Sanjay Thakur, New Delhi V. DCIT, Ghaziabad

ITA 3559/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2786 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 03-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Keywords: Search and seizure; Salary income; Document seized; Accommodation entries; Sham transactions; Revised return; Documents seized
• Section: 143(3); 142(1); 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G : DELHI BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA.NO.3559/DEL./2015 ASSESSMENT YEAR 2011-2012 SHRI SANJAY THAKUR, GHAZIABAD. PAN AJRPT9741P C/O. M/S. O.P. SAPRA & ASSOCIATES, C-763, NEW FRIENDS COLONY, NEW DELHI. PIN 110 025. VS. THE DCIT (CENTRAL CIRCLE), INCOME TAX OFFICE, 3 RD FLOOR, C.G.O. COMPLEX-1, HAPUR ROAD, GHAZIABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI KA PIL GOEL , ADVOCATE FOR REVENUE : SHRI S.S. RANA, CIT - D.R. DATE OF HEARING : 24.10.2018 DATE OF PRONOUNCEMENT : 06 .11.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), GHAZIABAD, DATED 31.03 .2015, FOR THE A.Y. 2011-2012. 2 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 WAS CONDUCTED IN THE CASE OF SHRI PANKA J SHARMA AND SHRI AJAY SHARMA . IT WAS INFORMED THAT CASH WAS GOING TO BE WITHDRAWN FROM A/C NO.XXX2277 OF M/ S. A.K TRADERS WITH HDFC BANK, AMBEDKAR ROAD, GHAZIABAD, SOURCE OF WHICH IS NOT EXPLAINED IN THE HANDS OF SH RI AJAY SHARMA, THE PROPRIETOR OF M/S. A.K. TRADERS. WHEN T HE TEAM VISITED THE BANK PREMISES IT WAS FOUND THAT AN AMOU NT OF RS.2.78 CRORES WAS ALREADY GOT TRANSFERRED TO A/C NO.XXX16097 WITH PUNJAB NATIONAL BANK, NAVYUG MARKET, GHAZIABAD STANDING IN THE NAME OF M/S. TUSHAR BUILDING MATERIAL SUPPLIER, GAUTAM BUDH NAGAR. BANK AUTHORIT IES WERE REQUESTED TO PUT BALANCE OF RS.1,78,35,905/- STANDING TO CREDIT IN A/C NO.XXXX2277 OF M/S. A.K TRADERS UNDER RESTRAINT. MEANWHILE, THE TEAM IMMEDIATELY VISITED PUNJAB NATIONAL BANK AND IT WAS FOUND THAT BY THAT TIME TH E ENTIRE AMOUNT OF RS.2.78 CRORES HAD BEEN WITHDRAWN IN CASH . THE BANK PREMISES OF HDFC BANK, AMBEDKAR ROAD, GHAZIABAD IN THE CASE OF BANK A/C NO. XXXX2277 OF M/S. A.K TRADE RS WAS 3 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SEARCHED ON 11.10.2010 AND BALANCE STANDING TO CREDIT WAS SEIZED. DURING EXAMINATION SHRI AJAY SHARMA STATED THAT HE DOES NOT KNOW ABOUT THE SOURCE OF AMOUNTS CREDITED TO ABOVE ACCOUNT AND DESTINATION OF THE AMOUNTS DEBITED AS T HE ENTIRE AFFAIRS WERE BEING LOOKED AFTER BY SHRI PANKAJ SHAR MA, HIS BROTHER-IN-LAW WHOSE OFFICE ADDRESS IS 12, NAVYUG M ARKET, GHAZIABAD. ACCORDINGLY, SURVEY UNDER SECTION 133A O F THE I.T. ACT WAS CONDUCTED AT 12, NAVYUG MARKET, GHAZIABAD A ND SHOP NO. 3, HARISH CHAND KA BAGH, CHHAPARAULA POLIC E CHOWKI, NEAR DHARAMKANTA, GAUTAM BUDH NAGAR. THE PREMISES 12, NAVYUG MARKET, GHAZIABAD WAS FOUND TO BE OFFICE OF SHRI MANOJ KUMAR JAIN, PROPRIETOR OF M/S. RISHAV TRADING CO. AND NO BUSINESS ACTIVITIES WERE FOUND T O BE CARRIED ON AT THE PREMISES. SUBSEQUENTLY, ON 13.10. 2010, CURRENT RESIDENCE, FLAT NO. 306, PLOT NO. 3/4, MADH AVKUNJ, SECTOR-2, RAJENDRA NAGAR, SAHIBABAD, GHAZIABAD OF S HRI AJAY SHARMA, THE PROPRIETOR WAS ALSO COVERED UNDER SEARC H. DURING EXAMINATION UNDER SECTION 132(4) ON 13.10.20 10 SHRI PANKAJ SHARMA STATED THAT HE WAS ENGAGED IN PROVIDI NG 4 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ACCOMMODATION ENTRIES IN THE GARB OF SUPPLY OF STEE L AND BUILDING MATERIAL IN THE NAME OF VARIOUS CONCERNS A ND M/S. A.K. TRADERS IS ONE OF THEM. SHRI AJAY SHARMA IS AN UNEMPLOYED YOUTH. THE A/C NO.XXXX2277 WAS OPENED WI TH HDFC BANK, AMBEDKAR ROAD, GHAZIABLAD ON 21.08.2009 BY HIM IN THE NAME OF M/S. A.K. TRADERS ON BEING ASKED BY HIS BROTHER-IN-LAW SHRI PANKAJ SHARMA FROM WHOM HE WAS GETTING SALARY OF RS.8,000/- PER MONTH. ALL THE PAP ERS RELATING TO OPERATION OF BANK ACCOUNT AND FINANCIAL TRANSACTIONS THEREIN ARE ADMITTED TO HAVE BEEN SIGN ED BY HIM IN ADVANCE ON BEING ASKED BY SHRI PANKAJ SHARMA. TH E AMOUNTS IN THE SAID ACCOUNT HAVE BEEN CREDITED BY T RANSFER THROUGH RTGS OR OTHERWISE AND MOST OF THE AMOUNTS H AVE BEEN WITHDRAWN IN CASH OR HAVE BEEN TRANSFERRED TO BANK ACCOUNTS OF OTHER CONCERNS AND ULTIMATELY THE CASH HAS BEEN WITHDRAWN FROM THOSE ACCOUNTS. THE CONCERNS TO WHIC H THE AMOUNTS HAVE BEEN TRANSFERRED OR THE AMOUNTS HAVE B EEN RECEIVED BY TRANSFER ARE 10 IN NUMBER MENTIONED AT PAGE-2 OF THE ASSESSMENT ORDER WHICH INCLUDES TWO PROPRIETARY 5 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. CONCERNS OF THE ASSESSEE. DURING SEARCH PROCEEDINGS AT THE RESIDENCE OF SHRI PANKAJ SHARMA AT SAHIBABAD, GHAZI ABAD, SHRI PANKAJ SHARMA WAS EXAMINED ON OATH AND HE ADMI TTED THAT HE WAS ENGAGED IN PROVIDING ACCOMMODATION ENTR IES AND WAS EARNING RS.15,000/- PER MONTH FROM THIS WORK. H E HAD ASKED HIS BROTHER-IN-LAW SHRI AJAY SHARMA TO FORM A CONCERN IN THE NAME OF M/S. A.K. TRADERS AND HAVE ITS ACCOU NT OPENED IN HDFC BANK FOR FACILITATING THE WORK OF ACCOMMODATION ENTRIES. HE ALSO APPROACHED THE ASSES SEE AND USED HIS TWO PROPRIETARY CONCERNS NAMELY M/S. TUSHA R BUILDING MATERIAL SUPPLIER AND M/S. SIGMA SALES COR PORATION WHERE FROM HE STARTED TO PROVIDE ACCOMMODATION ENTR IES. THE AMOUNTS WERE GOT TRANSFERRED TO THE BANK ACCOUNTS O F CONCERNS FROM WHERE THE ACCOMMODATION ENTRY WAS TO BE PROVIDED AND THE AMOUNTS WERE PAID BACK EITHER BY WITHDRAWING FROM THE SAME ACCOUNT OR BY TRANSFER TO BANK ACCOUNTS OF OTHER CONCERNS AND THEREAFTER WITHDRAWA LS FROM THOSE ACCOUNTS. SHRI PANKAJ SHARMA ADMITTED THAT BO GUS 6 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. BILLS OF STEEL/BUILDING MATERIAL HAVE BEEN ISSUED I N FAVOUR OF THE BENEFICIARIES OF ACCOMMODATION ENTRIES. 2.1. A SURVEY UNDER SECTION 133A WAS CARRIED OUT A T THE GIVEN ADDRESS OF M/S. TUSHAR BUILDING MATERIAL SUPP LIER BUT NO BUSINESS ACTIVITIES WERE FOUND. THE ASSESSEE WAS EXAMINED ON OATH 28.10.2010. HE INFORMED THAT HE WAS CARRYIN G ON DOOR-TO-DOOR MARKETING OF ALOE VERA GEL AND WAS EAR NING RS.7000/- TO RS.8,000/-PER MONTH. ON BEING ASKED HE STATED THAT HE WAS BEING PAID RS.5,000/- PER MONTH BY SHRI PANKAJ SHARMA FOR USING HIS CONCERNS. HE CLARIFIED THAT HE WAS ASKED BY MR. PANKAJ SHARMA TO ALLOW HIM PROVIDING ACCOMMO DATION ENTRIES FROM THE BANK ACCOUNT OF HIS CONCERNS. HE ACCORDINGLY, HANDED OVER PRE-SIGNED CHEQUE BOOK OF HIS CONCERNS TO MR. PANKAJ SHARMA. HE IS NOT AWARE OF A NY BUSINESS ACTIVITY BEING CARRIED ON IN THE NAME OF T HAT CONCERN. THE ASSESSEE AS REGARDS THE AMOUNT OF RS.2 .78 CRORES STATED THAT IT WAS TRANSFERRED THROUGH RTGS TO THE PROPRIETARY CONCERN BELONGING TO HIM WHICH HAVE BEE N 7 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. WITHDRAWN EITHER BY SHRI PANKAJ SHARMA OR BY ANY OF HIS PERSONS AS HE HAD ALREADY HANDED-OVER PRE-SIGNED CH EQUE BOOK WHICH HAVE BEEN USED FOR WITHDRAWING THE ABOVE AMOUNTS. 2.2. SURVEYS UNDER SECTION 133A OF THE INCOME-TAX ACT, 1961 WERE ALSO CARRIED OUT ON 10.10.2010 AT THE OFF ICE OF SHRI MANOJ KUMAR JAIN PROPRIETOR OF M/S. RISHAV TRADING CO. AND PANKAJ SHARMA, 12, NAVYUG MARKET, GHAZIABAD AND AT THE ADDRESS OF M/S. TUSHAR BUILDING MATERIAL SUPPLIER, GHAZIABAD, PROPRIETARY CONCERN OF THE ASSESSEE ON 12.10.2010. NO BOOKS OF ACCOUNT AND DOCUMENTS HAVE BEEN FOUND FROM THE PREMISES OF M/S. RISHAV TRADING CO., 12, NAVYUG MARKET, GHAZIABAD. THE A.O, THEREFORE, NOTED THAT ABOVE WOULD TRANSPIRES THAT SHRI PANKAJ SHARMA AND SHRI AJAY SHARMA ALONG WITH SHRI MANOJ KUMAR JAIN, SANJA Y THAKUR, PUSHKAR TYAGI, AMIT BANSAL AND VISHNU BHAGW AN WERE CARRYING ON THE BUSINESS OF PROVIDING ACCOMMOD ATION ENTRIES TO SEVERAL BUSINESS HOUSES BY GETTING AMOUN T 8 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. TRANSFERRED THROUGH THEIR ACCOUNTS BY RTGS OR CHEQU E AND LATER ON WITHDRAWING THE AMOUNT FROM THE SAME ACCOU NTS. THE LIST OF BENEFICIARIES AND THE NAME OF THE FIRMS WHO HAD GIVEN ACCOMMODATION ENTRIES IS MENTIONED AT PAGES 5 TO 13 OF THE ASSESSMENT ORDER. THE A.O. ALSO NOTED THAT ALL THESE ARE SHAM TRANSACTIONS. THE ASSESSEE HAS NOT CARRIED-OUT ANY BUSINESS ACTIVITY AND HAVE MERELY PROVIDING ACCOMMO DATION ENTRIES FOR THE PURPOSE OF EARNING COMMISSION. THE ASSESSEES HAVE CLAIMED A PERCENTAGE OF 0.01% AS COMMISSION I. E. RS.10,000/-PER CRORE. THE A.O, THEREFORE, NOTED THA T ON THE BASIS OF SEARCH AND SEIZURE OPERATION AND ENQUIRIES IT IS ESTABLISHED THAT ASSESSEE IS ENGAGED IN THE BUSINES S OF PROVIDING ACCOMMODATION ENTRIES. NOTICE UNDER SECTI ON 153C WAS ISSUED FOR THE A.Y..2005-06 TO 2010-11 ON 18.09 .2012 & NOTICE UNDER SECTION 142(1) WAS ISSUED FOR ASSESSME NT YEAR 2011-12 UNDER APPEAL ON 18.09.2012 FOR FILING OF RE TURN OF INCOME. THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE YEAR UNDER APPEAL ON 17.01.2013 AND SHOWN INCOME OF RS.1,53,450/- FROM BUSINESS AND INCOME FROM SALARY. THE 9 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. A.O. ON THE BASIS OF THESE MATERIAL COMPUTED COMMIS SION INCOME OF ASSESSEE AT 3% OF THE TOTAL AMOUNT/ GROSS DEPOSITS. THE GROSS DEPOSITS WERE FOUND IN A SUM OF RS.17.14 CRORES AND BY APPLYING 3%, A.O. MADE ADDITION OF RS.51,43, 833/-. THE A.O. ALSO CONSIDERED THE UNEXPLAINED DEPOSIT IN THE BANK ACCOUNT OF ASSESSEE OF RS.17.14 CRORES WHICH WAS AD DED ON PROTECTIVE BASIS. THE ASSESSMENT WAS COMPLETED ON A N INCOME OF RS.17.67 CRORES VIDE ORDER DATED 31.03.20 13 UNDER SECTION 143(3) OF THE I.T. ACT, 1961. 3. THE ASSESSEE CHALLENGED THE INITIATION AND COMPLETION OF ASSESSMENT PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT AND THE ABOVE ADDITIONS BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSESSEE WAS FORWARDED T O THE A.O. FOR HIS COMMENTS. THE LD. CIT(A) AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF ASSESSEE AND MATERIAL ON RECORD DECI DED VARIOUS ISSUES IN THE APPEAL OF ASSESSEE AND DISMIS SED THE SAME. THE ASSESSEE AS REGARDS THE VALIDITY OF ISSUA NCE OF NOTICE UNDER SECTION 153C OF THE I.T. ACT HAD SUBMI TTED BEFORE 10 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. LD. CIT(A) THAT NO MATERIAL BELONGING TO ASSESSEE W AS FOUND DURING THE COURSE OF SEARCH. THEREFORE, PROCEEDINGS UNDER SECTION 153C ARE INVALID AND BAD IN LAW. THE A.O. I N THE REMAND REPORT SUBMITTED BEFORE LD. CIT(A) THAT A.O. RECORDED SATISFACTION UNDER SECTION 153C ON 18.09.2012 FOR A .YS. 2005- 2006 TO 2010-2011 AND FOR A.Y. 2011-2012 UNDER APPE AL, A.O. ISSUED NOTICE UNDER SECTION 142(1) OF THE I.T. ACT. THE LD. CIT(A), THEREFORE, NOTED THAT THE PRESENT ASSESSMEN T IS NOT UNDER SECTION 153C, BUT UNDER SECTION 143(3), THERE FORE, THIS ISSUE DOES NOT ARISE AND PROCEEDING HAVE BEEN RIGHT LY INITIATED UNDER SECTION 143(3) OF THE I.T. ACT. THE OTHER POI NT RAISED IN THE APPEAL BEFORE LD. CIT(A) AS WELL AS ON MERIT HA VE BEEN REJECTED BY THE LD. CIT(A). 4. THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLENG ED THE VALIDITY OF THE IMPUGNED ASSESSMENT ORDER AS WE LL AS BOTH THE ABOVE ADDITIONS ON MERIT. THE ASSESSEE ALSO FIL ED AN APPLICATION FOR ADMISSION OF THE FOLLOWING ADDITION AL GROUNDS OF APPEAL. 11 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. THAT ASSESSMENT FRAMED UNDER SECTION 143(3) FOR TH E PERIOD UNDER CONSIDERATION (A.Y. 2011-12) WHICH FAL LS IN SIX YEARS BLOCK PRESCRIBED UNDER SECTION153C, IS INVALID, VOID-AB-INITIO AND LACKS JURISDICTION AS I T WOULD HAVE BEEN FRAMED UNDER SECTION153C, ACCORDINGLY THE ORDERS PASSED AO AND FIRST APPELLAT E AUTHORITY DESERVES TO BE QUASHED. 'THAT ASSESSMENT FRAMED UNDER SECTION143(3) FOR THE PERIOD UNDER CONSIDERATION IS ULTRA VIRES TO SECTIO N 153C, IN AS MUCH AS THE NO DOCUMENT IS REFERRED IN SATISFACTION NOTE, MUCH LESS INCRIMINATING DOCUMENT , MUCH LESS BELONGING TO ASSESSEEE HEREIN , MUCH LESS SEIZED DURING SEARCH ACTION UNDER SECTION132 MUCH LESS FOR THE SUBJECT PERIOD, SO AS TO GIVE RISE TO ANY UNDISCLOSED INCOME AND THEREFORE SATISFACTION NOTE IS COMPLETELY INCHOATE AND NON STARTER AND THEREFORE ORDERS PASSED BY AO AND FIRST APPELLATE AUTHORITY DESERVES TO BE QUASHED. . 12 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. THAT IMPUGNED ASSESSMENT FRAMED UNDER SECTION143(3) ON BASIS OF NOTICE UNDER SECTION143(2 ) DATED 21/01/2013 IS INVALID AND VOID AB INITIO BEIN G MADE ON BASIS OF NON-EST RETURN FILED UNDER SECTION153A/153C ON 17/01/2013 AS NO RETURN WAS THERE UNDER SECTION139/142FILED ON 17/01/2013 TO VALIDLY ISSUE NOTICE UNDER SECTION143(2 ] 5. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO SEARCH UNDER SECTION 132 WAS CONDUCTED ON ASSESSEE. SEARCH WAS CONDUCTED UNDER SECTION 132 ON 11.10.2010 AT A. K. TRADERS ON HDFC BANK, GHAZIABAD. PROCEEDINGS UNDER SECTION 153C WERE INITIATED AGAINST THE ASSESSEE FOR A.YS. 2005-06 TO AY 2010-2011 AND ACTION UNDER SECTION 142(1) HAVE B EEN TAKEN FOR A.Y. UNDER APPEAL I.E., 2011-2012 AND ASS ESSMENT HAVE BEEN FRAMED UNDER SECTION 143(3) OF THE I.T. A CT. THESE FACTS AFFIRMED BY THE AUTHORITIES BELOW IN THE IMPU GNED ORDERS. HE HAS FILED COPY OF THE SATISFACTION NOTE RECORDED BY THE A.O. UNDER SECTION 153C ON 18.09.2012 IN THE CA SE OF THE 13 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ASSESSEE, COPY OF WHICH IS FILED AT PAGE 10 OF THE PB. HE HAS ALSO FILED COPY OF THE ORDER SHEET OF THE A.O. AT P AGE-3 OF THE PAPER BOOK TO SHOW THAT NO NOTICE UNDER SECTION 153 C HAVE BEEN ISSUED IN THE CASE OF THE ASSESSEE FOR ASSESSM ENT YEAR UNDER APPEAL. HE HAS SUBMITTED THAT THERE IS NO REF ERENCE OF ANY INCRIMINATING MATERIAL IN THE SATISFACTION NOTE DATED 18.09.2012. HE HAS SUBMITTED THAT THE PRESENT ASSES SMENT FOR A.Y. 2011-2012 WAS REQUIRED TO BE FRAMED UNDER SECT ION 153C AS THE PERIOD PRESCRIBED IN PROVISO TO SECTION 153C WHICH IS TO BE CALCULATED FROM DATE OF RECORDING OF THE SATISFA CTION NOTE AND NOT FROM THE DATE OF SEARCH UNDER SECTION 132 A S IS SETTLED BY VARIOUS HONBLE HIGH COURTS DECISIONS MAINLY RRJ SECURITIES 380 ITR 612 AND SARWAR AGENCY 397 ITR 40 0. THE PRESCRIPTION OF LAW UNDER SECTION 153C IN TURN REQU IRED ISSUANCE OF NOTICE UNDER SECTION 153C FOR PRESENT P ERIOD, RECORDING OF SATISFACTION BY AO OF RAIDED PERSON IN HIS ASSESSMENT, ON THE BASIS OF INCRIMINATING SEIZED MATERIAL QUA SUBJECT PERIOD WHICH IS PATENTLY MISSING AS ADMITTE D BY AO/CIT-A IN THE IMPUGNED ORDERS, WITHOUT WHICH ENTI RE 14 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. EXERCISE IS A NULLITY. HE HAS ALSO REFERRED THE DEC ISION OF HONBLE APEX COURT IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 AND DECISION OF HONBLE DELHI H IGH COURT IN THE CASE OF N.S. SOFTWARE 403 ITR 259. SINCE DAT E OF RECORDING OF SATISFACTION NOTE IS DATED 18.09.2012 FALLING IN FY 2012-2013 AND AY 2013-2104 AND SIX ASSESSMENT YEARS COUNTED AS PER PRESCRIPTION OF SECTION 153C(1) WOUL D BE A.YS. 2007- 08 TO AY 2012-2013 WHEREAS THE SATISFACTION N OTE REFERS AY 2005-06 TO AY 2010-2011, WHICH SHOWS THE INHEREN T DEBILITY IN THE PROCEEDINGS AND THE PRESENT ASSESSM ENT UNDER SECTION 143(3) IS FRAMED WHICH SHOULD HAVE BEEN DON E UNDER SECTION 153C OF THE ACT. HE HAS SUBMITTED THAT IT IS A LEGAL ISSUE WHICH GOES TO THE LEGALITY OF THE ASSESSMENT AND NO ADDITIONAL FACTS SHALL HAVE TO BE CONSIDERED. HE HA S SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF ITAT, DELHI, F-BENCH, DELHI IN THE CASE OF M/S. BNB INVESTMENT & PROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CENTRAL CIRCLE-1, FARIDABAD IN ITA.NOS.504 & 503/DE L./2015, DATED 27.06.2018. HE HAS, THEREFORE, SUBMITTED THAT SINCE NO 15 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. NOTICE UNDER SECTION 153C HAVE BEEN ISSUED IN THE C ASE OF THE ASSESSEE FOR THE BLOCK PERIOD AS WELL, NO ASSESSMEN T HAS BEEN FRAMED UNDER SECTION 153C OF THE I.T. ACT, FURTHER, NO INCRIMINATING MATERIAL WAS FOUND FOR ASSESSMENT YEA R UNDER APPEAL DURING THE COURSE OF SEARCH, THEREFORE, ASSE SSMENT ORDER FRAMED UNDER SECTION 143(3) IS NULLITY AND BA D IN LAW AND REQUIRES TO BE QUASHED. 6. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE T HE APPELLATE ORDER UNDER APPEAL 2011-2012 IS NOT RELATED TO THE SEARCH ASSESSMENT AND NO NOTICE UNDER SECTION 153C HAVE BE EN ISSUED, THEREFORE, ASSESSMENT UNDER SECTION 143(3) HAVE BEEN RIGHTLY FRAMED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE MATERIAL ON RECORD AND FINDINGS OF THE AUTHORIT IES BELOW. AN IDENTICAL ISSUE HAVE BEEN CONSIDERED BY ITAT, DE LHI, F- BENCH, DELHI IN THE CASE OF M/S. BNB INVESTMENT & P ROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CENTRAL CIRCLE -1, 16 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. FARIDABAD IN ITA.NOS.504 & 503/DEL./2015, DATED 27.06.2018, IN WHICH THE IDENTICAL ADDITIONAL GROUN D WAS CONSIDERED IN THE LIGHT OF JUDGMENT OF HONBLE DELH I HIGH COURT AND OTHERS AND ADDITIONAL GROUND OF APPEAL HA VE BEEN ALLOWED DELETING THE ENTIRE ADDITIONS ON MERIT. THE FINDINGS OF THE ORDER OF THE TRIBUNAL DATED 27.06.2018 FROM PAR AS 2 TO 10 ARE REPRODUCED AS UNDER : ITA.NO.504/DEL./2015 M/S. BNB INVESTMENTS & PROP ERTIES LTD., A.Y. 2012-2013 : 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT IN THIS CASE, A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON M/S KRRISH GROUP OF CASES ON 09.11.2011. A SURVEY U NDER SECTION133A OF THE ACT WAS ALSO CARRIED OUT ON THE BUSINESS PREMISES OF THE ASSESSEE. ASSESSEE EARNED INCOME FROM BUSINESS AND OTHER SOURCES. THE ASSESSE E FILED ITS ORIGINAL RETURN DECLARING TOTAL INCOME OF RS.2,08,95,242/- ON 28.09.2012. IN RESPONSE TO NOTI CE UNDER SECTION 153A(1) (A] R.W.S 153C, ASSESSEE FILE D 17 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. REVISED RETURN DECLARING TOTAL INCOME OF RS. 2,22,4 3,593/-. ASSESSMENT WAS FRAMED AT RS. 5,22,43,593/- BY MAKIN G ADDITION OF RS.3 CRORES AS SURRENDERED AMOUNT NOT INCORPORATED IN THE RETURN OF INCOME. ASSESSEE CHAL LENGED THE VALIDITY OF THE ASSESSMENT PROCEEDINGS AS WELL AS ADDITION ON MERIT BEFORE THE LD. CIT(A). HOWEVER, A PPEAL OF THE ASSESSEE HAS BEEN DISMISSED. 3. ASSESSEE IN THE PRESENT APPEAL, CHALLENGED THE VALIDITY OF THE PROCEEDINGS UNDER SECTION 153C OF T HE I.T. ACT AND ADDITION OF RS.3 CRORES. THE ASSESSEE ALSO MOVED AN APPLICATION FOR ADMISSION OF ADDITIONAL GROUNDS IN WHICH ASSESSEE RAISED THE FOLLOWING ADDITIONAL GROU NDS : 1. ADDITIONAL GROUND NO. 1 THAT UNDER THE FACTS AND CIRCUMSTANCES, IN THE ABS ENCE OF ISSUANCE AND SERVICE OF NOTICE U/S. 153 C R/W. SEC. 153A OF THE I.T.ACT, THE JURISDICTION FOR FRAMING THE IMPUG NED ASSTT. HAS BEEN WRONGLY ASSUMED, HENCE, THE IMPUGNED ASSTT . IS WITHOUT JURISDICTION, ILLEGAL AND UNSUSTAINABLE IN LAW. 18 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ADDITIONAL GROUND NO. 2 THAT WITHOUT PREJUDICE, AS THE SEIZED DOCUMENTS IN SEARCH OF A 3 RD PARTY HAVE BEEN RECEIVED BY THE AO OF THE ASSESSEE ON 29.08.2013, T HEREFORE, IN VIEW OF SEC. 153C(1) (FIRST PROVISO), THE SEARCH YEAR IS A.Y. 2014-2015 AND NOT IMPUGNED A.Y. 2012-2013, HENCE, I N CASE, IF IMPUGNED ASSTT. HAS BEEN FRAMED U/S. 153B(1)(B) TREATING A.Y. 2012-2013 AS THE SEARCH YEAR, THE WHOLE ASSTT. PROCEEDINGS STANDS VITIATED IN LAW AND UNSUSTAINABL E BECAUSE THE A.Y. 2012-2013 FALLS WITHIN PERIOD OF P RECEDING 6 ASSTT. YEARS AS PROVIDED IN SEC.153A(1)(B), THERE FORE, THE ASSTT. OF A.Y. 2012-2013 WAS TO BE FRAMED ONLY U/S. 153C AND THAT TOO AFTER ISSUANCE AND SERVICE OF NOTICE U /S. 153C R/W. SEC. 153A OF THE I.T. ACT WHICH HAS NEVER BEEN ISSUED AS ADMITTED BY AO IN RT1 REPLY. 2. THAT BOTH THE ABOVE GROUNDS ARE PURE LEGAL GROUNDS WHICH GOES TO THE ROOT OF THE MATTER WHICH CAN BE TAKEN A T ANY STAGE OF PROCEEDINGS BEFORE HONBLE ITAT. 3. THAT, FURTHER, NO NEW FACTS ARE REQUIRED TO BE INVE STIGATED OR PLACE ON RECORDS FOR ADJUDICATING THESE GROUNDS WHI CH ARE ALREADY AVAILABLE ON RECORDS. 19 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. 4. THAT UNDER ABOVE MENTIONED FACTS AND CIRCUMSTANCES AND AS PER THE FOLLOWING AUTHORITIES, THESE ADDITIONAL GRO UNDS DESERVES TO BE ADMITTED:- NATIONAL THERMAL POWER COMPANY LTD. 229 ITR 383 (SC) GEDORE TOOLS PVT. LTD., 238 ITR 268 (DEL.) 5. THAT WITHOUT PREJUDICE, THE ISSUES COVERED IN THESE ADDITIONAL GROUNDS ARE COVERED IN G.N. 1 AND G. N. 2, AS TAKEN INITIALLY IN FORM - 36 ALSO, HOWEVER, THESE H AVE BEEN TAKEN SPECIFICALLY ONLY AS A MATTER OF ABUNDANT PRE CAUTION AND TO MEET OUT THE SITUATION IN CASE THE HONBLE C OURT IS OF THE OPINION THAT THE SAME ARE NOT COVERED IN GROUND NOS. 1 & 2 AS INITIALLY TAKEN. 3.1. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITIONAL GROUNDS ARE LEGAL IN NATURE AND NO NEW FACTS SHALL HAVE TO BE CONSIDERED. HE, THEREFORE, S UBMITTED THAT ADDITIONAL GROUNDS MAY BE ADMITTED. HE HAS REL IED UPON THE DECISION OF THE HONBLE SUPREME COURT IN T HE CASE 20 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. OF NATIONAL THERMAL POWER CO. LTD., (1998) 229 ITR 383 (SC) AND GEDORE TOOLS PVT. LTD., 238 ITR 268 (DEL.) . 4. ON THE OTHER HAND, LD. D.R. SUBMITTED THAT ADDITIONAL GROUNDS HAVE NO MERIT AND THE SAME MAY B E REJECTED. THE ASSESSMENT HAS BEEN RIGHTLY FRAMED UN DER SECTION 153A(1)(B) OF THE I.T. ACT, 1961. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT THE ADDITIONAL GROUNDS ARE LEGAL I N NATURE AND NO NEW FACTS SHALL HAVE TO BE CONSIDERED. THE ADDITIONAL GROUNDS GO TO THE VALIDITY OF THE ASSESS MENT PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT, THE REFORE, THE SAME SHOULD BE ADMITTED FOR DECIDING THE APPEAL . THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF VMT SPINNING CO LTD., VS. CIT (2016) 389 ITR 326 (P & H ) CONSIDERING VARIOUS DECISIONS INCLUDING THE DECISIO N OF THE HONBLE SUPREME COURT IN THE CASE OF NATIONAL THERM AL POWER CO. LTD., (1998) 229 ITR 383 (SC) HELD THAT THE TRIBUNAL COULD DECIDE THE APPEAL ON A GROUND NEITHE R TAKEN 21 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. IN THE MEMORANDUM OF APPEAL NOR BY SEEKING ITS LEAVE . THE ONLY REQUIREMENT WAS THAT THE TRIBUNAL COULD NOT RE ST ITS DECISIONS ON ANY OTHER GROUND UNLESS THE PARTY WHO MIGHT BE AFFECTED HAD SUFFICIENT OPPORTUNITY OF BEING HEA RD GIVEN ON THAT GROUND. THEREFORE, THE TRIBUNAL OUGHT TO HA VE EXERCISED ITS DISCRETION IN VIEW OF THE FACT THAT A SSESSEE INTENDED RAISING ONLY A LEGAL ARGUMENT WITHOUT REFE RENCE TO ANY DISPUTED QUESTION OF FACTS. 5.1. CONSIDERING THE ISSUE IN THE LIGHT OF THE FAC TTHAT ADDITIONAL GROUNDS ARE LEGAL IN NATURE AND SHALL HA VE BEARING ON THE VALIDITY OF THE ASSESSMENT PROCEEDIN GS, THEREFORE, THE SAME IS ADMITTED FOR THE PURPOSE OF DISPOSAL OF THE APPEAL. 5.2. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SEARCH WAS CONDUCTED IN THE CASE OF M/S KRRISH GROUP OF CASES ON 09.11.2011. A SURVEY UNDER SECTION133A OF THE ACT WAS ALSO CARRIED OUT ON 22.11.2011 AT THE BUSIN ESS 22 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. PREMISES OF THE ASSESSEE-COMPANY AND ITS DIRECTOR. THE SEIZED/IMPOUNDED DOCUMENTS IN THE GROUP WERE RECEIV ED BY THE A.O. ON 29.08.2013. THESE FACTS ARE MENTIONE D IN THE ASSESSMENT ORDER. HE HAS REFERRED TO PB-161 WHI CH IS SATISFACTION NOTE RECORDED UNDER SECTION 153C OF TH E I.T. ACT IN THE CASE OF ASSESSEE DATED 03.10.2013. THE SATIS FACTION NOTE WAS, THEREFORE, RECORDED IN THE A.Y. 2014-2015 IN THE CASE OF THE PERSON SEARCHED. PB-190 TO 195 ARE THE NOTICES ISSUED UNDER SECTION 153A R.W.S.153C OF THE I.T. AC T IN THE CASE OF THE ASSESSEE FOR A.YS. 2006-2007 TO 2011-20 12. HE HAS SUBMITTED THAT NO NOTICE UNDER SECTION 153C HAV E BEEN ISSUED FOR ASSESSMENT YEAR UNDER APPEAL I.E., 2012- 2013. HE HAS REFERRED TO PB-160 WHICH IS A REPLY FILED UN DER RTI ACT DATED 01.11.2016 BY DCIT, CC-1, GURGAON, IN WHI CH, A.O. HAS REPORTED THAT NO NOTICE UNDER SECTION 153C WAS ISSUED FOR A.Y. 2012-2013 AS IT WAS A SEARCH YEAR. HENCE, NOTICE UNDER SECTION 143(2)/142(1) WERE ISSUED. LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A.O. ACCORDINGLY DID NOT PASS ANY ASSESSMENT ORDER UNDER 23 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SECTION 153C OF THE I.T. ACT AND PASSED THE ASSESSM ENT ORDER UNDER SECTION 153B(1)(B) OF THE I.T. ACT BEIN G A SEARCH YEAR. HE HAS SUBMITTED THAT FIRST PROVISO TO SECTIO N 153C IS APPLICABLE IN THE CASE OF THE ASSESSEE BECAUSE NO S EARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE. THE AMENDMENT IN SECTION 153C CAME W.E.F. 01.04.2017 WH ICH IS PROSPECTIVE IN NATURE. ASSESSMENT IN A.Y. 2012-2 013 UNDER APPEAL SHOULD HAVE BEEN COMPLETED UNDER SECTI ON 153C BEING 5 TH YEAR IN THE BLOCK OF 06 TH YEAR. THE FIRST PROVISO TO SECTION 153C(1) PROVIDES THAT IN CASE OF SECTION 153C, THE DATE OF RECEIVING OF BOOKS OF ACCOUNT BY THE JURISDICTIONAL A.O. SHALL HAVE TO BE CONSTRUE AS DA TE OF INITIATION OF SEARCH. SINCE THE BOOKS OF ACCOUNT/IM POUNDED DOCUMENTS HAVE BEEN RECEIVED BY THE A.O. ON 29.08.2 013, THEREFORE, A.Y. 2014-2015 WILL BE THE YEAR OF SEARC H AND ASSESSMENTS UNDER SECTION 153C OF THE I.T. ACT SHOU LD HAVE BEEN COMPUTED FOR A.YS. 2008-2009 TO 2013-2014. SIN CE, NO NOTICE UNDER SECTION 153C HAVE BEEN ISSUED FOR ASSESSMENT YEAR IN APPEAL, THEREFORE, THE ASSESSMEN T ORDER 24 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. IS ILLEGAL, VOID AND BAD IN LAW. HE HAS RELIED UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. SARWAR AGENCY P. LTD., (2017) 397 ITR 400 (DEL. ), ORDER OF ITAT, DELHI, B-BENCH IN THE CASE OF ACIT VS. EMP IRE CASTING PVT. LTD., NEW DELHI IN ITA.NO.4018/DEL./20 11 AND C.O.NO.207/DEL./2012 DATED 21.11.2017 AND ORDER OF ITAT, DELHI, C-BENCH IN THE CASE OF PAVITRAREALCON PVT. LTD., NEW DELHI VS. ACIT, CENTRAL CIRCLE-32, NEW DELHIIN ITA.NOS. 3185, 3186 & 3253/DEL./2015 DATED 04.10.2017. HE HA S ALSO REFERRED TO MEMORANDUM EXPLAINING FINANCE BILL 2017 IN WHICH IT IS PROVIDED THAT AMENDMENT IN SECTION 153C SHALL APPLY IN RESPECT OF SEARCH CONDUCTED OR REQUI SITION MADE ON OR AFTER 1 ST DAY OF APRIL, 2017. 6. ON THE OTHER HAND, LD. D.R. SUBMITTED THAT SECTION 153A(1) DEALS WITH THE YEARS OF REOPENING I N THE CASE OF SEARCH PROCEEDING AND AS PER SECTION 153C(1 ) AFTER THE SATISFACTION, THE A.O. SHALL PROCEED IN ACCORDA NCE WITH PROVISIONS OF SECTION 153A(1) OF THE I.T. ACT. SECT ION 25 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. 153A(1)(B) IS VERY CLEAR THAT A.O. SHALL ASSESS OR RE-ASSESS THE TOTAL INCOME OF 06 ASSESSMENT YEARS IMMEDIATELY PRE CEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED. NO WHERE THE SECTION CONTAINS THE WORD DATE OF INITIATION OF THE SEARCH WHICH ARE REFERRED TO BY THE FIRST PROVISO TO SECTION 153C OF THE I.T. ACT. HENCE, THE FIRST PROVISO TO SECTION 153C OF THE I.T. ACT IS ONLY REF ERRING TO THE ABATEMENT OF THE EXISTING PROCEEDINGS MENTIONED IN THE SECOND PROVISO TO SECTION 153A(1) OF THE I.T. ACT, AS CLEARLY MENTIONED IN THE FIRST PROVISO AND FURTHER CLARIFIE D BY USAGE OF WORDS THE DATE OF INITIATION OF SEARCH WHICH ARE NO WHERE MENTIONED IN SECTION 153A(1) OF THE I.T. A CT. EVEN AFTER THE AMENDMENT IN SECTION 153C, THE FIRST PROV ISO STANDS AS IT IS IN THE STATUTE WHICH MAKES IT FURTH ER CLEAR THAT FIRST PROVISO TO SECTION 153C ALWAYS REFERRED TO ABATEMENT OF PROCEEDINGS AS MENTIONED IN THE SECOND PROVISO SECTION 153A(1) OF THE I.T. ACT, OTHERWISE, THE CURRENT 153C SHALL HAVE MAJOR INCONGRUITY AS TO WHE THER SIX 26 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. YEARS WOULD BE RECKONED FROM THE DATE OF SEARCH AS MENTIONED IN THE AMENDED SECTION 153C(1) OR FROM TH E DATE OF HANDING OVER OF THE DOCUMENTS AS MENTIONED IN TH E FIRST PROVISO OF SECTION 153C WHICH REMAINED UN-AMENDED. HE HAS, THEREFORE, SUBMITTED THAT ASSESSMENT HAVE BEEN RIGHTLY FRAMED UNDER SECTION 153A(1)(B) OF THE I.T. ACT, 1961. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SECTION 153C OF THE I.T. ACT, 1961, AS IS APPLICABL E TO ASSESSMENT YEAR UNDER APPEAL READS AS UNDER : 153C.ASSESSMENT OF INCOME OF ANY OTHER PERSON.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BEL ONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENT S OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE 27 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGA INST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS 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 REQUISITION UNDER SECTION 132A IN THE SEC OND PROVISO TO SUB-SECTION (1) OF SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. [PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY B Y RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZE TTE, SPECIFY THE CLASS OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TO TAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH 28 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SEARCH IS CONDUCTED OR REQUISITION IS MADE EXCEPT I N CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED.] [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNI SHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT T O THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SE CTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND I N RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTI ON 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH O THER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTI ON 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTIC E UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MA DE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE 29 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTI CE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSO N OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 1 53A. 7.1. THE HONBLE DELHI HIGH COURT IN THE CASE OF P R. CIT VS. SARWAR AGENCY P. LTD., (2017) 397 ITR 400 ( DELHI.) (HC) (SUPRA), CONSIDERING THE IDENTICAL ISSUE HELD AS UNDER : SUB-SECTION (1) OF SECTION 153C OF THE INCOME-TAX ACT, 1961 PROVIDES THAT THE ASSESSMENT OR REASSESSMENT O F THE INCOME OF THE 'OTHER PERSON' WOULD BE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THE FIRST PROVISO T O SUB- SECTION (1) OF SECTION 153C FURTHER STATES THAT, IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INI TIATION OF SEARCH IN THE SECOND PROVISO TO SECTION 153A(L) 'SH ALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER 30 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. PERSON'. IN TERMS OF SECTION 153A(1)(B) OF THE ACT. THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTA L INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH WAS CONDUCTED. THE SECOND PROVISO TO SUB-SEC TION (1) OF SECTION 153A OF THE ACT STATES THAT ASSESSME NT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR FALLIN G WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN T HE SAID SUB-SECTION PENDING ON THE DATE OF INITIATION OF TH E SEARCH UNDER SECTION 132, WOULD ABATE. IN CIT V. RRJ SECUR ITIES LTD. [2016] 380 ITR 612 (DELHI), THE COURT HELD THA T IN THE CONTEXT OF PROCEEDINGS UNDER SECTION 153C OF THE AC T, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH I N THE SECOND PROVISO TO SECTION 153A HAS TO BE CONSTRUED AS THE DATE ON WHICH THE ASSESSING OFFICER RECEIVES THE DOCUMENTS OR ASSETS FROM THE ASSESSING OFFICER OF T HE 31 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SEARCHED PERSON, THAT FURTHER PROCEEDINGS, BY VIRTU E OF SECTION 153(1) OF THE ACT, WOULD HAVE TO BE IN ACCO RDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO T HE DATE OF SEARCH WOULD HAVE TO BE CONSTRUED AS THE REFEREN CE TO THE DATE OF RECORDING OF SATISFACTION. IT WOULD FOL LOW' THAT THE SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS OR REASSESSMENTS COULD BE MADE UNDER SECTION 153C OF T HE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DATE OF HANDING AVER OF ASSETS OR DOCUMENTS TO THE ASSESSING 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 EFF ECT THAT THE BLOCK PERIOD FOR THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED AS WELL AS THE 'OTHER PERSON' WOULD BE THE SAME SIX ASSESSMENT YEARS IMMEDIATELY PRECED ING THE YEAR OF SEARCH IS PROSPECTIVE. 32 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT, 1 961 TOOK PLACE ON NOVEMBER 11, 2010 IN THE T GROUP OF C ASES. THE DOCUMENTS PERTAINING TO THE ASSESSEE WERE FORWA RDED ALONG WITH A SATISFACTION NOTE BY THE ASSESSING OFF ICER OF THE PARTY IN RESPECT OF WHICH THE SEARCH WAS CONDUC TED TO THE ASSESSING OFFICER OF THE*ASSESSEE ON JANUARY 3, 2013. THE ASSESSING OFFICER OF THE ASSESSEE ISSUED NOTICE TO THE ASSESSEE UNDER SECTION 153C OF THE ACT ON JANUARY 4 ,2013 FOR THE ASSESSMENT YEAR 2006-07. THE TRIBUNAL HELD THAT THE NOTICE ISSUED TO THE ASSESSEE UNDER SECTION 153C OF THE ACT FOR THE ASSESSMENT YEAR 2006-07, WAS WITHOUT JURISD ICTION SINCE THE ASSESSMENT YEAR WAS BEYOND THE PURVIEW OF ISSUANCE OF NOTICE IN TERMS OF THE PROVISION UNDER SECTION 153C OF THE ACT. ON APPEAL: HELD ACCORDINGLY, DISMISSING THE APPEAL, THAT THE T RIBUNAL WAS JUSTIFIED IN HOLDING THAT THE NOTICE ISSUED TO THE 33 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ASSESSEE UNDER SECTION 153C OF THE ACT FOR THE ASSE SSMENT YEAR 2006-07 WAS WITHOUT JURISDICTION SINCE THE ASS ESSMENT YEAR WAS BEYOND THE PURVIEW OF ISSUANCE OF NOTICE I N TERMS OF THE PROVISION. 7.2. THE ITAT, DELHI, B-BENCH IN THE CASE OF ACIT, C.C.-2, NEW DELHI VS. EMPIRE CASTING PVT. LTD., NEW DELHI (SUPRA), HELD IN PARAS 5 AND 5.1 AS UNDER : 5. WE HAVE HEARD THE RIVAL SUBMISSION ON THIS ISS UE AND ALSO PERUSED THE JUDGMENT DATED 30TH OCTOBER, 2015 OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CI T VS RRJ SECURITIES IN ITA NO. 164/2015 AND ITA NO. 175 TO 177/2015. FOR READY REFERENCE, THE RELEVANT PARA OF THE JUDGMENT IS REPRODUCED AS UNDER: '24. AS DISCUSSED HEREINBEFORE, IN TERMS OF PROVISO TO SECTION 153C OF THE ACT, A REFERENCE TO THE DATE OF THE SEARCH UNDER THE 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 THE PERSON OTHER THAN THE ON E 34 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SEARCHED) TO THE AO HAVING JURISDICTION TO ASSESS T HE SAID ASSESSEE. FURTHER PROCEEDINGS, BY VIRTUE OF SECTION 153C(1) OF 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 SECTION 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DATE OF HANDING OVER OF ASSETS/DOCUMENTS TO THE AO OF THE ASSESSEE. IN THIS CASE, IT WOULD BE THE DATE OF THE RECORDING OF SATISFACTION UNDER SECTION 153C OF THE ACT, I.E., 8TH SEPTEMBER, 2010. IN THIS VIEW, THE ASSESSMENTS MADE IN RESPECT OF ASSESSMENT YEAR 2003-04 AND 2004-05 WOULD BE BEYOND THE PERIOD OF SIX ASSESSMENT YEARS AS RECKONED WITH REFERENCE TO THE DATE OF RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON. IT IS CONTENDED BY THE REVENUE THA T THE RELEVANT SIX ASSESSMENT YEARS WOULD BE THE ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH 35 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. WAS CONDUCTED. IF THIS INTERPRETATION AS CANVASSED BY THE REVENUE IS ACCEPTED, IT WOULD MEAN THAT WHEREAS IN CASE OF A PERSON SEARCHED, ASSESSMENTS I N RELATION TO SIX PREVIOUS YEARS PRECEDING THE YEAR I N WHICH THE SEARCH TAKES PLACE CAN BE REOPENED BUT IN CASE OF ANY OTHER PERSON, WHO IS NOT SEARCHED BUT H IS ASSETS ARE SEIZED FROM THE SEARCHED PERSON, THE PERIOD FOR WHICH THE ASSESSMENTS COULD BE REOPENED WOULD BE MUCH BEYOND THE PERIOD OF SIX YEARS. THIS IS SO BECAUSE THE DATE OF HANDING OVER OF ASSETS/DOCUMENTS OF A PERSON, OTHER THAN THE SEARCHED PERSON, TO THE AO WOULD BE SUBSEQUENT TO THE DATE OF THE SEARCH. THIS, IN OUR VIEW, WOULD BE CONTRARY TO THE SCHEME OF SECTION 153C(1) OF THE AC T, WHICH CONSTRUES THE DATE OF RECEIPT OF ASSETS AND DOCUMENTS BY THE AO OF THE ASSESSEE (OTHER THAN ONE SEARCHED) AS THE DATE OF THE SEARCH ON THE ASSESSEE. THE RATIONALE APPEARS TO BE THAT WHEREAS IN THE CASE OF A SEARCHED PERSON THE AO OF THE SEARCHED PERSON ASSUMES POSSESSION OF SEIZED ASSETS/DOCUMENTS ON SEARCH OF THE ASSESSEE; THE SEIZED ASSETS/DOCUMENTS BELONGING TO A PERSON 36 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. OTHER THAN A SEARCHED PERSON COME INTO POSSESSION OF THE AO OF THAT PERSON ONLY AFTER THE AO OF THE SEARCHED PERSON IS SATISFIED THAT THE ASSETS/DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON. THUS, THE DATE ON WHICH THE AO OF THE PERSON OTHER THAN THE ONE SEARCHED ASSUMES THE POSSESSION OF THE SEIZED ASSETS WOULD BE THE RELEVA NT DATE FOR APPLYING THE PROVISIONS OF SECTION 153A OF THE ACT. WE, THEREFORE, ACCEPT THE CONTENTION THAT IN ANY VIEW OF THE MATTER, ASSESSMENT FOR AY 2003-04 AND AY 2004-05 WERE OUTSIDE THE SCOPE OF SECTION 153C OF THE ACT AND THE AO HAD NO JURISDICTION TO MAKE AN ASSESSMENT OF THE ASSESSEE'S INCOME FOR THAT YEAR.' 5.1. THE FACT THAT SATISFACTION UNDER SECTION153C OF THE ACT IN THE CASE WAS RECORDED ON 2ND NOVEMBER, 2009, IS NOT DISPUTED BY BOTH THE PARTIES. IN THE JUDGMENT CITED ABOVE, THE HON'BLE HIGH COURT HAS HELD THAT WHEN THE ASSES SING OFFICER OF SEARCHED PERSON AND SUCH OTHER PERSON IN WHOSE CASE PROCEEDINGS UNDER SECTION 153C ARE INITIATED, IS THE SAME OFFICER, THEN THE DATE OF RECORDING OF SATISFA CTION 37 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. WOULD BE CONSTRUED AS THE DATE OF HANDING OVER OF T HE SEIZED RECORDS BY THE ASSESSING OFFICER OF SEARCHED PERSON TO THE ASSESSING OFFICER OF SUCH OTHER PERSON IN WH OSE CASE PROCEEDINGS UNDER SECTION 153C ARE INITIATED. SINCE THE HON'BLE HIGH COURT HAS ALREADY CONSTRUED THE RELEVA NT PROVISIONS, WE DO NOT CONCUR WITH THE ARGUMENTS ADV ANCED BY THE LD. CIT DR ON THIS COUNT. RESPECTFULLY FOLLO WING THE ABOVE JUDGMENT OF THE HON'BLE HIGH COURT IN RRJ SECURITIES (SUPRA) THE DATE OF HANDING OVER OF SEIZ ED MATERIAL/ RECORD BY THE ASSESSING OFFICER OF SEARCH ED PARTY TO THE ASSESSING OFFICER OF THE ASSESSEE WOULD BE 2 ND NOVEMBER, 2009. FURTHER, FOLLOWING THE JUDGMENT, TH E SIX ASSESSMENT YEARS FOR WHICH ASSESSMENT/RE-ASSESSMENT COULD BE MADE UNDER SECTION153C OF THE ACT WOULD AL SO HAVE TO BE CONSTRUED AS FROM THE REFERENCE DATE OF HANDING OVER OF ASSETS/DOCUMENTS TO THE ASSESSING OFFICER O F THE ASSESSEE. IN THE CASE IN HAND, IT WOULD BE THE DATE OF RECORDING SATISFACTION UNDER SECTION 153 OF THE ACT I.E. 2ND NOVEMBER, 2009, AND THEREFORE, SIX ASSESSMENT YEARS WHICH WOULD ELIGIBLE FOR ASSESSMENT/RE-ASSESSMENT WOULD COMMENCE FROM ASSESSMENT YEAR 2004-05 TO ASSESSMENT YEAR 2009-10. THE ASSESSMENT/RE-ASSESSMENT IN RESPE CT OF 38 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ASSESSMENT YEAR 2003-04 WOULD, THUS, BE BEYOND THE PERIOD OF SIX ASSESSMENT YEAR AS RECKONED WITH REFERENCE T O THE DATE OF SATISFACTION RECORDED BY THE ASSESSING OFFI CER OF THE SEARCHED PERSON. WE, THEREFORE, HOLD THAT THE LEARN ED CIT(A) WAS QUITE JUSTIFIED IN CONSIDERING THE ASSES SMENT FOR ASSESSMENT YEAR 2003-04 AS OUTSIDE THE SCOPE OF SECTION 153C OF THE ACT, BEING BARRED BY LIMITATION AND WITHOUT JURISDICTION. ACCORDINGLY, THE IMPUGNED ASSESSMENT ORDER IS LIABLE TO BE QUASHED. WE DECIDE ACCORDINGLY. 7.3. THE ITAT, DELHI, C-BENCH, IN THE CASE OF PAVI TRA REALCON PVT. LTD., NEW DELHI VS. ACIT, C.C.32, NEW DELHI (SUPRA) UNDER THE SAME CIRCUMSTANCES HELD THAT ASSESSMENT COMPLETED UNDER SECTION 143(3) IS INVAL ID. THE RELEVANT PARA-16 OF THE ORDER IS REPRODUCED AS UNDE R : 16. WE FIND THE YEAR FOR WHICH THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED UNDER SECTION143(3 ) IS FOR ASSESSMENT YEAR 2011-12. THIS YEAR FALLS WIT HIN THE PERIOD OF SIX YEARS WHEN COUNTED FROM THE DATE OF RECORDING OF SATISFACTION NOTE UNDER SECTION153/153 C OF THE I.T. ACT WHICH IS DEEMED DATE OF SEARCH. THE ACT 39 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. HAS BEEN AMENDED RECENTLY BY THE FINANCE ACT, 2017 WITH PROSPECTIVE EFFECT I.E., FROM ASSESSMENT YEAR 2018- 19. THUS, THE PERIOD IS SAME NOW ONLY FOR THE SEARC HED PARTIES AS WELL AS THE OTHER PERSON AS PER THE AMENDED PROVISIONS OF THE SAID SECTION. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSMENT COMPLETED UNDER SECTION143(3) IS INVALID. 8. IT IS NOT IN DISPUTE THAT SEARCH WAS CONDUCTED ON KRRISH GROUP OF CASES ON 09.11.2011. THE IMPOUNDED DOCUMENTS HAVE BEEN RECEIVED BY THE A.O. ON 29.08.2013. THE SATISFACTION UNDER SECTION 153C HAV E BEEN RECORDED ON 03.10.2013. THE A.O. PASSED THE ASSESSMENT ORDER UNDER SECTION 153B(1)(B) OF THE I. T. ACT, CONSIDERING THE ASSESSMENT YEAR UNDER APPEAL I .E., A.Y. 2012-2013 TO BE THE YEAR OF SEARCH. HOWEVER, T HE FIRST PROVISO TO SECTION 153C OF THE I.T. ACT PROVI DES THAT THE 06 ASSESSMENT YEARS FOR WHICH ASSESSMENTS OR RE - ASSESSMENTS COULD BE MADE UNDER SECTION 153C OF THE I.T. ACT, WOULD ALSO HAVE TO BE CONSTRUED WITH REFE RENCE 40 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. TO THE DATE OF HANDING-OVER OF THE ASSETS OR DOCUME NTS TO THE A.O. OF THE ASSESSEE. THEREFORE, THE 06 ASSESSM ENT 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 O RDER UNDER SECTION 153C OF THE I.T. ACT. HOWEVER, A.O. H AS NOT ISSUED ANY NOTICE UNDER SECTION 153C OF THE I.T . ACT BEFORE INITIATING THE PROCEEDINGS AGAINST THE ASSES SEE WHICH IS ALSO ADMITTED BY THE A.O. IN REPLY TO THE ASSESSEE UNDER RTI ACT. THE AMENDMENT IN SECTION 153C OF THE I.T. ACT BY THE FINANCE ACT, 2017, W.E. F. 01.04.2017 TO THE EFFECT THAT BLOCK PERIOD FOR THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED AS WELL AS THE OTHER PERSON WOULD BE THE SAME SIX ASSESSMEN T YEAR IMMEDIATELY PRECEDING THE YEAR OF SEARCH IS PROSPECTIVE IN NATURE. THE ISSUE HAVE BEEN DEALT IN DETAIL BY THE HONBLE JURISDICTIONAL DELHI HIGH COU RT IN THE CASE OF PR. CIT VS. SARWAR AGENCY P. LTD., (SUP RA) AND BY ITAT, DELHI, B-BENCH, IN THE CASE OF EMPIRE 41 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. CASTING PVT. LTD., NEW DELHI VS. ACIT, C.C.2, NEW D ELHI AND PAVITRA REALCON PVT. LTD., NEW DELHI VS. ACIT, C.C.32, NEW DELHI (SUPRA). THE A.O, THEREFORE, SHOU LD HAVE FRAMED THE ASSESSMENT UNDER SECTION 153C OF TH E I.T. ACT IN THE CASE OF THE ASSESSEE AND AT THE TIM E OF INITIATING THE PROCEEDING AGAINST THE ASSESSEE, SHO ULD HAVE ISSUED NOTICE UNDER SECTION 153C OF THE I.T. A CT WHICH HAVE NOT BEEN DONE IN THIS CASE. THE ISSUE OF NOTICE UNDER SECTION 153C IS MANDATORY AND A CONDIT ION PRECEDENT FOR TAKING ACTION AGAINST THE ASSESSEE UN DER SECTION 153C OF THE I.T. ACT. THE ASSESSMENT ORDER, THEREFORE, VITIATE, VOID, ILLEGAL AND BAD IN LAW AN D CANNOT BE SUSTAINED. THE CONTENTION OF THE LD. D.R. HAVE ALREADY TAKEN CARE IN THE ABOVE JUDGMENTS. 9. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE SAME AND ALLOW THE ADDITIONAL GROUNDS OF APPEALS. RESULTANTLY, ALL ADD ITIONS 42 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. STANDS DELETED. SINCE THE ASSESSMENT ORDER IS SET A SIDE ON LEGAL GROUNDS, THEREFORE, THERE IS NO NEED TO DE CIDE THE ADDITION ON MERIT WHICH HAS BEEN LEFT WITH ACAD EMIC DISCUSSION ONLY. 10. IN THE RESULT, ITA.NO.504/DEL./2013 OF THE ASSESSEE IS ALLOWED. 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS, IN THE LIGHT OF ABOVE DECISION OF THE TRIBUNAL IN THE CASE OF M/ S. BNB INVESTMENT & PROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CENTRAL CIRCLE-1, FARIDABAD (SUPRA), WE ARE OF THE VIEW THAT ADDITIONAL GROUNDS ARE LEGAL IN NATURE AND NO NEW F ACTS SHALL HAVE TO BE CONSIDERED. THE ADDITIONAL GROUNDS GO TO THE VALIDITY OF THE ASSESSMENT PROCEEDINGS UNDER SECTIO N 143(3) OF THE I.T. ACT, THEREFORE, SAME SHOULD BE ADMITTED FO R DECIDING THE APPEAL. IN THE SIMILAR CIRCUMSTANCES, THE ADDIT IONAL GROUND WAS ADMITTED BY THE TRIBUNAL IN THE CASE OF M/S. BNB INVESTMENT & PROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CENTRAL CIRCLE-1, FARIDABAD (SUPRA). FOLLOWING THE SAME ORDER 43 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. ABOVE AND CONSIDERING THE ADDITIONAL GROUNDS ARE LE GAL IN NATURE, WHICH HAVE BEARING ON THE VALIDITY OF THE A SSESSMENT PROCEEDINGS, THE SAME ARE ADMITTED FOR THE PURPOSE OF DISPOSAL OF THE APPEAL. 9. IT IS NOT IN DISPUTE THAT A SEARCH WAS CONDUCTE D IN THE BANK PREMISES OF HDFC BANK, AMBEDKAR ROAD, GHAZIABAD, IN THE CASE OF BANK A/C NO.XXX2277 OF M/ S. A.K TRADERS. NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE. THE SATISFAC TION NOTE HAVE BEEN RECORDED IN THE CASE OF ASSESSEE ON 18.09 .2012 UNDER SECTION 153C OF THE I.T. ACT FOR A.YS. 2005-2 006 TO 2010-2011. ASSESSMENT YEAR UNDER APPEAL 2011-2012 W AS CONSIDERED TO BE THE YEAR OF THE SEARCH. HOWEVER, T HE 1 ST PROVISO TO SECTION 153C OF THE I.T. ACT PROVIDES TH AT SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS OR RE-ASSESS MENTS COULD BE MADE UNDER SECTION 153C OF THE I.T. ACT, W OULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DATE OF HANDING- OVER OF THE ASSETS OR DOCUMENTS TO THE A.O. OF THE ASSESSEE. 44 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SINCE, SATISFACTION NOTE HAVE BEEN RECORDED ON 18.0 9.2012, THEREFORE, THE SIX ASSESSMENT YEARS UNDER SECTION 1 53C OF I.T. ACT IN THE CASE OF ASSESSEE WOULD BE A.YS. 2007-200 8 TO 2012- 2013. THE A.O, THEREFORE, SHALL HAVE TO PASS THE AS SESSMENT 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 INITIATING THE PROCEEDINGS AGAINST THE ASSESSEE WHI CH IS ALSO ADMITTED BY THE AUTHORITIES BELOW IN THE IMPUGNED O RDERS. THE AMENDMENT IN SECTION 153C OF THE I.T. ACT BY TH E FINANCE ACT, 2017, W.E.F. 01.04.2017 TO THE EFFECT THAT BLO CK PERIOD FOR THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUC TED AS WELL AS THE OTHER PERSON WOULD BE THE SAME SIX AS SESSMENT YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH IS P ROSPECTIVE IN NATURE. AN IDENTICAL ISSUE HAVE BEEN CONSIDERED BY ITAT, DELHI, F-BENCH, DELHI IN THE CASE OF M/S. BNB INVES TMENT & PROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CEN TRAL CIRCLE-1, FARIDABAD (SUPRA) IN THE LIGHT OF DECISIO N OF HONBLE DELHI HIGH COURT IN IN ANOTHER DECISION OF THE TRIB UNAL. THE A.O, THEREFORE, SHOULD HAVE FRAMED THE ASSESSMENT U NDER 45 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. SECTION 153C OF THE I.T. ACT IN THE CASE OF THE ASS ESSEE AND AT THE TIME OF INITIATING THE PROCEEDING AGAINST THE A SSESSEE, SHOULD HAVE ISSUED NOTICE UNDER SECTION 153C OF THE I.T. ACT WHICH HAVE NOT BEEN DONE IN THIS CASE. NO SATISFACT ION NOTE HAVE BEEN RECORDED UNDER SECTION 153C OF THE I.T. A CT FOR THE ASSESSMENT YEAR UNDER APPEAL. NO ASSESSMENT UNDER S ECTION 153C HAVE BEEN FRAMED. FURTHER, NO NOTICE UNDER SEC TION 153C HAVE BEEN ISSUED AND NO INCRIMINATING MATERIAL WAS FOUND AGAINST THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER APPEAL. THE ABOVE CONDITIONS OF SECTION 153C ARE MA NDATORY FOR TAKING ACTION AGAINST THE ASSESSEE UNDER SECTIO N 153C OF THE I.T. ACT. THE ASSESSMENT ORDER PASSED BY THE A. O. UNDER SECTION 143(3) OF THE I.T. ACT, THEREFORE, VITIATED , VOID, ILLEGAL AND BAD IN LAW AND CANNOT BE SUSTAINED. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT THE ISSUE IS COVERED BY ABOVE ORDE R OF THE ITAT, DELHI, F-BENCH, DELHI IN THE CASE OF M/S. BNB INVESTMENT & PROPERTIES LTD., GURGAON, HARYANA VS. THE DCIT, CENTRAL CIRCLE-1, FARIDABAD (SUPRA). WE, ACCORDINGL Y, SET ASIDE 46 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. THE ORDERS OF THE AUTHORITIES BELOW AND QUASH THE O RDERS OF THE AUTHORITIES BELOW AND ALLOW THE ADDITIONAL GROU NDS OF APPEAL. RESULTANTLY, ALL ADDITIONS STANDS DELETED. SINCE THE ASSESSMENT ORDER IS SET ASIDE ON LEGAL GROUNDS, THE REFORE, THERE IS NO NEED TO DECIDE THE ADDITION ON MERIT WH ICH HAS BEEN LEFT WITH ACADEMIC DISCUSSION ONLY. 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRASHANT MAHARISHI) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 6 TH NOVEMBER, 2018 VBP/- COPY TO 1. THE APP ELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT G BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI 47 ITA.NO.3559/DEL./2015 SHRI SANJAY THAKUR, NEW DELHI. DATE OF DICTATION 31.10.2018 DATE ON WHICH THE TYPED DRAFT ORDER IS PLACED BEFOR E THE DICTATION MEMBER 02.11.2018 DATE ON WHICH THE APPROVAL DRAFT COMES TO THE SR. P S DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATION MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S. 06.11.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 06.11.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 06.11.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER.