Deputy Commissioner of Income Tax, Central Circle-1, Surat, Surat V. Dhaval Bharatkumar Shah, Surat

MA 18/SRT/2024

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 0936 (ITAT-SURAT)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 14-07-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2024
• Assessment Year: 2019-2020
• Appeal Filed On: 12-05-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Document seized; Period of limitation; Time period of passing order; Documents seized
• Section: 132; 142(1); 153A; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER M.A. No. 18/Srt/2024 (Arising out of IT(SS)A No. 130 & 131/Srt/2023) (A.Y. 2019-20) (Physical hearing) D.C.I.T., Central Circle-1, Surat. Vs. Dhaval Bharatkumar Shah, 3 rd & 4 th Floor, Sargam House, Ghoddod Road, Surat-395007. PAN No. ACTPS 6405 Q Appellant/ Revenue Respondent/ Assessee Department represented by Shri Vinod Kumar, Sr. DR Assessee represented by Shri P.M. Jagasheth, CA Date of hearing 28/06/2024 Date of pronouncement 15/07/2024 Order under section 254(2) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This Miscellaneous Application (MA) is filed by the revenue for seeking rectification in the order of Tribunal dated 18/01/2024 passed in IT(SS)A No. 130 & 131/Srt/2023 for the Assessment Year (AY) 2019-20. 2. The learned Senior Departmental Representative (ld. Sr. DR) for the revenue submits that while passing the order on 18/01/2024, the Bench has quashed assessment order dated 25/09/2022. Quashing the assessment order on the point of limitation is mistake apparent on record by not considering the fact that date of handing over the relevant seized material to the jurisdictional Assessing Officer. The ld. Sr. DR for the revenue submits that a search action in this case was carried out on 21/10/2020. The authorisation of bank locker was executed on 11/12/2020. The seized material was handed over by the Investigation Wing to Assessing Officer on 13/10/2021. Therefore, after MA No. 18/Srt/2024 DCIT Vs Dhaval Bharatkumar Shah.. 2 handing over seized material, as per clause (xi) of Explanation of Section 153B, maximum period of 180 days is to be excluded from the end of financial year i.e. from 31/03/2022 for completion of assessment year. Thus, limitation period for passing assessment order was up to 30/09/2022. The assessment order was passed on 25/09/2022 was well within statutory time limit for passing the assessment order. The Bench has concluded that the assessment order was passed after a period of limitation, therefore, finding of Tribunal is wrong, thus it is mistake apparent on record. 3. On the other hand, the learned Authorised Representative (ld AR) of the assessee submits that his assessment order dated 25/09/2022 is clearly barred by time period prescribed under Section 153B of the Income Tax Act, 1961 (in short, the Act). The ld. AR of the assessee submits that search action under Section 132 of the Act was carried out on 21/10/2020 in PVS Sarma Group of Surat. The search team operated locker of assessee on 11/12/2020, which is last execution of authorisation, thus maximum period for passing assessment order is 180 days from end of financial year. The assessment order was passed on 25.09.2022 which is much beyond the time period. Clause (xi) of Explanation of section 153B is not applicable for AY 2019-20 as has been held by Madras High Court in Agni Estate and Foundation (P) Ltd Vs DCIT (2023) 157 taxmann.com 312 (Mad) and Rajkot Tribunal in ACIT Vs Shri Rajesh Kumar Govindlal Patel in ITA No. 25& 26/Rjt/2021 and CO No. 1&2/ Rjt/2021 dated 12.04.2013. Both the decisions were considered by this Bench while deciding the appeal. The revenue is MA No. 18/Srt/2024 DCIT Vs Dhaval Bharatkumar Shah.. 3 seeking review of the order under the garb of present MA, which is not permissible. To support such contention, the ld AR for the assessee relied on the decision of Gujarat High Court in Pr CIT Vs Hitesh Ashok Vaswani (2023) 156 taxmann.com 200 (Gujarat). 4. Hearing of this MA was concluded on 28.06.2024. The ld Sr DR for the revenue filed his written submissions on 10/07/2024, by narrating the facts that during the hearing he was directed to call the note of seized material and its handing over to Assessing Officer. In the written submission, the ld Sr DR of revenue has contended that seized material was handed over to the Assessing Officer on 08.12.2021 and time period for completion of assessment was 180 days from the end of financial year i.e. from 31.03.2022. Assessment order was passed on 30/09/2022 which is within 190 days from 31/03/2022. The ld. Sr.DR for the revenue also made a reference of applicability of clause (xi) of Explanation (2) to Section 153B. Though, no such direction was given to the ld Sr DR for revenue. Rather it was shown from assessment order that there is no reference in the assessment order about handing over the impugned seized documents to the assessing officer. In this written submission, the ld. Sr.DR/Assessing Officer is trying to twist the entire fact which we shall refer in our finding. 5. We have considered the rival submission of the parties and have perused the order of Tribunal carefully. In the present case, the Assessing Officer passed the assessment order under Section 153A of the Act on 25/09/2022. In para 2 of assessment order, the Assessing Officer recorded that search action MA No. 18/Srt/2024 DCIT Vs Dhaval Bharatkumar Shah.. 4 under Section 132 was carried out in PVS Sarma Group on 21/10/2020 and the assessee is one of the entities covered in the search. The case was assigned to him by way of order under Section 172. In para 3 of assessment order, the Assessing Officer further recorded that notice under Section 153A was issued to assessee on 28/10/2021. The assessee filed return of income on 21/11/2021. Notice under Section 142(1) was issued on 24/11/2021. Now, surprisingly the fact is pleaded that seized material was handed over to Assessing Officer on 08/12/2021. This fact about allegedly handing over of seized material to the Assessing Officer on 08/12/2021 is for the first time disclosed, for the reasons best known to the Assessing Officer. Facts remained the same that the Assessing Officer issued notice under Section 153A, completed Assessment under Section 153A. No such fact was argued or brought in the notice of this Bench at the time of hearing of case on 09/10/2023 or on 31/10/2023. Now no such fact can be considered which is otherwise not in consonance with the contents of assessment order. 6. We find that the main argument of ld Sr DR for the revenue is based upon clause (xi) to Explanation to section 153B. On careful perusal of this clause, we find is that clause relates to exclusion of the period taken for handing over seized material the assessing officer. The clause has been inserted with effect from 1-4-2021 and hence operates prospectively only, being a substantive provision. The benefit of the exclusion under that clause thus, would not be available to the revenue in the present assessments i.e. in AY 2019-2020, as has been held by the Hon’ble Madras High Court in Agni MA No. 18/Srt/2024 DCIT Vs Dhaval Bharatkumar Shah.. 5 Estates and Foundations (P.) Ltd. Vs Deputy Commissioner of Income tax [2023] 157 taxmann.com 312 (Madras). Even otherwise, no such defence was raised by the revenue at the time of making submission, at the time of final hearing of the matter when submissions of both the parties were heard, before decision in the present appeal. Thus, we do not find any merit in the application of revenue, much less to bring any mistake in our notice for rectification of any such mistake. The revenue is seeking review of the order which is not permissible under the scope of application under Section 254(2) of the Act. 7. In the result, this Miscellaneous Application filed by the revenue is dismissed. Order was pronounced in the open court on 15 th July, 2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 15/07/2024 *Ranjan Copy to: 1. Appellant 2. Respondent 3. CIT 4. DR 5. Guard File By order Sr. Pvt. Secretary, ITAT, Surat