ASSISSTANT COMMISSIONER OF INCOME TAX, CIR. 20(1), MUMBAI, MUMBAI vs. RUPESH KANTILAL SAVLA, MUMBAI

Facts

Assessee Rupesh Kantilal Savla's assessment for A.Y. 2011-12 was reopened based on information from a search on the Globe Group (23.01.2015) and a subsequent search on other entities (04.12.2014) where incriminating documents related to the assessee were found. The AO made additions under sections 69A and 68 concerning unexplained money and cash credits, particularly for alleged bogus Long Term Capital Gains. The assessee challenged the assessment on grounds of being time-barred and lack of proper satisfaction note under Section 153C.

Held

The Tribunal, relying on Supreme Court judgments (e.g., CIT vs. Jasjit Singh, Super Malls (P.) Ltd.), held that for assessments under Section 153C, the block period is computed from the date of receipt of books of accounts/documents by the jurisdictional AO of the non-searched person. As the information was received on 31.03.2018, the A.Y. 2011-12 falls outside the permissible six-year block period (A.Y. 2012-13 to 2017-18). Consequently, the assessment order for A.Y. 2011-12 was quashed due to lack of jurisdiction and being time-barred.

Key Issues

Whether the assessment for A.Y. 2011-12 initiated under Section 153C read with Section 143(3) of the Income Tax Act, 1961, was time-barred and beyond the jurisdiction of the Assessing Officer, considering the date of information receipt and the block period computation as per judicial precedents.