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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. R. K. PANDA & SH. KULDIP SINGH
Appellant by Sh.Raj Kumar, CA Sh. Sumit Goel, CA Respondent by Sh. S. S Rana, CIT DR Date of hearing: 05/12/2019 Date of Pronouncement: 17/02/2020 ORDER
PER R.K PANDA, AM:
1. This appeal filed by the assessee is directed against the order dated 04.07.2016 of the CIT(A)-19, New Delhi relating to A.Y.2012-13.
The grounds of appeal
are as under :-
1. That under the facts and circumstances, the impugned Asstt. framed U/s. 153 C is illegal and without jurisdiction in the absence of issuance of mandatory statutory notice U/s. 153 C, which fact stands admitted as per RTI reply dtd. 20.05.2016.
2.That without prejudice, under the facts and circumstances, as no Asstt. proceedings were pending for A.Y. 2012 - 2013 as on the date of search, hence, the Asstt. Proceedings were unabated in view of second proviso to Sec. 153 A (1), consequently the AO exceeded his jurisdiction in examining the issue of addition of Rs. 1 1,08,034/- which is not emanating from any material / incriminating material found / seized during search. 3.That without prejudice, under the facts and circumstances, addition of Rs. 11,08,034/- on the basis of alleged less declared intt. income as per Form - 26 AS is un - sustainable in law as well as on merits.
The Ld. Counsel for the assessee at the time of hearing did not press ground of appeal
No.1 for which the Ld. DR has no objection. Accordingly ground of appeal No.2 filed by the assessee is dismissed as not pressed.
4. So far as the ground of appeal No.1 is concerned, the facts of the case, in brief, are that the assessee is an individual and filed her return of income on 28.07.2012 declaring total income at Rs.28,02,620/- which was processed u/s. 143 (1). Subsequently the case was selected for scrutiny through CASS and notice u/s. 143 (2) and 142 (1) were duly issued and served on the assessee. As per the assessment order, a search and seizure operation u/s. 132 (1) of the IT Act 1961 was carried out by the Investigation Wing, Ghaziabad on 19.10.2011 at the premises of Agarwal Associates and Jainco Group of cases comprising M/s. Jainco Page | 2 Promoters (P) Ltd. & Others. The material seized during the search and seizure contained certain documents that relates to Mrs. Seema Jain w/o Sh. Praveen Kumar Jain. The AO completed the assessment u/s. 143 (3) r.w.s. 153 C and 153 A of the Act on 31.03.2015 determining the total income at Rs.45,98,654/- wherein he made addition of Rs.11,08,034/- on account of undisclosed interest income and Rs.6,70,000/- being unsecured loan received from two parties.
5. Before CIT(A) the assessee, apart from challenging the addition on merit, challenged the validity of the assessment order on account of invoking of provisions of section 143 (3) r.w.s. 153C and 153 A. The Ld. CIT(A) deleted only the addition of Rs.6,70,000/- but sustained addition of Rs.11,08,034/- on account of undisclosed interest income.
6. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal.
7. The Ld. Counsel for the assessee while arguing the ground of appeal No.1 referred to the reply obtained from the Income Tax department under RTI Act, copies of which are placed at paper book page No.1 and 2. He submitted that no notice u/s. 153C was issued for A.Y.2012-13 as admitted by the department, therefore, in absence of issue of notice u/s. 153C the assessment order passed u/s. 143 (3) r.w.s. 153 A/ 153 C is void ab initio. He submitted that when the assessment order has been framed u/s. 153A/153C, therefore, without issuing mandatory notice u/s. 153C, the AO could not have assumed jurisdiction, since such proceedings were initiated on the basis of receipt of documents by Page | 3 the AO of the assessee from the AO of the searched person on 06.03.2014. Relying on the following decisions he submitted that the assumption of the jurisdiction by the AO in the instant case is not in accordance with law since no mandatory notice u/s. 153 C was issued by the AO.
DLF Properties (P) Ltd. Vs. DCIT 60 SOT 88 (Delhi-Trib.) 2. Pavitra Realcon (P.) Ltd. Vs. ACIT [2017] 87 taxmann.com 142 (Delhi-Trib.)
The Ld. DR on the other hand submitted that this case was selected for scrutiny on 28.07.2012 through CASS and notice u/s. 143 (2) was issued on 06.08.2013 which was duly served on the assessee on 08.08.2013. He submitted that it is a case of scrutiny and mention of section 143 (3) r.w.s. section 153 C/ 153 A of the IT Act, 1961 is a typographical error which may kindly be ignored in view of the provisions of section 292 B. 8.1 The Ld. Counsel for the assessee in his rejoinder submitted that the CIT(A) in the order passed in A. Y.2006-07 vide order dated 27.05.2016 has held that the relevant six years in the case of the assessee should be from the A. Y. 2008-09 to 2013-14. Therefore, assessment for this year has to be u/s. 153C and not u/s.143 (3).
We have considered the rival arguments made by both the sides, perused the orders of the authorities below and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO at para-2 of the order has mentioned as under :- “2. In the instant case, a Search and Seizure operation u/s 132(1) of the I.T. Act, 1961 was carried out by the Investigation Wing, Ghaziabad on 19.10.2011 at the premises of Agarwal Associates & Jainco Group of cases comprising M/s Jainco Promoters (P) Ltd others at G-10, Plot No.6, Aditya Commercial Complex, Preet Vihar, Delhi-110092 & 12, Dayanand -Vihar, Delhi. The material seized during the search & seizure contained certain documents that relates to Mrs. Seema Jain w/o Sh. Praveen Kumar Jain.”
We find from the copy of the assessment order that the AO at page-1 and at page-3 has mentioned that the assessment has been completed u/s. 143 (3) r.w.s. 153 C / 153A of the IT Act. 1961. A perusal of the reply received from the Income Tax department by the assessee under RTI Act shows that the AO has categorically given a reply that no notice u/s. 153 C was issued for A. Y. 2012-13.
A perusal of the order of the CIT(A) for A. Y. 2006-07 shows that the ld. CIT(A) in assessee’s own case for A.Y.2006-07 vide appeal No. 29/15-16 order dated 27.05.2016 at para – 7 of the order has annulled the assessment by observing as under : “Although the proviso to section 153C considers the date of receipt of documents as the date of initiation of search only for the purpose of second proviso to section 153 A which deals only with the abatement of pending cases, the Hon'ble Delhi High Court has held that date of receipt of documents and books of accounts shall also be considered as the date of search for the purpose of counting the six years for which the assessments have to be carried out, Since the relevant six years in the case of appellant should be from Assessment Year 2008-09 to 2013-14. being bound by the decision of Jurisdictional High Court, the Assessment Year 2006-07 has to be treated as beyond the period of six years and the assessment is annulled. Since the assessment has been held to be invalid, the other grounds are not being discussed. Page | 5
Since the order of the CIT(A) has attained finality as nothing contrary brought to our notice, therefore, the assessment for A.Y. 2012-13 has to be u/s. 153C/153A of the IT Act. Since the AO has not issued the mandatory notice u/s. 153 C as admitted by the AO in his reply to the information obtained by the assessee under RTI Act, therefore, the mandatory procedure prescribed u/s. 153 C has been violated and, therefore, assessment order so passed by the AO is not in accordance with law. Hence, the same has to be quashed. We accordingly hold that the assessment order framed by the AO u/s. 143 (3) / 153 C and 153 A is void ab initio and, therefore, has to be quashed. The ground raised
by the assessee is accordingly allowed.
13. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 17.02.2020.