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Income Tax Appellate Tribunal, “A’’BENCH: BANGALORE
Before: SHRI N.V. VASUDEVAN & SHRI B.R. BASKARAN
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
Both the appeals filed by the revenue are directed against the orders passed by Ld. CIT(A)-2, Panaji and they relate to the assessment years 2015-16 & 2016-17. Both the appeals were heard together and are being disposed of by this common order, for the sake of convenience. In both the appeals, the revenue is aggrieved by the decision of Ld. CIT(A) in deleting the additions made by the A.O. on account of profit surrendered in the statement taken u/s 131 of the Income-tax Act,1961 ['the Act' for short] and also on the basis of evidence found from the premises of M/s. Hindustan Builders & Developers.
&2322/Bang/2019 MA Smart Developers Mangalore Pvt. Ltd., Mangaluru
The assessee is a builder and developer. The revenue carried out a survey operation u/s 133A of the Act in the hands of the assessee on 30.12.2015. Consequent thereto, the assessment relating to assessment year 2015-16 was reopened u/s 147 of the Act. Further, the return of income filed by the assessee for assessment year 2016-17 was taken up for scrutiny by issuing notice u/s 143(2) of the Act. Since the assessee did not cooperate with the A.O., he completed assessment of both years to the best of his judgement u/s 144 of the Act. (However, in the assessment order for AY 2016-17 also, the AO has mentioned the section as “sec.144 r.w.s 147 of the Act). The appeal filed by the assessee before Ld. CIT(A) for both the years were partly allowed. Aggrieved by the relief granted by Ld. CIT(A), the revenue has filed these appeals before us.
At the time of hearing, it was pointed out to us that the A.O. has also passed one more assessment order in the hands of the assessee for both the years under consideration u/s 144 r.w.s. 153C of the Act. The Ld. D.R. explained the background for passing the orders u/s 144 r.w.s. 153C of the Act. He submitted that the revenue carried out search operations on 30-08-2017 u/s 132 of the Act in the hands of Shri Md. Ibrahim, Shri Khodi Abdul Khader and Shri Ibrahim Khalil etc. All these people are directors of the assessee company. During the course of search, certain documents belonging to the assessee herein have been seized. The Ld. D.R. submitted that the said documents were handed over to the A.O. of the assessee on 12.6.2018. Accordingly, the A.O. issued notice u/s 153C of the Act for both the years under consideration on 1.3.2019. &2322/Bang/2019 MA Smart Developers Mangalore Pvt. Ltd., Mangaluru
Page 3 of 5 4. A perusal of the above said fact would show that the seized documents were received by the A.O. of the assessee herein on 12.6.2018. Hence the validity of the impugned assessment orders passed by the AO u/s 144 r.w.s 147 requires to be examined, since impugned assessment orders have been passed by the AO on 31- 12-2018, i.e., after the receipt of documents u/s 153C of the Act. In this connection, it is pertinent to refer to the first proviso to section 153C of the Act reads as under:- “[Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub- section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:] A perusal of the above said proviso would show that the date of receiving of books of accounts and other documents or assets seized by the Assessing officer of the assessee shall be considered to be the “date of initiation of search u/s 132 of the Act” for the purpose of second proviso to sub section 1 of section 153A of the Act.
We shall now refer to the second proviso to section 153A(1) of the Act. which reads as under:- “Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years [and for the relevant assessment or years] referred to in this [sub-section] pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate.”
On a combined reading of proviso to section 153C of the Act and the second proviso to section 153A(1) of the Act (both extracted above) would show that on the date of initiation of the search, the assessment or reassessment, if any relating to any assessment year &2322/Bang/2019 MA Smart Developers Mangalore Pvt. Ltd., Mangaluru
Page 4 of 5 falling within the period of 6 assessment years and “pending” on that date shall abate.
We noticed earlier that the date of initiation of search in the hands of the assessee should be considered as 12.6.2018 as per the proviso to sec.153C of the Act. The impugned assessment orders have been passed by the AO on 31.12.2018, meaning thereby, on the date of initiation of search, the assessment relating to assessment year 2015-16 initiated u/s 147 of the Act and the assessment relating to assessment year 2016-17 initiated after issue of notice u/s 143(2) of the Act were pending. Hence, according to second proviso to section 153A(1) of the Act read with proviso to section 153C of the Act, the above said assessments of both the year shall abate.
It was also brought to our notice that the A.O. has also passed assessment orders for both the years u/s 144 r.w.s 153C of the Act on 31.12.2019 after initiation of proceedings u/s 153C of the Act.
Accordingly, the impugned assessment orders passed by the A.O. u/s 144 r.w.s. 147 of the Act for both the years shall become non-est in the eyes of law, since the pending assessments on the date of initiation of search shall abate. Accordingly, the A.O. was not correct in law in passing the impugned assessment orders on 31.12.2018. Accordingly, assessment orders of both the years are liable to be quashed. We order accordingly.
Since we have held that the impugned assessment orders are non-est in the eyes of law, there is no requirement to dispose of the grounds urged on merit. &2322/Bang/2019 MA Smart Developers Mangalore Pvt. Ltd., Mangaluru
In the result, both the appeals filed by the revenue are dismissed.
Order pronounced in the open court on 4th Mar, 2022.