DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2 (2), PUNE V. M/S. SAVITRIBAI PHULE SHIKSHAN PRASARAK MANDAL, SOLAPUR

MA 116/PUN/2023

AI Insights

The case revolves around a Miscellaneous Application filed by the Revenue against the Tribunal's earlier decision which favored the assessee, M/s. Savitribai Phule Shikshan Prasarak Mandal, in a dispute concerning the validity of assessment proceedings under Section 153C of the Income Tax Act, 1961. The Revenue challenged the Tribunal's reliance on a Bombay High Court decision, citing a subsequent Supreme Court judgment that allegedly supported their position. However, the Tribunal found that the Supreme Court's decision was not available at the time of their original ruling and thus could not be applied retrospectively. The Tribunal also addressed the procedural issue of the delay in filing the Miscellaneous Application, noting that it was filed beyond the statutory period, which it could not condone.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 29541 (ITAT-PUNE)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Other Referred Cases: CIT vs. M/s. Arpit Land Pvt. Ltd., Income Tax Officer vs Vikram Sujitkumar Bhatia
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ TRIPATHI
• Assessee Lawyers: SUHAS BORA
• Keywords: Document seized; Documents seized; Period of limitation; Reopening of assessment; Search and seizure; Charitable institution; Validity of assessment
• Section: 143(3); 254(2); 12AA; 153; 132; 13; 153C; 12

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” ɊायपीठपुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFOREMS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER Miscellaneous Application No.116/PUN/2023 (arising out of IT(SS)A No.23/PUN/2019) िनधाᭅरण वषᭅ / Assessment Year: 2013-14 The Deputy Commissioner of Income Tax, Central Circle-2(2), Pune. V s M/s.Savitribai Phule Shikshan Prasarak Mandal, Kamlapur, Taluka Sangola, District Solapur – 413307. PAN: AAFTS0635J Appellant/ Assessee Respondent /Revenue Assessee by Shri Suhas Bora – AR Revenue by Shri Manoj Tripathi – DR Date of hearing 29/11/2024 Date of pronouncement 06/02/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This Miscellaneous application filed by the Revenue against the Tribunal order in IT(SS)A No.23/PUN/2019 for A.Y.2013-14, dated 27.07.2022. MA No.116/PUN/2023 [R] 2 2. The Revenue has stated in the Miscellaneous Application as under : “01. The Hon'ble Tribunal was pleased to allow the appeal of the assesse IT(SS)A No.23/PUN/2021 vide order dated 27.07.2022 by placing reliance on the decision of Hon'ble Bombay High Court in Income Tax Appeal No. 83/2014 CIT vs. M/s. Arpit Land Pvt. Ltd. dated 07.02.2017. Subsequently, on the issue of validity of assessment u/s 153C proceedings, the Hon'ble Apex Court vide its judgment dated 06.04.2023in Income Tax Officer vs Vikram Sujitkumar Bhatia decided the appeal in favour of Revenue. This verdict of the Hon'ble Apex Court has bearing on the decision of Hon'ble ITAT order dated 27.07.2022 The facts of the case are as under 02. Search and seizure action was carried out in the case of Sinhgad Technical Education Society and Maruti Nivrutti Navale group of cases on 06.08.2013. On perusal of certain seized documents, it was found that cash of Rs. 1 13 Crores was introduced in the books of assessee and donation receipts were prepared later. In view of the available information, the AO recorded satisfaction u/s 153C of the Act stating that certain incriminating documents seized during the search action \"pertains to\" the assesssee. Accordingly, the assessment proceedings u/s 153C of the Act were completed on 31.03.2016making addition of Rs.1.13 Crores to the total income of the assessee. In the assessment order, it was held that the cash receipts were not genuine donations/voluntary contributions as per provisions of Section 12 of the Act and were treated as capitation fees and sham transactions. 03 Aggrieved by the assessment order passed, the assessee filed appeal before Ld. CIT(A) which upheld the addition made. Further, the assessee filed appeal before the Hon'ble ITAT, Pune. The Hon'ble ITAT decided the assessee's appeal vide order dated MA No.116/PUN/2023 [R] 3 27.07.2022 and quashed the impugned assessment proceedings u/s 153C of the Act as the AO recorded the satisfaction note u/s 153C stating that the corresponding seized material in fact pertains to the assessee herein and thus had a bearing on its undisclosed income. The Hon'ble ITAT relied on the Hon'ble Bombay High Court's decision in Income Tax Appeal No. 83/2014 CIT Vs. Mos. Arpit Land Pvt. Ltd. dated 07.02.2017. The Hon'ble High Court was of the view that the Revenue has to strictly comply with the Section 153C of the Act and the non satisfaction of the condition precedent viz, seized documents must belong to respondent assessee is a jurisdictional issue and non satisfaction thereof would make the entire proceedings taken thereunder null and void. The Hon'ble ITAT reiterated that the AO used clinching statutory expressions \"pertains to\" and has a bearing which was introduced in the Act vide Finance Act, 2015 we.f. 01.06.2015 having prospective operation only whereas the search action in the case of assessee was carried out on 01 10.2013 04 In this regard, it is pertinent to note that the 2015 amendment to section 153C was a case of substitution of words, whereby \"belong/belongs\" was replaced with \"pertain/pertains. Recently, the Hon'ble Apex Court in its latest decision in Income Tax Officer vs Vikram Sujitkumar Bhatia and 114 connected cases decided the validity of assessment proceedings u/s 153C of the Act. In this case, the question, \"Whether the amendment brought to Section 153C of the Income Tax Act, 1961 vide Finance Act, 2015 would be applicable to searches conducted under Section 132 of the Act, 1961 before the date of amendment?\" was answered. It was held that the amendment brought to Section 153C of the Act, 1961 vide Finance Act, 2015 shall be retrospectively applicable to searches conducted under Section 132 of the Act, 1961 before 01.06.2015, ie., the date of amendment. 05 In view of the above discussion, the satisfaction note in the case of assessee as recorded by the then AO cannot be termed as bad in law Further, the incriminating materials pertaining to the assessee were found and seized during the search action and accordingly the AO was right in assuming jurisdiction u/s 153C of the Act. MA No.116/PUN/2023 [R] 4 Hence, the rulings of the Hon'ble High Courts on which the Hon'ble ITAT relied upon have become void. 06 Further, in this case, the Hon'ble ITAT passed order on 27.07.2022 and it was received in the office of the undersigned on 10.01.2023. Further, the last date for filing Miscellaneous Application in this case was 31.01.2023 However, the decision of the Apex Court in Income Tax Officer vs Vikram Sujitkumar Bhatia and 114 connected cases was passed on 06.04.2023. In view of the above mentioned factual matrix, the Miscellaneous Application could not be filed within due date. 07 Therefore, in light of Hon'ble Supreme Court's judgement and the reasons discussed above, it is prayed to condone the delay of 98 days and modify/rectify the appellate order dated 27.07.2022 and recall the order in the interest of Justice.” 2.1 Written Submissions made by the Assessee are as under : “1. The appellant is a charitable trust duly registered under The Bombay Public Trust Act and also U/Sec. 12AA of the Income Tax Act, 1961. 2. The appellant is involved in the activity of imparting education and is having educational campus at Kamalpur, Pandarpur, Solapur (all in Solapur District only). 3. Search and seizure action U/Sec. 132 of the Act was conducted at STES and Others on 06.08.2013. 4. During the course of search, certain documents pertaining to the appellant were found and seized. 5. The assessing officer issued notice U/Sec. 153C of the Act on 13.01.2016 to file the return for AY 2013-14 to which the appellant trust submitted a letter dated 18.01.2016 informing the AO that the return filed on 18.06.2013 may be treated as return filed in response to said notice. MA No.116/PUN/2023 [R] 5 6. The appellant requested for copy of satisfaction note which was provided by the AO and the appellant vide letter dated 18.03.2016 made a detailed submissions with reference to the documents mentioned in the satisfaction note and pointed out that there were no incriminating documents in respect of AY 2013-14 and therefore the reopening of assessment for this year was invalid. 7. The learned AO has not appreciated the submissions made and the objections taken by the appellant trust and assessed the total income at Rs.1,13,00,000/- by considering the donation as income not eligible for set off being sham transaction by passing an assessment order U/Sec. 153C r.w.s. 143(3) of the Act on 31.03.2016. 8. In the case of the STES, the search action U/Sec. 132 of the Act has been carried out on 06.08.2013 and therefore provisions of Section 153C of the Act stating \"belongs to or belong to a person\" shall prevail and the AO in the satisfaction note has categorically stated that \"the incriminating documents found and seized during the course of search at the office premises of Sinhagad Technical Education Society are pertains to Savitribai Phule Shikshan Prasarak Mandal\". Accordingly, it is submitted that the notice issued U/Sec.153C of the Act is bad in law and void ab initio. 9. Hon'ble Bench vide order dated 27.07.2022 has after an elaborate discussion and following the decision of Hon'ble jurisdictional HC in ITA no.83/2014 in the case of CIT vs M/s Arpit Land Pvt Ltd dated 07.02.2017 has decided the issue of validity of assessment completed u/sec 153C of the Act in favor of the assessee by holding that \"We adopt the forgoing detailed discussion mutatis mutandis to quash the impugned section 153 assessment since not based on proper satisfaction recorded under the provisions of the Act. All other pleadings on merits stand rendered acamedic.\" (Refer para 4 of the decision). At para 5 accordingly it is held that assessee's appeal is allowed in the above terms. MA No.116/PUN/2023 [R] 6 10. Against the said ITAT order dated 27.07.2022 MA is filed on 09.05.2023 contending that the said ITAT order was not acceptable to the revenue because the Hon'ble Apex Court in its latest decision ITO vs Vikram Sujitkumar Bhatia and 114 connected cases decided the validity of assessment proceedings u/s 153C of the Act. In this case, the question \"Whether the amendment brought to section 153C of the Act vide Finance Act 2015 would be applicable to searches conducted u/s 132 of the Act before the date of amendment was answered. It was held that amendment brought to section 153C of the Act vide Finance Act shall be retrospectively applicable to searches conducted u/s 132 of the Act before 01.06.2015 i.e date of amendment which is a mistake apparent and prayed for rectification u/sec 254(2) of the Act. Submission 1. MA filed by the AO not maintainable being barred by limitation. 1.1 At the outset it is submitted that MA in this case has been filed on 09.05.2023 in relation to the ITAT order dated 27.07.2022. The amended law of section 254(2) provides that a miscellaneous application to be necessarily filed within a period of six months from the end of the month in which the order has been passed. In the case of the appellant Hon'ble ITAT passed the order on 27.07.2022and hence the period of six months had already expired on 31.01.2023 thus there is a delay of 98 days (it is admitted by the AO at para 6 and 7 of the MA). 1.2 The statutory period of limitation has been provided in the Act itself without any relaxation or discretion conferred on the ITAT to condone the delay, if any in filing MA, therefore it is submitted that Tribunal has no power to condone the delay in any case. 1.3 In support of this contention, we rely upon the following decisions: i. Hon'ble Punjab & Haryana High Court in the case of Raja Malwinder Singh vs. UOI & Anr. ((2006) 278 ITR 568). MA No.116/PUN/2023 [R] 7 ii. Hon'ble ITAT Delhi in the case of Rahul Jee & Co. (P.) Ltd. vs. ACIT, Company Circle-2(1), New Delhi [(2009) 120 ITD 481). iii. Hon'ble ITAT Hyderabad in the case of Paresh Dhanji Chedda vs. DCIT (Asst.), Special Range-2, Hyderabad [M.A. Nos. 99 to 112 (Hyd.) of 2015, Order dated on 15.07.2016]. iv. Hon'ble ITAT Nagpur in the case of Daryapur Shetkari Sahakari Ginning & Pressing Factory Ltd. vs. ACIT, Amravati [MA Nos. 12 to 14/NAG/2019, Order dated 20.03.2020). V. Hon'ble ITAT Jaipur in the case of DCIT /CPC/ITO, Ward-6(4), Jaipur vs. Suman Solanki [M.A. No. 13/JP/2023, Order dated on 17.07.2023. Accordingly, it is prayed that the present MA filed by the revenue deserves to be completely dismissed as not maintainable being barred by the limitation. 2. On Merits 2.1 Even on merits also, there is no mistake in the order of Hon'ble ITAT dated 27.07.2022, as the Hon'ble ITAT had passed the order on 27.07.2022 whereas the decision in the case of ITO vs Vikram Sujitkumar Bhatia and 114 connected cases was passed on 06.04.2023 i.e much later to the order of the ITAT dated 27.07.2022.It is submitted that the aforesaid decision of Apex Court was not available on the day when the order was passed on 27.07.2022 and not on the day when CIT(A) has passed the order on 17.01.2019 as well as on the date 31.12.2016 when AO has passed the order u/sec 153C r.w.s.143(3) of the Act. Therefore the Hon'ble ITAT has committed no mistake because the Apex Court decision was not available before them. 2.2 On the contrary on the date of passing the order of the CIT(A) dated 17.01.2019 and order of the Hon'ble ITAT dated 27.07.2022 the binding decision of the Hon'ble jurisdictional BHC decision in MA No.116/PUN/2023 [R] 8 the case of ITA no.83/2014 in the case of CIT vs M/s Arpit Land Pvt Ltd dated 07.02.2017 was available before the Hon'ble ITAT and were duly taken a note at para 3 on page 3 to 5 of the ITAT order and relied upon. 2.3 It is submitted that since the Hon'ble ITAT bench while deciding the issue in favor of the assessee by relying upon the decision of Hon'ble jurisdictional HC and therefore in view of the binding judgement under Article 227 of the Constitution of India, it is submitted that the order of the Hon'ble ITAT dated 27.07.2022 cannot be said to be erroneous requiring any rectification.” Findings & Analysis : 3. We have heard both the parties and perused the records. It is an admitted fact in this case ITAT order in IT(SS)A No.23/PUN/2019 dated 27.07.2022 was served on Revenue on 10.01.2023. 3.1 In this case, Revenue has pleaded that Hon’ble Supreme Court vide order dated 06.04.2023 in the case of Income Tax Officer Vs. Vikram Sujitkumar Bhatia held that the Amendment in Section 153C is retrospective. The observation of the Hon’ble Supreme Court is as under : Quote “Therefore, it is observed and held that theamendment brought to section 153C of the Act, 1961 vide Finance Act, 2015 MA No.116/PUN/2023 [R] 9 shall be applicable to searchesconducted under section 132 of the Act, 1961 before 1-6-2015, i.e., the date of the amendment.” Unquote 3.2 Revenue in the Miscellaneous Application has pleaded that as per the decision of Hon’ble Supreme Court in the case of Vikram Bhatia(supra), the Amendment to Section 153C will be applicable to the Assessee for A.Y.2013-14, wherein the search & seizure was on 01.10.2013. However, it is a fact that the decision of Hon’ble Supreme Court in the case of Income Tax Officer Vs. Vikram Sujitkumar Bhatia was delivered on 06.04.2023, thus, the said decision was not available before the Hon’ble ITAT on 08.07.2022 when the case of the Assessee was heard. Therefore, the Hon’ble ITAT decided the case of the Assessee based on the Law applicable on 08.07.2022. Therefore, there is no apparent mistake in the order of the ITAT in IT(SS)A No.23/PUN/2019. We find support from the decision of Hon’ble Jurisdictional High Court in the case of Infantry Security and Facilities Vs. ITO vide Writ Petition MA No.116/PUN/2023 [R] 10 No.17175 of 2024, dated 03.12.2024, wherein the Hon’ble High Court held that “decision of the Hon’ble Supreme Court which never existed when the Tribunal passed original order could never have been applied by the Tribunal, and hence it cannot be said that there was any mistake on the face of the record, so as to confer jurisdiction on the Tribunal to exercise its jurisdiction under section 254(2) of the Income Tax Act, 1961.” 4. Accordingly, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the open Court on 6th February, 2025. Sd/- Sd/- (ASTHA CHANDRA) (DR. DIPAK P. RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 6th Feb, 2025/ SGR* MA No.116/PUN/2023 [R] 11 आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "