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Facts
A search and seizure operation was conducted on M/s SRS group. The assessee's assessment was transferred, and a notice under section 153C of the Act was issued. The assessment was framed under section 153A read with section 143(3) of the Act. The assessee's appeals pertained to assessment years 2008-09 to 2013-14.
Held
The Tribunal held that the notice under section 153C of the Act was issued beyond the prescribed period of 6 years from the search date. Therefore, the assumption of jurisdiction by the AO was improper, rendering the assessments invalid.
Key Issues
Whether the assumption of jurisdiction by the AO to frame the assessment under Section 153C of the Act was proper given the timing of the notice in relation to the search date and the assessment years involved.
Sections Cited
132(1), 127, 153C, 153A, 143(3), 143(2), 153B(1)(b)
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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI M. BALAGANESH & SHRI YOGESH KUMAR U.S.
O R D E R PER BENCH.: 1. These are the appeals filed by the assessee in to 3633/Del/2018 for AYs 2008-09 to 2013-14 as under:-
S Appeal No. AY CIT CIT order AO AO order Order u/s No. dated dated 1. 3628/Del/2018 2008-09 CIT(A)-2, 28.02.2018 DCIT, 25.03.2015 153A(1)(b) Gurgaon CC-II, r.w.s. 143(3) 2. 3629/Del/2018 2009-10 15.01.2018 Faridaba 30.03.2015 153A(1)(b) d r.w.s. 143(3) 3. 3630/Del/2018 2010-11 15.01.2018 30.03.2015 153A(1)(b) r.w.s. 143(3) 4. 3631/Del/2018 2011-12 15.01.2018 30.03.2015 153A(1)(b) r.w.s. 143(3) 5. 3632/Del/2018 2012-13 30.01.2018 30.03.2015 153A(1)(b) r.w.s. 143(3 6. 3633/Del/2018 2013-14 30.01.2018 30.03.2015 153B(1)(b) r.w.s. 143(3)
– Asst Year 2008-09 – Assessee Appeal 2. Though the assessee has raised several grounds before us, the preliminary issue to be decided in this appeal is as to whether the assumption of jurisdiction by the Learned AO to frame the assessment is proper or not, in the facts and circumstances of the instant case. This goes to the root of the matter and hence is taken up first.
We have heard the rival submissions and perused the materials available on record. A search and seizure operation was carried out under section 132(1) of the Act on 9-5-2012 in the residential as well as business / office premises of M/s SRS group. The assessment of the assessee was later transferred to Central Circle vide order passed by the learned CIT, Faridabad under section 127 of the Act dated 8-2-2013. Thereafter, notice under section 153C of the Act stood issued to the assessee on 18-9-2014 on the premise that certain documents pertaining / relating to assessee were found during the course of search of SRS group. The assessment was ultimately framed under section 153A read with section 143(3) of the Act on 26-3-2015 for the Assessment Year 2008-09 by the learned AO determining total income of the assessee at Rs 1,14,95,000/-, which stood confirmed by the learned CITA.
At the outset, we find that the notice under section 153C of the Act is issued to the assessee on 18-9-2014 and hence as per the decision of Hon’ble Supreme Court in the case of CIT vs Jasjit Singh reported in 155 taxmann.com 155 (SC) dated 26-9-2023, the date of search qua the assessee becomes 18-9-2014 relevant to assessment year 2015-16. Accordingly, the Assessment Year 2008-09 falls beyond the period of 6 years and hence no assessment could be framed under section 153C of the Act for the Assessment Year 2008-09 in the case of the assessee. Hence the entire assessment framed is beyond jurisdiction and is hereby quashed. Since the entire assessment is quashed, the adjudication of other factual and legal grounds raised
by the assessee becomes academic in nature and they are left open.
5. In the result, the appeal of the assessee is allowed.
– Asst Year 2009-10 – Assessee Appeal – Asst Year 2010-11 – Assessee Appeal Asst Year 2011-12 – Assessee Appeal – Asst Year 2012-13 – Assessee Appeal
Identical issues are involved in all these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience. Though the assessee has raised several grounds in all these years, we find that the preliminary issue to be decided in all these appeals is as to whether any addition could be made in the absence of any incriminating materials found during the course of search in the case of completed assessments in the hands of the assessee.
We have heard the rival submissions and perused the materials available on record. We find in all these years under consideration, the Learned AO had completed the assessments under section 153A of the Act after making the addition on account of dividend income and disallowance of freight charges and disallowance of expenses under section 14A of the Act. There is absolutely no incriminating material found during the course of search under section 132(1) of the Act in the case of SRS Group. No seized document reference was even referred to by the Learned AO in the entire assessment order while making these additions/ disallowances. For Assessment Years 2009-10, 2010-11 and 2011-12, the original scrutiny assessments were completed under section 143(3) of the Act on 16-12- 2011, 15-3-2013 and 28-3-2014 respectively. For Assessment Year 2012- 13, the time limit for issuance of notice under section 143(2) of the Act had expired by 30-9-2013 and admittedly no such notice was issued by the revenue.
Notice under section 153C of the Act stood issued to the assessee on 18-9-2014. There is no document placed on record by both the sides as to on which date the satisfaction note was recorded by the Learned AO in terms of section 153C of the Act. Since the notice under section 153C of the Act was issued to the assessee on 18-9-2014, the date of search qua the assessee becomes 18-9-2014 in view of the decision of the Hon’ble Supreme Court in the case of CIT vs Jasjit Singh reported in 155 taxmann.com 155 (SC). Accordingly, the years under consideration i.e. Assessment Years 2009-10 to 2012-13 would become unabated / completed assessments on the date of search on 18-9-2014 qua the assessee herein. In the absence of any incriminating material found during the course of search qua the additions/ disallowances made by the Learned AO in respect of unabated assessments, those additions / disallowances would have no legs to stand as held by the Hon’ble Supreme Court in the case of Abhishar Buildwell Pvt Ltd reported in 454 ITR 212(SC). Respectfully following the said decision, the additions/ disallowances made in the assessments framed for the Assessment Years 2009-10 to 2012-13 are hereby deleted. Since relief is granted to the assessee on this legal issue, the adjudication of other factual and legal grounds raised by the assessee becomes academic in nature and they are left open. Accordingly, the appeals of the assessee for the Assessment Years 2009-10 to 2012-13 are hereby allowed.
– Asst Year 2013-14 – Assessee Appeal
Though the assessee has raised several grounds before us, the preliminary issue to be decided in this appeal is as to whether the Learned AO was justified in framing the assessment under section 143(3) of the Act instead of section 153C of the Act in the facts and circumstances of the case.
We have heard the rival submissions and perused the materials available on record. Admittedly notice under section 153C of the Act stood issued to the assessee on 18-9-2014. Hence the date of search qua the assessee becomes 18-9-2014 in view of the decision of the Hon’ble Supreme Court in the case of CIT vs Jasjit Singh reported in 155 taxmann.com 155 (SC). Accordingly, assessment should be framed for the Assessment Year 2013-14 under section 153C of the Act as it falls within the prescribed period of 6 years prior to the year in which search has been conducted qua the assessee. Since the assessment has been framed by the Learned AO under section 143(3) of the Act instead of section 153C of the Act, the same is liable to be quashed and is hereby quashed. Since the entire assessment is quashed on legal issue, the adjudication of other factual and legal grounds raised by the assessee become academic in nature and they are left open. Accordingly, the appeal of the assessee for the Assessment Year 2013-14 is hereby allowed.
To sum up, all the appeals of the assessee are allowed. Order pronounced in the open court on 30/06/2025.