SHYAM SUNDER TIBREWAL V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2)

SCA/18636/2018

AI Insights

The case involves Shyam Sunder Tibrewal, the petitioner, challenging the notices issued under Section 153C of the Income Tax Act, 1961, by the Deputy Commissioner of Income Tax, Circle 2(1)(2), the respondent. The core issue was the jurisdictional validity of the notices and subsequent assessments for the assessment years 2009-10 to 2015-16, following a search conducted on December 4, 2014, prior to the amendment of Section 153C which came into effect on June 1, 2015. The petitioner argued that the documents seized did not pertain to him, and thus, the issuance of notices under Section 153C was without authority of law. The High Court, referencing a coordinate bench's decision on similar matters, found in favor of the petitioner, leading to the quashing of the notices and assessments.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 683315 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 25-06-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAUNA BHATT
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment years; Impugned notices; Jurisdiction; Quash and set aside; Search and seizure
• Section: 153A; 153C

Judgement Text

"C/SCA/18636/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 18636 of 2018 ========================================================== SHYAM SUNDER TIBREWAL Versus DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(2) ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 25/06/2019 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. Rule returnable forthwith. Ms. Mauna Bhatt, the learned Senior Standing Counsel waives service of notice of rule for and on behalf of the respondent. 2. By this writ-application under Article 226 of the Constitution of India, the writ-applicant has prayed for the following reliefs: “(a) quash and set aside the impugned notices at Annexure-'A' to this petition; (b) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the notices at Annexure -'A' to this Page 1 of 6 C/SCA/18636/2018 ORDER petition and stay further proceedings for assessment for AY 2009-10 to AY 2015-16; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition.” 3. On 04.12.2018, this Court passed the following order: “1. Mr. B.S. Soparkar, learned advocate for the petitioner submitted that in this case, the search has taken place on 04.12.2014, that is, prior to the amendment in section 153C of the Income Tax Act, 1961, which came into effect from 1st June, 2015 and hence, the jurisdictional requirement for assumption of jurisdiction under section 153C of the Act qua the other persons (in this case the petitioner assessee) is that the seized documents forming the basis of satisfaction note must not merely pertain to the other person, but must belong to the other person. Reference was made to the satisfaction note to point out that the Assessing Officer has recorded satisfaction that the documents seized from searched premises pertain/pertains to the petitioner. It was submitted that therefore, the assumption of jurisdiction on the part of the Assessing Officer by issuance of notice under section 153C of the Income Tax Act, 1961 is without authority of law. 2. Having regard to the submissions advanced by the learned counsel for the petitioner, Issue Notice returnable on 22nd January, 2019. By way of ad- interim relief, the Assessing Officer may proceed further pursuant to the impugned notice dated 26.03.2018; he, however, shall not pass the final order without the permission of this court. Direct Service is permitted.” 4. Ultimately, a batch of writ-applications with regard to the Page 2 of 6 C/SCA/18636/2018 ORDER legality and validity of the issue of notice under Section 153C of the Act came to be heard by the coordinate bench. Finally, a batch of writ-applications came to be disposed of by the coordinate bench with a judgment and order dated 02.04.2019. The coordinate bench addressed itself on four questions. First, with regard to the maintainability of the petitions. Secondly, the question was with regard to whether Section 153C of the Act as amended with effect from 01.06.2015 would be applicable to the case where search is initiated prior to that date. Thirdly, the question was with regard to whether the notice u/s. 153C of the Act was barred by limitation and fourthly, the question was with regard to the relevant Assessment Years contemplated u/s. 153A of the Act. 5. With regard to the first question, the coordinate bench took the view that the writ-applications were maintainable. With regard to the second question, the Court took the view that the Legislature has specifically made the amended provisions of Section 153C of the Act applicable with prospective effect from 01.06.2015. The Court held that if such amended provisions are not made applicable to the searches carried out prior to 01.06.2015, they would affect the substantive rights of the persons who are brought within the Page 3 of 6 C/SCA/18636/2018 ORDER ambit of Section 153C of the Act by virtue of such amendment. So far as the third question is concerned with regard to the limitation, the Court took the view that when the statute itself provides for an alternative period of limitation, merely because the period of limitation is provided under the first part has elapsed; it cannot be said that the notices were barred by the limitation on such ground. While answering the last question, the Court held as under: “21.2 On a plain reading of section 153A of the Act, it is evident that the trigger point for issuance of notice under that section is a search under section 132 or a requisition under section 132A of the Act. Notice is required to be issued to the searched person calling upon him to file return of income for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, insofar as computation of the six assessment years in respect of which notice is required to be issued is concerned, the relevant date is the immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made. 21. Accordingly, in terms of clause (b) of sub- section (1) of section 153A of the Act, in case of HN Safal Group, since the search is conducted on 4.9.2013 the previous year in which such search is conducted or requisition made is 1.4.2013 to 31.3.2014 and the assessment year relevant to such previous year would be 2014-15; therefore, the six years assessment years would be the six assessment years preceding assessment year 2014- 15 which would be 2013-14, 2012-13, 2011-12, 2010-11, 2009-10 and 2008-09. In case of Barter Group and Venus Group, since the search is conducted on 4.12.2014 and 13.3.2015 respectively, Page 4 of 6 C/SCA/18636/2018 ORDER the previous year in which such search is conducted or requisition made is 2014-15 and the assessment year relevant to such previous year would be 2015- 16 and therefore, the six assessment years preceding 2015-16 would be 2014-15, 2013-14, 2012-13, 2011-12, 2010- 11 and 2009-10. Therefore, in case any notices under section 153C of the Act which have been issued for assessment years beyond the six assessment years referred to hereinabove, such notices would be beyond jurisdiction as the same do not fall within the six assessment years as contemplated under section 153A of the Act.” 6. Ultimately, the final order which came to be passed by the Court reads as under: “In the light of the above discussion, the petitions succeed, and are accordingly, allowed. The impugned notices issued under section 153C of the Income Tax Act, 1961 in each of the petitions are hereby quashed and set aside. In cases where the assessment orders are subject matter of challenge, the impugned assessment orders are hereby quashed and set aside on the ground that the very initiation of proceedings under section 153C of the Income Tax Act, 1961 was without jurisdiction. Rule is made absolute accordingly in each of the petitions, with no order as to cost.” 7. The issues involved in the present petition are identical. We propose to apply the very same principles of law as laid down and explained by the coordinate bench in the Special Civil Application No. 12825/2018 and allied matters to the facts of the present case. Page 5 of 6 C/SCA/18636/2018 ORDER 8. In view of the above, the petition is allowed. The impugned notice at Annexure -'A' is hereby quashed and set aside. 9. Consequently, if any Assessment Order has been passed under Section 153C of the Income Tax Act, 1961, the same is also quashed and set aside. (J. B. PARDIWALA, J) (A. C. RAO, J) MAYA Page 6 of 6 "