DCIT, Faridabad V. Sh. Vinod Kumar, New Delhi

ITA 2550/DEL/2015

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7895 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 30-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Search and seizure; Salary income; Document seized; Validity of assessment; Revised return; Documents seized
• Section: 142(1); 153A; 32; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI L. P. SAHU, ACCOUNTANT MEMBER I.T.A. NO.2550/DEL/2015 ASSESSMENT YEAR: 2012-13 DCIT, CENTRAL CIRCLE-1, FARIDABAD. VS. VINOD KUMAR, H. NO.267, IST FLOOR, CHHATARPUR ENCLAVE, MEHRAULI, NEW DELHI. TAN/PAN: AALPK 7391K (APPELLANT) (RESPONDENT) CO NO.146/DEL/2018 ASSESSMENT YEAR: 2012-13 VINOD KUMAR, H. NO.267, IST FLOOR, CHHATARPUR ENCLAVE, MEHRAULI, NEW DELHI. VS. DCIT, CENTRAL CIRCLE-1, FARIDABAD. TAN/PAN: AALPK 7391K (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S.S. RANA, CIT-DR RESPONDENT BY: SHRI P.C. YADAV, ADV. DATE OF HEARING: 22 05 2019 DATE OF PRONOUNCEMENT: 09 08 2019 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE AGAINST THE IMPUGNED OR DER DATED 24.02.2015 PASSED BY PR. CIT (OSD), GURGAON U/S.153 B(1)/143(3) FOR THE ASSESSMENT YEAR 2012-13. I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 2 2. THOUGH, THE REVENUE HAS CHALLENGED THE ADDITION OF RS.38,61,24,029/- MADE ON ACCOUNT OF SHORT TERM CAPI TAL GAIN, WHEREAS IN THE CROSS OBJECTION THE ASSESSEE HAS CHALL ENGED THE VERY VALIDITY OF ASSESSMENT FRAMED U/S.153B(1)/143(3 ) ON THE FOLLOWING GROUNDS: 1. THE ORDER OF AO AS SUSTAINED BY THE CIT (A) IS BAD IN LAW. 2. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT ORDER PASSED UNDER SECTION 153B(1)(B)/14 3(3), CONSIDERING THE IMPUGNED YEAR AS YEAR OF SEARCH, IG NORING THE DATE OF RECEIPT OF MATERIAL FROM THE AO OF SEARCHED PERSON, IS BAD IN LAW IN TERMS OF THE IST PROVISO OF SECTION 153C OF THE ACT . A) THE AO HAS ERRED IN ASSUMING AND ASSESSING THE IMPUGNED YEAR- AS YEAR OF SEARCH, IGNORING THAT THE YEAR OF SEARCH FOR THE PRESENT ASSESSEE WOULD BE AY 2014-15, AS THE DOCUMENTS PER TAINING TO PRESENT ASSESSEE WERE RECEIVED ON 29.08.2013, AS IS EVIDENT FROM THE ASSESSMENT ORDER. B) ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE THE ASSESSMENT OF THE IMPUGNED YEAR WITHOUT FOLLOWING T HE MANDATORY PROVISIONS OF LAW APPLICABLE FOR CASES COVERED UNDE R SECTION 153C IS BAD IN LAW 3. WITHOUT PREJUDICE TO THE ABOVE, ON THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE JURISDICTION OF THE AO UNDER SECTION 153C IS BAD IN LAW AS NO SATISFACTION IN THE FILE S EARCHED PERSON HAS EVER BEEN RECORDED FOR ASSUMING THE JURISDICTION OF ASSESSEE'S CASE FOR THE PRESENT AY. 3. SINCE THE VALIDITY AND THE JURISDICTION OF THE ASSE SSING OFFICER FOR PASSING THE ORDER U/S.153B(1)/143(3) HAS BEEN CH ALLENGED BY THE ASSESSEE IN HIS CROSS OBJECTION, THEREFORE, THIS IS SUE IS BEING TAKEN UP. THE BRIEF FACTS QUA THE SAID LEGAL ISSUE ARE THAT ASSESSEE I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 3 IS AN INDIVIDUAL DERIVING INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES. RETURN OF INCOME FOR THE ASSESSMENT YE AR 2012-13 WAS FILED ON 06.10.2012, DECLARING TOTAL INCOME OF RS.1,12,01,410/-. A SEARCH AND SEIZURE ACTION WAS CO NDUCTED BY THE INVESTIGATION WING, CHANDIGARH AT KRRISH GROUP ON 09.11.2011. THEREAFTER, A SURVEY ACTION U/S.133A WAS ALSO CARRIED OUT ON 05.11.2011 AT THE BUSINESS PREMISES OF THE ASSES SEE AND HIS COMPANY M/S. AMBAWATA BUILDWELL PVT. LTD. AS CULLE D OUT FROM THE ASSESSMENT ORDER, THE ASSIGNMENT OF JURISDICTI ON OVER THE ASSESSEE WAS TRANSFERRED TO CIT, CENTRAL GURGAON, VIDE ORDER DATED 12.08.2013, WHO TRANSFERRED THE CASE TO ASSESSING OFF ICER OF CENTRAL CIRCLE-1, FARIDABAD AND THE SEIZED DOCUMENTS WERE RECEIVED IN THE SAME CENTRAL CIRCLE ON 29.08.2013. TH EREAFTER, THE ASSESSING OFFICER IN PARAGRAPH 2 HAD TAKEN NOTE OF THE FACT THAT IN THE PRESENT YEAR THE PROVISION OF SECTION 153A(1)(A) R .W.S. 153C OF THE ACT ARE APPLICABLE, TREATING IT TO BE THE YEAR OF SEA RCH. ACCORDINGLY, A NOTICE WERE ISSUED TO THE ASSESSEE U/S .142(1) REQUIRING HIM TO FILE HIS RETURN OF INCOME IN RESPEC T OF ASSESSMENT YEAR 2012-13, I.E., ASSESSMENT YEAR PERTAINING TO YEAR IN WHICH SURVEY WAS CONDUCTED. IN RESPONSE, ASSESSEE HAS STATE D THAT HE HAS ALREADY FILED HIS RETURN OF INCOME ON 16.10.2012 . THEREAFTER, ASSESSEE HAS FILED REVISED RETURN ON 29.11.2013 DECL ARING INCOME OF RS.4,62,24,040/-. IN PURSUANCE TO SUCH REVISED RE TURN NOTICE U/S.143(2) AND 142(1) WERE ISSUED TO THE ASSESSEE. TH E ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS MADE ADDITION OF RS.38,61,24,029/- AFTER DETAILED DISCUSSION BASED ON SEIZED MATERIAL AND FINALLY CONCLUDED AS UNDER: 13. THE TOTAL CONSIDERATION FOR 2737 EQUITY SHARES AT THE RATE OF RS.1,57,517/- PER SHARE AS CALCULATED ABOVE COMES T O I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 4 RS.43,11,24,029/-. HOWEVER, THE ASSESSEE HAS TAKEN THE SALE CONSIDERATION FOR 2737 EQUITY SHARES AS RS.4,50,00, 000/- WHICH IS NOT ACCEPTABLE. HENCE, THE DIFFERENCE OF THE SALE C ONSIDERATION WHICH COMES TO RS.38,61,24,029/- IS ADDED TO THE RETURNED INCOME OF THE ASSESSEE. HENCE, AN ADDITION OF RS.38,61,24,029/- IS MADE TO THE RETURNED INCOME OF THE ASSESSEE FOR THE YEAR. 4. THOUGH, VALIDITY OF ASSESSMENT WAS NOT CHALLENGED BEFORE THE LD. CIT(A), HOWEVER, IN CROSS OBJECTION, ASSESSEE HA S RAISED THIS ISSUE AND HAS ALSO FILED APPLICATION UNDER RULE 27 OF THE ITAT RULES. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE HAD SUBMI TTED FOLLOWING DATES AND SEQUENCE OF EVENTS WITH REFERENCE TO ASSESSMENT ORDER: - DATE SEQUENCE OF EVENT PAGE NO OF PB 09.11.2011 SEARCH AND SEIZURE ACTION OCCURRED IN THE CASE OF KRRISH GROUP. IT IS ALLEGED THAT SOME DOCUMENTS BELONGING TO ASSESSEE WERE FOUND FROM KRRISH REALITY NIRMAN PVT LTD LOCATED AT 406 TOWER, ELEGANCE TOWER,JASOLA DISTT. CENTRE SARITA-VIHAR NEW-DELHI ADMITTED FACT- SEE ASST ORDER- PG-2 16.10.2012 RETURN OF INCOME FILED BY ASSESSEE DECLARING INCOME OF RS 1,12,01,410/- ADMITTED FACT- SEE ASST ORDER- PQ -2 12.08.2013 JURISDICTION OF ASSESSEE HAS BEEN TRANSFERRED FROM GURGAON TO FARIDABAD. SEE ASST ORDER FIRST PAGE 29.08.2013 THE DOCUMENTS PERTAINING TO ASSESSEE HAD BEEN TRANSFERRED TO THE AO OF CENTRAL CIRCLE. ADMITTED FACT - SEE ASST ORDER- PG -1 I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 5 16.10.2013 DETAILED QUESTIONNAIRE HAS BEEN ISSUED ASST ORDER PG-2 27.12.2013 EFFECTIVE HEARING VIS-A- VIS THE ISSUE INVOLVED HAS TAKEN PLACE PARA I AT PAGE NO-3 OF THE ASSESSMENT ORDER 03.02.2014 AR OF THE ASSESSEE APPEARED AND FILED REPLY 05.02.2014 ORDER OF ASSESSMENT HAS BEEN PASSED. 6. BASED ON THE AFORESAID EVENTS, HE SUBMITTED THAT DOCU MENTS PERTAINING TO ASSESSEE WERE HANDED OVER TO THE ASSESSI NG OFFICER AFTER 29.08.2013. ACCORDINGLY, IN TERMS OF PROVISO TO SECTION 153C THE DATE OF SEARCH IN THE CASE OF THE PRESENT ASSESSEE WOULD BE RECKONED FROM 29.08.2013, WHICH DATE FALLS UNDER ASS ESSMENT YEAR 2013-14. HE FURTHER POINTED OUT THAT BY VIRTUE OF 1 ST PROVISO TO SECTION 153C, THE DATE OF HANDING OVER THE DOCUMENT W OULD BECOME THE DATE OF SEARCH IN THE CASE OF OTHER PERSON AND PREVIOUS SIX YEARS WOULD HAVE TO BE RECKONED FROM THIS DATE WHI CH MEANS THE RELEVANT ASSESSMENT YEAR OF SEARCH IN THIS CASE WOU LD BE ASSESSMENT YEAR 2013-14, (I.E., FROM 29.08.2013) AND SIX PREVIOUS ASSESSMENT YEARS WOULD START FROM ASSESSMENT YEARS 2007 -08 TO 2012-13. THUS, THE PRESENT ASSESSMENT FRAMED BY THE ASS ESSING OFFICER UNDER PROVISION OF THE ACT IS VOID AB INITIO AS THE SAME HAS BEEN PASSED WITHOUT FOLLOWING THE MANDATORY PROVISION O F SECTION 153C. IN SUPPORT, HE STRONGLY RELIED UPON THE JUDGMEN T OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE CIT VS. RRJ SECURITIES LTD. (2016) 380 ITR 612 AND PR. CIT VS. SARWAR AGENCIES PVT. LTD., 340 ITR 400 . HE POINTED OUT THAT THE SAME PRINCIPLE HAS BEEN FOLLOWED BY THE CO-ORDINATE BENCHES INCLUDING GROUP C ASES AND RELIED UPON THE FOLLOWING THREE JUDGMENTS. I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 6 (I) M/S. AMBAWATTA BUILD WELL PVT. LTD., ITA NO.2592/DEL/2015, (II) M/S. BNB INVESTMENT & PROPERTIES LTD., ITA NO.504/DEL/2015 (III) M/S. COMMITMENT MORTALITY VISION EDUCATION SOCIETY, 3980 & 3981/DEL/2017 7. HE FURTHER POINTED OUT THAT IN THE CASE OF BNB INVESTMENT (SUPRA) THE SAME TOO WAS IN PURSUANCE OF SAME SEARCH OF KRRISH GROUP AND ASSESSING OFFICER WAS AL SO THE SAME, AND IN THAT CASE THE TRIBUNAL FOR THE SAME AS SESSMENT YEAR 2012-13 HAS HELD THE ASSESSMENT VOID AB INITIO AND WITHOUT JURISDICTION. 8. ON THE OTHER HAND, LD. CIT-DR SUBMITTED THAT ASSESSMENT HAS BEEN FRAMED U/S.153A(1)(B) WHICH PRO VIDES THAT ASSESSING OFFICER HAS TO ASSESS OR RE-ASSESS T HE TOTAL IN ALL THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED. NOWHERE THE SECTION CONTAINS T HE WORDS THE DATE OF INITIATION OF SEARCH WHICH ARE REFERR ED IN THE 1 ST PROVISO TO SECTION 153C. THE 1 ST PROVISO TO SECTION 153C IS ONLY REFERRING TO THE ABATEMENT OF EXISTING PROCEED INGS AS MENTIONED IN THE 2 ND PROVISO TO SECTION 153A(1). 1 ST PROVISO FURTHER CLARIFIES THIS POINT BY USAGE OF WORDS THE DATE OF INITIATION OF SEARCH WHICH ARE NOWHERE MENTIONED E LSE IN SECTION 153A(1). THIS POINT HAS BEEN NOW CLARIFIED BY AMENDMENT BROUGHT IN THE STATUTE OF FINANCE ACT, 20 17 IN SECTION 153A FOR DECREASING THE TIME LIMIT OF COMPL ETION OF I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 7 ASSESSMENT AND ALSO INCREASING THE PERIOD FROM 6 TO 10 YEARS IN RELEVANT CASES. HE ALSO QUOTED THE AMENDED PROVISO OF SECTION 153C. HE FURTHER SUBMITTED EVEN AFTER THIS AMENDMENT, THE FIRST PROVISO STANDS AS IT IS AND THE STATUTE MAKES IT FURTHER CLEAR THAT THE FIRST PROVISO TO SECTION 153C ALWAYS MEANT TO REFER TO THE ABATEMENT OF THE PROCE EDINGS AS MENTIONED IN THE SECOND PROVISO TO SECTION 153A (1) . OTHERWISE THE CURRENT SECTION 153C WILL HAVE MAJOR INCONGRUITY AS TO WHETHER SIX YEARS WOULD BE RECKON ED FROM DATE OF SEARCH AS MENTIONED IN AMENDED 153C (1) OR FROM THE DATE OF HANDING OVER OF THE DOCUMENTS AS MENTIONED IN THE FIRST PROVISO OF 153C WHICH REMAINED UNAMENDED. THE DECISION OF RRJ SECURITIES (SUPRA) WAS RENDERED WIT H RESPECT TO, WHETHER THE INITIAL ASSESSMENT YEAR WOULD BE TI ME BARRED OR NOT. HERE IT IS NOT A DISPUTE OF TIME BARRING OR LIMITATION. FURTHER THE AMENDED 153C(1) WAS NOT AVAILABLE FOR T HE GUIDANCE OF THE HON'BLE COURT AND HENCE PROPER APPR ECIATION OF LAW WAS NOT DONE. 9. HE FURTHER REFERRED TO THE JUDGMENT OF HONBLE DE LHI HIGH COURT IN THE CASE OF GANPATI FINCAP SERVICES P. LTD. VS. CIT (2017) 82 TAXMANN.COM 408 (DELHI) WHEREIN THEIR LORDSHIPS HAVE SUMMARIZED THE LEGAL POSITION AS UND ER: 41. TO SUMMARISE THE LEGAL POSITION: (I) NO SEARCH UNDER SECTION 132(1) OF THE ACT CAN BE INITIATED WITHOUT A SATISFACTION NOTE BEING RECORDED BY THE A O OF SUCH SEARCHED PERSON. THIS IS FOLLOWED BY ISSUANCE OF A NOTICE TO SUCH SEARCHED PERSON UNDER SECTION 153A OF THE ACT. AT T HAT STAGE THE AO I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 8 DOES NOT HAVE TO RECORD ANOTHER SATISFACTION NOTE Q UA THE SEARCHED PERSON. (II) WHERE PROCEEDINGS ARE PROPOSED TO BE INITIATE D UNDER SECTION 153C OF THE ACT AGAINST THE 'OTHER PERSON', IT HAS TO BE PRECEDED BY A SATISFACTION NOTE BY THE AO OF THE SE ARCHED PERSON. HE WILL RECORD IN THIS SATISFACTION NOTE THAT THE SEIZ ED DOCUMENT BELONGS TO THE OTHER PERSON. DEPENDING ON THE NATURE AND CO NTENTS OF THE DOCUMENT HE MAY BE REQUIRED TO GIVE SOME REASONS FO R SUCH CONCLUSION. (III) WHERE THE AO OF THE SEARCHED PERSON IS DIFFER ENT FROM THE AO OF THE OTHER PERSON, THE AO WILL SIMULTANEOUS WITH TRA NSMITTING THE DOCUMENTS ALONG WITH HIS SATISFACTION NOTE TO THE A O OF THE OTHER PERSON, MAKE A NOTE IN THE FILE OF THE SEARCHED PER SON THAT HE HAS DONE SO. BUT THIS IS FOR ADMINISTRATIVE CONVENIENCE . THE FAILURE BY THE AO OF THE SEARCHED PERSON, AFTER PREPARING AND DESP ATCHING THE SATISFACTION NOTE AND DOCUMENTS TO THE AO OF THE OT HER PERSON, TO MAKE A NOTING TO THAT EFFECT IN THE FILE OF THE SEA RCHED PERSON WILL NOT VITIATE THE PROCEEDINGS UNDER SECTION 153C AGAINST THE OTHER PERSON. (IV) WHERE THE AO OF THE SEARCHED PERSON AND THE OT HER PERSON IS THE SAME, SUCH A SATISFACTION NOTE QUA THE OTHER PE RSON HAS TO BE RECORDED BY THE AO OF THE SEARCHED PERSON PRIOR TO THE INITIATION OF THE PROCEEDINGS AGAINST THE OTHER PERSON. THIS IS A SINE QUA NON FOR TRIGGERING THE PROCEEDINGS AGAINST THE OTHER PERSON UNDER SECTION 153C OF THE ACT. (V) THERE DO NOT HAVE TO BE TWO SEPARATE SATISFACTI ON NOTES PREPARED BY THE AO OF THE SEARCHED PERSON EVEN WHER E HE IS ALSO THE AO OF THE OTHER PERSON. IN SUCH EVENT, THE AO NEED MAKE ONLY ONE SATISFACTION NOTE. THAT SATISFACTION NOTE IS QUA TH E OTHER PERSON. FURTHER IT IS SUFFICIENT THAT SUCH SATISFACTION NOT E IS PLACED IN THE FILE OF THE OTHER PERSON BY THE AO IN HIS CAPACITY AS TH E AO OF SUCH OTHER PERSON. I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 9 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO P ERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER AS WELL AS RELEVANT DATES AND EVENTS ON THE ISSUE OF VALIDITY OF THE ASSESSMENT AS CHALLENGED BY THE ASSESSEE IN THE CRO SS OBJECTION. THE ASSESSING OFFICER HAS FRAMED THE ASS ESSMENT ORDER BY TREATING THE ASSESSMENT YEAR 2012-13 AS TH E YEAR OF SEARCH ON THE PREMISE THAT SEARCH AND SEIZURE OPERA TION WAS CARRIED ON 09.11.2011 IN THE CASE OF KRRISH GROUP O F CASES AND ALSO CONSEQUENTIAL SURVEY U/S.133A CARRIED ON I N THE CASE OF THE ASSESSEE ON 15.11.2011. IT IS AN ADMITT ED FACT THAT JURISDICTION OF THE ASSESSEE HAS BEEN TRANSFERR ED FROM GURGAON TO FARIDABAD ON 12.08.2012 AND DOCUMENT REL ATING TO THE ASSESSEE HAS BEEN TRANSFERRED TO THE PRESENT ASSESSING OFFICER OF CENTRAL CIRCLE-1, FARIDABAD. 1 ST PROVISO TO SECTION 153C READS AS UNDER: PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE RE FERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MA KING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO [SUB-SE CTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON:]. THE 2 ND PROVISO TO SECTION 153A (1) READS AS UNDER: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUIS ITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 10 12. THE CONTROVERSY, WHETHER IN THE WAKE OF 2 ND PROVISO TO SECTION 153C THE DATE OF INITIATION OF SEARCH U/S.1 32 SHOULD BE FROM THE DATE OF RECEIVING OF BOOKS OF ACCOUNT O R DOCUMENTS ETC. BY THE ASSESSING OFFICER HAVING JURI SDICTION OVER SUCH PERSON HAD COME UP BEFORE THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF R.R. SECURITIES (SUPRA). THIS JUDGMENT HAS BEEN AGAIN REITERATED AND FOLLOW ED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF PR. CIT VS. SARWAR AGENCIES (SUPRA) WHEREIN THEIR LORDSHIPS HAVE EXPLAINED THE SAID PROVISIONS CONSIDERING THE AMENDMENT IN SECTION 153C BY THE FINANCE ACT, 2017 WITH EFFECT FROM APRIL 1, 2017, IN THE FOLLOWING MANNER: SUB-SECTION (1) OF SECTION 153C OF THE INCOME-TAX ACT, 1961 PROVIDES THAT THE ASSESSMENT OR REASSESSMENT OF THE INCOME OF THE 'OTHER PERSON' WOULD BE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THE FIRST PROVISO TO SUB SECTION ( 1) OF SECTION 153C FURTHER STATES THAT, IN CASE OF SUCH OTHER PER SON, THE REFERENCE TO THE DATE OF INITIATION OF SEARCH IN TH E SECOND PROVISO TO SECTION 153A(L) 'SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON. IN TERMS OF SECTION 153A(L)(B) OF THE ACT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTA L INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSE SSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEA RCH WAS CONDUCTED. THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A OF THE ACT STATES THAT ASSESSMENT OR REASSESSM ENT RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 11 ASSESSMENT YEARS REFERRED TO IN THE SAID SUB-SECTIO N PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTI ON 132, WOULD ABATE. IN CIT V. RRJ SECURITIES LTD. [2016] 380 ITR 612 (DELHI), THE COURT HELD THAT IN THE CONTEXT OF PROCEEDINGS U NDER SECTION 153C OF THE ACT, THE REFERENCE TO THE DATE OF INITI ATION OF THE SEARCH IN THE SECOND PROVISO TO SECTION 153A HAS TO BE CONSTRUED AS THE DATE ON WHICH THE ASSESSING OFFICE R RECEIVES THE DOCUMENTS OR ASSETS FROM THE ASSESSING OFFICER OF THE SEARCHED PERSON, PROCEEDINGS, BY VIRTUE OF SECTION 153(1) OF THE HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF ACT A ND THE REFERENCE TO THE DATE OF SEARCH WOULD HAVE TO BE CO NSTRUED AS THE REFERENCE TO THE DATE OF RECORDING OF SATISFACT ION. IT WOULD FOLLOW THAT THE SIX ASSESSMENT YEARS FOR WHICH ASSE SSMENTS OR REASSESSMENTS COULD BE MADE UNDER SECTION 153C OF T HE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO T HE DATE OF HANDING OVER OF ASSETS OR DOCUMENTS TO THE ASSESSIN G OFFICER OF THE ASSESSEE. THE AMENDMENT IN SECTION 153C OF THE ACT BY THE FIN ANCE ACT, 2017 WITH EFFECT FROM APRIL 1, 2017 TO THE EFFECT T HAT THE BLOCK PERIOD FOR THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED AS WELL AS THE 'OTHER PERSON WOULD BE TH E SAME SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH IS PROSPECTIVE. A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT,'1 961 TOOK PLACE ON NOVEMBER 11, 2010 IN THE T GROUP OF CASES. THE DOCUMENTS PERTAINING TO THE ASSESSEE WERE FORWARDED ALONG WITH A SATISFACTION NOTE BY THE ASSESSING OFFICER O F THE PARTY IN RESPECT OF WHICH THE SEARCH WAS CONDUCTED TO THE AS SESSING OFFICER OF THE*ASSESSEE ON JANUARY 3, 2013. THE ASSESSING I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 12 OFFICER OF THE ASSESSEE ISSUED NOTICE TO THE ASSESS EE UNDER SECTION 153C OF THE ACT ON JANUARY 4,2013 FOR THE A SSESSMENT YEAR 2006-07. THE TRIBUNAL HELD THAT THE NOTICE ISS UED TO THE ASSESSEE UNDER SECTION 153C OF THE ACT FOR THE ASSE SSMENT YEAR 2006-07, WAS WITHOUT JURISDICTION SINCE THE AS SESSMENT YEAR WAS BEYOND THE PURVIEW OF ISSUANCE OF NOTICE I N TERMS OF THE PROVISION UNDER SECTION 153C OF THE ACT. ON APP EAL: HELD ACCORDINGLY, DISMISSING THE APPEAL, THAT THE T RIBUNAL WAS JUSTIFIED IN HOLDING THAT THE NOTICE ISSUED TO THE ASSESSEE UNDER SECTION 153C OF THE ACT FOR THE ASSESSMENT YEAR 200 6-07 WAS WITHOUT JURISDICTION SINCE THE ASSESSMENT YEAR WAS BEYOND THE PURVIEW OF ISSUANCE OF NOTICE IN TERMS OF THE PROVI SION. 13. THE RATIO OF THE JUDGMENTS OF HONBLE JURISDICT IONAL HIGH COURT HAS BEEN APPLIED IN A SIMILAR GROUP MATTERS P ERTAINING TO THE SAME SEARCH FOR THE ASSESSMENT YEAR 2012-13 IN THE CASE OF BNB INVESTMENT (SUPRA), WHEREIN THE TRIBUNA L AFTER REFERRING TO THE HONBLE JURISDICTIONAL HIGH COURT JUDGMENT AND ALSO CATENA OF OTHER TRIBUNAL DECISION, FINALLY OBSERVED AND HELD AS UNDER: IT IS NOT IN DISPUTE THAT SEARCH WAS CONDUCTED ON KRRISH GROUP OF CASES ON 09.11.2011. THE IMPOUNDED DOCUMEN TS HAVE BEEN RECEIVED BY THE A.O. ON 29.08.2013. THE SATISFACTION UNDER SECTION 153C HAVE BEEN RECORDED ON 03.10.2013. THE A.O. PASSED THE ASSESSMENT ORDER UN DER SECTION 153B(L)(B) OF THE I.T. ACT, CONSIDERING THE ASSESSMENT YEAR UNDER APPEAL I.E., A.Y. 2012-2013 TO BE THE YE AR OF SEARCH. HOWEVER, THE FIRST PROVISO TO SECTION 153C OF THE I.T. ACT PROVIDES THAT THE 06 ASSESSMENT YEARS FOR WHICH I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 13 ASSESSMENTS OR RE-ASSESSMENTS COULD BE MADE UNDER S ECTION 153C OF THE I.T. ACT, WOULD ALSO HAVE TO BE CONSTRU ED WITH REFERENCE TO THE DATE OF HANDING-OVER OF THE ASSETS OR DOCUMENTS TO THE A.O. OF THE ASSESSEE. THEREFORE, THE 06 ASSESSMENT YEARS UNDER SECTION 153C OF I.T. ACT IN THE CASE OF ASSESSEE WOULD BE A.Y. 2008-2009 TO 2013-2014. THE A.O, THEREFORE, SHALL HAVE TO PASS THE ASSESSMENT ORDER UNDER SECTION 153C OF THE I.T. ACT. HOWEVER, A.O. HAS NOT ISSUED ANY NOTICE UNDER SECTION 153C OF THE I.T. ACT BEFORE IN ITIATING THE PROCEEDINGS AGAINST THE ASSESSEE WHICH IS ALSO ADMI TTED BY THE A.O. IN REPLY TO THE ASSESSEE UNDER RTI ACT. TH E AMENDMENT IN SECTION 153C OF THE I.T. ACT BY THE FI NANCE ACT, 2017, W.E.F. 01.04.2017 TO THE EFFECT THAT BLOCK PE RIOD FOR THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED AS WELL AS THE OTHER PERSON WOULD BE THE SAME SIX ASSESSM ENT YEAR IMMEDIATELY PRECEDING THE YEAR OF SEARCH IS PROSPEC TIVE IN NATURE. THE ISSUE HAVE BEEN DEALT IN DETAIL BY THE HONT)LE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF PR. CIT VS. SARWAR AGENCY P. LTD., (SUPRA) AND BY ITAT, DELHI, B-BENCH, IN THE CASE OF EMPIRE CASTING PVT. LTD., NEW DELHI VS. ACIT, C.C.2, NEW DELHI AND PAVITRA REALCON PVT. LTD., NEW DELHI VS. ACIT, C.C.32, NEW DELHI (SUPRA). THE A.O, THEREFORE , SHOULD HAVE FRAMED THE ASSESSMENT UNDER SECTION 153C OF TH E I.T. ACT IN THE CASE OF THE ASSESSEE AND AT THE TIME OF INITIATING THE PROCEEDING AGAINST THE ASSESSEE, SHOULD HAVE ISSUED NOTICE UNDER SECTION 153C OF THE I.T. ACT WHICH HAVE NOT B EEN DONE IN THIS CASE. THE ISSUE OF NOTICE UNDER SECTION 153C I S MANDATORY AND A CONDITION PRECEDENT FOR TAKING ACTION AGAINST THE ASSESSEE UNDER SECTION 153C OF THE I.T. ACT. THE AS SESSMENT ORDER, THEREFORE, VITIATE, VOID, ILLEGAL AND BAD IN LAW AND I.T.A. NO.2550/DEL/2015 & CO NO.146/DEL/2018 14 CANNOT BE SUSTAINED. THE CONTENTION OF THE LD. D.R. HAVE ALREADY TAKEN CARE IN THE ABOVE JUDGMENTS. 14. THE AFORESAID FINDINGS AND THE OBSERVATION OF T HE TRIBUNAL WILL APPLY MUTATIS MUTANDIS IN THIS CASE ALSO, AS THE FACTS AND CIRCUMSTANCES ARE PARI MATERIA AND EVEN THE SEQUENCE OF EVENTS. ACCORDINGLY FOLLOWING THE AFORE SAID PRECEDENT, WE HOLD THAT THE IMPUGNED ASSESSMENT YEA R 2012- 13 CANNOT BE TREATED AS YEAR OF SEARCH, AND THEREFO RE, ASSESSMENT COULD NOT HAVE BEEN FRAMED U/S.143(3) R. W.S. 153B(1) AND ACCORDINGLY, ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS DECLARED NULL AND VOID AND CON SEQUENTLY THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. 15. SINCE, WE HAVE ALREADY HELD THAT ASSESSMENT ORD ER IS NOT IN ACCORDANCE WITH LAW, THEREFORE, THE ISSUE RAISED ON MERITS BY THE DEPARTMENT HAS BECOME PURELY INFRUCTUOUS AND SAME IS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED AND CROSS OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2019. SD/- SD/- [L.P. SAHU] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 9 TH AUGUST, 2019