DIT CC 6 (2), MUMBAI V. GOPAL BHAGWANDAS AHUJA, MUMBAI

MA 209/MUM/2022

AI Insights

The case involves a Miscellaneous Application by the Revenue seeking recall of the Tribunal's order dated 22.07.2021, which had quashed the assessment made under section 153C r.w.s. 143(3) of the Income Tax Act. The Tribunal initially found that the assessment should have been made under section 153A r.w.s. 143(3) instead, due to the absence of incriminating material post the search on the assessee. The Revenue contended that there was a mistake in the Tribunal's order regarding the application of sections 153A and 153C, and that the necessary satisfaction notes were indeed recorded by the Assessing Officer. The Tribunal acknowledged the mistake and recalled the order for a fresh hearing.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123564 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-02-2023
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 02-02-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 01-08-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH DAVE; TAZIL PADVEKAR
• Section: 143(3); 153A; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI AMITSHUKLA (JUDICIAL MEMBER) AND OM PRAKASH KANT (ACCOUNTANT MEMBER M.A. No.209/Mum/2022 (Arising out of ITA No.7501/Mum/2019) (Assessment Year: 2014-15) DCIT CC-6(2), 19 th floor, Air India Building, Nariman Point, Mumbai-400021. Vs. Shri Gopal Bhagwandas Ahuja, 121, Soona Villa Pery Cross Road, Bandra West, Mumbai-400050. PAN No. AABPA 5620 P Appellant Respondent Revenue by : Shri Manoj Kumar Sinha, DR Assessee by : Shri Girish Dave & Shri Tazil Padvekar Date of Hearing : 03/02/2023 Date of pronouncement : 13/02/2023 ORDER PER OM PRAKASH KANT, AM This miscellaneous application has been preferred by the Revenue seeking recall/rectification of the order of the Tribunal dated 22.07.2021 passed in ITA No. 7501/Mum/2019 for assessment year 2014-15. 2. In the Miscellaneous Application, the Revenue has raised the issue that there is a mistake in the order of the Tribunal in recording to the fact that assessment 153A r.w.s. 143(3) of the Act, 143(3) of the Act and the assessment Tribunal, observing as under: “4. After hearing material on record, we note that in this case the search has also been conducted on the assessee as noted and observed by the AO in para 1 of the assessment order. However, in the second para the AO mentioned that notice under section 153C of the Act has been issued to the assessee on 22.09.2017 after recording satisfaction in the case of Shri Ahuja Properties and Realtor Pvt. Ltd. as well as the assessee. Then finally the AO assessed the same income as was assessed under of the Act. In this case, we note that on the date of search, the assessment year under consideration has attained finality. In other words, the assessment has not abated on the date of search and therefore in order to make any addition ther In this case, we are of the view that the assessment has to be framed under section 153A read with 143(3) of the Act. However, the AO has framed the assessment under section 153C read with section 143(3) of the Act. Even making addition in the assessment framed under section 153C of the Act there has to be satisfaction of the AO of the searched person as well as of the other person in respect of whom the satisfaction has been recorded which is assessee in the present assessee has not been searched. But nothing is coming out of the records before us. Under these circumstances, we are not in a position to sustain the order of Ld. CIT(A) wherein the assessment framed by the AO has been upheld. In our c framed by the AO is no assessment in the eyes of law. Accordingly, the same is quashed. 3. The Ld. Departmental Representative (DR) referred dated 11.01.2023 filed by the Ld. Assessing Officer search warrant issued Shri recording to the fact that assessment should have been 153A r.w.s. 143(3) of the Act, rather than framed u/s 153C r.w.s. and the assessment has been quashed as under: 4. After hearing both the parties and perusing the material on record, we note that in this case the search has also been conducted on the assessee as noted and observed by the AO in para 1 of the assessment order. However, in the second para the AO mentioned that under section 153C of the Act has been issued to the assessee on 22.09.2017 after recording satisfaction in the case of Shri Ahuja Properties and Realtor Pvt. Ltd. as well as the assessee. Then finally the AO assessed the same income as was assessed under section 143(3) of the Act. In this case, we note that on the date of search, the assessment year under consideration has attained finality. In other words, the assessment has not abated on the date of search and therefore in order to make any addition there has to be incriminating material. In this case, we are of the view that the assessment has to be framed under section 153A read with 143(3) of the Act. However, the AO has framed the assessment under section 153C read with section 143(3) of the Act. Even making addition in the assessment framed under section 153C of the Act there has to be satisfaction of the AO of the searched person as well as of the other person in respect of whom the satisfaction has been recorded which is assessee in the present case presuming that assessee has not been searched. But nothing is coming out of the records before us. Under these circumstances, we are not in a position to sustain the order of Ld. CIT(A) wherein the assessment framed by the AO has been upheld. In our considered opinion, the assessment as framed by the AO is no assessment in the eyes of law. Accordingly, the same is quashed.” The Ld. Departmental Representative (DR) referred 23 filed by the Ld. Assessing Officer, warrant issued by the Investigation wing of Income Shri Gopal Bhagwandas Ahuja M.A. No. 209/M/2022 2 should have been framed u/s framed u/s 153C r.w.s. has been quashed by the both the parties and perusing the material on record, we note that in this case the search has also been conducted on the assessee as noted and observed by the AO in para 1 of the assessment order. However, in the second para the AO mentioned that under section 153C of the Act has been issued to the assessee on 22.09.2017 after recording satisfaction in the case of Shri Ahuja Properties and Realtor Pvt. Ltd. as well as the assessee. Then finally the AO assessed section 143(3) of the Act. In this case, we note that on the date of search, the assessment year under consideration has attained finality. In other words, the assessment has not abated on the date of search and therefore in order to e has to be incriminating material. In this case, we are of the view that the assessment has to be framed under section 153A read with 143(3) of the Act. However, the AO has framed the assessment under section 153C read with section 143(3) of the Act. Even for making addition in the assessment framed under section 153C of the Act there has to be satisfaction of the AO of the searched person as well as of the other person in respect of whom the satisfaction has been recorded case presuming that assessee has not been searched. But nothing is coming out of the records before us. Under these circumstances, we are not in a position to sustain the order of Ld. CIT(A) wherein the assessment framed by the AO has been onsidered opinion, the assessment as framed by the AO is no assessment in the eyes of law. The Ld. Departmental Representative (DR) referred to letter wherein copy of by the Investigation wing of Income-tax department has been enclosed residence of the assessee found from those premises, which the basis of conclusion by the Tribunal that assessee was also searched, search warrant has been issued in the name of the (11)entities including M/s Shree Ahuja P Ltd. and in relation to search of those eleven person , the residence of the assessee was searched and included in the said search warrant mistake in the order of the Tribunal. 4. We have heard rival sub dispute and perused the relevant material on record. 153A of the Act, where a search warrant is executed on the assessee, in that case, notice u/s 153A of the Act is to be issued for initiating search assessment proceedings. But, search, documentor other material third person (i.e. other person) searched person, then for initiating search assessments of such third person i.e. other person, the Act prescribe for issuing notice u/s 153C of the Act. The Tribunal in the impugned order has concluded that search was conducted in the case of the assessee, so notices u/s 153A of the Act should have been issued, rather than notice u/s 153C the of the search warrant produced by the Ld. DR has been provided to the Ld Counsel of the assessee also. Shri has been enclosed. The Ld. DR submitted that residence of the assessee was searched and cash and Jewellery was found from those premises, which the basis of conclusion by the al that assessee was also searched, however, warrant has been issued in the name of the entities including M/s Shree Ahuja Properties & Realtors Pvt. in relation to search of those eleven person , the residence of the assessee was searched and name of the assessee is not included in the said search warrant, therefore, there is an apparent mistake in the order of the Tribunal. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. of the Act, where a search warrant is executed on the , in that case, notice u/s 153A of the Act is to be issued for ssessment proceedings. But, ifduring the said search, documentor other material etc. belonging/pertaining to third person (i.e. other person) is /are found from the premises of searched person, then for initiating search assessments of such e. other person, the Act prescribe for issuing notice u/s 153C of the Act. The Tribunal in the impugned order has concluded that search was conducted in the case of the assessee, so notices u/s 153A of the Act should have been issued, rather C of the Act issued by the Ld. AO. We have seen of the search warrant produced by the Ld. DR, a copy of which has been provided to the Ld Counsel of the assessee also. Shri Gopal Bhagwandas Ahuja M.A. No. 209/M/2022 3 . The Ld. DR submitted that and cash and Jewellery was found from those premises, which the basis of conclusion by the however, the relevant warrant has been issued in the name of the other eleven roperties & Realtors Pvt. in relation to search of those eleven person , the residence name of the assessee is not , therefore, there is an apparent mission of the parties on the issue-in- dispute and perused the relevant material on record. As per section of the Act, where a search warrant is executed on the , in that case, notice u/s 153A of the Act is to be issued for ifduring the said etc. belonging/pertaining to are found from the premises of searched person, then for initiating search assessments of such e. other person, the Act prescribe for issuing notice u/s 153C of the Act. The Tribunal in the impugned order has concluded that search was conducted in the case of the assessee, so notices u/s 153A of the Act should have been issued, rather of the Act issued by the Ld. AO. We have seen , a copy of which has been provided to the Ld Counsel of the assessee also. It is evident from the said assessee is not in the entities which have been searched. It is the residence of the assessee which has been action carried out in the case of those entities which are listed in the search warrant. Therefore, there is a mistake apparent fro record in observation of the Tribunal that search has been conducted on the assessee and therefore, consequent assessment should have been passed u/s 153A r.ws. 143(3) of the Act has resulted in quashing of the assessment. In apparent mistake from the record of the Tribunal for deciding afresh on the issue of validity of the assessment passed u/s 153C r.w.s. 143(3) of the Act. 4.1 The Tribunal has further observed that in the case of the assessment for year under consideration therefore, being non have been made without aid of any incriminating material. We find that the search action in the case of M/s Shree Ahuja Properties Realtors Pvt. Ltd. was carried out on 25.06.2015 initiating proceedings u/s 153C in the case.T case of assessee for the year under consideration i.e. 2014 completed by the Assessing Officer u/s 143(3) of the Act o 13.12.2016 after making addition of Rs.4,27,67,000/ on 22.09.2017, the Assessing Officer is Act.Therefore, in the case, the issue of the abatement of the assessment has to be seen Shri said copy of the search warrant that name of the e is not in the entities which have been searched. It is the residence of the assessee which has been searched during action carried out in the case of those entities which are listed in the search warrant. Therefore, there is a mistake apparent fro record in observation of the Tribunal that search has been conducted on the assessee and therefore, consequent assessment should have been passed u/s 153A r.ws. 143(3) of the Act quashing of the assessment. In t mistake from the record, we deem it fit to recall the order of the Tribunal for deciding afresh on the issue of validity of the assessment passed u/s 153C r.w.s. 143(3) of the Act. The Tribunal has further observed that in the case of for year under consideration attained finality and therefore, being non-abated assessment year, no addition could have been made without aid of any incriminating material. We find that the search action in the case of M/s Shree Ahuja Properties Realtors Pvt. Ltd. was carried out on 25.06.2015 initiating proceedings u/s 153C in the case.The assessment in the case of assessee for the year under consideration i.e. 2014 completed by the Assessing Officer u/s 143(3) of the Act o 13.12.2016 after making addition of Rs.4,27,67,000/ on 22.09.2017, the Assessing Officer issued notice u/s 153C of the in the case, the issue of the abatement of the assessment has to be seen, keeping in view, the date on whi Shri Gopal Bhagwandas Ahuja M.A. No. 209/M/2022 4 copy of the search warrant that name of the e is not in the entities which have been searched. It is the searched during search action carried out in the case of those entities which are listed in the search warrant. Therefore, there is a mistake apparent from record in observation of the Tribunal that search has been conducted on the assessee and therefore, consequent assessment should have been passed u/s 153A r.ws. 143(3) of the Act, which quashing of the assessment. In view of above we deem it fit to recall the order of the Tribunal for deciding afresh on the issue of validity of the assessment passed u/s 153C r.w.s. 143(3) of the Act. The Tribunal has further observed that in the case of assessee, attained finality and no addition could have been made without aid of any incriminating material. We find that the search action in the case of M/s Shree Ahuja Properties & Realtors Pvt. Ltd. was carried out on 25.06.2015 i.e. basis of he assessment in the case of assessee for the year under consideration i.e. 2014-15 was completed by the Assessing Officer u/s 143(3) of the Act on 13.12.2016 after making addition of Rs.4,27,67,000/-. Thereafter, sued notice u/s 153C of the in the case, the issue of the abatement of the the date on which the Assessing Officer has recorded satisfaction note. If the assessment is completed prior to that date if the assessment u/s 143(3) was not complete prior to recording satisfaction note then same get abated mistake in recording this fact of abatement of assessment. 4.2 There is also mistake in recording of the fact that nothing is coming out of the records about satisfaction note of the AO of searched submission that said satisfaction never called for by the Tribunal observation of the Tribunal. 4.3 Accordingly, the to fix the appeal for fresh hearing in regular course and intimate the parties for hearing as per the procedure/ 5. In view of the above, the Miscellaneous Application of the Revenue is allowed. Order pronounced the ITAT Rules, 1963 on Sd/- (AMIT SHUKLA JUDICIAL MEMBER Mumbai; Dated: 13/02/2023 Rahul Sharma, Sr. P.S. Shri Assessing Officer has recorded satisfaction note. If the assessment is completed prior to that date, then it attains finality and however, if the assessment u/s 143(3) was not complete prior to recording satisfaction note then same get abated, so there is mistake in recording this fact of abatement of assessment. There is also mistake in recording of the fact that nothing is coming out of the records about satisfaction note of person as well as of other person. said satisfactions are available in record of called for by the Tribunal, we feel appropriate to recall said observation of the Tribunal. Accordingly, the appeal is recalled and the registry is to fix the appeal for fresh hearing in regular course and intimate the parties for hearing as per the procedure/ITAT Rule.1963 In view of the above, the Miscellaneous Application of the Order pronounced in the open Court/under Rule 34(4) of the ITAT Rules, 1963 on 13/02/2023. Sd/ AMIT SHUKLA) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Shri Gopal Bhagwandas Ahuja M.A. No. 209/M/2022 5 Assessing Officer has recorded satisfaction note. If the assessment then it attains finality and however, if the assessment u/s 143(3) was not complete prior to recording ere is apparent mistake in recording this fact of abatement of assessment. There is also mistake in recording of the fact by the Tribunal that nothing is coming out of the records about satisfaction note of r person. In view of available in record of AO and , we feel appropriate to recall said egistry is directed to fix the appeal for fresh hearing in regular course and intimate the ITAT Rule.1963. In view of the above, the Miscellaneous Application of the nder Rule 34(4) of Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Applicant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Shri Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Shri Gopal Bhagwandas Ahuja M.A. No. 209/M/2022 6 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai