DCIT, CENTRAL CIRCLE-1(1),, AHMEDABAD vs. SHRI GOPAL DAHYABHAI PATEL,, AHMEDABAD

ITSSA 152/AHD/2021Status: DisposedITAT Ahmedabad19 May 2023AY 2011-1218 pages
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What were the facts?

The appeals and cross-objections before the ITAT Ahmedabad concerned assessment orders passed under section 143(3) read with section 153A of the Income Tax Act, 1961, for assessment years 2011-12, 2012-13, and 2013-14. The proceedings were initiated following a search and seizure operation under section 132 on March 10, 2015, which covered the Venus Group, including the residence and bank locker of the assessee, Shri Gopal Dahyabhai Patel. The assessment for AY 2011-12 was completed on December 28, 2017, assessing income at Rs. 2,82,60,110/- against a returned income of Rs. 64,240/-. The assessee challenged the validity of the assessment order, primarily on the grounds of being time-barred under section 153B(1). The CIT(A) dismissed this contention, holding the assessment to be within the time limit.

What did the Tribunal hold?

The Tribunal held that the assessment order passed for AY 2011-12 on December 28, 2017, was invalid due to limitation of time. The Tribunal found that the prohibitory orders issued under section 132(3) were not justified as it was practicable to seize the documents. The judgment cited the Bombay High Court's decision in CIT v. Sandhya P. Naik, emphasizing that prohibitory orders must be supported by reasons of impracticability. The Tribunal concluded that the conditions for imposing prohibitory orders under section 132(3) were not complied with, rendering those orders invalid. Consequently, the search was deemed concluded on March 10, 2015. Based on section 153B, the time limit for passing the assessment order expired on March 31, 2017. Therefore, the assessment order dated December 28, 2017, was quashed. As a result, the issues raised by the Revenue on merit and other technical grounds raised by the assessee were dismissed as infructuous. The same reasoning was applied to the appeals for AY 2012-13 and 2013-14.

What were the issues?

1. Whether the assessment order passed under section 143(3) r.w.s. 153A of the Act for AY 2011-12, finalized on December 28, 2017, is barred by limitation under section 153B(1) of the Act, considering the search was conducted on March 10, 2015. Assessee's Contention: The assessee argued that the search was conducted on March 10, 2015. As per section 153B(1), the assessment should have been completed within two years from the end of the financial year in which the search was conducted, i.e., by March 31, 2017. Since the assessment was finalized on December 28, 2017, it is time-barred. The assessee relied on the provisions of section 153B(1)(a) and the principle that prohibitory orders under section 132(3) were not justified and the search concluded on March 10, 2015. Revenue's Contention: The revenue contended that prohibitory orders were placed on certain items, and these were lifted in April 2015. Therefore, the search was concluded in FY 2015-16, making the time limit for assessment up to March 31, 2018. The assessment order passed in December 2017 was thus within the prescribed time limit. The revenue relied on the CIT(A)'s finding that the search concluded in FY 2015-16.

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 153A,Section 153B(1),Section 132(3)

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Heard together (3 matters)

C.O No.02/Ahd/2022
C.O No.03/Ahd/2022
C.O No.04/Ahd/2022

Read from the judgment's own cause title. This page is filed under one of them.

अहमदाबाद "यायपीठ "यायपीठ "यायपीठ "यायपीठ आयकर आयकर अपीलीय आयकर आयकर अपीलीय अपीलीय अिधकरण अपीलीय अिधकरण अिधकरण, अहमदाबाद अिधकरण अहमदाबाद अहमदाबाद IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’C’’ BENCH, AHMEDABAD

BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER

Sl. IT(SS)A No./C.O 1-2. IT(SS)A 2011-12 DCIT Gopal Dahyabhai Patel No.152/Ahd/2021 Central Circle-1(1), 17-9, B/1 Devendra With Ahmedabad Society Naranpura, C.O No.02/Ahd/2022 Ahmedabad PAN: APZPP0855N

3-4. 2012-13 DCIT IT(SS)A M/s. SSA Hire No.153/Ahd/2021 Central Circle-1(1), Purchase Pvt. Ltd. With Ahmedabad 21, Suvidha Nagar, C.O No.03/Ahd/2022 Bhurav Char Rasta, Godhra, Gujarat- 389001 PAN: AAMCS8305F

5-6. 2013-14 DCIT IT(SS)A M/s. SSA Hire No.154/Ahd/2013 Central Circle-1(1), Purchase Pvt. Ltd. With Ahmedabad 21, Suvidha Nagar, C.O No.04/Ahd/2022 Bhurav Char Rasta, Godhra, Gujarat- 389001 PAN: AAMCS8305F

(Applicant) (Respondent)

Revenue by : Shri Pushpendra Singh Chaudhary, C.I.T. D.R Assessee by : Shri Parimalsinh B Parmar, & Shri V. V. Govani, A.Rs.

सुनवाई क" तारीख/Date of Hearing : 02/05/2023 घो

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