RUSHABH UDAYAN MODI,AHMEDABAD vs. THE ITO, WARD-3(3)(1), AHMEDABAD

Brief facts relating to the case was that a search was conducted on 04/12/2014 on various premises of Shri Anil Hiralal Shah & Shri Saket J. Shah in the office of the Sarthav Infrastructure Pvt.Ltd. from where hard disc was also seized with Exel Sheet, MS Excel Sheet “CCCCC.xls.”, at the premises of AY 2011-12

Matter was carried in appeal, where the assessee raised legal grounds challenging the validity of the assessment framed in the present case as also grounds relating to the merits of the case , which were all dismissed by the Ld.CIT(A). Accordingly, the order passed by the AO was confirmed by the Ld.CIT(A).

Aggrieved by the same, the assessee has come up in appeal before us by raising following grounds:

The Ld.Counsel for the assessee, at the outset itself pointed that the contention raised in Ground Nos.1 & 1.1 ,of the notices issued u/s.153C of the Act for the impugned year being barred by limitation, is now settled in favour of the assessee by the decision of Hon’ble Apex Court in the case of Commissioner of Income-tax vs. Jasjit Singh reported in (2023) 155 taxmann.com 155 (SC). The Ld.Counsel for the assessee pointed out that the issue for consideration arose on account of determination of the date of initiation of search as provided in Section 153C of the Act since the section provided that the AO was entitled to assess the income of six years prior to the date of initiation of search. The first proviso to the said section provided that the date of initiation on search was to be construed as reference to the date of receiving the books of accounts or documents or assets seized or requisition by the AO having jurisdiction over the other person. The controversy has arisen, the Ld.Counsel for the assessee pointed out, on account of fact that the ld.CIT(A) has treated the date of initiation of search as the year in which search action was taken was actually undertaken in the AY 2011-12 case of Sarthav Infrastructure Pvt.Ltd. While the case of the assessee was that it ought to have been taken as the year in which documents relating to the assessee were handed over to the assessees AO for initiating action u/s.153C of the Act. This issue, Ld.Counsel for the assessee stated, has been finally settled by the Hon’ble Apex Court in the case of Commissioner of Income- tax vs. Jasjit Singh (supra) categorically holding that in the case of the other person who is to be assessed in terms of section 153C r.w.s.153A of the Act, the period for which they are required to file their returns/the period of which they are to be assessed/commence only from the date when the material are forwarded to their jurisdictional AOs. Copy of the order was placed before us. Further, the relevant and pertinent dates were pointed out to us from CIT(A)’s order, which are as under:

The Ld.DR fairly conceded to the same though he has supported the order of the ld.CIT(A).

We have considered the contentions of both the parties. Admittedly, the issue raised before us, as to which date is to be treated as the date of initiation of search for the purposes of determining the six years prior to the date of search for framing assessment u/s.153C r.w.s.153A of the Act now stands settled by the decision of Hon’ble Apex Court in the case of Commissioner of Income-tax vs. Jasjit Singh (supra). The Ld.Counsel for the assessee has pointed out that applying the proposition of law laid down in the said decision, the impugned assessment year, i.e. AY 2011-12 falls outside the six years which the AO in the present case is entitled to assess. The Ld.DR did not controvert the facts of the case, nor was he was able to distinguish the decision relied upon by the Ld.Counsel for the assessee.

In the light of the same, we have no hesitation in holding that the impugned assessment year for which assessment has been framed in the case of the assessee in terms of section 153C of the Act falls outside the six years prescribed under law for assessment. Therefore, the assessment framed is beyond the jurisdiction of the AO and is not legally sustainable. The order passed by the AO is accordingly set aside as invalid.

Ground Nos.1 & 1.1 of assessee’s appeal are allowed.

Since we have set aside the order passed by the AO treating it to be invalidly passed beyond jurisdiction, the remaining grounds raised by the assessee on merits need no adjudication, being merely being academic in nature.

Accordingly, the appeal of the assessee is allowed in above terms.

( ) / The CIT(A-12, Ahmedabad िवभागीय "ितिनिध आयकर अपीलीय अिधकरण राजोकट/DR,ITAT, Ahmedabad, 5. , , गाड( फाईल /

Guard file.