TMI Blog2023 (3) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... idered view, the invocation of proceedings u/s. 153C is against the provisions of law. As prior to the amendment the material found from the premises of the searched person, should be belonging to the person in whose case the material is to be used by drawing satisfaction and for issuance of notice u/s. 153C. Decided against revenue. - IT(SS)A Nos: 177 to 180/Ahd/2021 & ITA No: 290/Ahd/2021 and C.O. Nos: 5 to 9/Ahd/2022 - - - Dated:- 28-2-2023 - Shri Waseem Ahmed , Accountant Member And Shri T. R. Senthil Kumar , Judicial Member For the Assessee : Shri Mahesh Chhajed , A. R. For the Revenue : Shri S udhendu Das , CIT - DR ORDER PER : T. R. SENTHIL KUMAR , JUDICIAL MEMBER : - These five appeals filed are by the Revenue as against the Common Appellate Order dated 10.08.2021 passed by the Ld. Commissioner of Income Tax (Appeals)-11, Ahmedabad arising out of the assessment orders passed under section 153C(1)(b) r.w.s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) for the Assessment Years (A.Ys) 2011-12 to 2014-15 and assessment order passed under section 143(3) for the Assessment Year 2015-16 respectively. The Cross Objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r requisitioned ' belongs or belong to the person other than the searched person was not satisfied. 3.2. In present case, the search action was conducted in the case of Shri Sanket Jitendrabhai Shah on 04.12.2014 i.e. date prior to 01- 06-2015 [pre amended section of 153C]. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. Thus the assessee has submitted in his case, the satisfaction note has been recorded on 14.10.2016 by the AO and the relevant extract of the same reads is as under: 12, In view of the above facts, I am satisfied that the above mentioned documents seized from the residence of Shri Sanket Jitendrabhai Shah (Vora) and during the course of search at B-406, Wall Street-11, EHisbridge, Ahmedabad, pertain/pertains to or the above information discussed in paras 6 to 8 relates to the assessee M/s, Soniz Procon Private Limited for the assessment year 2009-10 to 2014-15. Since the assessee being other than the person referred to in Section 153A of the Act, I have satisfaction to proceed against the assessee M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement to justify assumption of jurisdiction under section 153C in case of the assessee did not exist. It was only from 01-06-2015 when the amended provisions of section 153C came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the assessee . 3.6. Another fold of the argument of the assessee was that the seized loose sheets in the business premises of the assessee during the course of Survey u/s.133A cannot be used for framing assessment under section 153C of the Act. 4. The Ld. CIT(A) after considering the submissions of the assessee and various case laws on the jurisdictional issue deleted the additions made by the AO as follows: 9.16 In 153C proceedings in case of the other person (other than the searched assessee), the addition to be made must have a live link with the seized material found from the premises of the searched assessee. Section 153A(1) of the Act has reference of search u/s. 132 of the Act and requisition of books of account etc. u/s. 132A of the Act. There is no reference of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition does not have legal sanctity in view of the decisions/judgement of Hon'ble Courts including the following. whereby it has been held that the on money has to be taxed in the year in which the sale deed was executed or sales have been registered. DCIT vs. Ohm Developers in ITA No. 314/Ahd/2002 dated 08.05.2015 D. R. Construction vs ITO in ITA No, 2735/Ahd/2010 dated 08.04.2011 Thus the taxation of the income from the On-Money in the year of receipt is against the proposition as laid down by the jurisdictional Tribunal in the orders above. 9.34. It is also worth here to mention that the addition on merits require no separate adjudication since on legal grounds, the addition have been found to be unjustified in all the assessment years and hence deleted. Therefore, no decision on merits is given. In the result, the grounds of appeal and additional grounds of appeal are partly allowed. Decision on grounds of appeal of Asst. Yrs.2012-13, 2013-14, 2014-15 2015-16. 9.35 Since all the above grounds of appeal are identically involved in the appeal for A.Y.2012-13, A.Y. 2013-14, A.Y. 2014-15 2015-16 also, and the facts are similar in these years, hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised by the Assessee in the Cross Objection are as under: 1. The Ld. A.O has erred in law and/or facts in making the assessment without service of notice U/s 143 (2) of the Act hence order passed by the Ld. A.O. is bad and illegal. 2. The Ld. A.O has not assumed valid jurisdiction U/S 153C of the Act hence order passed U/s 143(3) r.w.s 153C(1)(b) of the Act is bad, illegal and void. 3. The order is bad and illegal as no valid and specific show cause notice was given hence, the same is against provisions of principle of natural justice. 4 The Ld. A.O. has erred in law and on facts in making addition on presumption basis without any material evidence on records in completed assessment case of completed assessment. 5 The Ld. A.O erred in law and or facts in making addition of alleged receipts of on money from the members without any material and corroborative evidence on record and hence addition U/s 69A of the Act of Rs. 4,68,85,100/- is required to deleted. 6. The approval granted y JCIT u/s. 153D of the Act is null and void as he has granted approval u/s 153D of the Act in a mechanical way and without application of mind. 7. We have heard riv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to other third party. Therefore in our considered view, the invocation of proceedings u/s. 153C is against the provisions of law. 7.3. In this connection, the Hon'ble Gujarat High court in the case of Anil Kumar Gopikishan Agrawal vs. Assistant Commissioner of Income-tax, Circle 3(2), Ahmedabad [2019] 106 taxmann.com 137 (Gujarat) wherein it was held as under. Section 153C is a machinery provision which is inserted in the statute book for the purpose of carrying out assessments of a person other than the person searched under sections 132 and 132A. The moot question that arises for consideration in the present case is as to what is relevant date from which the amended provisions of section 153C would be applicable. While the amended provisions have been expressly brought into force with effect from 1-6-2015, the controversy in the present case arises because the searches in all these cases had been conducted prior to 1-6-2015, whereas the proceedings under section 153C have been initiated after that date and it is in this backdrop that the validity of the impugned notices has been called in question. It is the case of the petitioners that the proceedings under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.14 In the facts of the present case, the search was conducted in the cases of searched person on 4.12.2014, date prior to 1-6-2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the MS Exel file containing the information relating to the appellant admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C in case of the petitioners, did not exist. It was only on 1-6-2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners. [Para 19.9] 5.15 In this backdrop, to test the stage of applicability of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal group on 4-9-2013. If the Assessing Officer of the searched person h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required under section 153C prior to the coming into force of the amended provisions and in any another case after the coming into force of the amended provisions. [Para 19.11] It is the date of search that has been considered to be the relevant date for the purpose of applying the amended provisions of section 153C(1). [Para 19.4] 5.17 The trigger for initiating action whether under section 153A or 153C is the search under section 132 or requisition under section 132A and the statutory provisions as existing on the date of the search would be applicable. The mere fact that there is no limitation for the Assessing Officer of the searched person to record satisfaction will not change the trigger point, namely, the date of the search. The satisfaction of the Assessing Officer of the searched person would be based on the material seized during the course of the search or requisition and not the assessment made in the case of the searched person, though he may notice such fact during the course of assessment proceedings. Therefore, whether the satisfaction is recorded immediately after the search, after initiation of proceedings under section 153A or after assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requisition is made after the amendment. [Para 19.19] 5.21 Thus, when the Legislature thought it fit to make the amendment in section 153B relating to time limit of assessment under section 153A retrospective from a particular date, it provided that such retrospectivity would relate to cases where the search is initiated or books of account documents or other assets are requisitioned, from such date. Thus, even the Legislature has considered the initiation of search or making of requisition as the trigger point for applying the provisions of section 1538 to assessment under section 153. Under section 153C also, ultimately, assessment or re-assessment is required to be made in accordance with section 153A. Thus, when the amended provisions of section 153C (1) have been brought into force with effect from 1-6-2015, it has to be construed that such amended provisions would apply to a search initiated under section 132 or in relation to books of account, other documents or any assets requisitioned under section 132A after 31-5-2015 Consequently, in relation to searches carried out till 31-5-2015, it was not permissible for the Assessing Officer to assume jurisdiction under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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