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Income Tax Appellate Tribunal, DELHI BENCHES “G” : DELHI
Before: SHRI BHAVNESH SAINI, J.M. & SHRI O.P. KANT, A.M.
For Assessee : Shri Kapil Goel, Advocate For Revenue : Shri S.S. Rana, CIT-D.R. Date of Hearing : 28.01.2019 Date of Pronouncement : 30.01.2019 ORDER PER BHAVNESH SAINI, J.M. This Order shall dispose of all the above appeals filed by the assessee for different assessment years as mentioned above.
1.1. All the appeals by the assessee are directed against the different orders of the Ld. CIT(A)-II, New Delhi, Dated 13.02.2014 for the A.Ys. 2003-2004 and 2004-2005, Order
2 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
Dated 25.02.2014 for the A.Y. 2005-2006, Order Dated 26.2.2014 for the A.Y. 2006-2007 and Order Dated 27.02.2014 for the A.Ys. 2007-2008 and 2008-2009.
Briefly the facts of the case of that a search and seizure action under section 132 of the I.T. Act, 1961 was carried-out in the case of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s. Madhusudhan Buildcon Pvt. Ltd., on 20.10.2008 and during the course of search at the residential premises at F-6/5, Vasant Vihar, New Delhi, certain documents belonging to the assessee-company were seized. On the basis of the documents so found belonging to the assessee-company, proceedings were initiated in the case of the assessee-company under section 153C read with section 153A of the I.T. Act. The cases of the assessee were centralized. Statutory notices were issued and assessments were completed under section 153C/143(3) of the I.T. Act, 1961, in all the assessment years under appeals. The A.O. made the following additions against the assessee in different assessment years as under :
3 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
A.Y. Unexplained Share capital purchases Disallowance under section under section of expenses 68 of IT Act 69C of IT Act (Rs) (Rs) (Rs) 2003-2004 36,50,180 3,76,465 4,51,000 2004-2005 35,77,652 4,04,530 --- 2005-2006 35,00,461 4,25,023 --- 2006-2007 39,81,920 4,04,612 --- 2007-2008 2,40,13,860 7,18,405 --- 2008-2009 90,89,386 33,76,450 --- 2.1. The assessee challenged the above additions and assumption of jurisdiction under section 153C of the I.T. Act, 1961, before the Ld. CIT(A). It was contented that no satisfaction have been recorded as per section 153C of the I.T. Act, 1961, and the assessment orders are not as per Law being illegal and time barred and that additions on merit are wholly unjustified and without recovery of any incriminating material. The Ld. CIT(A), however, dismissed appeals of the assessee-company.
The assessee-company challenged the Orders of the Ld. CIT(A) before ITAT, Delhi Bench in above appeal
4 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. numbers which have been disposed of by the Tribunal vide order dated 14.08.2015. The assessee contended before the Tribunal that in the case of the assessee, the satisfaction note under section 153C have been recorded by the A.O. of the assessee i.e., other person. No satisfaction note have been recorded by the A.O. of the person searched. The Tribunal following several decisions held that the issuance of notice under section 153C is illegal because the satisfaction note was not recorded by the A.O. of the person searched. The proceeding under section 153C was, therefore, found to be null and void and were quashed. The remaining grounds on merit have not been decided accordingly. All the appeals of assessee were accordingly allowed.
The Revenue preferred appeals before the Hon’ble Delhi High Court which were decided in Income Tax Appeal No. 82 of 2016 etc., vide Order Dated 16.11.2016. The Hon’ble Delhi High Court has held that the findings and conclusions of the ITAT cannot be sustained. The Learned
5 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
Counsel for the Assessee submitted before the Hon’ble Delhi High Court that having regard to these facts, the ITAT’s findings with respect to no proper recording of the satisfaction under section 153C of the I.T. Act may be set aside and matter may be remanded for reconsideration on merits of the assessee’s appeal. The Hon’ble Delhi High Court accordingly, set aside the ITAT’s findings with regard to absence of any satisfaction under section 153C and as a consequence, remit the appeals for reconsideration of the ITAT on merits. It was directed that all the rights and contentions of the parties are kept open. The Departmental Appeals were accordingly allowed. In view of the above Judgment of the Hon’ble Delhi High Court, the appeals of the assessee were re-fixed for hearing on merits.
The assessee in all the above appeals, challenged the Orders passed by the A.O. under section 153C/143(3) of the I.T. Act, 1961, as illegal, time barred, bad in law as well
6 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. as the additions on merits were challenged as reproduced above.
We have heard the Learned Representatives of both the parties and perused the material available on record.
Learned Counsel for the Assessee as regards appeals for A.Ys. 2003-2004 and 2004-2005 contended that the date of search under section 132 of the I.T. Act is 20.10.2008 in the case of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s. Madhusudhan Buildcon Private Limited. PB-1 is the satisfaction note recorded under section 153C of the I.T. Act for the A.Ys. 2003-2004 to 2008-2009, Dated 08.09.2010. Learned Counsel for the Assessee submitted that the connected cases with the cases of Shri B.K. Dhingra etc., are RRJ Securities Limited as well as M/s. Sanchit Consultants Pvt. Ltd.,. He has submitted that date of search for initiation of proceedings under section 153C of the I.T. Act is not relevant because the date of satisfaction
7 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. note is relevant through which incriminating documents have been handed over by the A.O. of the searched person to the A.O. of the assessee i.e., other person. The date of satisfaction note is 08.09.2010, therefore, assessments under section 153C could be framed for six preceding assessment years i.e., A.Ys. 2005-2006 to 2010-2011. He has, therefore, submitted that no assessment under section 153C could be framed against the assessee for A.Ys. 2003- 2004 and 2004-2005 which are beyond the block period. Learned Counsel for the Assessee submitted that in the group cases similar issue have been decided by the Hon’ble Delhi High Court in the case of RRJ Securities Limited and other group case have been decided by ITAT G-Bench, Delhi in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd.,, Dated 29.01.2018 in ITA.Nos.6410 to 6415/Del./2013. The findings of the Tribunal in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd., (supra), in paras 12 to 16 are reproduced as under :
8 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
“12. The next contention of the assessee has been that the assessment orders for A.Yrs. 2003-04 and 2004-05 u/s. 153C are barred by limitation. Referring to the first proviso to section 153C, it was submitted that this proviso construes the date of initiation of search as the date of receiving the books of account/document/ seized material in cases of 'such other person'. In the present case, since the satisfaction for initiation of the proceedings u/s 153C was recorded by the AO in the month of September, 2010 on 25.09.2010 (i.e. A.Y. 2011-12), which may be assumed as the month of receiving the books/seized material, therefore, assessment u/s 153C could be undertaken up to 6 financial years prior to September 2010, which would include financial years relevant to assessment years 2005-06 to 2010-11. It was, therefore, submitted that A. Yrs. 2003-04 and 2004-05 were outside the purview of section 153C. The assessee has, inter alia, relied on the decision in one of the group cases, i.e., CIT vs. RRJ
9 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
Securities Ltd., 380 ITR 612(Delhi), rendered by Hon’ble jurisdictional High Court.
On the other hand, the ld. DR, reiterated the findings reached by the ld. CIT(A) on this count in the impugned order and relied on some decisions, which are placed on record.
Having considered the rival submissions and gone through the entire material available on record, we find that this issue involved in cross objections of assessee for A.Yrs. 2003-04 and 2004-05 is covered in favour of the assessee and against the Revenue by the decision of Hon’ble jurisdictional High Court rendered in one of the assessee’s group cases, RRJ Securities Ltd. (supra), wherein after considering the provisos to sections 153A and 153C of the Act, the Hon’ble jurisdictional High Court has observed as under :
“As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of 10 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/ reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of 11 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment year 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the 12 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the 13 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 200304 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee’s income for that year”.
Therefore, respectfully following the principle of law laid down by Hon’ble jurisdictional High court in the above decision, we have no hesitation to conclude that the assessments made by the Assessing Officer u/s. 153C of the Act for A.Yrs. 2003-04 and 2004-05 are beyond
14 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. the scope of section 153C and the same being void ab initio deserve to be quashed. Accordingly, the cross objections of the assessee for A.Yrs. 2003-04 and 2004- 05 deserve to be allowed on this legal issue only and since the assessments for these years are held as void, the appeals of the Revenue for these years deserve to fail.
Adverting to the merits of additions challenged by the Revenue and by assessee in remaining appeals and cross objections, we find that on the identical contentions of the parties and similar facts and circumstances of the case, the ITAT, Delhi Benches on the basis of same search dated 20.10.2008, has decided the merits of same additions made on the basis of similar documents found, in the case of assessee’s group, DCIT vs. M/s. Devi Dayal Petrochemicals Pvt. Ltd. (Revenue’s appeal Nos. 5430 to 5436/Del./2013) and assessee’s cross objections Nos. 83 to 88/Del./ 2014) for A.Yrs. 2003-04 to 2008-09, have restored the 15 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
issue back to the file of Assessing Officer vide order dated 10.09.2014 observing as under:
“Ld. Counsel of the assessee further stated that assessment framed is against the scheme of the Act whereby the reassessment u/s. 153C in such cases is to be confined to the additions and disallowances consequent to the material found during the course of the search. The additions which are not based on any incriminating material found during search are liable to be deleted. He also submitted that the revenue authorities have erred in law and on facts in holding that the audited books and transactions through bank nowithstanding, the book results are required to be rejected, since the entries are artificial, sham and not reflective of actual business/commercial transactions. Ld. Counsel of the assessee filed a Paper Book having
16 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. pages 1 to 27 containing the assessment records etc. and draw our attention towards the Page No. 1 of the same Paper Book viz. Satisfaction Note dated 5.7.2010 for issuing Notice u/s. 153C of the I.T. Act, 1961 to the assessee for the assessment years 2003-04 to 2008-09 and stated that documents at pages 1 to 25 of Annexure A-25 seized by the department are the cheque book which are not related to the assessment year 2003-04 to 2008-09 and also submitted that the same has already been accounted for in the books of accounts by the assessee. He also draw our attention towards the decision dated 29.3.2012 of the Hon’ble Delhi High Court delivered in the case of SSP Aviation Ltd. vs. Deputy Commissioner of Income Tax [2012] 346 ITR 177 (Delhi) in support of its case. Ld. Counsel of the assessee also submitted that the view taken
17 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. by the Hon’ble High Court is fortified by the Legislative amendment made by the Finance Act, 2014 in section 153C of the Income tax Act, 1961. Accordingly, Ld. Counsel of the assessee requested that the issues involve in the assessee’s cross objections and in the Revenue’s appeals may be set aside to the Assessing Officer to verify whether the seized documents mentioned in the Satisfaction Note dated 5.7.2010 relating to the assessee on which notice u/s. 153C has been issued to the assessee and if these documents namely the cheques have already been accounted for in the books of accounts of the assessee and are not relating to the period i.e. asstt. year 2003-04 to 2008-09, then the proceedings u/s. 153C may be cancelled, otherwise, the Assessing Officer may take action, as per law.
18 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
8. On the other hand, Ld. Department Representative relied upon the order of the Assessing Officer and she oppose the request of the assessee’s counsel.
9. We have heard both the counsel and perused the records. We have also gone through the orders of the lower authorities, Paper Book filed by the assessee and the case law relied upon by the assessee. We find that Ld. Counsel of the assessee filed a Paper Book having pages 1 to 27 containing the assessment records etc. and he drawn our attention towards the Page No. 1 of the same Paper Book viz. Satisfaction Note dated 5.7.2010, the same is reproduced here-below:-
“Satisfaction Note for issuing notice u/s. 153C of the I.T. Act, 1961 in the case of 19 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
M/s Devi Dayal Petro Chemicals Pvt. Ltd., Lane W-17-A, House No. 18, Western Avenue, Sainik Farm South, New Delhi, AACCD454J for A.Y. 2003-04 to 2008-09.
05/7/2010 Documents at pages 1 to 25 of Annexure A-25 seized by the Party R-2 from the premises at F-6/5, Vasant Vihar, New Delhi during the course of search conducted u/s. 132 of the I.T. Act, 1961 on 20.10.2008 in the case of Sh. BK Dhingra, Smt. Poonam Dhingra, M/s Madhusudan Buildcon Pvt. Ltd. have been found to belong to M/s Devi Dayal Petro Chemicals Pvt. Ltd., Lane W-17-A, House NO. 18, Western Avenue, Sainik Farm South, New Delhi which has not been covered u/s. 132 of the I.T. Act, 1961. Accordingly, in terms of provisions of section 143C of the Act,
20 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. notices u/s. 153C are hereby issued for the A.Y. 2003-04 to 2008—09 in the case of M/s Devi Dayal Petro Chemicals Pvt. Ltd.. The case was centralized in the Central Circle-17, New Delhi vide orders dated 14.12.2009 of CIT-IV, New Delhi.
SD/- Dated5.7.10 DCIT, Central Circle-17, New” 9.1. It was contended by the learned counsel that the documents mentioned by the Assessing Officer in the satisfaction note i.e. documents at pages 1 to 25 of Annexure A-5 are only the counterfoil of the cheque book which is duly accounted for in the books of account. He had also contended that the counterfoil belonged to the year 2008-09 and, therefore, the proceedings under Section 153C could not have been initiated for the years to which the documents do not 21 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. belong and even after initiating proceedings to the year to which the documents belonged, the Assessing Officer ought to have dropped the proceedings because all transactions reflected by the counterfoils by the cheques is duly accounted for. In support of this contention, he had relied upon the decision of Hon'ble Jurisdictional High Court in the case of SSP Aviation Ltd. – 346 ITR 177. At page 189 of the report in paragraph 17, their Lordships held as under:-
“The section merely enables the Revenue authorities to investigate into the contents of the document seized, which belongs to a person other than the person searched so that it can be ascertained whether the transaction or the income embedded in the document has been accounted for in the case of the appropriate person. It is aimed at ensuring that income
22 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. does not escape assessment in the hands of any other person merely because he has not been searched under section 132 of the Act. It is only a first step to the enquiry, which is to follow. The Assessing Officer who has searched the satisfaction that the document relates to a person other than the searched person can do nothing except to forward the document to the Assessing Officer having jurisdiction over the other person and thereafter it is for the Assessing Officer having jurisdiction over the other person to follow the procedure prescribed by section 153A in an attempt to ensure that the income reflected by the document has been accounted for by such other person. If he is so satisfied after obtaining the returns from such other person for the six assessment years, the proceedings will have to be closed. If the 23 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. returns filed by the other person for the period of six years does not show that the income reflected in the document has been accounted for, additions will be accordingly made after following the procedure prescribed by law and after giving adequate opportunity of being heard to such other person. That, in sum and substance, is the position.”
9.2. Considering the facts of the case and the arguments of both the sides, we set aside the matter to the file of the Assessing Officer for re-examination of the issue in the light of the above decision of Hon'ble Jurisdictional High Court i.e., the Assessing Officer will first verify the years to which the seized documents belonged. There would be no justification for continuation of the proceedings under Section 153C to which the seized documents do not belong. Therefore,
24 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. the Assessing Officer will drop the proceedings initiated under Section 153 of the years to which the seized documents do not belong. For the year to which the seized documents belonged, he will verify whether the transaction reflected by the seized documents are duly accounted for in the books of account. If the transactions are duly accounted for in the books of account, as contended by the learned counsel, the Assessing Officer will drop the proceedings initiated under Section 153C. However, if for the year to which the seized documents belonged, the transaction reflected by the seized documents is not recorded in the books of account, the proceedings under Section 153C will continue and the Assessing Officer will make the assessment afresh in accordance with law. Since we have set aside all the years under appeal, the Revenue’s appeals on merits do not require any adjudication and they are also deemed to 25 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. be allowed for statistical purposes. The Assessing Officer will proceed to make the assessment afresh only in the year where proceedings under Section 153C can validly continue in the light of the above decision of Hon'ble Jurisdictional High Court.”
Similar arguments have been advanced by both the parties in the instant cases also and identical additions have been made on the basis of documents seized on the same search. We, therefore, respectfully following the decision of co-ordinate Bench in the above decision, remit the issue of additions on merits back to the file of the Assessing Officer to decide the same afresh in the light of directions/observations given by ITAT, Bench ‘B’ in the case of DCIT vs. M/s. Devi Dayal Petro Chemicals Pvt. Ltd. (supra) at para No. 9.2 of the order dated 10.09.2014 (Relied by the ld. AR) as reproduced above. Accordingly, all the appeals of the Revenue and cross
26 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. objections of the assessee for A.Yrs. 2005-06 to 2008-09 deserve to be allowed for statistical purposes.
In the result, the appeals of the Revenue for A.Yrs. 2003-04 and 2004-05 are dismissed whereas the cross objections of the assessee for these years are allowed. The remaining appeals of the Revenue and cross objections of the assessee for A.Yrs. 2005-06 to 2008-09 are allowed for statistical purposes.”
7.1. He has submitted that in this case the decision of the group cases decided by the Hon’ble jurisdictional Delhi Court in the case of RRJ Securities Limited have been considered and reproduced. Therefore, the issue is covered in favour of the assessee by the above decisions. Learned Counsel for the Assessee submitted that the documents found during the course of search could be handedover by the A.O. of the searched person to the A.O. of the assessee only after recording the satisfaction note under section 153C of the I.T. Act. He has, therefore, submitted that the 27 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
A.Ys. 2003-2004 and 2004-2005 would be beyond the block period i.e., beyond 6 years and as such no assessments could be framed under section 153C of the I.T. Act, 1961.
7.2. However, as regards the remaining assessment years, the Learned Counsel for the Assessee argued on merits and submitted that the Department has given a reply to the assessee Dated 30.12.2014/02.01.2015 whereby the copies of the seized documents have been provided to the assessee which shows no incriminating material have been found against the assessee for making the above additions. He has submitted that the issue on merits has also been decided by the ITAT G-Bench, Delhi in the case of DCIT, Central Circle-21, New Delhi vs., M/s. Sanchit Consultants Pvt. Ltd.,, Dated 29.01.2018 in ITA.Nos.6410 to 6415/Del./2013, in which the Tribunal following the decision in assessee’s group case of DCIT vs. M/s. Devi Dayal Petrochemicals Pvt. Ltd., restored the matter back to the file of A.O. to decide the issue afresh in the light of the above decision. All the matters were, therefore, allowed for 28 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. statistical purposes in which specific direction have been given to the A.O. to verify the years to which seized documents belonged and in case, no seized material belonged to the assessee, the A.O. shall drop the proceedings. The A.O. was directed to make assessment as per Law. He has, therefore, submitted that for A.Ys. 2005- 2006 to 2008-2009, the assessments may be restored to the file of A.O. for verifying the facts for deciding the issue on merits as have been decided in the case of ITAT G-Bench, Delhi in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd.,, (supra).
On the other hand, Ld. D.R. relied upon the Orders of the authorities below and submitted that the date of search and handing-over of the seized documents is relevant as per Section 153C/153A of the I.T. Act and as such assessments have been correctly made under section 153C/143(3) for A.Ys. 2003-2004 and 2004-2005. The Ld. D.R. also submitted that the decision in the case of RRJ Securities Ltd., was rendered with respect to whether the 29 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
initial assessment order would be time barred or not. He has also filed written submissions in support of his contention. However, as regards the remaining assessment years, the Ld. D.R. also suggested that the matter may be remanded to the file of A.O. for verification of the facts as is directed in the case of DCIT vs., M/s. Sanchit Consultants Pvt. Ltd.,, (supra).
We have considered the rival submissions and perused the material available on record, It is not in dispute that search was conducted in the cases of Shri B.K. Dhingra and Others on 20.10.2008 and during the course of search certain documents belonging to assessee were seized. Accordingly proceedings under section 153C of the I.T. Act, 1961, were initiated by recording the satisfaction note Dated 08.09.2010 for assessment year under appeals i.e., 2003- 2004 to 2008-2009 (PB-1). It is also not in dispute that the search in the cases of Shri B.K. Dhingra and Others connected to cases were of M/s. RRJ Securities Ltd., and M/s. Sanchit Consultants Pvt. Ltd., (supra). The ITAT, Delhi
30 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
G-Bench, in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra), following the decision of the Hon’ble jurisdictional Delhi High Court in the case of RRJ Securities Ltd., (supra), on identical facts concluded that the assessments made by the A.O. under section 153C of the I.T. Act for A.Ys. 2003- 2004 and 2004-2005 are beyond the scope of Section 153C of the I.T. Act, 1961 and the same being void abinitio, deserves to be quashed. The issue is, therefore, covered by the Judgment of Hon’ble Delhi High Court in the case of RRJ Securities Ltd., (supra) as well as Order of the Tribunal in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra). The Ld. D.R. during the course of hearing also contended that in case A.O. of the assessee and the person searched are same, then, the handing-over of the seized document would be the same date i.e., date of search. However, the CBDT vide Circular No.24 of 2015 Dated 31.12.2015 issued directions with regard to recording of the satisfaction note under section 153C of the I.T. Act and clarified that even if the A.O. of the searched person and the other person is one
31 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi. and the same, then also, he is required to record his satisfaction as has been held by the Courts. Therefore, the provisions of Law shall have to be complied with for initiating the proceedings under section 153C of the I.T. Act, 1961. We may also note that seized documents could be handedover by the A.O. of the searched person to the A.O. of the assessee/other person only after recording the satisfaction note under section 153C of the I.T. Act, 1961. Therefore, contention of the Ld. D.R. are rejected. The case Law relied upon in the written submissions are not applicable to advance the case of the Revenue. The issue is, therefore, covered in favour of the assessee by the Order of the ITAT, Delhi Bench in the group of case of M/s. Sanchit Consultants Pvt. Ltd., (supra). Therefore, the A.O. could proceed under section 153C of the I.T. Act from the date of recording of the satisfaction on 08.09.2010 for preceding six assessment years 2005-2006 to 2010-2011. We, accordingly, hold that the assessments made by the A.O. under section 153C of the I.T. Act for A.Ys. 2003-2004 and 32 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
2004-2005 are beyond the jurisdiction to frame the assessment under section 153C of the I.T. Act. We, therefore, set aside the Orders of the authorities below and quash the assessment in the matter. Resultantly, all additions stand deleted.
In the result, appeals of the assessee for the A.Ys. 2003-2004 and 2004-2005 (ITA.Nos.1525/Del./2014 and ITA.No.1526/Del./2014) are allowed.
In the remaining appeals for A.Ys. 2005-2006 to 2008-2009 (ITA.Nos.1527 to 1530/Del./2014), the assessee challenged the addition on merits only as noted above. It is stated by both the parties that this issue is same as have been decided in the in the group case of M/s. Sanchit Consultants Pvt. Ltd., (supra). In this order, the Tribunal following the decision in the group of M/s. Devi Dayal Petro Chemicals Pvt. Ltd., (supra) restored the matter back to the file of A.O. with certain directions to re-frame the assessments. We, following the Order in the case of M/s.
33 ITA.No.1525 to 1530/Del./2014 Satkar Fincap Ltd., (Amalgamated with Pride Residency Pvt. Ltd.,) Through Pride Residency Pvt. Ltd., New Delhi.
Sanchit Consultants Pvt. Ltd., (supra), set aside the assessments on the above additions and restore the issue of additions on merits back to the file of A.O. with a direction to re-decide the same afresh in the light of observations/ directions of the Tribunal in the case of M/s. Sanchit Consultants Pvt. Ltd., (supra). The A.O. shall frame the assessments by giving reasonable, sufficient opportunity of being heard to the assessee and shall frame the assessments in the light of directions given in the group cases above. The appeals of the assessee for A.Ys. 2005- 2006 to 2008-2009 in ITA.Nos.1527/Del./2014 to ITA.No. 1530/Del,./2014 are allowed for statistical purposes.