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TMI Blog2022 (12) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... l carries on the Real Estate business. A Survey operation U/s. 133A of the Act was simultaneously conducted in the residential premises of the assessee based on the evidence found during the search proceedings in the case of Sri Ravipati Nageswara Rao on 20/07/2011. Subsequently, notice U/s. 153C r.w.s 153A of the Act dated 23/07/2013 was issued and served on the assessee on 29/07/2013 requiring the assessee to file the return of income for the AY 2006-07. Since the assessee failed to file the return of income, notice u/s. 142(1) of the Act dated 26/08/2013 was issued and served on the assessee on 30/08/2013. Assessee failed to comply with this notice u/s. 142(1) of the Act. The Ld AO then issued a show cause notice dated 19/11/2013 to show cause the reason as to why an action u/s. 276CC of the Act should not be initiated for the failure to furnish the return of income for the AY 2006-07. Citing the non-compliance, again the Ld. AO issued another show cause notice on 11/02/2014 and served upon the assessee on 15/02/2014. Finally in response to the show cause notice dated 11/02/2014, the assessee appeared on 20/02/2014 and promised to file the return of income on or before 25/02/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be of the Assessing Officer having jurisdiction in the case of searched person. 11. The Ld. CIT(A) has failed to appreciate the distinction between search in RNR's case and survey in assessee's case while deciding the validity of initiation of proceedings u/s. 153C. None of the seized documents listed in the remand report of the AO belonging to the assessee nor do they relate to current assessment year, nor any of them considered in the assessment order. Therefore initiation of proceedings U/s. 153C is invalid. 13. The assessment year 2006-07 is not a preceding assessment year. It falls beyond the period of 6 preceding assessment years because under the first proviso to section 153C the date of initiation of the search has to be construed as the date of receiving the books of account or documents or assets seized by the AO. The date of the receiving the books of account in this case is 23/07/2013. 14. The Ld. CIT(A) is not justified in sustaining additions of both Rs. 25,00,000/- of entire opening capital on the liabilities side and Rs. 20,00,000/- of loans and advances plus Rs. 1,97,500/- appearing on the assets side. 15. Ld. CIT(A) is not justified in restricting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / or other person on whom search and seizure operations were conducted has financial transactions of a personal nature and / or other business transactions with the assessee, a notice U/s. 153C is to be issued to the assessee required to furnish the return of income for all the AYs beginning from 2006-07 to 2011-12." It is clear from the note that there are ample materials in both the cases of Sri Ravipati Nageswara Rao and impounded material in the case of the appellant as stated earlier in the order. Accordingly, the AO has issued notice U/s. 153C on 23/07/2013 along with notice U/s. 142(1) calling for the return of income for the AY 2006-07. The appellant chose not to file the return of income though there are prima facie transactions indicating taxable income. It is the argument of Authorized Representative of the appellant that requirement of section 153C is nto mentioned in the satisfaction note is devoid of fact. The Assessing Officer has mentioned about the incriminating material ;such as Annexure RNR/A/18, Annexure RNR/A/1, Annexure A/RNR/23 to 39, Annexure RNR/A/1 (pages 1 to 83 and Annexure RNR/A/8 etc. The relevant material seized indicates the investments made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd antivirus to the letter and spirit of the law. Therefore I am unable to find any reason to agree with the argument of the appellant that the AY 2006-07 is beyond six preceding AYs. Accordingly, the legal grounds and the additional grounds raised by the appellant are rejected being illogical and such situation amounts to 'putting the cart before the horse." 8. Therefore, we are of the considered view that the Ld. CIT(A) has rightly examined and adjudicated the issue and hence we find no infirmity in the order of the Ld. CIT(A) and therefore no interference is required on this issue. 9. Ground No. 14 is with respect to sustenance of additions of the opening balance of capital and loans and advances appearing on the assets side of the balance sheet. We find that the assessee has not filed his returns of income and has pleaded ignorance before the Ld. CIT(A) for non-filing of the return of income. The Ld. CIT(A) has carefully considered the submissions and in his findings held as follows: "(c) I have carefully considered the order of the Assessing Officer and the submissions made by the appellant before the DDIT (Inv.) as well as before the Assessing Officer. The appellant's au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. 3 lakhs being interest income. However, while filing the return of income the assessee has disclosed Rs. 1.50 lakhs as agricultural income in the capital account and Rs. 50,000/- profit from real estate business. It is seen from the order of the Ld. CIT (A) that no details are filed before the Ld. Revenue Authorities for the balance of Rs. 4 lakhs. The assessee also not represented before us nor filed any evidence regarding the interest income and agricultural income which the assessee claims to have purchased the plot at Venkateswara Nagar for Rs. 6 lakhs. In the absence of any cogent evidence, the Ld. CIT(A) has confirmed the amount of Rs. 4 lakhs and therefore we are of the considered view that there is no infirmity in the order of the Ld. CIT(A) and hence we hereby dismiss the ground raised by the assessee. 13. In the result, appeals filed by the assessee is dismissed. 14. Since the issues raised by the assessee in his appeals ITA Nos.580 to 585/Viz/2018 are identical to that of the grounds raised in ITA No.579/Viz/2018 (AY 2006-07), our decision with respect to ITA No.579/Viz/2018 mutatis mutandis applies to the ITA Nos.580 to 585/Viz/2018 also. 15. In the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty proceedings u/s. 271(1)(c) also are not valid in law. (Tax Effect - Rs. 18,47,175/-) 5. (a) In the appellate order against the assessment order, Learned CIT()A is not justified in ignoring the CBDT Circle No. 24/2015 dated 31.12.2015 placed before him according to which satisfaction has to be of the Assessing Officer having jurisdiction in the case of searched person. The initiation of proceedings u/s. 153C are invalid in law. Therefore penalty proceedings u/s. 271(1)(c) also are not valid in law. (b) In the appellate order against the assessment order, Learned CIT(A) has erred on facts and in law in holding that initiation of proceedings u/s. 153C of Income Tax Act, 1961 (Act) by Deputy Commissioner of Income Tax, Central Circle, Vijayawada [A.O, hereinafter] is valid and that satisfaction u/s. 153C has been reached by him (A.O). As the assessment proceedings are not valid in law, the penalty proceedings also are not valid in law. (c) Learned CIT(A) failed to notice that satisfaction of the A.O noted in the order sheet is not that any money, bullion, jewellery or other valuable thing or book of account or documents seized in search u/s. 153A, belong to the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase and survey in assessee's case while deciding the validity of initiation of proceedings u/s. 153C. None of the seized documents listed in the remand report of the A.O belong to the assessee nor do they relate to current assessment year, nor any of them considered in the assessment order. Therefore initiation of proceedings u/s. 153C is invalid. Therefore penalty proceedings u/s. 271(1)(c) also are not valid in law. (Tax Effect - Rs. 18,47,175/-). 10. In the appellate order against the assessment order, Initiation of proceedings u/s. 153C being legally invalid because no incriminating material relating to the year has been seized in the course of search proceedings, consideration of documents impounded during survey and statement in the course of survey proceedings cannot arise, for the purpose of assessment. Therefore initiation of proceedings u/s. 153C is invalid. Therefore penalty proceedings u/s. 271(1)(c) also are not valid in law. (Tax Effect - Rs. 18,47,175/-) 11. For these and any other grounds which may be added to, altered or deleted with the permission of the Hon'ble Tribunal, it is prayed that the above grounds of appeal be considered alternatively or cu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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