M/s. EON Auto Industires (P) Ltd., New Delhi v. DCIT, New Delhi

ITA 3179/DEL/2013 | 2008-2009
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 317920114 RSA 2013
Assessee PAN AABCE7796B
Bench Delhi
Appeal Number ITA 3179/DEL/2013
Duration Of Justice 4 year(s) 6 month(s) 7 day(s)
Appellant M/s. EON Auto Industires (P) Ltd., New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted B
Tribunal Order Date 28-11-2017
Date Of Final Hearing 09-05-2017
Next Hearing Date 09-05-2017
First Hearing Date 09-05-2017
Assessment Year 2008-2009
Appeal Filed On 21-05-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI AMIT SHUKLA JUDICIAL MEMBER & SHRI WASEEM AHMED ACCOUNTANT MEMBER I.T.A. NO.3179/DEL/2013 ASSESSMENT YEAR:2008-09 EON AUTO INDUSTRIES (P) LTD. A-100 MAYAPURI INDUSTRIAL AREA NEW DELHI V. DCIT CENTRAL CIRCLE 17 NEW DELHI TAN/PAN:AABCE7796B (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SALIL KAPOOR ADVOCATE RESPONDENT BY: SHRI RACHNA SINGH CIT (DR) DATE OF HEARING: 27 09 2017 DATE OF PRONOUNCEMENT: 28 11 2017 O R D E R PER AMIT SHUKLA J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 11/3/2013 PASSED BY THE LD. CIT (APPEALS)-II NEW DELHI FOR THE QUANTUM OF ASSESS MENT PASSED UNDER SECTION 143(3) FOR ASSESSMENT YEAR 2008- 09. 2. IN THE GROUNDS OF APPEAL SEVERAL GROUNDS HAVE BEEN RAISED WHEREBY ASSESSEE HAS CHALLENGED THE VALIDITY OF ASSESSMENT PASSED UNDER SECTION 143(3) ON VARIOUS COU NTS; FIRSTLY NO NOTICE UNDER SECTION 143(2) WAS SERVED WITHIN THE TIME PRESCRIBED UNDER THE ACT; SECONDLY ASSESSMENT ORDER COULD NOT HAVE BEEN PASSED UNDER SECTION 143(3) BUT ONLY UNDER SECTION 153C R.W.S. 153A; THIRDLY ASSESSMENT ORDER IS BARRED BY LIMITATION; AND LASTLY ASSESSEE HAS ALSO CHALLENGED THE VALIDITY OF I.T.A. NO.3179/DEL/2013 2 THE ASSESSMENT ON THE GROUND THAT THERE IS A VIOLATION O F THE PRINCIPLES OF NATURAL JUSTICE AND COPY OF SATISFACTION UNDER SECTION 153C HAS NOT BEEN PROVIDED TO THE ASSESSEE. BE SIDES THIS ON MERITS ALSO ASSESSEE HAS CHALLENGED THE ADDITION O F RS.3 52 50 000/- MADE BY THE ASSESSING OFFICER ON AC COUNT OF ALLEGED CASH PAYMENT MADE TO ACQUIRE THE PROPERTY; AND FURTHER THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT AD MITTING THE ADDITIONAL EVIDENCES WHICH WERE FILED BEFORE HIM VID E APPLICATION MADE UNDER RULE 46A. 3. BRIEF FACTS QUA THE LEGAL ISSUES RAISED CHALLENGING THE VALIDITY OF THE IMPUGNED ASSESSMENT ORDER ON VARIOUS COUNTS ARE THAT A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) WAS CONDUCTED BY THE DEPARTMENT ON 19/2/2008 IN THE CASE OF M/S B.L. KASHYAP & SONS AND GROUP OF CASES. AT THE TIME OF EXAMINATION OF SEIZED DOCUMENTS SEIZED IN THE CASE OF M/S B.L. KASHYAP & SONS IT WAS NOTICED THAT THE ASSESSEE-COMPANY I.E. M/S EON AUTO INDUSTRIES (P) LTD. HAS MADE UNACCOUNTE D CASH PAYMENTS OF RS.3 37 50 000/- IN THE PROPERTY SITUATED AT SY. NO.12/2B WHITEFIELD VILLAGE KRISHNARAJAPURA HUBLI BANGALORE. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS NOTE D THAT SINCE THE DOCUMENTS SEIZED BELONG TO THE ASSESSEE-COMPA NY WHO WAS THE PERSON OTHER THAN THE PERSON REFERRED TO IN SE CTION 153A ASSESSEE WAS REQUIRED TO BE ASSESSED BY ACQUIR ING JURISDICTION IN TERMS OF SECTION 153C. THE CASE WAS CE NTRALIZED BY ORDER PASSED UNDER SECTION 127(2) BY CIT CENTRAL VID E ORDER DATED 19/11/2009 AND THEREAFTER NOTICE UNDER SECTION 1 53C WAS ISSUED FOR ASSESSMENT YEARS 2002-03 TO 2007-08 AND NO TICE UNDER SECTION 143(2) WAS ISSUED FOR THE ASSESSMENT YEA R 2008-09 AFTER RECORDING THE SATISFACTION ON 20/11/2009. THE ASSESSING I.T.A. NO.3179/DEL/2013 3 OFFICER IN THE IMPUGNED ASSESSMENT ORDER ALSO MENTIONS THAT NOTICE UNDER SECTION 143(2) WAS ISSUED ON 20/11/2009 REQUIRING THE ASSESSEE TO FILE ITS RETURN OF INCOME. IN RESPONSE TO THE SAID NOTICE ASSESSEE VIDE REPLY/ LETTER DATED 1/12/2009 STATED THAT THE RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 HAS A LREADY BEEN FILED ELECTRONICALLY ON 27/9/2008. THE COPY OF THE ACKNOWLEDGMENT OF RETURN OF INCOME WAS ALSO FILED BEF ORE THE ASSESSING OFFICER ALONG WITH THE SAID REPLY. FROM THE EVENTS AS NOTED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER FOLLOWING CHRONOLOGY OF EVENTS CAN BE CULLED OUT WHICH IS REL EVANT FOR THE ADJUDICATION FOR LEGAL GROUNDS RAISED BEFORE US BY THE ASSESSEE:- S L .N O . PARTICULARS DATE 1. DATE OF SEARCH ON B.L. KASHYAP & SONS LTD GROUP COMPANIES (NO SEARCH ON ASSESSEE) 19.02.2008 2. RETURN OF INCOME FILED BY THE ASSESSEE U/S 139 27.09.2008 3. ORDER U/S 127 FOR TRANSFER OF CASE FROM ITO WARD 11(1) NEW DELHI TO ACIT CENTRAL CIRCLE- 17 NEW DELHI. 19.11.2009 4. RECORDING OF SATISFACTION BY ACIT CENTRAL CIRCLE- 17 NEW DELHI. 20.11.2009 5. ISSUE OF NOTICE U/S 142(1) BY ACIT CENTRAL CIRCLE- 17 NEW DELHI. 20.11.2009 6 . REPLY AGAINST NOTICE U/S 142(1) BY ASSESSEE 01.12.2009 7. ISSUE OF NOTICE U/S 143(2)/142(1) BY ACIT CENTRAL CIRCLE-17 NEW DELHI. 01.12.2009 8. ASSESSMENT COMPLETED U/S 143(3) BY ACIT CENTRAL CIRCLE-17 NEW DELHI U/S 143(3) 29.12.2009 4. DURING THE COURSE OF HEARING AS REQUIRED BY THE BENC H THE DEPARTMENT HAD FILED COPY OF SATISFACTION RECORDED FOR ISSUANCE OF NOTICE UNDER SECTION 153C IN THE CASE OF THE I.T.A. NO.3179/DEL/2013 4 ASSESSEE WHEREIN IT HAS BEEN MENTIONED THAT SAME WAS RECORDED ON 28/11/2009 BY THE PRESENT ASSESSING OFFICER AND NO T BY THE ASSESSING OFFICER OF THE PERSON SEARCHED DURING THE ASSESSMENT PROCEEDINGS U/S 153A. 5. FROM THE AFORESAID EVENTS AND FACTS SHRI SALIL KAPOOR LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSIN G OFFICER HERE IN THIS CASE HAS PASSED THE ASSESSMENT ORDER UNDE R SECTION 143(3) BY TREATING THE ASSESSMENT YEAR 2008-09 AS THE Y EAR OF SEARCH IN TERMS OF SECTION 153A (1) (B). ADMITTEDLY HE RE IT IS NOT THE CASE OF A SEARCHED PERSON UNDER SECTION 153A ALBEIT JURISDICTION HAS BEEN ACQUIRED UNDER SECTION 153C AS OTHER PERSON AND THEREFORE THE DATE OF SEARCH WOULD BE RE CKONED FROM THE DATE HANDING OVER OF THE DOCUMENTS ETC. AND NOT TH E DATE OF SEARCH OF THE PERSON COVERED U/S 153A. IN TERMS OF FIRST PROVISO TO SECTION 153C REFERENCE TO THE DATE OF INITIATION OF S EARCH IN THE CASES OF A PERSON COVERED UNDER SECTION 153C HAS BEE N CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOO KS OF ACCOUNT OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESS ING OFFICER WHO HAS THE JURISDICTION OVER THE PERSON IN WHOSE CASE PROCEEDINGS UNDER SECTION 153C IS BEING INITIATED. HER E IN THIS CASE FROM A PERUSAL OF THE DATE OF RECORDING OF SATI SFACTION BY THE ACIT CENTRAL CIRCLE 17 NEW DELHI IT CAN BE SEEN THAT REFERENCE DATE AS CONSTRUED IN TERMS OF PROVISO TO SECTION 153C AT THE MOST CAN BE RECKONED AS 28/11/2009 AND IF THAT IS THE REFERENCE DATE THEN THE ASSESSMENT ORDER CANNOT PERTAIN TO THE YEAR OF SEARCH AND IN THAT CASE SUCH AN ASSESSMENT CO ULD HAVE BEEN PASSED ONLY UNDER SECTION 153C. ONCE ASSESSMENT ITSELF HAS NOT BEEN COMPLETED UNDER SECTION 153C THEN THE ENTI RE ASSESSMENT GETS VITIATED. IN SUPPORT HE STRONGLY REFERR ED AND I.T.A. NO.3179/DEL/2013 5 RELIED UPON THE JUDGMENT ON THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. IN I.T.A. NO 164 175 TO 177/2015 JUDGMENT DATED 30/10/2015 WHEREIN THE HON'BLE HIGH COURT HELD THAT IN THE CASE OF OTHER PE RSONS COVERED UNDER SECTION 153C IN TERMS OF PROVISO THEREIN THE REFERENCE DATE HAS TO BE CONSTRUED AS DATE OF HANDING OVER OF ASSETS/DOCUMENTS BELONGING TO THE ASSESSEE TO THE ASSESS ING OFFICER HAVING JURISDICTION OVER THE ASSESSEE. IN THE ABSENCE OF SUCH DATE THEN THE RECORDING OF SATISFACTION UNDER SE CTION 153C SHOULD BE CONSIDERED AS REFERENCE DATE. THE ASSESSM ENT FOR THE PERIOD OF SIX YEARS HAS TO BE SEEN WITH REFERENCE TO THE DATE OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER. H E DREW OUR SPECIFIC ATTENTION TO THE FINDING AND OBSERVATION OF THE HON'BLE COURT APPEARING IN PARAGRAPHS 11 TO 24 WHEREIN THEIR LORDSHIPS AFTER REFERRING TO VARIOUS JUDGMENTS OF THE HON'BLE DE LHI HIGH COURT AND OTHER COURTS HAVE HELD THAT IN THE CASE OF O THER PERSON COVERED UNDER SECTION 153C REFERENCE DATE O F SEARCH IN TERMS OF SECOND PROVISO TO SECTION 153A HAS TO BE RE CKONED FROM THE DATE OF REQUISITION OF DOCUMENTS OR DATE OF RECORDI NG OF SATISFACTION UNDER SECTION 153C. THUS HERE IN THIS CA SE REFERENCE DATE SHOULD HAVE TO BE TAKEN AS DATE OF REC ORDING OF THE SATISFACTION WHICH IS 28/11/2009 AND THEREFORE REG ULAR ASSESSMENT UNDER SECTION 143(3) COULD NOT HAVE BEEN M ADE AND THE ONLY MANNER IN WHICH ASSESSMENT COULD HAVE BEEN F RAMED FOR ASSESSMENT YEAR 2008-09 WAS IN TERMS OF SECTION 15 3C READ WITH SECTION 153A AS REQUIRED UNDER THE STATUTE. 6. THE OTHER ALTERNATIVE LEGAL ARGUMENT PUT FORTH BY THE LD. COUNSEL FOR THE ASSESSEE WAS THAT IF THE PRESENT ASSES SMENT ORDER IS TO BE TREATED AS REGULAR ASSESSMENT ORDER UNDE R SECTION I.T.A. NO.3179/DEL/2013 6 143(3) THEN ISSUANCE AND SERVICE OF NOTICE UNDER SEC TION 143(2) WAS BEYOND THE STATUTORY TIME LIMIT AS PRESCRIBED UNDE R THE ACT BECAUSE HERE IN THIS CASE RETURN OF INCOME U/S 139 WA S FILED ON 27/9/2008 AND THE LAST DATE FOR SERVICE OF NOTICE UNDE R SECTION 143(2) WAS 30/9/2009 AND HERE IN THIS CASE NOTICE UND ER SECTION 143(2) HAS BEEN ISSUED ON 1/12/2009; AND IF ONE GOE S BY THE OBSERVATION MADE BY THE ASSESSING OFFICER IN THE IMPUG NED ASSESSMENT ORDER THEN IT IS 20/11/2009 ALTHOUGH IT WA S A NOTICE UNDER SECTION 142(1) AND NOT UNDER SECTION 143( 2). EVEN IF THE ISSUANCE AND SERVICE OF NOTICE IS DATED 20/11/2009 THEN ALSO IT IS BARRED BY LIMITATION IN TERMS OF SECTION 143( 2) AND NO ADDITION COULD HAVE BEEN MADE IN THE ORDER PASSED UND ER SECTION 143(3). HE SUBMITTED THAT THESE GROUNDS AND ISSUES WERE RAISED BEFORE THE LD. CIT(A) ALSO VIDE GROUNDS NO.4 TO 7 AN D THE LD. CIT(A) HAS DULY CONSIDERED THESE GROUNDS AND HAVE RE JECTED THEM AFTER DETAILED DISCUSSION. THUS THESE LEGAL GROUNDS ARE ARISING FROM THE IMPUGNED APPELLATE ORDER. 7. ON THE OTHER HAND THE LD. CIT (DR) HAS FILED DETAILED WRITTEN SUBMISSIONS; FIRSTLY ON THE MERITS OF THE ADDITION; AND SECONDLY ON ISSUE OF JURISDICTION AND VALIDITY OF THE ASSESS MENT ORDER. ONE OF THE MAIN LIMB OF HER ARGUMENTS WAS THAT JURISDICTIONAL ISSUE AND POINT OF JURISDICTION CANNOT B E CHALLENGED BY THE ASSESSEE AFTER COMPLETION OF THE ASSESSMENT AND IN SUPPORT OF THIS PROPOSITION SHE RELIED UPON THE JUDG MENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAPIL JAIN REPORTED IN 50 DTR 342 (DELHI) WHEREIN THE HON'BLE HIGH COURT HAS TAKEN NOTE OF SECTION 124(3) ON SUCH MATTERS. O N THE ISSUE OF ASSESSEES SUBMISSION WITH RESPECT TO THE CON TENTION THAT ASSESSMENT YEAR 2008-09 WILL FALL WITHIN SIX ASSES SMENT I.T.A. NO.3179/DEL/2013 7 YEARS PERTAINING TO ASSESSMENT COVERED UNDER SECTION 15 3C R.W.S. 153A AND NOT TO BE RECKONED AS YEAR OF SEARCH WHEREB Y REGULAR ASSESSMENT UNDER SECTION 143(3) IS TO BE MADE SHE SUB MITTED THAT SIX ASSESSMENT YEARS PERTAINING TO ASSESSMENT UNDER SECTION 153C HAVE TO BE RECKONED IN THE SAME ASSESSMEN T YEARS WHICH IS IN RESPECT OF ASSESSMENTS TO BE MADE UNDER S ECTION 153A. THE REASON BEING THAT THE CONCEPT OF SIX ASSESSM ENT YEARS ARE COVERED BOTH IN RESPECT OF SECTION 153A AND 153C B Y THE SAME CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153A. THE REFERENCE OF THE DATE OF INITIATION OF SEARCH IN FIRST PROVISO TO SUB-SECTION (1) OF SECTION 153C IS ONLY LIMITED AND RESTRICTED TO THE PURPO SE OF ABATEMENT AND NOT FOR ANY OTHER PURPOSE. IN SUM AND S UBSTANCE THE CONTENTIONS OF THE LD. D.R. AS SUMMARIZED BY HER IN HER WRITTEN SUBMISSION ARE AS UNDER:- THE REFERENCE OF SECOND PROVISO TO SUB-SECTION (1) O F SECTION 153A IN FIRST PROVISO TO SUB-SECTION (1) OF SE CTION 153C IS FOR THE LIMITED PURPOSE OF ASCERTAINING AND DECLARING THE DATE ON WHICH ALL PENDING ASSESSMENTS A ND REASSESSMENTS SHALL ABATE. IT IS QUITE LOGICAL AND RATIO NAL TO INTERPRET SO BECAUSE THERE IS A TIME GAP BETWEEN THE DAT E OF SEARCH AND THE DATE WHEN THE AO OF SUCH OTHER PERSON (153C CASES) RECEIVES DOCUMENTS AND COME TO KNOW THAT THERE IS A 153C PROCEEDING TO BE INITIATED. IN THE INTERVENING PERIOD NEW ASSESSMENT AND REASSESSMENT PROCEEDINGS MAY BE INITIATED. THEREFORE IT WAS NECESS ARY TO PROVIDE FOR ABATEMENT OF SUCH ASSESSMENT AND REASSESSMENT PROCEEDINGS THAT COULD BE INITIATED AFTER THE DATE OF SEARCH UP TO THE DATE OF RECEIVING OF DOCUMENTS BY THE AO OF SUCH OTHER PERSON. THE REFERENCE OF SECOND I.T.A. NO.3179/DEL/2013 8 PROVISO TO SUB-SECTION (1) OF SECTION 153A IN FIRST PRO VISO TO SUB-SECTION (1) OF SECTION 153C WAS THEREFORE MADE WI TH THE SPECIFIC PURPOSE OF SETTING THE DATE ON WHICH ALL P ENDING ASSESSMENTS AND REASSESSMENTS MUST ABATE. A CAREFUL ANALYSIS AS HIGHLIGHTED BY HER SHE POINTED OUT THAT IT WILL CLEARLY ESTABLISH SUCH INTENT OF THE LEGISLATURE AND AL SO THAT SIX ASSESSMENT YEARS FOR ASSESSMENT SHALL REMAIN THE S AME IN RESPECT OF SECTION 153A AS WELL AS SECTION 153C (ASSUMING ANYTHING TO THE CONTRARY WOULD LEAD TO A SITUATION WHERE THERE WOULD BE ASSESSMENTS UNDER SECT ION 153C THAT WOULD PERTAIN TO ASSESSMENT YEARS FALLING AFT ER THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED AND THIS WILL CREATE AN ABSURDIT Y IN THE INTERPRETATION OF THE STATUTE. 8. AFTER REFERRING TO VARIOUS PROVISIONS CONTAINED IN SECTIONS 153A TO 153C LD. CIT (DR) SUBMITTED THAT POIN T OF DEPARTURE FOR SECTION 153C FROM 153A IN TERMS OF PROV ISIONS OF SECTION 153C IS ONLY FOR TWO INSTANCES NAMELY IN RES PECT OF TIME LIMITATION FOR COMPLETION OF ASSESSMENT UNDER SECTION 1 53A AND 153C AND FOR THE PURPOSE OF ASCERTAINING THE STATUS OF P ENDING ASSESSMENT OR UNABATED ASSESSMENT AND BEYOND THAT NOTH ING SHOULD BE READ UNDER THE SAID PROVISIONS. SHE HAS AL SO FILED DETAILED WRITTEN OBJECTIONS ON THE ADDITIONAL GROUND FIL ED BY THE ASSESSEE THAT THE ORDER PASSED UNDER SECTION 143(3) IS ILLEGAL AND BAD IN LAW AS THE ORDER HAS TO BE PASSED UNDER SECTION 153C. 9. HOWEVER WE ARE NOT DEALING WITH HER OBJECTIONS ON ADDITIONAL GROUNDS BECAUSE THIS ISSUE IS ALREADY EMA NATING NOT ONLY FROM THE ORDER OF LD. CIT (A) BUT ALSO FROM THE G ROUNDS TAKEN I.T.A. NO.3179/DEL/2013 9 BY THE ASSESSEE BEING GROUND NO.4 BEFORE US WHEREI N THE ASSESSEE HAD CHALLENGED THAT THE LD. CIT (A) HAS ERRED IN UPHOLDING THE ADDITION MADE BY THE ASSESSING OFFICER SINCE THE ASSESSMENT ORDER HAS NOT BEEN PASSED AS PER PROVISIO NS OF SECTION 153C. THUS AT THE TIME OF HEARING ITSELF WE H AVE MADE IT CLEAR THAT WE ARE NOT ENTERING INTO THE ADMISSIBILITY OF ADDITIONAL GROUNDS AS THE ISSUE RAISED THEREIN IS ALREADY EMANA TING FROM THE ORIGINAL GROUND TAKEN BEFORE US IN FORM NO.36. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE RELEVANT MATERIAL REFERRED TO BEFORE US AT THE TIME OF H EARING. THE MAIN LEGAL ISSUE WHICH HAS BEEN RAISED IN THE GROUND S OF APPEAL AND WHICH HAS ALSO BEEN ARGUED AT LENGTH BY BOTH THE PARTIES ARE THAT:- FIRSTLY WHETHER THE ASSESSING OFFICER UNDER THE LAW COULD HAVE PASSED ASSESSMENT ORDER UNDER SECTION 143(3) BY TREATING THE ASSESSMENT YEAR 2008-09 AS YEAR OF SEARCH; OR UNDER SECTION 153C R.W.S. 153A WHEREBY ASSESSING OFFICER IS REQUIRED TO ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. IF ASSESSMENT YEAR 2008-09 IS NOT RECKONED AS YEAR OF SEARCH THEN IT HAS TO BE TREATED AS PART OF ASSESSMENT TO BE FRAMED FOR SIX PRECEDING ASSESSMENT YEARS IN TERMS OF CLAUSE (B) OF SUB-SECTION (1) OF SECTION 153A. SECONDLY ASSESSEE HAS CHALLENGED THAT IN CASE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS RECKONED AS REGULAR ASSESSMENT UNDER SECTION 143(3) I.T.A. NO.3179/DEL/2013 10 FOR THE YEAR UNDER SEARCH THEN IN THE ABSENCE OF NOTICE UNDER SECTION 143(2) BEING SERVED ON THE ASSESSEE BEFORE STATUTORY TIME LIMIT THE ENTIRE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) AND THE ADDITIONS THEREIN GETS VITIATED. 11. AS DISCUSSED IN THE FOREGOING PARAGRAPHS THE CRUCIAL DATE FOR DETERMINING THE ISSUE BEFORE US ARE AS UNDER :- S.N. PARTICULARS DATE 1 DATE OF SEARCH ON B.L. KASHYAP & SONS LTD GROUP COMPANIES (NO SEARCH ON ASSESSEE) 19.02.2008 2 RETURN OF INCOME FILED BY THE ASSESSEE U/S 139 27.09.2008 3 ORDER U/S 127 FOR TRANSFER OF CASE FROM ITO WARD 11(1) NEW DELHI TO ACIT CENTRAL CIRCLE- 17 NEW DELHI. 19.11.2009 4 RECORDING OF SATISFACTION BY ACIT CENTRAL CIRCLE- 17 NEW DELHI. 20.11.2009 5 ISSUE OF NOTICE U/S 142(1) BY ACIT CENTRAL CIRCLE- 17 NEW DELHI. 20.11.2009 6 REPLY AGAINST NOTICE U/S 142(1) BY ASSESS EE 01.12.2009 7 ISSUE OF NOTICE U/S 143(2)/142(1) BY ACIT CENTRAL CIRCLE-17 NEW DELHI. 01.12.2009 8 ASSESSMENT COMPLETED U/S 143(3) BY ACIT CENTRAL CIRCLE-17 NEW DELHI U/S 143(3) 29.12.2009 HERE IN THIS CASE ASSESSEE HAS BEEN ROPED IN AS A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A I.E. ASSESSEE IS COVERED UNDER SECTION 153C WHEREBY PROVISIONS OF S ECTION 153A HAS BEEN MADE APPLICABLE THAT IS THE ASSESSING OFFIC ER WAS SATISFIED THAT ANY MONEY BULLION JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING SEIZED OR REQUISITIONED BELONGS TO THE ASSESSEE; OR I.T.A. NO.3179/DEL/2013 11 ANY BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITI ONED PERTAIN OR PERTAINS TO THE ASSESSEE; OR ANY INFORMATION CONTAINED THEREIN RELATES TO A PERSON (I.E. ASSESSEE) OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. IF THE ASSESSING OFFICER OF THE PERSON SEARCHED RECORDS SUCH SATISFACTION THEN THE DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED IS HANDED OVER TO THE A SSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON A ND THEN THE ASSESSING OFFICER HAS THE JURISDICTION TO PROCEED TO RO PE IN THE ASSESSEE UNDER THE PROVISION OF SECTION 153C R.W.S 15 3A BY ISSUANCE OF NOTICE UNDER SECTION 153C/153A AND WILL P ROCEED TO ASSESS OR REASSESS THE INCOME OF OTHER PERSON I.E . THE PERSON COVERED UNDER SECTION 153C IN ACCORDANCE TO THE PROVIS IONS OF SECTION 153A. ONCE JURISDICTION IS ASSUMED UNDER SEC TION 153C IN THE CASE OF OTHER PERSON THEN ALL THE PROVISIONS OF SECTION 153A HAVE BEEN MADE APPLICABLE. HOWEVER IN TERMS O F FIRST PROVISO TO SECTION 153C REFERENCE DATE FOR THE PURPOSE OF CONSTRUING THE DATE OF INITIATION OF SEARCH IN TERMS O F SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A HAS BEEN ENVISAG ED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSET SEIZED OR REQUISITIONED BY THE ASSES SING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. I N OTHER WORDS REFERENCE DATE IN THE CASES OF OTHER PERSON FO R THE PURPOSE OF SECTION 153A (1) HAS BEEN RECKONED AS DATE OF REC EIVING OF BOOKS OF ACCOUNT OR DOCUMENTS BY THE ASSESSING OFFICE R OF THE OTHER PERSON. IF SUCH A DATE IS TO BE APPLIED HERE IN THIS CASE THEN OSTENSIBLY DATE OF SATISFACTION AS RECORDED BY THE ACIT CENTRAL CIRCLE NEW DELHI AT THE MOST CAN BE RECKONED AS REFERENCE DATE WHICH IS 20/11/2009 BECAUSE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED IS NOT AVAILABLE. IF REFERENCE DATE IN TERMS OF FIRST PROVISO TO SECTION I.T.A. NO.3179/DEL/2013 12 153C IS TAKEN AS 20/11/2009 THEN ASSESSMENT YEAR 2008 -09 WILL NOT BE COVERED UNDER THE YEAR OF SEARCH ALBEIT IT WOULD BE COVERED UNDER THE PERIOD OF SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING TO THE ASSESSMENT YEAR RELEVANT TO THE YEAR OF SEARCH AS GIVEN IN CLAUSE (B) OF SECTION 153A (1) AND ALSO FIRST AND SECOND PROVISO TO SECTION 153A. THIS ISSUE HAS BEEN DEALT IN DETAIL BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. (SUPRA) WHEREIN THE HON'BLE HIGH COURT AFTER REFERRING TO THE JUDGMENTS OF HON'BLE DELHI HIGH COURT IN THE CASES OF SSP AVIATION LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX REPORTED IN (2012) 346 ITR 177 (DEL); IN PEPSI FOOD S PVT. LTD. V. ASSISTANT COMMISSIONER OF INCOME TAX REPORTED IN (2014) 367 ITR 112 (DEL) AND CATENA OF OTHER JUDGMENTS OF OTHER HIGH COURTS; HELD THAT FOR THE PURPOSE OF DETERMINING ABATED AND UNABATED ASSESSMENT AND RECKONING OF PERIOD OF SIX AS SESSMENT YEARS PRIOR TO THE YEAR OF SEARCH REFERENCE DATE IN TERMS OF PROVISIONS OF SECTION 153C CAN BE TAKEN AS DATE OF RE CORDING OF SATISFACTION UNDER SECTION 153C. THE RELEVANT OBSERVATI ON IN THIS REGARD READS AS UNDER:- 24. AS DISCUSSED HEREINBEFORE IN TERMS OF PROVISO TO SECTION 153C OF THE ACT A REFERENCE TO THE DATE OF THE SEA RCH UNDER THE SECOND PROVISO TO SECTION 153A OF THE ACT HAS T O BE CONSTRUED AS THE DATE OF HANDING OVER OF ASSETS/DOC UMENTS BELONGING TO THE ASSESSEE (BEING THE PERSON OTHER T HAN THE ONE SEARCHED) TO THE AO HAVING JURISDICTION TO ASSE SS THE SAID ASSESSEE. FURTHER PROCEEDINGS BY VIRTUE OF SE CTION 153C(1) OF THE ACT WOULD HAVE TO BE IN ACCORDANCE WITH SECTION 153A OF THE ACT AND THE REFERENCE TO THE DA TE OF SEARCH WOULD HAVE TO BE CONSTRUED AS THE REFERENCE TO THE DATE OF RECORDING OF SATISFACTION. IT WOULD FOLLOW THAT THE I.T.A. NO.3179/DEL/2013 13 SIX ASSESSMENT YEARS FOR WHICH ASSESSMENTS /REASSESSMENTS COULD BE MADE UNDER SECTION 153C OF THE ACT WOULD ALSO HAVE TO BE CONSTRUED WITH REFERENC E TO THE DATE OF HANDING OVER OF ASSETS/DOCUMENTS TO T HE AO OF THE ASSESSEE. IN THIS CASE IT WOULD BE THE DATE OF THE RECORDING OF 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 WOUL D BE BEYOND THE PERIOD OF SIX ASSESSMENT YEARS AS RECKON ED 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 ASSESSME NT 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 ACCEP TED IT WOULD MEAN THAT WHEREAS IN CASE OF A PERSON SEARCHE D ASSESSMENTS IN RELATION TO SIX PREVIOUS YEARS PRECE DING THE YEAR IN WHICH THE SEARCH TAKES PLACE CAN BE REOPENE D BUT IN CASE OF ANY OTHER PERSON WHO IS NOT SEARCHED BUT H IS ASSETS ARE SEIZED FROM THE SEARCHED PERSON THE 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 TH E SEARCHED PERSON TO THE AO WOULD BE SUBSEQUENT TO T HE DATE OF THE SEARCH. THIS IN OUR VIEW WOULD BE CONTRARY TO THE SCHEME OF SECTION 153C (1) OF THE ACT WHICH CONSTR UES THE DATE OF RECEIPT OF ASSETS AND DOCUMENTS BY THE AO O F THE ASSESSEE (OTHER THAN ONE SEARCHED) AS THE DATE OF T HE SEARCH ON THE ASSESSEE. THE RATIONALE APPEARS TO BE THAT W HEREAS IN THE CASE OF A SEARCHED PERSON THE AO OF THE SEARCHE D PERSON ASSUMES POSSESSION OF SEIZED ASSETS/DOCUMENTS ON SE ARCH OF THE ASSESSEE; THE SEIZED ASSETS/DOCUMENTS BELONG ING TO A PERSON OTHER THAN A SEARCHED PERSON COME INTO POSSE SSION OF THE AO OF THAT PERSON ONLY AFTER THE AO OF THE SEAR CHED I.T.A. NO.3179/DEL/2013 14 PERSON IS SATISFIED THAT THE ASSETS/DOCUMENTS DO NO T 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 RELEVA NT DATE FOR APPLYING THE PROVISIONS OF SECTION 153A OF THE ACT. WE THEREFORE ACCEPT THE CONTENTION THAT IN ANY VIEW O F THE MATTER ASSESSMENT FOR AY 2003-04 AND AY 2004-05 WE RE OUTSIDE THE SCOPE OF SECTION 153C OF THE ACT AND TH E AO HAD NO JURISDICTION TO MAKE AN ASSESSMENT OF THE ASSESS EE'S INCOME FOR THAT YEAR. 12. IF THE RATIO OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE AFORESAID CASE IS TO BE APPLIED ON THE FACTS OF THE PRE SENT CASE THEN FIRSTLY REFERENCE DATE HAS TO BE RECKONED AS DATE OF RECORDING OF SATISFACTION UNDER SECTION 153C WHICH I S 20/11/2009; AND SECONDLY IF SUCH A DATE IS TAKEN AS DATE OF INITIATION OF THE SEARCH OR REQUISITION FOR THE PURPOS E OF SECOND PROVISO TO SECTION 153A(1) THAT IS FOR THE PURPOSE OF ABATEME NT OF PENDING ASSESSMENT PROCEEDINGS; THEN THE YEAR OF SE ARCH IN TERMS OF CLAUSE (B) OF SECTION 153A(1) WOULD BE ASSE SSMENT YEAR 2010-11; AND 2008-09 WOULD FALL WITHIN THE CATEGORY OF SIX ASSESSMENT YEARS PRIOR TO THE YEAR OF SEARCH. IN SUC H A SITUATION ASSESSMENT FOR ASSESSMENT YEAR 2008-09 SHOULD HAVE BE EN COMPLETED IN TERMS OF SECTION 153C READ WITH 153A AND NOT AS A REGULAR ASSESSMENT UNDER SECTION 143(3). THE REASON B EING ENTIRE CONCEPT OF ABATED; UNABATED AS LAID DOWN IN 2 ND PROVISO TO SECTION 153A(1) AND OTHER ISSUE OF LIMITATION AS CONTAI NED SECTION 153 B HAS TO BE SEEN WITH REFERENCE TO SUCH REFERENC E DATE WHICH HAS DIFFERENT CONSEQUENCES. LIKE FOR INSTANCE IN SECTI ON 153 B THE PERIOD OF LIMITATION FOR COMPLETION OF REGULAR ASS ESSMENT FOR THE YEAR OF SEARCH AND FOR THE ASSESSMENT FALLING IN EACH OF THE I.T.A. NO.3179/DEL/2013 15 SIX ASSESSMENT YEARS ARE DIFFERENT. THUS IN OUR HUM BLE OPINION ASSESSMENT FOR ASSESSMENT YEAR 2008-09 SHOULD HAVE BE EN COMPLETED UNDER SECTION 153A READ WITH 153C AND NOT AS REGULAR ASSESSMENT UNDER SECTION 143(3) BY TREATING THE A.Y. 2008-09 AS YEAR OF SEARCH. 13. NOW COMING TO THE ALTERNATIVE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN CASE REGULAR ASSESSME NT UNDER SECTION 143(3) IS TO BE TREATED AS VALID ASSESSMENT TH EN SUCH AN ASSESSMENT ITSELF IS BAD IN LAW FOR THE REASON THAT NO N OTICE UNDER SECTION 143(2) HAS BEEN SERVED UPON THE ASSESSE E WITHIN THE PERIOD OF 12 MONTHS. THE LD. CIT D.R. BEFORE US THOUGH HAS ARGUED VEHEMENTLY THAT SUCH AN ISSUE OF JURISDICTION AN D CHALLENGE OF NON-SERVICE OF NOTICE UNDER SECTION 143( 2) CANNOT BE MADE POST-COMPLETION OF ASSESSMENT BUT COULD NOT PRO VIDE ANY EVIDENCE OR DOCUMENT ON RECORD THAT ANY NOTICE UNDER SE CTION 143(2) HAS BEEN ISSUED PRIOR TO 30/9/2009 WHICH WAS THE LAST DATE OF SERVICE OF NOTICE UNDER SECTION 143(2). HERE IN THIS CASE RETURN WAS FILED ON 27/9/2008 AND TIME LIMIT IN TERMS OF PROVISO TO SECTION 143(2) WAS ON OR BEFORE 30/9/2009 UP TO W HICH NOTICE UNDER SECTION 143(2) WAS MANDATORILY REQUIRED TO BE S ERVED UPON THE ASSESSEE IN CASE THE ASSESSING OFFICER WANTED TO VARY THE RETURNED OF INCOME FILED UNDER SECTION 139. IT IS TRITE PROPOSITION OF LAW THAT IF NO NOTICE HAS BEEN ISSUED IN ACCORDAN CE TO PROVISIONS OF SECTION 143(2) THEN NO ADDITION OVER AN D ABOVE THE RETURNED INCOME CAN BE MADE AND THIS LAW HAS BEEN WEL L SETTLED BY VARIOUS JUDGMENTS INCLUDING THAT OF HON'BLE SUPREM E COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON [2010] 321 ITR 362(SC). I.T.A. NO.3179/DEL/2013 16 14. THUS ON THIS COUNT ALSO WE HOLD THAT ADDITION MADE B Y THE ASSESSING OFFICER IN THE IMPUGNED ORDER IS UNSUS TAINABLE BEING BEYOND THE SCOPE OF ASSESSMENT FRAMED UNDER SE CTION 143(3). THUS ON LEGAL GROUNDS THE APPEAL OF THE ASS ESSEE IS ALLOWED AND OTHER GROUNDS RAISED ON MERITS HAVE BECOM E PURELY INFRUCTUOUS AND THE SAME ARE TREATED AS DISMISSED. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH NOVEMBER 2017. SD/- SD/- [WASEEM AHMED] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28 TH NOVEMBER 2017 JJ:1211 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR DATE 1. DRAFT DICTATED ON 2. DRAFT PLACED BEFORE AUTHOR 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE COMES BACK TO PS/SR. PS 8. UPLOADED ON 9. FILE SENT TO THE BENCH CLERK 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. I.T.A. NO.3179/DEL/2013 17