TMI Blog2023 (8) TMI 452X X X X Extracts X X X X X X X X Extracts X X X X ..... py of the reasons recorded by the AO while reopening the assessment, which was provided to the assessee vide letter dated 01/06/2021. Since in the present case, the assessment proceedings were initiated on the basis of information received by the AO, therefore, we are of the considered view that the learned CIT(A) completely erred in holding that the assessment proceedings for the year under consideration can only be initiated u/s 153A of the Act and the same cannot be initiated under section 147. Accordingly, we set aside the impugned order passed by the learned CIT(A). During the hearing, the learned AR made submissions regarding the validity of proceedings under section 147 of the Act. However, we find that the learned CIT(A) has not examined any other aspect and has also not adjudicated on other issues raised by the assessee on merits. Therefore, we deem it appropriate to restore the appeal to the file of the learned CIT(A) for de novo adjudication - Appeal by the Revenue is allowed for statistical purposes. - Shri B.R. Baskaran, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Akshay Jain For the Revenue : Smt. Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o shared with the assessee vide letter dated 01/06/2021. During the reassessment proceedings, statutory notices under section 143(2) as well as section 142(1) of the Act were issued and served on the assessee, inter-alia, requesting the assessee to explain as to why the sale of shares of M/s Global Capital Market Ltd should not be treated as bogus and as to why the amount of Rs. 53,60,000, should not be added to the total income of the assessee. In response thereto, the assessee submitted that the sale consideration received by the assessee from the sale of scrip of M/s. Global Capital Market Ltd is genuine. 4. The AO, vide order dated 13/08/2021, passed under section 147 of the Act did not agree with the submissions of the assessee and held that the individuals in the GM Group have taken long-term capital gains from scrips which are established as penny stock by the Directorate of Investigation, Kolkata. The AO noted the findings of the Kolkata Directorate in respect of the no. of scrips through which unaccounted income was converted as exempt long-term capital gains. The AO noted that the promoter of the company M/s. GM Modular Private Limited has given the statement that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t assessment years' means beyond six assessment year and not more than ten assessment year. Therefore, I agree with the Ld. AR that as per section 153A of the Act, the AO has power to open re-assessment proceeding for 10 years' subject to conditions specified in the said section. In the instant case, the AO has re-opened proceeding for AY 2013-14 which is seventh year immediately preceding the year of search. Therefore, AY 2013-14 falls within the ambit of Section 153A of the Act. Hence, the assessment proceeding for AY 2013- 14 can be initiated u/s 153A of the Act only and the same cannot be initiated u/s 147 of the Act. 7.2 In this regard, reliance of the appellant in the judgment delivered by Hon'ble Jurisdictional Tribunal in the case of M/s. Rayoman Carriers Pvt. Ltd. vs ACIT (ITA No. 3275/Mum/2015 3276/Mum/2015) is in order. In the judgment, the Tribunal has held that in consequences to search the proceeding should be initiated of 153C of the Act and not u/s Section 147 of the Act. Thus, assessment order framed u/s. 143(3) r.w.s. 147 is without any jurisdiction. The head notes and catch notes of the decision is as under: 15. In terms of above judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue involved, in my considered view, in the instant case, the AO has acted without jurisdiction by re-opening the case under section 147 of the Act instead of u/s 153A. Hence, the assessment order passed u/s. 147 of the Act for AY 2013-14 deserved to be held as void ab initio. Hence, the additions made i.e., (i) On account of accommodation entry from sale of penny scrips amounting to Rs. 53,60,000/- and (ii) On account of Commission expenses of Rs. 1,60,800/- as unexplained expenditure u/s. 69C of the Act cannot survive as held in the above judicial decisions. The AO is accordingly directed to delete the impugned additions made in the assessment order. Thus, the additional ground of appeal is allowed. Being aggrieved, the Revenue is in appeal before us. 6. We have considered the submissions of both sides and perused the material available on record. Since the dispute in the present appeal is pertaining to the provision under which the assessment can be initiated, therefore, it is pertinent to analyse these provisions of the Act before proceeding further. Section 153A of the Act deals with assessment in case of search or acquisition and the same reads as under:- 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation. For the removal of doubts, it is hereby declared that, (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 7. Therefore, in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction to assess or reassess the total income of six assessment years under section 153A of the Act. 8. However, on the other hand, under section 147 of the Act if the AO has reason to believe that any income chargeable to tax has escaped assessment then he may assess or reassess such income. In ACIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd, [2007] 291 ITR 500 (SC), the Hon ble Supreme Court observed as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket Ltd. This fact is further established from the copy of the reasons recorded by the AO while reopening the assessment, which was provided to the assessee vide letter dated 01/06/2021. It is also pertinent to note that recently the Hon ble Supreme Court in PCIT v/s Abhisar Buildwell (P.) Ltd., [2023] 149 taxmann.com 399 (SC) held that in case of the completed/unabated assessments the AO in the exercise of powers under sections 147/148 of the Act can re-open the assessment, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act. Since in the present case, the assessment proceedings were initiated on the basis of information received by the AO, therefore, we are of the considered view that the learned CIT(A) completely erred in holding that the assessment proceedings for the year under consideration can only be initiated under section 153A of the Act and the same cannot be initiated under section 147 of the Act. Accordingly, we set aside the impugned order passed by the learned CIT(A). During the hearing, the learned AR made submissions regarding the validity of proceedings under section 147 of the Act. However, we find that the learned CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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