9911796707
TMI Blog2022 (8) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of law and accordingly, the assessment proceedings initiated and assessment order passed on the foundation of such notice are liable to be quashed." 3. The ld. Counsel for the assessee submitted that the assessment proceedings initiated u/s 153C of the Act were bad in law, without jurisdiction and barred by limitation and, accordingly, the assessment proceedings initiated and the assessment order passed are liable to be quashed and the CIT(A) has grossly erred in not holding so. The ld. Counsel further submitted that the issuance of notice u/s 153C of the Act and recording of satisfaction are contrary to the provisions of law and, thus, the assessment proceedings and the assessment order passed u/s 153C r.w.s. 143(3) on the foundation of such invalid notice are liable to be quashed. The ld. Counsel placed vehement reliance on the order of the ITAT Delhi, 'D' Bench in ITA No.204/Del/2021, order dated 28.02.2022 for AY 2011-12 and on another order dated 09.06.2021 in ITA No.203/Del/2021 for AY 2012-13 both in the case of Karina Airlines International Ltd. vs. ACIT and submitted that since the search was conducted on 07.04.2016, the AO of the person searched recorded his satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see may be allowed. 6. On careful consideration of the above rival submissions, first of all, we may point out that the applicability of amendment to sections 153A and 153C of the Act has been considered and adjudicated by the ITAT Delhi, 'D' Bench, in the case of M/s Karina Airlines International Limited, vide order dated 28.02.2022 for AY 2011-12 by which it was held thus:- "8. We have considered rival submissions and perused the materials on record. For deciding the issue, following dates and events would have a crucial bearing: 1. 07.04.2016 - search and seizure operation under section 132 of the Act was conducted in case of Sh. Harvansh Chawla. 2. 29.03.2019 - The Assessing Officer of the searched person recorded satisfaction with reference to the assessee and handed over the seized material. 3. 15.09.2019 - The Assessing Officer of the assessee recorded the satisfaction for initiation of proceeding under section 153C of the Act. 9. Thus, as could be seen from the aforesaid dates and events, the search and seizure operation under section 132 of the Act had taken place on 07.04.2016. On a reading of section 153A of the Act, it is very much clear that in case of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.4 However, in order to protect the interest of the revenue in cases where tangible evidence(s) are found during a search or seizure operation (including section 132A cases) and the same is represented in the form of undisclosed investment in any asset, section 153A of the Income-tax Act relating to search assessments has been amended to provide that notice under the said section can be issued for an assessment year or years beyond the sixth assessment year already provided up to the tenth assessment year if- (i) the Assessing Officer has in his possession books of accounts or other documents or evidence which reveal that the income which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in one year or in aggregate in the relevant four assessment years(falling beyond the sixth year); (ii) such income escaping assessment is represented in the form of asset; (iii) the income escaping assessment or part thereof relates to such year or years. 80.5 Applicability: The amended provisions of section 153A of the Income-tax Act shall apply where search under section 132 of the Income-tax Act is initiated or requisition under section 132A of the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion on 15/9/2019. It is clear that the date of search had fallen in the A.Y. 2017-18 which is relevant for the case of the person searched; whereas the satisfaction recorded by the learned Assessing Officer of the searched person on 29/3/2019 had fallen in the assessment year 2019-20 in which case the immediately preceding 6 assessment years would be assessment years 2013-14 to 2018-19; and the date of satisfaction recorded by the learned Assessing Officer of the assessee on 15/5/2019 falls in the assessment year 2020-21 in which case the immediately preceding 6 assessment years would be the assessment years from 2014- 15 to 2019-20. 10. It is, therefore, clear that when we reckon the 6 assessment years with reference to the recording of satisfaction by the learned Assessing Officer of the searched person or with reference to the recording of satisfaction by the learned Assessing Officer of the other person, in either case the assessment year 2012-13 is well beyond such period. So far as this factual position is concerned, it remains unassailable. 11. In respect of the starting point for computation of the block period, the Hon'ble Delhi High Court in the case of Pr. CIT v Sar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because 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 possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne 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 153 A of the Act and the reference to the date of search would have to be construed as the reference to the date of 10 recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recordings of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recordings of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. 8. If we apply the ratio laid down by the Hon'ble Jurisdictional High Court, in the present case, then the date of satisfaction, i.e., 25.09.2018 has to be reckoned as the date of reference from where six assessment years immediately preceding assessment years has to be construed and therefore, six preceding assessment years in this case shall be from Assessment Year 2012-13 to Assessment Year 2018-19. The instant Assessment Year, i.e., Assessment Year 2017-18 ergo would be covered in the earlier six assessment years where the assessments have to be framed u/s.l53C only, whereby the Assessing Officer was required to issue a notice u/s.153C, and frame the assessment u/s.l53C/143(3). Contra to the law as interpreted by the Hon'ble Jurisdictional High Court, the Id. Assessing Officer had issued notice u/s. 142(1) and resultantly has framed the assessment u/s. 143(3), treating it to be regular assessment for the year of search. The amendment to clarify this position u/s. 153C (1) was brought in the statute by the Finance Act, 2017 w.e.f. 01.04.2017, wherein it has been provided that the six preceding assessment years for the person covered u/s 153C would be same as that of the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also stated therein that the amendment will take effect from 1st April, 2017. Therefore, even the CBDT, in the context of the amended provisions of section 153A of the Act, has clarified that it would apply when search or requisition is made after the date of the 13 amendment. Evidently, therefore, even the amended provisions of section 153C of the Act would apply when search or requisition is made after the amendment." 10. Similar amendments have been made from time to time in Section 153C and one of such amendment was in the Finance Act, 2015 brought in the statute from 01.06.2015, whereby the statute extended the scope of Section 153C by holding that not only the specified items 'belonging to other person' would trigger the provision of Section 153C but also any books of account or documents, seized or requisitioned which pertain to, or any information contained therein, which relates to other person would also trigger the provisions of section 153C of the Act. This amendment too has been held to be prospective and applicable only to searches conducted after 01.06.2015. This has been held so as Hon'ble Jurisdictional High Court in various judgments, some of which are as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is liable to be quashed. We order accordingly. In view of our finding that the very assessment itself is bad being barred by limitation, adjudication of other grounds will only be academic and need not be resorted to." 9. In view of the above, the facts being identical, the above noted order of the coordinate Bench of the ITAT Delhi in the case of M/s Karina Airlines International Limited vs. ACIT for AY 2012-13 would squarely apply to the present appeal as well. Thus, respectfully following the order of the coordinate Bench, as noted above, we are inclined to hold that the impugned assessment order passed u/s 153C r.w.s. 143(3) of the Act, dated 31.12.2019, is wholly without jurisdiction, hence, invalid. Accordingly, we quash the same along with all consequent proceedings and orders including the order of the ld.CIT(A). Accordingly, grounds No.1 and 2 of the assessee are allowed. 10. In view of our conclusion recorded for grounds No.1 and 2 of the assessee in the earlier part of this order, the grounds raised by the assessee on merits having become academic, are not being adjudicated upon. 11. In the result, the appeal of the assessee is allowed, as indicated above. ITA N ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
