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Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & MS. PADMAVATHY S
O R D E R Per Padmavathy S, Accountant Member
This appeal by the assessee is directed against the order of the PCIT, Bengaluru dated 28/12/2016 passed u/s 263 of the Income-tax Act 1961 (the Act) for the assessment year 2007-08.
The brief facts of the case 2. A search u/s 132 of the Income-tax Act, 1961 was carried out in the case of Sri HB Sudarshan on 8.6.2012. The residential premises of Sri K.G Rajesh was also covered u/s 132 of the Act. Consequent to search action, notice u/s 153C of the Act was issued to the assessee. In response to notice u/s 153C, the assessee had filed the Return of Income declaring income of Rs.63,480/- for A.Y. 2007-08. Subsequently, assessment u/s 143(3) rws 153C was concluded on 10.03.2015 assessing the income at Rs.1,66,72,223/- after making following additions: i) Disallowance of unsubstantiated claim of agricultural income of Rs.13,61,789/-. ii) Unexplained credits to the tune of Rs. 1,52,46,934/-
The PCIT perused the records and passed an order u/s 263 of the Act as he was of the view that order passed by the AO was erroneous is so far as it was prejudicial to the interest of revenue. The PCIT in the order made further addition of Rs.29,79,399.50 and set aside the matter to the file of AO for fresh consideration of the cash credits in the SB account No.6913 of Syndicate Bank, Chikamagalur Branch.
Aggrieved by the order of the PCIT, the assessee has filed an appeal before us.
There is a delay in filing the appeal before us by the assessee. The assessee had filed a petition for condoning the delay. We have considered the submissions and found no latches attributable to the assessee and there is reasonable cause in not filing this appeal on time. Hence, we condone the delay and admit the appeal for adjudication on merits.
The assessee had filed an appeal before the CIT(A) against the original order of the AO u/s 143(3) r,w,s 153C on the ground that the assessment done by the AO for the year 2007-08 u/s 153C was barred by time and hence void-ab-initio. The CIT(A) vide order dated 24.11.2017 quashed the assessment order as barred by limitation.
The ld.AR submitted that since the original assessment order was cancelled by the CIT(A), therefore order passed by the PCIT u/s 263 has lost its substratum and need to be quashed. The copy of the order of the CIT(A) setting aside the assessment passed u/s 143(3) r.w.s 153C of the IT Act is placed on record. The ld.AR also submitted that the revenue appeal filed against the said order of the CIT(A) for A.Y 2007-08 before the coordinate bench of this Tribunal (ITA No.292/Bang/2018) is dismissed by the Tribunal taking a note of CBDT Circular No.17/2019 dated 8th August 2019 and considering the fact that the tax effect in the instant appeal is less than Rs.50 lakhs.
The ld.DR relied on the decision of the PCIT.
We heard both the rival submissions and perused the materials on record. We notice that the CIT(A) in his order dated 24/11/2017 has allowed the appeal in favour of the assessee where he has held that "I have examined the assessment records of Sri,HB.Sudarshan, the Person searched and perused the Satisfaction Note prepared by the assessing officer of the Person searched in order to initiate the proceedings u/s 153C in the case of the Appellant. The said satisfaction note is prepared on 1510912014. The contention of the Appellant that the date of search or the date of receipt of books of accounts /documents /valuables seized cannot be a date not earlier to 1510912014 and hence the applicable Previous Year shall be the financial year 2014- 15, relevant to Assessment Year 2015-16 The AC can require the Appellant to file return of income for such of those previous years falling within the maximum period of six Previous years immediately preceding A. Y. 2015-16 u/s 153 C, i.e. for the period commencing froin A. Y. 2009-1 0 and ending with A. Y 2014-15, provided the necessary incriminating documents are found and seized in respect of such previous years. In any case the AO does not have the jurisdiction to issue notice u/s 153 Cfor A. Y. 2007-08, as has been done in this case, as the same is beyond the limitation period. The decision of the Supreme Court in the case of CIT Pune vs Sinhgad Technical Education Society in Civil Appeal No. 11080 of 2017, arising out of SLP (C) No.2527 of 201, relied upon by the Appellant, is squarely applicable to this issue. I have to necessarily hold that the assessment proceeding initiated for the A. Y 2007-08 is void ab initio, without jurisdiction
and hence cancel the assessment order on the ground of limitation."
The original assessment proceedings u/s 153C is cancelled since the same was barred by limitation. Further, when the original order itself is cancelled, the order u/s 263 seeking to revise the original order has been rendered in fructuous. We also take into consideration that the appeal filed by the revenue against the order of CIT(A) passed u/s 143(3) r.w.s 144(C) is dismissed by the coordinate bench of this Tribunal based on monetary limit of the tax impact and the issue under contention has reached finality and we hold this appeal in favour of the assessee.
In the result, the appeal of the assessee is allowed.