M/s. Champak Niketan Pvt. Ltd., Kolkata V. ACIT, New Delhi

CO 39/DEL/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3784 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 02-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Search and seizure; Document seized; Period of limitation; Question of law; Time period of passing order; Documents seized
• Section: 143(3); 142(1); 153A; 68; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.5692/DEL/2016 ASSESSMENT YEAR : 2006-07 ACIT, CENTRAL CIRCLE- 30, NEW DELHI. VS. CHAMPAK NIKETAN PVT. LTD., 16 B, SHAKESPEAR SARANI, KOLKATA. PAN : AABCC0420G (APPELLANT) (RESPONDENT) C.O. NO.39/DEL/2017 (IN ITA NO.5692/DEL/2016) ASSESSMENT YEAR : 2006-07 CHAMPAK NIKETAN PVT. LTD., 16 B, SHAKESPEAR SARANI, KOLKATA. VS. ACIT, CENTRAL CIRCLE- 30, NEW DELHI. PAN : AABCC0420G (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. RACHNA SINGH, CIT-DR, ASSESSEE BY : SHRI AJAY VOHRA, SR. ADV. DATE OF HEARING : 08-05-2018 DATE OF PRONOUNCEMENT : 25-05-2018 O R D E R PER R. K. PANDA, AM : THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31.08.2016 OF CIT(A)- 30, NEW DELHI RELATING TO ASS ESSMENT YEAR 2006-07. THE ASSESSEE HAS FILED THE CROSS OBJECTION AGAINST THE APPEAL FILED BY THE REVENUE. 2 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 FOR THE SAKE OF CONVENIENCE, THESE WERE HEARD TOGET HER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT A SEARCH A ND SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961 WAS CONDUCTED BY THE INVESTIG ATION WING OF THE DEPARTMENT ON 14.11.2011 IN THE JINDAL GROUP OF CAS ES. DURING THE SEARCH, THE DOCUMENTS/BILLS BELONGING TO THE ASSESSEE, M/S CHAM PAK NIKETAN PVT. LTD., 1- RAJ BALLAV SAHA LANE, HOWRAH WERE ALSO FOUND AND SE IZED FROM THE RESIDENTIAL PREMISES OF SHRI S.S. JINDAL, MRS. SUBHADRA JINDAL, MR. BHAVESH JINDAL & MS. AAKRITI JINDAL, 12A, GREEN AVENUE, VASANT KUND, NEW DELHI IN WHOSE NAME SEARCH WARRANT OF AUTHORIZATION WAS ISSUED. SUBSEQ UENTLY, THE CASE OF THE ASSESSEE WAS CENTRALIZED WITH CENTRAL CIRCLE- 14, N EW DELHI VIDE ORDER F.NO. CIT-KOL-1/CENT./12-13/5922 DELHI DATED 27.12.2012. ACCORDINGLY, THE FOLLOWING SATISFACTION NOTE WAS RECORDED :- SATISFACTION NOTE FOR INITIATING PROCEEDINGS UNDER SECTION 153C READ WITH 153A OF THE INCOME TAX ACT, 1961 IN THE CASE OF M/S CHAMPAK NIKETAN PVT. LTD. (PAN-AABC0420G) THE CASE OF M/S CHAMPAK NIKETAN PVT. LTD. WAS CENTR ALIZED U/S 127 OF THE INCOME TAX ACT, 1961 WITH THE ASSESSING OFFICER, CE NTRAL CIRCLE- 22, NEW DELHI VIDE ORDER NO.FN19/CIT, C-II/CENT./12-13/4050 DATED 18/0 2/2013 PASSED BY CIT (CENTRAL-II), KOLKATA & SUBSEQUENTLY TO THIS CIRCLE BY CIT-III, NEW DELHI VIDE NO.1302 DATED 16/09/2013. ACTION UNDER SECTION 132 OF THE INCOME TAX WAS TAKE N IN JINDAL GROUP OF CASES BY INVESTIGATION DIRECTORATE, NEW DELHI ON 14.11.20 11 AT ITS BUSINESS & RESIDENTIAL PREMISES. DURING THE COURSE OF SEARCH PROCEEDINGS FROM DIFFERENT RESIDENTIAL/BUSINESS PREMISES SEVERAL DOCUMENTS WER E FOUND AND SEIZED. WHILE EXAMINING THE SEIZED DOCUMENTS/BOOKS OF ACCOUNT ETC , I HAVE COME ACROSS THE FOLLOWING DOCUMENTS: PREMISE FROM WHERE DOCUMENTS FOUND AND SEIZED: RESI DENCE OF SH. S.S. JINDAL, MR. BHAVESH JINDAL; ADDRESS 12, GREEN AVENUE, SECTOR- D , POCKET- 3, VASANT KUNJ, NEW DELHI PARTY NO.R4. 3 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 A1 BLANK CHEQUES OF BANK RBS FOR CHAMPAK NIKETAN P VT. LTD. A8 9-25 AUDITOR REPORT OF M/S CHAMPAK NIKETAN PVT. LTD., BALANCE SHEET, INVESTMENT ETC. 123 NOTES ON ACCOUNTS SIGNED BY DIRECTORS, CHEQUE OF RS.5.30 CR. DATED 25/08/2010 IN FAVOUR OF CHAMPAK NIKETAN PVT. LTD. PREMISE FROM WHERE DOCUMENTS FOUND AND SEIZED: RESI DENCE OF SH. S.S. JINDAL, MR. BHAVESH JINDAL; ADDRESS 12, GREEN AVENUE, SECTOR- D , POCKET- 3, VASANT KUNJ, NEW DELHI PARTY NO.R1. A-18 54-60 DETAILS OF SHARES OF CHAMPAK NIKETAN PVT . LTD. PURCHASED. I HAVE EXAMINED THE ABOVE DOCUMENTS AND THE CONTENT S NOTED/WRITTEN THEREIN. AFTER EXAMINATION OF THESE DOCUMENTS, I AM SATISFIE D THAT THESE AFORESAID DOCUMENTS BELONG TO M/S CHAMPAK NIKETAN PVT. LTD. IN VIEW OF THE SAME, I AM FURTHER SATISFIED THAT IT IS FIT CASE FOR INITIATING PROCEEDINGS U/S 153C RWS 153A OF THE INCOME TAX ACT, 1961. ACCORDINGLY, NOTICES U/S 153C RWS 153A ARE REQUIRED TO BE ISSUED AS PER PROVISIONS OF THE INCOME TAX ACT, 1961. 3. THE ASSESSING OFFICER ACCORDINGLY ISSUED NOTICE U/S 153C R.W.S. 153A ON 03.12.2013. THE ASSESSEE IN RESPONSE TO THE SAID N OTICE, FILED ITS RETURN OF INCOME ON 20.12.2013 DECLARING TOTAL INCOME OF RS.4 ,577/-. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS MENTIONED THAT THE ASSESSEE HAS NO OBJECTION FOR COMPLETING THE ASSESSMENT U/S 153C OF THE I.T. ACT WHICH IS IMPLIED. HE FURTHER MENTIONED IN THE ASSESSMENT ORDER THAT THE ORIGINAL RETURN WAS FILED ON 23.11.2006 U/S 139(1) DECLARING TOTAL INCOME OF RS. 4,577/-. IT MAY BE PERTINENT TO MENTION HERE THAT THE ORIGINAL ASSESSMENT WAS CO MPLETED U/S 143(3) VIDE ORDER DATED 17.10.2008 WHEREIN THE ASSESSING OFFICE R HAS DISCUSSED THE ISSUE OF INCREASE IN SHARE CAPITAL AND SHARE PREMIUM BY OBSE RVING AS UNDER :- FROM THE COPY OF BALANCE SHEET, PROFIT & LOSS ACCO UNT AND OTHER ENCLOSURES FILED DURING THE COURSE OF HEARING, IT APPEARS THAT THE A SSESSEE COMPANY DURING THE RELEVANT PREVIOUS YEAR HAD GOT ITS AUTHORIZED SHARE CAPITAL INCREASED BY RS.1,03,00,000/- FROM RS.1,84,00,000/- TO RS.2,87,0 0,000/-. ITS ISSUED, SUBSCRIBED AND 4 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 PAID UP SHARE CAPITAL HAS ALSO BEEN RAISED BY RS.1, 03,45,000/- BY ISSUING 10,34,500 OF EQUITY SHARES @ 10 PER SHARE TO THE FRESH SHARE HOL DERS AND HAS ALSO RAISED SHARE PREMIUM RESERVE OF RS9,31,05,00/- FROM THE FRESH SH ARE HOLDERS. 4. THE ASSESSING OFFICER ISSUED STATUTORY NOTICE U/ S 143(2) AND 142(1) ALONG WITH A QUESTIONNAIRE DATED 03.01.2014 ASKING THE AS SESSEE TO JUSTIFY THE SHARE CAPITAL OF RS.10.34 CRORES RAISED DURING THE YEAR W HICH INCLUDES SHARE APPLICATION MONEY OF RS.1.03 CRORES AND SHARE PREMI UM OF RS.9.31 CRORES. REJECTING THE VARIOUS EXPLANATION GIVEN BY THE ASSE SSEE AND OBSERVING THAT THE ASSESSEE FAILED TO FULFILL THE CRITERIA LAID DOWN I N THE PROVISIONS OF SECTION 68 OF THE I.T. ACT AND FURTHER OBSERVING THAT THE COMPANI ES HAVE INVESTED IN THE SHARES OF THE ASSESSEE COMPANY ARE ONLY PAPER COMPANIES WH ICH ARE NOT DOING ANY BUSINESS MADE ADDITION OF RS.10,34,50,000/- TO THE TOTAL INCOME OF THE ASSESSEE. 5. BEFORE THE LD. CIT(A), THE ASSESSEE APART FROM C HALLENGING THE ADDITION ON MERIT CHALLENGED THE VALIDITY OF ASSUMPTION OF JURI SDICTION U/S 153C OF THE I.T. ACT. IT WAS ARGUED THAT INITIATION AND COMPLETION OF THE ASSESSMENT ORDER U/S 153C AND 153A HAS BEEN DONE BEYOND THE PRESCRIBED L IMITATION PERIOD OF SIX YEARS FROM THE DATE OF HANDING OVER OF MATERIAL OR RECORDING OF SATISFACTION U/S 153C AS PER PROVISO OF SECTION 153C(1) OF THE I.T. ACT. IT WAS ARGUED THAT DOCUMENTS PERTAINING TO THE ASSESSEE WERE HANDED OV ER ON 03.12.2013 AND, THEREFORE, THE ASSESSING OFFICER CAN TAKE ACTION U/ S 153C IN SIX PRECEDING FINANCIAL YEARS I.E. FOR ASSESSMENT YEARS 2008-09 T O 2013-14 ONLY. HOWEVER, THE 5 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 ASSESSING OFFICER HAS WRONGLY ISSUED NOTICE U/S 153 C FOR ASSESSMENT YEARS 2006-07 AND 2007-08 WITHOUT HAVING ANY JURISDICTION . RELYING ON VARIOUS DECISIONS INCLUDING THE DECISION OF THE HONBLE DEL HI HIGH COURT IN THE CASE OF CIT VS. M/S RRJ SECURITIES LTD. REPORTED IN 380 ITR 612, IT WAS ARGUED THAT THE DATE OF HANDING OVER OF MATERIAL BELONGING TO THE A SSESSEE HAS TO BE CONSTRUED AS REFERENCE DATE FOR INITIATION OF ACTION U/S 153C AS AGAINST THE DATE OF INITIATION OF SEARCH THAT HAS TO BE CONSTRUED AS REFERENCE DATE F OR INITIATION OF ACTION U/S 153A OF THE I.T. ACT. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF RRJ SECURITIES LTD. (SUPRA), LD. CIT(A) HELD THAT THE ASSESSMENT COMPLE TED U/S 153C/153A WAS VOID AB-INITIO SINCE THE NOTICE U/S 153C WAS ISSUED BEYO ND THE LIMITATION PERIOD OF SIX YEARS FROM THE REFERENCE DATE. HE, HOWEVER, RE JECTED THE CLAIM OF THE ASSESSEE THAT INITIATION OF PROCEEDINGS U/S 153C WA S NOT VALID SINCE NO BOOKS OF ACCOUNT BELONGING TO THE ASSESSEE AS ENVISAGED IN T HAT SECTION WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH ON THE PERSON RE FERRED IN SECTION 153A OF THE I.T. ACT. THE RELEVANT OBSERVATION OF THE LD. CIT( A) READS AS UNDER :- 5.4 I HAVE CAREFULLY CONSIDERED ASSESSMENT ORDER, WRITTEN SUBMISSIONS, CASE LAWS RELIED UPON AND ORAL ARGUMENTS OF LD. AR. THE OBJEC TIONS/ARGUMENTS OF THE APPELLANT ARE DISCUSSED AS UNDER:- (I) IN THIS CASE B.C. JINDAL GROUP OF CASES, SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT, WAS INITIATED ON 14.11.2011. CASE OF THE A SSESSEE WAS CENTRALIZED WITH ACIT, CENTRAL CIRC1E-22, NEW DELHI, VIDE JURISDICTION ORD ER DATED 27.12.2012 FROM KOLKATTA 6 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 AND SUBSEQUENTLY, CENTRALIZED WITH ACIT, CENTRAL CI RC1E-14, NEW DELHI, VIDE ORDER OF CIT-III, NEW DELHI DATED 16.9.2013. (II) SUBSEQUENTLY, IN THE CASE OF APPELLANT, SATISF ACTION NOTE FOR INITIATING ACTION U/S 153C, WAS RECORDED, AFTER RECEIVING THE DOCUMEN TS ON 03.12.2013 PERTAINING TO THE ASSESSEE. SINCE, A.O. OF BOTH THE PERSONS, WAS SAME AND THEREFORE, PHYSICAL HANDING OVER OF THE DOCUMENTS WAS ASSUMED BY THE A. O. ON 03.12.2013. ACCORDINGLY, A.O. ISSUED NOTICE U/S 153C, ON 03.12.2013. (III) IN THE APPELLATE PROCEEDINGS, THE APPELLANT HAS SUBMITTED THAT THE DOCUMENTS PERTAINING TO APPELLANT, WERE HANDED OVER ON 03.12. 2013 AND THEREFORE, A.O. CAN TAKE ACTION U/S 153C IN 6 PRECEDING F.YS. I.E. FOR A.Y. 2008-09 TO A.Y. 2013-14 ONLY. HOWEVER, THE A.O. HAS WRONGLY ISSUED NOTICES U/S 15 3C FOR A.Y. 2006-07 AND A.Y. 2007-08, WITHOUT JURISDICTION. FOR THE ABOVE SUBMISSION, THE APPELLANT HAS ALSO RE LIED UPON THE DECISION OF JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT -7 VS. M/S RRJ SECURITIES LTD., [2016] 380 ITR 612 (DELHI), WHERE IT HAS BEEN HELD THAT THE DATE OF HANDING OVER OF MATERIAL, WILL BE CONSTRUED AS THE REFERENCE DATE F OR INITIATION OF ACTION U/S 153C, AS AGAINST DATE OF INITIATION OF SEARCH CONSTRUED THE REFERENCE DATE FOR INITIATION OF ACTION U/S 153A. THE RELEVANT PORTION OF DECISION HAS ALSO BEEN REPRODUCED IN THE WRITTEN SUBMISSIONS (SUPRA). FROM THE ABOVE, FOLLOWING FACTS EMERGED: THE DOCUMENTS WERE HANDED OVER TO THE A.O. ON 03.12 .2013 AND ACTION 153C WAS ALSO INITIATED ON 03.12.2013 ITSELF, AFTER RECO RDING SATISFACTION, AS PER PROVISO TO SECTION 153C (1) OF THE ACT, THE REFERENCE DATE FOR TAKING ACTION U/S 153C, WILL BE AS 03.12.2013 IN THE CASE OF APPELLANT, INSTEAD OF DATE OF SEARCH ON 14.11.2011, WHICH IS REQUIRED FOR TAKI NG ACTION 153A,AND THE 6 PRECEDING A.Y.S , WILL BE FROM A.Y. 2008-09 T O A.Y. 2013-14 ONLY. FROM THE ABOVE, IT IS CLEAR THAT A.O. HAS WRONGLY I SSUED NOTICES U/S 153C FOR A.Y. 2006-07 AND A.Y. 2007-08, SINCE THE DOCUMENTS WERE HANDED OVER ON 03.12.2013. THEREFORE, THE NOTICE ISSUED BY THE A .O., IS BEYOND THE LIMITATION PERIOD OF 6 YEARS FROM THE REFERENCE DATE, PRESCRI BED IN THE FIRST PROVISO TO SECTION 153C(1) AND 153A(1) OF ACT. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINIO N THAT THE ASSESSMENT COMPLETED U/S 153C/ 153A OF THE ACT, IS VOID AB-INI TIO, AS THE A.O. HAS NO JURISDICTION MAKING THE ASSESSMENT FOR A.Y. 2006-07, BEING BEYON D PERIOD OF 6 YEARS. AS SUCH, FACTS OF THE APPELLANT ARE SQUARELY COVERED BY THE RATIO LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT OF DELHI, IN THE CASE OF CIT-7 VS. M/S RRJ SECURITIES LTD., [2016] 380 : 612 (DELHI) (SUPRA). IN VIEW OF THE ABOVE, I AGREE WITH THE ARGUMENTS OF THE APPELLANT AND THEREFORE, I HOLD THAT THE ASSESSMENT COMPLETED U/S 153C/153A, IS VOID AB INITIO, SINCE NOTICE U/S 153C WAS ISSUED BEYOND LIMITATION PERIOD OF 6 YEARS FROM THE REFERENCE DATE. 7. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S :- 7 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ASSESSMENT COM PLETED U/S 153C/153A OF THE I.T. ACT, 1961 IS VOID AB-INITIO, AS THE A.O. HAS NO JUR ISDICTION FOR MAKING THE ASSESSMENT FOR A.Y. 2006-07, BEING BEYOND PERIOD OF SIX YEARS RELYING ON THE JUDGEMENT OF HON'BLE HIGH COURT OF DELHI, IN THE CASE OF CIT-7 V S. M/S RRJ SECURITIES LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE REFERENCE DATE FOR TAKING ACTION U/S 153C IS 03.12.2013, DATE OF INITIATING ACTION U/S 153C, INS TEAD OF DATE OF SEARCH ON 14.11.2011. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE FIRST PROVISO TO SECTION 15 3C OF THE INCOME TAX ACT, 1961 ENVISAGES THE SIX ASSESSMENT YEARS FOR THE PURPOSE OF ASSESSMENT U/S 153C BE DETERMINED FROM THE DATE ON WHICH SEIZED DOCUMENTS ARE CONSIDERED TO BE HANDED OVER IGNORING THE FACT THAT FIRST PROVISO TO SECTIO N 153C IS TO BE READ ONLY IN THE CONTEXT OF SECOND PROVISO TO SUB-SECTION 1 OF SECTI ON 153A, WHICH DEALS WITH ABATEMENT OF PENDING ASSESSMENT/ REASSESSMENT PROCE EDINGS ON THE DATE OF INITIATION OF SEARCH? 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW IN HOLDING THAT THE SIX ASSESSMENT YEARS FOR TH E PURPOSE OF ASSESSMENT U/S 153C OF THE INCOME TAX ACT, 1961 BE DETERMINED FROM THE DAT E ON WHICH SEIZED DOCUMENTS ARE CONSIDERED TO BE HANDED OVER TO THE JURISDICTIONAL AO IGNORING THE FACT THAT AS PER SECTION 153C(1) OF THE INCOME TAX ACT 1961, THE AO HAS TO ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH PROVISION O F THE SECTION 153A OF THE INCOME TAX ACT, 1961, ITSELF, THAT THE SECTION 153A(1) HAS UNAMBIGUOUSLY DEFINED THAT THE AO SHALL ASSESS OR REASSESS THE TOTAL INCOME OF SIX AS SESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE? 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE SIX PRECEDING A.YS. WILL BE FROM A.Y. 2008-09 TO A.Y. 2013-14 ONLY INSTEAD OF A.Y. 2006-07 TO A.Y. 2 011-12. 6. THAT THE ORDER OF THE CIT(A) IS PERVERSE, ERRONE OUS AND IS NOT TENABLE ON FACTS AND IN LAW. 7. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHER. 8. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER OR FORGO ANY GROUND(S) OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT THE SEARCH IN THE CASE OF JINDAL GROUP OF CASES TOOK PLACE ON 14. 11.2011 DURING WHICH CERTAIN DOCUMENTS/BILLS BELONGING TO THE ASSESSEE WERE FOUN D AND SEIZED FROM THE 8 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 PREMISES OF THE SEARCHED PARTIES. IT IS ALSO AN AD MITTED FACT THAT THE SATISFACTION NOTE WAS PREPARED ON 03.12.2013 AND THE DOCUMENTS W ERE HANDED OVER ON 03.12.2013. THE NOTICE U/S 153C WAS ALSO ISSUED TO THE ASSESSEE ON 03.12.2013. 9. IT IS THE SUBMISSION OF LD. COUNSEL FOR THE ASSE SSEE THAT AS PER THE PROVISO TO SECTION 153C(1) OF THE I.T. ACT, THE REFERENCE D ATE FOR TAKING ACTION U/S 153C WILL BE 03.12.2013 IN THE CASE OF THE ASSESSEE AND THEREFORE, THE IMPUGNED ASSESSMENT YEAR FALLS OUTSIDE THE PURVIEW OF THE PE RIOD OF SIX YEARS. 10. WE FIND THE PROVISIONS OF SECTION 153C READ AS UNDER :- ASSESSMENT OF INCOME OF ANY OTHER PERSON. 153C. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHER E THE ASSESSING OFFICER IS SATISFIED THAT, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR R EQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES T O, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHA LL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NO TICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE P ROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF AC COUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATIO N OF THE TOTAL INCOME OF SUCH OTHER PERSON 17 [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CO NDUCTED OR REQUISITION IS MADE AND] FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A : PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REF ERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITI ON UNDER SECTION 132A IN THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A S HALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUM ENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON : PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES 18 MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY THE CLAS S OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER S HALL NOT BE REQUIRED TO ISSUE NOTICE 9 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR S IX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE 19 [AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS AS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A] EXC EPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED. (2) XXXXX 11. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF RRJ SECURITIES LTD. (SUPRA) HAS HELD THAT THE PROVISO TO SECTION 153C(1 ) EXPRESSLY INDICATE THAT REFERENCE TO THE DATE OF INITIATION OF SEARCH FOR T HE PURPOSE OF SECOND PROVISO TO SECTION 153A, SHALL BE CONSTRUED AS A REFERENCE TO THE DATE ON WHICH VALUABLE ASSETS OR DOCUMENTS ARE RECEIVED BY THE ASSESSING O FFICER OF AN ASSESSEE (OTHER THAN THE SEARCH PERSON). WE FIND THE HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. SARWAR AGENCY (P.) LTD. REPORTED IN 397 ITR 400 AFTER CONSIDERING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES LTD. (SUPRA) HAS OBSERVED AS UNDER :- 6. THE CASE OF THE REVENUE IS THAT THE FIRST PROVI SO TO SECTION 153 C REFERS ONLY TO THE SECOND PROVISO TO SECTION 153 A(1) OF THE ACT, WHICH ONLY INDICATES THAT ANY ASSESSMENT RELATING TO ANY AY FALLING WITHIN THE PE RIOD OF SIX AYS WHICH IS PENDING AS OF THE INITIATION OF SEARCH SHALL ABATE. THEREFORE, THE SECOND PROVISO TO SECTION 153 C IS ALSO CONCERNED ONLY WITH THE ASPECT OF ABATEMENT OF PENDING ASSESSMENTS. ACCORDING TO THE REVENUE, THIS MAKES NO DIFFERENCE TO THE COMPUTATION OF THE BLOCK OF SIX YEARS PRECEDING THE AY RELEVANT TO THE PREVIOUS YEAR /IN WHICH THE SEARCH WAS CONDUCTED. IN OTHER WORDS, ACCORDING TO THE REVENUE , THE BLOCK PERIOD FOR BOTH THE SEARCHED PERSON AND THE 'OTHER PERSON' WOULD REMAIN THE SAME NOTWITHSTANDING THAT THERE MAY BE SOME DELAY IN TRANSMITTING THE DOCUMEN TS RECOVERED DURING THE SEARCH WHICH BELONG OR PERTAIN TO THE 'OTHER PERSON' TO TH E AO OF SUCH OTHER PERSON. 7. THE CASE OF THE ASSESSEE, ON THE OTHER HAND, IS THAT SINCE IN THE CASE OF THE 'OTHER PERSON' THE AO ISSUES NOTICE ONLY SUBSEQUENT TO THE NOTICES ISSUED UNDER SECTION 153 A TO THE SEARCHED PERSON, THE STARTING POINT FOR COMPUTATION OF THE BLOCK PERIOD WOULD BE THE DATE ON WHICH, BASED ON THE SEI ZED DOCUMENTS, NOTICE IS ISSUED TO 10 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 THE 'OTHER PERSON' UNDER SECTION 153 C OF THE ACT. THUS IN THE PRESENT CASE, THE SIX YEAR PERIOD PRIOR TO AY 2012-13 I.E. AY 2007-08 TO AY 2012-13. THUS NO NOTICE COULD BE ISSUED UNDER SECTION 153 C OF THE ACT TO REOPEN THE ASSESSEE'S ASSESSMENT FOR AY 2006-07. RELIANCE IS PLACED ON THE DECISION OF THIS COURT IN COMMISSIONER OF INCOME- TAX-7 V. RRJ SECURITIES LTD. [2016] 380 ITR 612 (DE L) WHERE THIS VERY QUESTION WAS EXAMINED AND ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. IN RRJ SECURITIES (SUPRA), THE COURT AFTER NOTIC ING THE DECISION IN SSP AVIATION LTD. V. DEPUTY CIT[2012] 346 ITR 177 (DEL) , HELD AS FOLLOWS: '21. AS DISCUSSED HEREINBEFORE, ONCE THE AO OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED ASSETS/DOCUMENTS BELONG T O ANOTHER PERSON AND THE SAID ASSETS/DOCUMENTS HAVE BEEN TRANSFERRED TO THE AO OF SUCH OTHER PERSON, THE PROCEEDINGS FOR ASSESSMENT/REASSESSMENT OF INCO ME OF THE OTHER PERSON HAS TO PROCEED IN ACCORDANCE WITH PROVISIONS OF SEC TION 153A OF THE ACT. SECTION 153A REQUIRES THAT WHERE A SEARCH HAS BEEN INITIATED UNDER SECTION 132 OF THE ACT, THE AO IS REQUIRED TO ISSUE NOTICE REQUIRING THE NOTICEE TO FURNISH RETURNS OF INCOME IN RESPECT OF SIX ASSESSM ENT YEARS RELEVANT TO THE SIX PREVIOUS YEARS PRECEDING THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED. AS DISCUSSED HEREINBEFORE, BY VIRTUE OF SECOND PROV ISO TO SECTION 153A, THE ASSESSMENT/REASSESSMENT PENDING ON THE DATE OF INIT IATION OF SEARCH ABATE. IN THE CONTEXT OF PROCEEDINGS UNDER SECTION 153C OF TH E ACT, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH IN THE SECOND PROV ISO TO SECTION 153A HAS TO BE CONSTRUED AS THE DATE ON WHICH THE AO RECEIVES THE DOCUMENTS OR ASSETS FROM THE AO OF THE SEARCHED PERSON. THUS, BY VIRTUE OF S ECOND PROVISO TO SECTION 153A OF THE ACT AS IT APPLIES TO PROCEEDINGS UNDER SECTION 153C OF THE ACT, THE ASSESSMENT/REASSESSMENT PENDING ON THE DATE ON WHIC H THE ASSETS/DOCUMENTS ARE RECEIVED BY THE AO WOULD ABATE. IN RESPECT OF S UCH ASSESSMENTS WHICH HAVE ABATED, THE AO WOULD HAVE THE JURISDICTION TO PROCEED AND MAKE AN ASSESSMENT. HOWEVER, IN RESPECT OF CONCLUDED ASSESS MENTS, THE AO WOULD ASSUME JURISDICTION TO REASSESS PROVIDED THAT THE A SSETS/DOCUMENTS RECEIVED BY THE AO REPRESENT OR INDICATE ANY UNDISCLOSED INCOME OR POSSIBILITY OF ANY INCOME THAT MAY HAVE REMAINED UNDISCLOSED IN THE RE LEVANT ASSESSMENT YEARS..... 24. AS DISCUSSED HEREINBEFORE, IN TERMS OF PROVISO TO SECTION 153C OF THE ACT, A REFERENCE TO THE DATE OF THE SEARCH UNDER TH E SECOND PROVISO TO SECTION 153A OF THE ACT HAS TO BE CONSTRUED AS THE DATE OF HANDING OVER OF ASSETS/DOCUMENTS BELONGING TO THE ASSESSEE (BEING T HE PERSON OTHER THAN THE ONE SEARCHED) TO THE AO HAVING JURISDICTION TO ASSE SS THE SAID ASSESSEE. FURTHER PROCEEDINGS, BY VIRTUE OF SECTION 153C(1) O F THE ACT, WOULD HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO THE DATE OF SEARCH WOULD HAVE TO BE CONSTRUED AS THE REFERENCE TO THE DATE OF RECORDING OF SATISFACTION. IT WOULD FOLLOW THAT THE SIX ASSESSME NT YEARS FOR WHICH ASSESSMENTS/REASSESSMENTS COULD BE MADE UNDER SECTI ON 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO T HE DATE OF HANDING OVER OF ASSETS/DOCUMENTS TO THE AO OF THE ASSESSEE.' 11 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 9. THE SAID DECISION IN RRJ SECURITIES (SUPRA) HAS BEEN FOLLOWED BY THIS COURT SUBSEQUENTLY IN ARN INFRASTRUCTURE INDIA LTD. V. AS SISTANT COMMISSIONER OF INCOME- TAX, CENTRAL CIRCULE-28, NEW DELHI[2017] 394 ITR 56 9 (DEL.). 10. MR. SALIL AGGARWAL, LEARNED COUNSEL FOR THE ASS ESSEE, HAS DRAWN THE ATTENTION OF THE COURT TO THE RECENT AMENDMENT MADE IN SECTIO N 153 C OF THE ACT BY THE FINANCE ACT, 2017 WITH EFFECT FROM 1ST APRIL 2017. THIS AME NDMENT IN EFFECT STATES THAT THE BLOCK PERIOD FOR THE SEARCHED PERSON AS WELL AS THE 'OTHER PERSON' WOULD BE THE SAME SIX AYS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. T HIS AMENDMENT IS PROSPECTIVE. 11. MR. ASHOK MANCHANDA, LEARNED SENIOR STANDING CO UNSEL FOR THE APPELLANT, SOUGHT TO PURSUE THIS COURT TO RECONSIDER ITS VIEW IN RRJ SECURITIES (SUPRA). THE COURT DECLINES TO DO SO FOR MORE THAN ONE REASON. F IRST, FOR REASONS BEST KNOWN TO IT, THE REVENUE HAS NOT CHALLENGED THE DECISION OF THIS COURT IN RRJ SECURITIES (SUPRA) IN THE SUPREME COURT. THE SAID DECISION HAS BEEN CONSI STENTLY FOLLOWED BY THE AUTHORITIES UNDER THIS COURT AS WELL AS BY THIS COU RT. THIRDLY, THE RECENT AMENDMENT TO SECTION 153 C(1) OF THE ACT STATES FOR THE FIRST TI ME THAT FOR BOTH THE SEARCHED PERSON AND THE OTHER PERSON THE PERIOD OF REASSESSMENT WOU LD BE SIX AYS PRECEDING THE YEAR OF SEARCH. THE SAID AMENDMENT IS PROSPECTIVE. 12. CONSEQUENTLY, NO SUBSTANTIAL QUESTION OF LAW AR ISES FROM THE IMPUGNED ORDER OF THE ITAT. THE APPEAL IS, ACCORDINGLY, DISMISSED. 12. WE FIND THE HONBLE DELHI HIGH COURT IN THE CAS E OF PR.CIT VS. R.L. ALLIED VIDE ITA NO.370/2015 AND BATCH OF OTHER APPE ALS ORDER DATED 28.01.2016 FOLLOWING THE DECISION IN THE CASE OF RRJ SECURITIE S LTD. (SUPRA) HAS OBSERVED AS UNDER :- 7. THIS COURT REITERATES THE VIEW ALREADY EXPRESSE D BY IT IN RRJ SECURITIES (SUPRA) WHEN IT COMES TO REOPENING OF ASSESSMENTS O F A PERSON OTHER THAN THE SEARCHED PERSON, IN TERMS OF THE FIRST PROVISO TO S ECTION 153C(1). IN SUCH EVENT THE DATE OF SEARCH WOULD GET POSTPONED TO THE DATE OF R ECEIPT OF THE BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED BY THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON AND THE SIX EARLIER AYS WOULD HAVE TO BE RECKONED WITH REFERENC E TO SUCH POSTPONED DATE OF SEARCH. THE FIRST PROVISO TO SECTION 153 B (1) DOES NOT SUPPORT THE CASE SOUGHT TO BE CANVASSED BY THE REVENUE. IT REFERS TO AND ACKNOWLE DGES THAT THE DATE OF SEARCH QUA THE 'OTHER PERSON', IN TERMS OF THE FIRST PROVISO T O SECTION 153 C (1), GETS POSTPONED TO THE DATE ON WHICH DOCUMENTS ARE HANDED OVER TO THE AO OF THE 'OTHER PERSON'. CONSEQUENTLY, THE QUESTION OF REFERRING THE CASE TO A LARGER BENCH DOES NOT ARISE. 12 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 8. IN THE PRESENT CASE, THERE IS NO DOUBT THAT IT W AS ONLY ON 24TH MARCH 2009 THAT THE AO OF THE ASSESSEE RECEIVED THE DOCUMENTS SEIZE D AND IT WAS ON THAT DATE A NOTICE UNDER SECTION 153C (1) WAS ISSUED AND SERVED UPON T HE ASSESSEE. CONSEQUENTLY, THIS COURT FINDS NO LEGAL ERROR IN THE CONCLUSION OF THE ITAT THAT NOTICE UNDER SECTION 153C (1) COULD NOT HAVE BEEN ISSUED FOR AYS 2001-02 AND 2002-03. 9. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSID ERATION. THE APPEALS ARE DISMISSED. 13. SINCE IN THE INSTANT CASE ALSO THE DOCUMENTS WE RE HANDED OVER TO THE ASSESSING OFFICER ON 03.12.2013 AND ACTION U/S 153C WAS ALSO INITIATED ON 03.12.2013 A FINDING GIVEN BY THE LD. CIT(A) AND NO T CONTROVERTED BY THE LD. DR, THEREFORE, THE SIX PRECEDING ASSESSMENT YEARS W ILL BE FROM A.Y. 2008-09 TO 2013-14. SINCE IN THE INSTANT CASE, THE ASSESSING OFFICER HAS ISSUED NOTICE U/S 153C TO THE ASSESSEE FOR ASSESSMENT YEAR 2006-07, T HEREFORE, THE SAME BEING BEYOND THE PERIOD OF SIX PRECEDING ASSESSMENT YEARS FROM THE REFERENCE DATE IS VOID AB-INITIO. THEREFORE, THE ASSESSMENT COMPLETE D U/S 153C/153A FOR THE IMPUGNED ASSESSMENT YEAR IS VOID AB-INITIO SINCE TH E ASSESSING OFFICER HAS NO JURISDICTION FOR MAKING THE ASSESSMENT FOR ASSESSME NT YEAR 2006-07 BEING BEYOND THE PERIOD OF SIX YEARS. SINCE THE ORDER OF THE LD. CIT(A) IS IN ACCORDANCE WITH LAW LAID DOWN BY THE HONBLE JURISD ICTIONAL HIGH COURT, THEREFORE, IN ABSENCE OF ANY CONTRARY MATERIAL BROU GHT TO OUR NOTICE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) H OLDING THE ASSESSMENT AS VOID AB-INITIO. ACCORDINGLY, THE ORDER OF LD. CIT(A) IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 13 ITA NO.5692/DEL/2016 C.O. NO.39/DEL/2017 C.O. NO.39/DEL/2017 (ASSESSEE) : 14. THE ASSESSEE IN THE CROSS OBJECTION HAS RAISED THE FOLLOWING CROSS-GROUND :- 1. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NO T APPRECIATING THAT THE INITIATION OF PROCEEDINGS UNDER SECTION 153C WAS NO T VALID INASMUCH AS NO BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE APPELLANT AS ENVISAGED UNDER THAT SECTION WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH O N THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. 15. SINCE THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED, THE CROSS OBJECTION FILED BY THE ASSESSEE BECOMES INFRUCTOUS. WE, THEREFORE, DISMISS THE GROUND RAISED BY THE ASSESSEE IN THE CROSS OBJECTIO N BEING ACADEMIC IN NATURE. 16. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS CROSS OBJECTION FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MAY, 2018. SD/- SD/- (SUDHANSHU SRIVASTAVA) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25-05-2018. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT 4) THE CIT(A) 5) THE DR, I.T.A.T., NEW DELHI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI