DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2 (2), PUNE V. SHARAD VITHOBA NAVALE, SOLAPUR

MA 121/PUN/2023

AI Insights

The case revolves around a Miscellaneous Application filed by the Revenue against an earlier ITAT order which quashed the assessment proceedings under section 153C for the assessment year 2013-14. The Revenue contended that the amendment to section 153C by the Finance Act, 2015, which was deemed retrospective by the Supreme Court, should apply to the case, thereby validating the proceedings. However, the ITAT maintained that the law as it stood at the time of the original decision was correctly applied, and the retrospective amendment could not be used to alter the outcome of the case decided under the pre-amendment law.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472325 (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: Income Tax Officer vs Vikram Sujitkumar Bhatia and 114 connected cases, CIT vs. M/s Arpit Land Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJKUMAR TRIPATHI
• Assessee Lawyers: SUHAS BORA
• Keywords: Document seized; Documents seized; Search and seizure
• Section: 254(2); 132; 153C

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। 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.121/PUN/2023 (arising out of IT(SS)A No.25/PUN/2019) िनधाᭅरणवषᭅ / Assessment Year: 2013-14 The Deputy Commissioner of Income Tax, Central Circle-2(2), Pune. V s Sharad Vithoba Navale, At Post Ekhatpur, Taluka-Sangola, Dist-Solapur – 413307. PAN: AZCPN9234A Appellant/ Assessee Respondent /Revenue Assessee by Shri Suhas Bora – AR Revenue by Shri Manojkumar 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.25/PUN/2018 for A.Y.2013-14, dated 27.07.2022. MA No.121/PUN/2023 [R] 2 2. The Revenue has stated in the Miscellaneous Application as under : “01. A 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 assessee alongwith other members of Navale family deposited large amount of cash in its various bank accounts. 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 29.03.2016 making addition of Rs.22.50,000/- to the total income of the assessee 02 Aggrieved by the assessment order passed, the assessee filed appeal before Ld. CIT(A) who 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 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 THAT relied on the Hon'ble Bombay High Court's decision in Income Tax Appeal No.83/2014 CIT vs. M/s Arpit Land Pvt. Ltd. dated 07.02.2017 The Hon'ble High Court was MA No.121/PUN/2023 [R] 3 of the view that the Revenue has to strictly comply with the Section 153C of the Act and 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 w.e.f. 01.06.2015 having prospective operation only whereas the search action in the case of assessee was carried out on 01 10.2013. 03 to 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. Le.. the date of amendment MA No.121/PUN/2023 [R] 4 04 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. Hence, the rulings of the Hon'ble High Courts on which the Hon'ble ITAT relied upon have become void. 05 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. 06. Therefore, in light of Hon'ble Supreme Court's judgement and above reasons discussed above, it is prayed to condone the delay and modify/rectify the appellate order dated 27.07 2022 and recall the order in the interest of justice.” Findings & Analysis : 3. We have heard both the parties and perused the records. In this case, it is an admitted fact in this case that ITAT order in MA No.121/PUN/2023 [R] 5 IT(SS)A No.25/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 the amendment brought to section 153C of the Act, 1961 vide Finance Act, 2015 shall be applicable to searches conducted 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 MA No.121/PUN/2023 [R] 6 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.25/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 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.” MA No.121/PUN/2023 [R] 7 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* 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. "