029/- made on account of Short Term Capital Gain, whereas in the Cross Objection the assessee has challenged the very validity of assessment framed u/s.153B(1)/143(3) on the following grounds: 1. The order of AO as sustained by the CIT (A) is bad in law. 2. On the facts and under the circumstances of the case the Assessment order passed under section 153B(1)(b)/143(3), considering the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment year pertaining to year in which survey was conducted. In response, assessee has stated that he has already filed his return of income on 16.10.2012. Thereafter, assessee has filed revised return on 29.11.2013 declaring income of ₹ 4,62,24,040/-. In pursuance to such revised return notice u/s.143(2) and 142(1) were issued to the assessee. The Assessing Officer in the assessment order has made addition of ₹ 38,61,24,029/- after detailed discussion based on seized material and finally concluded as under: 13. The total consideration for 2737 equity shares at the rate of ₹ 1,57,517/- per share as calculated above comes to ₹ 43,11,24,029/- However, the assessee has taken the sale consideration for 2737 equity shares as ₹ 4,50,00,000/- which is not acceptable. Hence, the difference of the sale consideration which comes to ₹ 38,61,24,029/- is added to the returned income of the assessee. Hence, an addition of ₹ 38,61,24,029/- is made to the returned income of the assessee for the year. 4. Though, validity of assessment was not challenged before the ld. CIT(A), however, in Cross Objection, assessee has raised this issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2013-14, (i.e., from 29.08.2013) and six previous assessment years would start from Assessment Years 2007-08 to 2012-13. Thus, the present assessment framed by the Assessing Officer under provision of the Act is void ab initio as the same has been passed without following the mandatory provision of Section 153C. In support, he strongly relied upon the judgment of Hon ble Jurisdictional High Court in the case CIT vs. RRJ Securities Ltd. (2016) 380 ITR 612 and Pr. CIT vs. Sarwar Agencies Pvt. Ltd., 340 ITR 400. He pointed out that the same principle has been followed by the co-ordinate Benches including group cases and relied upon the following three judgments. (i) M/s. Ambawatta Build well Pvt. Ltd., ITA No.2592/Del/2015, (ii) M/s. BNB Investment Properties Ltd., ITA No.504/Del/2015 (iii) M/s. Commitment Mortality Vision Education Society, 3980 3981/Del/2017 7. He further pointed out that in the case of BNB Investment (supra) the same too was in pursuance of same search of Krrish Group and Assessing Officer was also the same, and in that case the Tribunal for the same Assessment Year 2012-13 has held the assessment void ab initio and without jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153A of the Act. At that stage the AO does not have to record another satisfaction note qua the searched person. (ii) Where proceedings are proposed to be initiated under Section 153C of the Act against the 'other person', it has to be preceded by a satisfaction note by the AO of the searched person. He will record in this satisfaction note that the seized document belongs to the other person. Depending on the nature and contents of the document he may be required to give some reasons for such conclusion. (iii) Where the AO of the searched person is different from the AO of the other person, the AO will simultaneous with transmitting the documents along with his satisfaction note to the AO of the other person, make a note in the file of the searched person that he has done so. But this is for administrative convenience. The failure by the AO of the searched person, after preparing and despatching the satisfaction note and documents to the AO of the other person, to make a noting to that effect in the file of the searched person will not vitiate the proceedings under Section 153C against the other person. (iv) Where the AO of the searched person and the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , whether in the wake of 2nd proviso to Section 153C the date of initiation of search u/s.132 should be from the date of receiving of books of account or documents etc. by the Assessing Officer having jurisdiction over such person had come up before the Hon ble Jurisdictional High Court in the case of R.R. Securities (supra). This judgment has been again reiterated and followed by the Hon ble Jurisdictional High Court in the case of Pr. CIT vs. Sarwar Agencies (supra) wherein their Lordships have explained the said provisions considering the amendment in section 153C by the Finance Act, 2017 with effect from April 1, 2017, in the following manner : 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 Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment 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. 13. The ratio of the judgments of Hon ble Jurisdictional High Court has been applied in a similar group matters pertaining to the same search for the Assessment Year 2012-13 in the case of BNB Investment (supra), wherein the Tribunal after referring to the Hon ble Jurisdictional High Court judgment and also catena of other Tribunal decision, finally observed and held as under: 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(l)(b) of the I.T. Act, consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as year of search, and therefore, assessment could not have been framed u/s.143(3) r.w.s. 153B(1) and accordingly, assessment order passed by the Assessing Officer is declared null and void and consequently the Cross Objection of the assessee is allowed. 15. Since, we have already held that assessment order is not in accordance with law, therefore, the issue raised on merits by the Department has become purely infructuous and same is dismissed. 16. In the result, the appeal of the Revenue is dismissed and Cross Objection of the assessee is allowed. 9.1. It is not in dispute from the above facts that search and seizure action was conducted in M/s. Krrish Realty Nirman Pvt. Ltd., on 09.11.2011. Thereafter, survey was conducted in the premises of the assessee on 05.11.2011 and his Company M/s. Ambawata Buildwell Pvt. Ltd., the jurisdiction over the case of assessee was transferred to CIT, Central, Gurgaon vide Order Dated 12.08.2013, who transferred the case to A.O. of Central Circle-1, Faridabad and the seized documents were received in the same Central Circle on 29.08.2013. The Tribunal in the background of these identical facts and decision of the Hon ble Delhi H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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