ACIT, CC-I, Lucknow V. M/s. Seasons Realty Pvt. Ltd., Lucknow

ITSSA 241/LKW/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3501 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 20-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CIRCUMSTANCES OF CASE
• Keywords: Document seized; Question of law; Tax effect; Documents seized
• Section: 153A; 260A; 64; 13; 153; 153C; 148; 132; 2; 15

Judgement Text

I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS). NO.241/LKW/2020 ASSESSMENT YEAR:2012-13 A.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. VS. M/S SEASONS REALTY PVT. LTD., 4, WAY MMM, NEAR KRISHI BHAWAN SIKANDARBAGH, LUCKNOW. PAN:AAPCS8364M (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), DATED 17/06/2020 PERTAINING TO ASSESSMENT Y EARS 2012-2013. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GR OUNDS: 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD CIT(A) HAS ERRED IN ANNULLING THE ASSESSMENT O RDER FRAMED U/S 153C IN CASE OF 'OTHER PERSON' (NON-S EARCHED PERSON) ON GROUNDS THAT UNDER SECTION 153C, THE REL EVANT PERIOD OF SIX PRIOR ASSESSMENT YEAR(S) IS TO BE RECKONED FROM THE YEAR OF RECORDING SATISFACTION / HANDING OVER OF SEIZED MATERIAL, WITHOUT APP RECIATING THAT U/S 153C(1) ITSELF IT IS CLEARLY PROVIDED T HAT THE ASSESSMENT CAN BE MADE IN RESPECT OF 'OTHER PERSO N' FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SU B-SECTION APPELLANT BY SMT. SHEELA CHOPRA, CIT, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 02 /0 9 /20 21 DATE OF PRONOUNCEMENT 12/10/2021 I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 2 (1) OF SECTION 153A WHICH INTER ALIA PROVIDES TO RE CKON THE PERIOD OF SIX ASSESSMENT YEARS W.R.T TO THE PREVIOU S YEAR IN WHICH SEARCH IS INITIATED. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) WHILE ANNULLING THE ASSESSMENT ORDER FRAMED U/S 153C IN CASE OF OTHER PERSON FAILED TO APPRECIATE THAT SECTION 153C(1) HAS BEEN AMENDED W.E.F. 1.4.2017 TO CLARIFY THAT THE RELEVANT PERIOD OF SIX PRIOR ASSESSMENT YE AR(S) IS TO BE RECKONED FROM THE YEAR OF INITIATION OF SEARCH O NLY AND SINCE THE NOTICE U/S 153C WAS ISSUED AFTER 1. 4.2017 AND ASSESSMENT COMPLETED THEREAFTER, THE ABOVE AMENDMEN TS WERE SQUARELY APPLICABLE AND THAT THE DECISION OF D ELHI HC IN RRJ SECURITIES RENDERED PRIOR TO AMENDMENT WAS INAP PLICABLE. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN RELYING UPON THE EXPLANATORY MEMORANDUM CIRCULATED VIDE CBDT CIRCULAR NO 2/2018 EXPLAINING AMENDMENTS TO SECTION 153C BY FINANCE AC T 2017 WITHOUT APPRECIATING THAT THE EXPRESSION 'SIX ASSTT YEARS IMMEDIATELY PRECEDING THE ASSTT YEAR RELEVANT TO TH E PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED...' WAS ALREADY A PPEARING IN 2ND PROVISO TO 153C ALSO W.E.F. 1/7/2012 ITSELF AND HENCE THE SAME EXPRESSION INSERTED U/S 153C(1) W.E.F. 1/4/201 7 COULD NOT BE INFERRED TO BE APPLICABLE PROSPECTIVELY BASE D ON CBDT CIRCULAR AS IT IS SETTLED THAT IN CASE OF ANY CONFL ICT BETWEEN STATUTE AND CBDT CIRCULAR, THE FORMER SHALL TAKE TH E PRECEDENCE BECAUSE SIMILAR EXPRESSION APPEARING AT TWO PLACES IN SAME SECTION CANNOT HAVE TWO DIFFERENT DA TES OF APPLICABILITY. 4. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C IT(A) ERRED IN CONCLUDING THAT THE AMENDMENT WAS APPLICAB LE ONLY FOR SEARCHES CONDUCTED AFTER 1/4/2017 WITHOUT APPRE CIATING THAT THE AMENDMENT U/S 153C(1) INSERTING THE EXPRES SION SIX ASSTT YEARS IN WHICH SEARCH IS CONDUCTED. . WAS ONLY TO PROVIDE A MACHINERY PROVISION WITHOUT IMPOS ING ANY NEW CONDITIONS DENYING ANY ACCRUED RIGHTS OR IMPOSI NG DISABILITIES AND INTENDED TO ONLY CURE THE ABSURD C ONSEQUENCES BY APPLICATION OF 1 ST PROVISO TO THE EXTENT OF THE CLARIFYING THE RECKONING OF THE SIX ASSESSMENT YEARS U/S 153C(1) W HICH ALREADY EXISTED PRIOR TO AMENDMENT ALSO. I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 3 5. THAT THE LD. CIT(A) FAILED TO APPRECIATE THAT WH ILE INTERPRETING A MACHINERY/CURATIVE PROVISIONS, THEY SHOULD BE INTERPRETED IN SUCH WAY THAT IT WOULD GIVE MEANING TO THE CHARGING PROVISIONS AND THAT THE MACHINERY PROVISIO NS ARE LIBERALLY CONSTRUED AS HELD BY APEX COURT IN CASE O F CIT VS M/S CALCUTTA KNITWEARS 362 ITR 673(SC). THEREFORE, AMEN DMENT BROUGHT ON STATUTE ON 1.4.2017 WAS W.R.T TO THE MAC HINERY PROVISION ONLY TO THE EXTENT IT WAS ONLY CLARIFICA TORY/CURATIVE IN NATURE, AND HENCE NEEDS TO BE GIVEN A CONSTRUCTI ON SO AS TO GIVE THE A PURPOSIVE MEANING THEREBY IMPLYING THAT THE INSERTION OF EXPRESSION '...SIX ASSTT YEARS...... IN WHICH SEARCH IS CONDUCTED...' U/S 153C(1) WOULD ALWAYS BE APPLIC ABLE TO ALL PENDING CASES WHERE THE DATE OF RECORDING SATISFACT ION/ HANDING OVER OF SEIZED MATERIAL/ISSUE OF NOTICES U/ S 153C WAS AFTER 1.4.2017 IRRESPECTIVE OF THE YEAR OF SEARCH, AS IN THE PRESENT CASE. 6. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD CIT(A) ERRED IN NOT APPRECIATING THAT EVEN AFTER TO AMENDMENT U/S 153C(1) W.E.F. 1/4/2017, THE 1ST PROV ISO WHICH HAD BEEN HEAVILY RELIED BY THE HON'BLE DELHI HC IN RRJ SECURITIES HAS NOT BEEN AMENDED CLEARLY IMPLYING TH EREBY THAT 1ST PROVISO HAD NO RELEVANCE TO THE RECKONING AYS F OR PURPOSES OF MAKING ASSTT U/S. 153C(1). AS SUCH THE DECISION OF DELHI HC IN RRJ SECURITIES (SUPRA) CANNOT BE SAI D TO HAVE LAID DOWN THE CORRECT LAW IN VIEW OF THE SUBSEQUENT AMENDMENT BROUGHT U/S 153C (1) W.E.F. 1/4/2017. 7. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE D EPARTMENT DID FILE THE SLP AGAINST THE DECISION OF HC IN RRJ SECURITIES, BUT THE SAME GOT DISMISSED DUE TO INCORRECT TAGGING WITH ANOTHER CASES; WITH DIFFERENT QUESTION OF LAW AND N O REVIEW WAS FILED BECAUSE TAX EFFECT WAS BELOW THE MONETARY LIMITS AS PRESCRIBED BY THE CBDT FOR FILLING SLP AS EVIDENT F ROM THE CBDT LETTER F. NO. ADG (L&R)-II/SCC/FT5 NO. 200304/2015/2019-20/4638 DATED 25.09.2019. HENCE THE DECISION OF DELHI HC IN RRJ SECURITIES HAD NOT REAC HED FINALITY AND WAS NOT A BINDING PRECEDENT IN THE STATE OF UP. 8. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LEARNED CIT(A) ALSO ERRED IN NOT APPRECIATING THAT THE PLEA I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 4 THAT IMPUGNED AY WAS BEYOND THE SCOPE OF 6AYS U/S 1 53C WAS RAISED BEFORE CIT(A) FOR THE FIRST TIME ONLY AN D THEREFORE CIT(A) OUGHT TO HAVE GIVEN OPPORTUNITY TO THE AO AL SO BY CALLING FOR THE REMAND REPORT IN VIEW OF THE RATIO OF DECISION IN CASE OF CIT VS BRITISH INDIA CORPORATION LTD 337 IT R 64 (ALLD.). 2. LEARNED CIT, D.R., AT THE OUTSET, SUBMITTED THAT THE LEARNED CIT(A) HAS WRONGLY ALLOWED RELIEF TO THE ASSESSEE BY HOLDI NG THAT THE ASSESSMENT YEAR INVOLVED, IN THIS APPEAL, WAS BEYOND THE PERIO D OF SIX ASSESSMENT YEARS, WHICH WERE REOPENED U/S 153A OF THE ACT. IT WAS SUBMITTED THAT WITH THE AMENDMENT WITH EFFECT FROM 01/04/2017, THE LEAR NED CIT(A) SHOULD HAVE HELD THAT THE BLOCK OF SIX ASSESSMENT YEARS IN THE CASE OF SEARCHED PERSON AS WELL AS IN THE CASE OF OTHER PERSON WILL REMAIN THE SAME WHICH HE HAS OMITTED TO HOLD BY WRONGLY HOLDING THAT THE SAI D AMENDMENT IS APPLICABLE ONLY FOR SEARCHES CONDUCTED AFTER 01/04/ 2017 AND WHILE HOLDING SO HE HAS IGNORED AN IMPORTANT ASPECT THAT IN THIS APPEAL THE NOTICES WERE ISSUED AFTER 01/04/2017 AND THEREFORE, THE AMENDED PROVISIONS WERE APPLICABLE. IT WAS FURTHER SUBMITTED THAT LEARNED CIT(A), WHILE ALLOWING WRONG RELIEF TO THE ASSESSEE, HAS NOT CONSIDERED TH E JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KHITW EARS [2014] 362 ITR 673 (SC) WHEREIN IT HAS BEEN HELD THAT THE AMENDMENT TO ANY CHARGING PROVISION HAS TO BE LIBERALLY CONSTRUED AND HAS TO BE HELD CLARIFICATORY ONLY AND HENCE IS TO BE APPLIED RETROSPECTIVELY ONLY. L EARNED CIT, D.R., FURTHER SUBMITTED THAT THIS ISSUE OF NOT FALLING THESE YEAR S WITHIN THE SIX ASSESSMENT YEARS WAS TAKEN FIRST BEFORE LEARNED CIT(A) AND, TH EREFORE, KEEPING IN VIEW THE RATIO OF DECISION OF HON'BLE ALLAHABAD HIGH COU RT IN THE CASE OF CIT VS. BRITISH INDIA CORPORATION LTD. [2011] 337 ITR 64 (A LL) SHOULD HAVE GIVEN OPPORTUNITY TO THE ASSESSING OFFICER TO ADJUDICATE ON THIS GROUND. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, IT WAS ARGUED THAT L EARNED CIT(A) HAS WRONGLY ALLOWED RELIEF TO THE ASSESSEE AND THEREFOR E, IT SHOULD BE REVERSED. I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 5 3. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, HEAVILY PLACED RELIANCE ON THE ORDER OF LEARNED CIT(A) AND ARGUED THAT WHILE GIVING RELIEF TO THE ASSESSEE THE LEARNED CIT(A) HAS PLACED RELIANCE ON THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURIT IES LTD. [2016] 380 ITR 612 (DEL) WHEREIN HON'BLE COURT HAS CLEARLY HELD TH E PROVISIONS PREVAILING BEFORE THE AMENDMENT OF 01/04/2017 WILL BE APPLICAB LE IN THE CASE OF THE ASSESSEE AS THE SEARCH WAS CONDUCTED BEFORE 01/04/2 017. LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT BESIDES THE ABOVE CASE LAW, THE LEARNED CIT(A) HAS ALSO RELIED ON AN ORDER OF DELHI BENCH OF THE TRIBUNAL IN THE CASE OF SANJAY THAKUR VS. DCIT IN I.T.A. NO.355 9/DEL/2015 AND HAS ALSO RELIED ON CBDT CIRCULAR NO. 2/2018 DATED 15/02/2018 WHEREIN THE CBDT ITSELF HAS CLARIFIED THAT THE ABOVE AMENDMENT IS VA LID FOR THE SEARCHES CONDUCTED ON OR AFTER 01/04/2017 AND THEREFORE, IT WAS ARGUED THAT THE RELIANCE PLACED ON THE JUDGMENT OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS M/S CALCUTTA KNITWEARS (SUPRA), IN THE GR OUNDS OF APPEAL, IS NOT RELEVANT AS THE CBDT ITSELF HAS CLARIFIED THE ISSUE REGARDING THE ISSUE OF PROVIDING OPPORTUNITY TO THE ASSESSING OFFICER. LE ARNED COUNSEL FOR THE ASSESSEE ARGUED THAT THE LEGAL ISSUE CAN BE TAKEN A T ANY STAGE OF PROCEEDINGS WHICH HAS BEEN CLARIFIED MANY TIMES BY THE VARIOUS HIGH COURTS AND SUPREME COURT AND IN THIS RESPECT RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF NTPC LTD. V S. CIT 229 ITR 383 (SC). LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATTENTION TO A PETITION FILED BY THE ASSESSEE UNDER RULE 27 WHEREIN THE ASS ESSEE HAS TAKEN THE GROUND OF APPROVAL BY JT. CIT U/S 153D OF THE ACT B UT IT WAS SUBMITTED THAT HE WILL NOT BE PRESSING THE SAME. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IT IS UNDISPUTED FACT THAT A SEARCH TOOK PLACE ON SEARCHED PERSON ON 21/04/2016 WHICH IS BEFORE THE DATE OF 01 /04/2017 WHEREIN THE I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 6 AMENDMENT TOOK PLACE. WE FURTHER FIND THAT IN THIS CASE THE ASSESSEE IS OTHER PERSON AND DATE OF RECORDING OF SATISFACTION U/S 15 3C FOR ISSUE OF NOTICE U/S 153C IS 30/11/2018 AS NOTED BY LEARNED CIT(A) IN HIS ORD ER VIDE PARA 5.1. FOR THE SAKE OF COMPLETENESS, THE SATISFACTION NOTE RECORDED U/S 153C, PLACED AT PAGES 19 & 20 OF THE PAPER BOOK, HAS BEEN MADE PART OF THIS ORDER AND IS REPRODUCED BELOW: I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 7 4.1 THE PROVISION OF SECTION 153C, BEFORE THE AMEND MENT WITH EFFECT FROM 01/04/2017, READS AS UNDER: SECTION 153C. ASSESSMENT OF INCOME OF ANY OTHER PERSON. 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, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFOR MATION CONTAINED THEREIN, RELATES TO, I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 8 A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] [AND TH AT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH O THER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECE DING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND] FOR THE RE LEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A]:] [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH U NDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 4518 [SUB-SECTION (1) OF SECTION 153A] SHALL BE CONSTRUED AS REFERENCE TO THE DATE O F RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HA VING JURISDICTION OVER SUCH OTHER PERSON:] 4.2 THE ANALYSIS OF THE ABOVE PROVISIONS OF THE ACT DEMONSTRATES THAT IN THE CASE OF OTHER PERSON, THE DATE OF INITIATION OF SEARCH WILL BE TAKEN TO BE THE DATE OF RECEIVING OF DOCUMENTS OR ASSETS BY THE ASSESSING OFFICER OF THE OTHER PERSON. IN THE PRESENT CASE, THE SEARCH TOOK PLACE ON THE SEARCHED PERSON ON 21/04/2016 AND ASSESSING OFFICER OF THE S EARCHED PERSON RECORDED A SATISFACTION ON 30/11/2018 THAT CERTAIN DOCUMENTS FOUND DURING THE COURSE OF SEARCH OF SEARCHED PERSON RELATED TO THE OTHER PERSON AND, THEREFORE, ON THE SAME DATE HE RECORDED A SATISFACT ION TO ISSUE NOTICE TO OTHER PERSON I.E. THE PRESENT ASSESSEE U/S 153C OF THE ACT. SINCE THE ASSESSING OFFICER, IN THE CASE OF SEARCHED PERSON A ND OTHER PERSON I.E. ASSESSEE, WAS SAME, THEREFORE, THERE WAS NO NEED TO TRANSFER ANY ASSET OR DOCUMENTS PHYSICALLY AND THEREFORE, THE DATE OF REC ORDING OF SATISFACTION I.E. I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 9 ON 30/11/2018 WILL BE TREATED AS THE DATE OF SEARCH IN THE CASE OF OTHER PERSON WHICH IS THE ASSESSEE IN THE PRESENT APPEAL. THE HON'BLE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES VIDE ORDER DATE D 30/10/2015 HAS HELD THAT WHERE THE ASSESSING OFFICER OF SEARCHED PERSON AND OTHER PERSON IS SAME, THE DATE ON WHICH SATISFACTION IS RECORDED, W OULD BE REGARDED AS DATE ON WHICH ASSESSING OFFICER ASSUMES POSSESSION OF SE IZED DOCUMENTS/ASSETS IN HIS CAPACITY AS ASSESSING OFFICER OF OTHER PERSO N. THE ASSESSING OFFICER, IN THESE CASES, HAS RECORDED SATISFACTION ON 30/11/ 2018 AND THEREFORE, HAS ASSUMED JURISDICTION ON ASSESSEE ON 30/11/2018 AND THEREFORE, THE YEAR DURING WHICH SATISFACTION HAS BEEN RECORDED, WILL B E CONSIDERED AS SEARCH YEAR IN THE CASE OF ASSESSEE. SINCE THE DATE OF SE ARCH IN THE PRESENT YEAR FALLS IN FINANCIAL YEAR 2018-19 CORRESPONDING TO AS SESSMENT YEAR 2019-20, SIX ASSESSMENT YEARS PRECEDING THIS ASSESSMENT YEAR , WERE REQUIRED TO BE REOPENED FOR THE PURPOSE OF MAKING ASSESSMENTS U/S 153C OF THE ACT. THE ASSESSMENT YEARS WHICH COULD HAVE BEEN REOPENED U/S 153C ARE ASSESSMENT YEARS 2018-19, 2017-18, 2016-17, 2015-16 , 2014-15 AND 2013- 14. THE APPEAL UNDER CONSIDERATION RELATES TO ASSE SSMENT YEAR 2012-13 WHICH DOES NOT FALL IN THE ABOVE BLOCK PERIOD OF SI X YEARS THEREFORE, IS BEYOND THE SCOPE OF PROVISIONS OF SECTION 153C OF T HE ACT. THE HON'BLE DELHI HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIO NER OF INCOME TAX VS. SARWAR AGENCY (P.) LTD. [2017] 85 TAXMANN.COM 269 ( DELHI), VIDE ORDER DATED 17/08/2017, HAS CONSIDERED SIMILAR SITUATION AND HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING AS UNDER: 1. THE REVENUE HAS FILED THIS APPEAL UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 (ACT) AGAINST THE ORDER DATED 1ST JULY 2016 PASSED BY THE INCOME TAX APPELLATE TRIBUN AL (ITAT) IN ITA NO. 6039/DEL/2014 PERTAINING TO THE ASSESSMENT YEAR (AY) 2006-07. 2. THE QUESTION SOUGHT TO BE URGED BY THE REVENUE I S WHETHER THE ITAT WAS JUSTIFIED IN HOLDING THAT THE NOTICE I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 10 ISSUED TO THE ASSESSEE UNDER SECTION 153C OF THE AC T FOR THE AY IN QUESTION, I.E. 2006-07, IS WITHOUT JURISDICTI ON SINCE THE SAID AY IS BEYOND THE PURVIEW OF ISSUANCE OF NOTICE IN TERMS OF THE SAID PROVISION. 3. THE FACTS, IN BRIEF, ARE THAT A SEARCH UNDER SEC TION 132 OF THE ACT TOOK PLACE ON 11TH NOVEMBER 2010 IN THE TIN NA GROUP OF CASES. THE DOCUMENTS PERTAINING TO THE ASSESSEE WERE FORWARDED ALONG WITH A SATISFACTION NOTE BY THE AO OF THE SEARCHED PARTY TO THE AO OF THE ASSESSEE ON 3RD JAN UARY 2013. THE AO OF THE ASSESSEE ISSUED NOTICE TO THE A SSESSEE, WHICH QUA THE SEARCHED PARTY WAS THE 'OTHER PERSON' , UNDER SECTION 153C ON 4TH JANUARY 2013. 4. SUB-SECTION (1) OF SECTION 153 C PROVIDES THAT T HE ASSESSMENT OR RE- ASSESSMENT OF THE INCOME OF THE ' OTHER PERSON' WOULD BE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153 A. THE FIRST PROVISO TO SUB-SECTION (1) OF SECT ION 153 C FURTHER STATES THAT, IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF SEARCH IN THE SECOND P ROVISO TO SECTION 153 A(1) SHALL BE CONSTRUED AS REFERENCE T O THE DATE OF RECEIVING THE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HA VING JURISDICTION OVER SUCH OTHER PERSON. 5. IN TERMS OF SECTION 153 A(1) (B) OF THE ACT, THE AO SHALL ASSESS OR RE- ASSESS THE TOTAL INCOME OF SIX AYS IM MEDIATELY PRECEDING THE AY RELEVANT TO THE PREVIOUS YEAR IN W HICH THE SEARCH WAS CONDUCTED. THE SECOND PROVISO TO SUB-SEC TION (1) OF SECTION 153 A OF THE ACT, STATES THAT ASSESSMENT OR RE- ASSESSMENT RELATING TO ANY AY FALLING WITHIN THE PE RIOD OF SIX AYS REFERRED TO IN THE SAID SUB-SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132, WOULD A BATE. 6. THE CASE OF THE REVENUE IS THAT THE FIRST PROVIS O TO SECTION 153 C REFERS ONLY TO THE SECOND PROVISO TO SECTION 153 A(1) OF THE ACT, WHICH ONLY INDICATES THAT ANY ASSESSMENT R ELATING TO ANY AY FALLING WITHIN THE PERIOD OF SIX AYS WHICH I S PENDING AS OF THE INITIATION OF SEARCH SHALL ABATE. THEREFORE, THE SECOND PROVISO TO SECTION 153C IS ALSO CONCERNED ONLY WITH THE ASPECT OF ABATEMENT OF PENDING ASSESSMENTS. ACCORDING TO T HE REVENUE, THIS MAKES NO DIFFERENCE TO THE COMPUTATIO N OF THE BLOCK OF SIX YEARS PRECEDING THE AY RELEVANT TO THE PREVIOUS YEAR /IN WHICH THE SEARCH WAS CONDUCTED. IN OTHER W ORDS, I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 11 ACCORDING TO THE REVENUE, THE BLOCK PERIOD FOR BOTH THE SEARCHED PERSON AND THE 'OTHER PERSON' WOULD REMAIN THE SAME NOTWITHSTANDING THAT THERE MAY BE SOME DELAY I N TRANSMITTING THE DOCUMENTS RECOVERED DURING THE SEA RCH WHICH BELONG OR PERTAIN TO THE 'OTHER PERSON' TO TH E AO OF SUCH OTHER PERSON. 7. THE CASE OF THE ASSESSEE, ON THE OTHER HAND, IS THAT SINCE IN THE CASE OF THE 'OTHER PERSON' THE AO ISSUES NOT ICE ONLY SUBSEQUENT TO THE NOTICES ISSUED UNDER SECTION 153 A TO THE SEARCHED PERSON, THE STARTING POINT FOR COMPUTATION OF THE BLOCK PERIOD WOULD BE THE DATE ON WHICH, BASED ON T HE SEIZED DOCUMENTS, NOTICE IS ISSUED TO THE 'OTHER PERSON' U NDER SECTION 153C OF THE ACT. THUS IN THE PRESENT CASE, THE SIX YEAR PERIOD PRIOR TO AY 2012-13 I.E. AY 2007-08 TO AY 20 12-13. THUS NO NOTICE COULD BE ISSUED UNDER SECTION 153 C OF THE ACT TO REOPEN THE ASSESSEE'S ASSESSMENT FOR AY 2006-07. RELIANCE IS PLACED ON THE DECISION OF THIS COURT IN COMMISSI ONER OF INCOMETAX-7 V. RRJ SECURITIES LTD. [2016] 380 ITR 612 (DEL) WHERE THIS VERY QUESTION WAS EXAMINED AND ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. IN RRJ SECURITIES (SUPRA), THE COURT AFTER NOTIC ING THE DECISION IN SSP AVIATION LTD. V. DEPUTY CIT [2012] 346 ITR 177 (DEL), HELD AS FOLLOWS: 21. AS DISCUSSED HEREINBEFORE, ONCE THE AO OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED ASSETS/DOCUMENTS BELONG TO ANOTHER PERSON AND THE SAID ASSETS/DOCUMENTS HAVE BEEN TRANSFERRED TO THE AO OF SUCH OTHER PERSON, THE PROCEEDINGS FOR ASSESSMENT/REASSESSMENT OF INCOME OF THE OTHER PERSON HAS TO PROCEED IN ACCORDANCE WITH PROVISIONS OF SECTION 153A OF THE ACT. SECTION 153A REQUIRES THAT WHERE A SEARCH HAS BEEN INITIATED UNDER SECTION 132 OF THE ACT, THE AO IS REQUIRED TO ISSUE NOTICE REQUIRI NG THE NOTICEE TO FURNISH RETURNS OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS RELEVANT TO THE SIX PREVIOUS YEARS PRECEDING THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED. AS DISCUSSED HEREINBEFORE, BY VIRTUE OF SECOND PROVISO TO SECTION 153A, THE ASSESSMENT/ REASSESSMENT PENDING ON THE DATE OF INITIATION OF S EARCH I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 12 ABATE. IN THE CONTEXT OF PROCEEDINGS UNDER 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 AO RECEIVE S THE DOCUMENTS OR ASSETS FROM THE AO OF THE SEARCHED PERSON. THUS, BY VIRTUE OF SECOND PROVISO TO SECTIO N 153A OF THE ACT AS IT APPLIES TO PROCEEDINGS UNDER SECTION 153C OF THE ACT, THE ASSESSMENT/REASSESSMEN T PENDING ON THE DATE ON WHICH THE ASSETS/DOCUMENTS A RE RECEIVED BY THE AO WOULD ABATE. IN RESPECT OF SUCH ASSESSMENTS WHICH HAVE ABATED, THE AO WOULD HAVE TH E JURISDICTION TO PROCEED AND MAKE AN ASSESSMENT. HOWEVER, IN RESPECT OF CONCLUDED ASSESSMENTS, THE A O WOULD ASSUME JURISDICTION TO REASSESS PROVIDED THAT THE ASSETS/DOCUMENTS RECEIVED BY THE AO REPRESENT OR INDICATE ANY UNDISCLOSED INCOME OR POSSIBILITY OF A NY INCOME THAT MAY HAVE REMAINED UNDISCLOSED IN THE RELEVANT ASSESSMENT YEARS..... 24. AS DISCUSSED HEREINBEFORE, IN TERMS OF PROVISO TO SECTION 153C OF THE ACT, A REFERENCE TO THE DATE OF THE SEARCH UNDER 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 T HE PERSON OTHER THAN THE ONE SEARCHED) TO THE AO HAVIN G JURISDICTION TO ASSESS THE SAID ASSESSEE. FURTHER PROCEEDINGS, BY VIRTUE OF SECTION 153C(1) OF THE AC T, WOULD HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO THE DATE OF SEARCH WOU LD HAVE TO BE CONSTRUED AS THE REFERENCE TO THE DATE O F RECORDING OF SATISFACTION. IT WOULD FOLLOW THAT THE SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS/REASSESSMENT S COULD BE MADE UNDER SECTION 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENCE TO THE DAT E OF HANDING OVER OF ASSETS/DOCUMENTS TO THE AO OF THE ASSESSEE.' 9. THE SAID DECISION IN RRJ SECURITIES (SUPRA) HAS BEEN FOLLOWED BY THIS COURT SUBSEQUENTLY IN ARN INFRASTR UCTURE INDIA LTD. V. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCULE-28, NEW DELHI [2017] 394 ITR 569 (DEL.). I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 13 10. MR. SALIL AGGARWAL, LEARNED COUNSEL FOR THE ASS ESSEE, HAS DRAWN THE ATTENTION OF THE COURT TO THE RECENT AMEN DMENT MADE IN SECTION 153 C OF THE ACT BY THE FINANCE ACT , 2017 WITH EFFECT FROM 1ST APRIL 2017. THIS AMENDMENT IN EFFECT STATES THAT THE BLOCK PERIOD FOR THE SEARCHED PERSO N AS WELL AS THE 'OTHER PERSON' WOULD BE THE SAME SIX AYS IMMEDI ATELY PRECEDING THE YEAR OF SEARCH. THIS AMENDMENT IS PRO SPECTIVE. 11. MR. ASHOK MANCHANDA, LEARNED SENIOR STANDING CO UNSEL FOR THE APPELLANT, SOUGHT TO PURSUE THIS COURT TO R ECONSIDER ITS VIEW IN RRJ SECURITIES (SUPRA). THE COURT DECLINES TO DO SO FOR MORE THAN ONE REASON. FIRST, FOR REASONS BEST KNOWN TO IT, THE REVENUE HAS NOT CHALLENGED THE DECISION OF THIS COU RT IN RRJ SECURITIES (SUPRA) IN THE SUPREME COURT. THE SAID D ECISION HAS BEEN CONSISTENTLY FOLLOWED BY THE AUTHORITIES UNDER THIS COURT AS WELL AS BY THIS COURT. THIRDLY, THE RECENT AMEND MENT TO SECTION 153 C(1) OF THE ACT STATES FOR THE FIRST TI ME THAT FOR BOTH THE SEARCHED PERSON AND THE OTHER PERSON THE P ERIOD OF REASSESSMENT WOULD BE SIX AYS PRECEDING THE YEAR OF SEARCH. THE SAID AMENDMENT IS PROSPECTIVE. 12. CONSEQUENTLY, NO SUBSTANTIAL QUESTION OF LAW AR ISES FROM THE IMPUGNED ORDER OF THE ITAT. THE APPEAL IS, ACCO RDINGLY, DISMISSED. 4.3 WHILE ALLOWING RELIEF TO THE ASSESSEE, HON'BLE TRIBUNAL HAS HEAVILY PLACED RELIANCE ON THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF RRJ SECURITIES (SUPRA) AND HAS ALLOWED RELIEF TO THE AS SESSEE. THE GROUNDS OF APPEAL RAISED BY THE REVENUE PRIMARILY BASED ON THE AMENDMENT, WHICH TOOK PLACE ON 01/04/2017 AND THE CRUX OF THE ARGUME NTS IS THAT BY THIS AMENDMENT THE PROVISIONS OF SECTION 153C GETS AMEND ED RETROSPECTIVELY AND BLOCK PERIOD OF SIX YEARS IN THE CASE OF SEARCH ED PERSON AND THAT OF OTHER PERSON WILL REMAIN SAME. HOWEVER, WE ARE NOT IN AGREEMENT WITH THE ARGUMENT OF THE DEPARTMENT. THE CBDT, VIDE CIRCULA R NO. 2/2018 DATED 15/02/2018, REPRODUCED BY LEARNED CIT(A) IN HIS ORD ER, HAS CLEARLY HELD THAT SUCH AMENDMENT IS APPLICABLE IN CASES OF SEARCHES C ONDUCTED ON OR AFTER I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 14 01/04/2017. THE CONTENTS OF SUCH CIRCULAR, REPRODU CED BY LEARNED CIT(A), ARE REPRODUCED BELOW: 80. RATIONALISATION OF PROVISIONS OF THE INCOME DE CLARATION SCHEME, 2016 AND CONSEQUENTIAL AMENDMENT TO SECTION 153A AND 153C. 69 80.1 THE PROVISIONS OF CLAUSE (C) OF THE SECTION 19 7 OF THE FINANCE ACT, 2016 PROVIDE THAT WHERE ANY INCOME HAS ACCRUED , ARISEN OR BEEN RECEIVED OR ANY ASSET HAS BEEN ACQUIRED OUT OF SUCH INCOME PRIOR TO COMMENCEMENT OF THE INCOME DECLARATION SCH EME, 2016 (THE SCHEME), AND NO DECLARATION IN RESPECT OF SUCH INCOME IS MADE UNDER THE SCHEME, THEN, SUCH INCOME SHALL BE DEEMED TO HAVE ACCRUED, ARISEN OR RECEIVED, AS THE CASE MAY BE, IN THE YEAR IN WHICH A NOTICE UNDER SUB-SECTION (1) OF SECTION 142 OR SU B-SECTION (2) OF SECTION 143 OR SECTION 148 OR SECTION 153A OR SECTI ON 153C OF THE INCOME-TAX ACT IS ISSUED BY THE ASSESSING OFFICER, AND PROVISIONS OF THE SAID ACT SHALL APPLY ACCORDINGLY. 80.2 IN VIEW OF THE VARIOUS REPRESENTATIONS RECEIVE D FROM STAKEHOLDERS, SECTION 197 OF THE FINANCE ACT, 2016 HAS BEEN AMENDED SO AS TO OMIT CLAUSE (C) OF THE SAID SECTIO N. 80.3 APPLICABILITY: THIS AMENDMENT TAKES EFFECT RET ROSPECTIVELY FROM 1ST JUNE, 2016. 80.4 HOWEVER, IN ORDER TO PROTECT THE INTEREST OF T HE REVENUE IN CASES WHERE TANGIBLE EVIDENCE(S) ARE FOUND DURING A SEARC H OR SEIZURE OPERATION (INCLUDING SECTION 132A CASES) AND THE SA ME IS REPRESENTED IN THE FORM OF UNDISCLOSED INVESTMENT I N ANY ASSET, SECTION 153A OF THE INCOME-TAX ACT RELATING TO SEAR CH ASSESSMENTS HAS BEEN AMENDED TO PROVIDE THAT NOTICE UNDER THE S AID SECTION CAN BE ISSUED FOR AN ASSESSMENT YEAR OR YEARS BEYOND TH E SIXTH ASSESSMENT YEAR ALREADY PROVIDED UP TO THE TENTH AS SESSMENT YEAR IF (I) THE ASSESSING OFFICER HAS IN HIS POSSESSION BOO KS OF ACCOUNTS OR OTHER DOCUMENTS OR EVIDENCE WHICH REVEAL THAT THE I NCOME WHICH HAS ESCAPED ASSESSMENT AMOUNTS TO OR IS LIKELY TO AMOUN T TO FIFTY LAKH RUPEES OR MORE IN ONE YEAR OR IN AGGREGATE IN THE R ELEVANT FOUR ASSESSMENT YEARS(FALLING BEYOND THE SIXTH YEAR); (II) SUCH INCOME ESCAPING ASSESSMENT IS REPRESENTED IN THE FORM OF ASSET; I.T.(SS)A. NO.241/LKW/2020 ASSESSMENT YEARS:2012-13 15 (III) THE INCOME ESCAPING ASSESSMENT OR PART THEREO F RELATES TO SUCH YEAR OR YEARS. 80.5 APPLICABILITY: THE AMENDED PROVISIONS OF SECTI ON 153A OF THE INCOME-TAX ACT SHALL APPLY WHERE SEARCH UNDER SECTI ON 132 OF THE INCOME-TAX ACT IS INITIATED OR REQUISITION UNDER SE CTION 132A OF THE INCOME-TAX ACT IS MADE ON OR AFTER THE 1ST DAY OF A PRIL, 2017. 80.6 SECTION 153C OF THE INCOME-TAX ACT HAS ALSO BE EN AMENDED TO PROVIDE A REFERENCE TO THE RELEVANT ASSESSMENT YEAR OR YEARS AS REFERRED TO IN SECTION 153A OF THE INCOME-TAX ACT. 80.7 APPLICABILITY: THESE AMENDMENTS TAKE EFFECT FR OM 1ST APRIL, 2017. 4.4 THE LUCKNOW BENCH OF THE TRIBUNAL IN I.T.A. NO. 97 & 98, VIDE ORDER DATED 06/04/2021 HAS ALREADY TAKEN A VIEW IN FAVOUR OF AS SESSEE BY FOLLOWING THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES [2016] 380 ITR 216 (DEL). 4.5 THEREFORE, THE ARGUMENTS OF THE REVENUE DO NOT HAVE ANY FORCE AND IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND FOLLOWING THE JUDICIAL PRECEDENTS, THE GROUNDS OF APPEAL, TAKEN BY THE REVENUE, ARE DISMIS SED. THE PETITION MOVED BY THE ASSESSEE UNDER RULE 27 OF THE I.T. RULES ALSO ST ANDS DISMISSED AS NOT PRESSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMI SSED AND THE PETITION FILED BY ASSESSEE UNDER RULE 27 IS ALSO DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 12/10/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:12/10/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR