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Facts
A search was conducted in the case of M/s. Skanray Technology Private Limited, and documents pertaining to the assessee were found. A notice under section 153C of the Act was issued to the assessee, and an assessment order was passed based on it. The assessee's premises were also covered in the search.
Held
The Tribunal held that since the assessee's premises were covered in the search, proceedings should have been initiated under section 153A of the Act, not section 153C. The assessment framed under section 153C was quashed.
Key Issues
Whether proceedings under section 153C were validly initiated when the assessee's premises were covered under a search under section 132, and thus section 153A should have been invoked.
Sections Cited
132, 153C, 144, 153A, 143(3), 133A, 143(2), 2(22)(e), 147, 148, 149, 151, 139, 132A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHU & SHRI. KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This is an appeal filed by the Revenue against the Order passed by the NFAC - learned CIT(A), vide DIN :ITBA/APL/M/250/2024- 25/107469956(1) dated 19.03.2025.
Briefly stated facts of the case are that assessee is an individual. Assessee has filed return of income on 31.08.2018 declaring total income of Rs. 3,19,78,760/-. A search was conducted under section 132 of the Act in the case of M/s. Skanray Technology Private Limited and others on 06.11.2019. During the search carried out in the case of M/s. Skanray Technology Private Limited (entity of agnus group) various documents pertaining to assessee were also found. Consequent to search under section Page 2 of 13 132 of the Act assessee’s documents pertains and information contained therein relates to the assessee. The assessee’s case was centralized under section 127 of the Act dated 11.03.2020. Consequent to the search a notice under section 153C of the Act was issued to the assessee on 18.02.2021. Accordingly AO passed Assessment Order under section 153Cr.w.s. 144 of the Act dated 09.09.2021 assessing total income of Rs.7,62,09,930/-.The assessee Mr. Arun Kumar Pillai and Mr. K R Ravi Shankar are the main shareholders of Agnus group of companies and associated with the Agnus Group comprises of M/s Agnus Holdings Pvt Ltd (AHPL), Agnus Capital LLP, M/s Chayadeep Properties Private Limited (CPPL), M/s Chayadeep Ventures LLP, Skanray Healthcare Global Pvt ltd (SHGPL), Pronomz Ventures LLP and other companies and partnership firms where Mr. Arun Kumar Pillai and Mr. Ravishankar are the main stakeholders. During the course of Search & Survey proceedings, various Agnus group entities were also covered under section 133A of the Act.During the course of search proceedings at the residence of Mr Arun Kumar Pillai, various incriminating documents as per panchanama dated 07.11.2019 & 21.11.2019 marked as A/STPL/132/A7/01 & A/STPL/1323/01 were found and seized. The documents seized from the premises mentioned above belong to the assessee Sri Arun Kumar Pillai and were found during the search proceedings in the case of M/s Skanray Technologies Private Limited and have a bearing on the determination of the total income of the assessee for the year under consideration. Accordingly notice under section 153C of the Act was issued on 18.02.2021 after recording satisfaction by the AO of M/s. Skanray Technologies Private Limited. Assessee was granted 30 days time to file return of income. In pursuance to notice under section 153C of the Act assessee filed return of income on 02.04.2018 admitting income of Rs.4,60,94,060/-. Accordingly notice under section 143(2) of the Act was issued to the assessee on 08.04.2021 and subsequently other statutory notices Page 3 of 13 were issued to the assessee. During the course of proceedings under section 153C of the Act, income was assessed at Rs.7,62,09,930/-.
Aggrieved form the above Order, assessee filed appeal before learned CIT(A). Learned CIT(A)-15, Bangalore, passed Order in favour of the assessee relying on the judgment in assessee’s own case for Assessment Year 2014-15 in Order dated 30.08.2024 and observed that notice should have been issued by the AO under section 153A instead of section 153C of the Act since assessee’s premises was also covered under section 132 of the Act and allowed the appeal of the assessee.
Feeling aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned DR relied on the Order of AO and submitted that proper satisfaction was recorded by the AO of M/s. Skanray Technologies Private Limited. On that basis the AO of the assessee recorded satisfaction and issued notice under section 153C of the Act. Further submitted that the notice issued by the AO is correct since the search was conducted at group companies and various documents were found in the case of the assessee at different places. To avoid multiple assessments anotice u/s 153C was issued and he further submitted that during the course of entire assessment proceedings assessee did not cooperate therefore AO was bound to complete assessment under section 153Cr.w.s. 144 of the Act.
On the other hand, learned Counsel relied on the Order of learned CIT(A) and submitted that on similar facts for Assessment Year 2014-15, the Co-ordinate Bench of the Hon’ble Tribunal has allowed appeal of the assessee and observed that notice should have been issued under section 153A instead of 153C of the Act. Therefore Order of learned CIT(A) is correct and it does not require any interference.
Considering the rival submissions and perusing the entire material available on records and Orders of authorities below, we noted that assessee has filed Paper Book containing Page Nos.1 to 424 and case law Paper Books containing Page Nos.425 to 681. On going through the Order of the learned CIT(A) it is noticed that CIT(A) has noted that search was carried out in the assessee’s premises also. Therefore notice under section 153A of the Act should have been issued by the AO instead of issue of notice under section 153C of the Act and relied on the judgment of Co-ordinate Bench of the Tribunal noted supra on similar set of facts in assessee’s own case. For the sake of convenience, we are reproducing judgment of Co-ordinate Bench in assessee’s own case for Assessment Year 2014-15 which is as under:
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Respect fully following the above judgement of the co-ordinate bench in assesse’s own case we hold that the notice should have been issued by the AO u/s 153A of the Act instead of 153C of the Act.
In the result, appeal filed by the Revenue is dismissed.