Income Tax Appellate Tribunal - Delhi
M/S. Lucky Holdings Pvt. Ltd., Kolkata vs Acit, New Delhi on 28 May, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "B", NEW DELHI
BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER
AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No.5674/Del/2016
Assessment Year : 2006-07
ACIT, Central Circle- 30, Lucky Holdings Pvt. Ltd.,
New Delhi. 16 B, Shakespear Sarani,
Vs.
Kolkata.
PAN : AAACL8149G
(Appellant) (Respondent)
C.O. No.19/Del/2017
(In ITA No.5674/Del/2016)
Assessment Year : 2006-07
Lucky Holdings Pvt. Ltd., ACIT, Central Circle- 30,
16 B, Shakespear Sarani, New Delhi.
Vs.
Kolkata.
PAN : AAACL8149G
(Appellant) (Respondent)
Department by : Ms. Rachna Singh, CIT-DR,
Assessee by : Shri Ajay Vohra, Sr. Adv.
Ms. Deepashree Rao, CA
Mr. Vibhu Gupta, CA
Date of hearing : 08-05-2018
Date of pronouncement : 28-05-2018
ORDER
PER R. K. PANDA, AM :
The appeal filed by the Revenue is directed against the order dated 31.08.2016 of CIT(A)- 30, New Delhi relating to assessment year 2006-07. The assessee has filed the Cross Objection against the appeal filed by the Revenue. 2 ITA No.5674/Del/2016 C.O. No.19/Del/2017 For the sake of convenience, these were heard together and are being disposed of by this common order.
2. Facts of the case, in brief, are that a search and seizure operation u/s 132 of the I.T. Act, 1961 was conducted by the Investigation Wing of the Department on 14.11.2011 in the Jindal Group of cases. During the search, the documents/bills belonging to the assessee were also found and seized from the residential premises of Shri S.S. Jindal, Mrs. Subhadra Jindal, Mr. Bhavesh Jindal & Ms. Aakriti Jindal, 12A, Green Avenue, Vasant Kund, New Delhi in whose name search warrant of authorization was issued. Subsequently, the case of the assessee was centralized with Central Circle- 14, New Delhi vide order F.No. CIT-Kol-1/Cent./12-13/5922 Delhi dated 27.12.2012. Accordingly, the following satisfaction note was recorded :-
"Satisfaction note for initiating proceedings under Section 153C read with 153A of the Income Tax Act, 1961 in the case of M/s Lucky Holdings Pvt. Ltd.
(PAN-AAACL8149G) The case of M/s Lucky Holdings Pvt. Ltd. was centralized u/s 127 of the Income Tax Act, 1961 with the Assessing Officer, Central Circle- 14, New Delhi vide Order No.CIT/Kol-I/Cent./127/B.C. Jindal/12-13/5930 dated 27.12.2012 and subsequently by to ACIT, CC-14, New Delhi.
Action under section 132 of the Income Tax was taken in Jindal group of cases by Investigation Directorate, New Delhi on 14.11.2011 at its business & residential premises. During the course of search proceedings from different residential/business premises several documents were found and seized. While examining the seized documents/books of account etc, I have come across the following documents:
Premises: Office/Residence of Sh. S.S. Jindal, Mrs. Subhadra Jindal, Sh. Bhavesh Jindal and Miss Aakriti Jindal, B.C. Jindal Group, 12-A, Green Avenue, Vasant Kunj, New Delhi; Party No.R-1.Page No.10
Annexure A-5 Page Number 1 to 89 Page Numbers Documents 16 Resolution for amalgamation of eight companies in M/s Lucky Holdings Pvt. Ltd.3 ITA No.5674/Del/2016 C.O. No.19/Del/2017
Annexure A-7 21 Amalgamation of company application no.619 of 2010, ballot paper for the meeting of equity shareholders of M/s Lucky Holdings Pvt. Ltd.
22 Company Application no.619 of 2010, F form of proxy Equity shareholders of Lucky Holdings Pvt. Ltd.
Annexure A-9 Page Nos.1-219 3-4 Share transfer of M/s Lucky Holdings Pvt. Ltd. ....... M/s Lucky Holding Pvt. Ltd. (existing & proposed) 5-10 List of shares M/s Lucky Holding Pvt. Ltd. .............. 16-25, 119-223 Copy of share transfer stamp and form of M/s Lucky Holdings Pvt.
Ltd.
149-155 Share transfer from M/s Lucky Holdings Pvt. Ltd. Annexure A-18 Page Nos.1-91 1 Transfer of 50000 equity shares to Aakriti Jindal by M/s Lucky Holdings Pvt. Ltd.
2 314269 equity shares of Rs.10/- each allotted by Lucky Holdings Pvt. Ltd. Aakriti Jindal 3 752050 share certificate dully transferred to Shyam Sunder Jindal by Lucky Holdings Pvt. Ltd.
4 1409520 equity shares of Rs.10/- each allotted by Lucky Holdings Pvt. Ltd. Subhadra Jindal 5 937705 Share certificate dully transferred to Bhavesh Jindal by Lucky Holdings Pvt. Ltd.
41-44 List of shares of Lucky Holdings Pvt. Ltd. Transfer in the name of M/s SSJ Trust on 11/05/2009 45 Lucky Holdings Pvt. Ltd., transfer of 1358850 equity shares in the name of SSJ Trust Premises: Sh SS Jindal, Sh. Bhavesh Jindal, 12, Green Avenue, Sec-D, Pocket-3, Vasant Kunj, New Delhi : Party No.R-4 Annexure A-1 1-5 Blank Vouchers of Lucky Holdings Pvt. Ltd.
6-28 Blank Cheques of bank RBS of M/s Lucky Holdings Pvt. Ltd.
I have examined the above documents and the contents noted/written therein. After examination of these documents, I am satisfied that these aforesaid documents belong to M/s Lucky Holdings Pvt. Ltd. In view of the same, I am further satisfied that it is fit case for initiating proceedings u/s 153C rws 153A of the Income Tax Act, 1961.
Accordingly, notices u/s 153C rws 153A are required to be issued as per provisions of the Income Tax Act, 1961."
3. The Assessing Officer accordingly issued notice u/s 153C r.w.s. 153A on 03.12.2013. The assessee in response to the said notice, filed its return of 4 ITA No.5674/Del/2016 C.O. No.19/Del/2017 income on 20.12.2013 declaring total income of Rs.49,504/-. The Assessing Officer in the assessment order has mentioned that the assessee has no objection for completing the assessment u/s 153C of the I.T. Act which is implied. He further mentioned in the assessment order that the original return was filed on 18.11.2006 u/s 139(1) declaring total income of Rs.49,504/-. It may be pertinent to mention here that the original assessment was completed u/s 143(3) vide order dated 22.10.2008 wherein the Assessing Officer has discussed the issue of increase in share capital and share premium by observing as under :-
"1. ............
2. In response to the same, Mr. Gopal Kumar Agarwal, FCA, appeared, duly empowered, and produced details and documents as well as submitted clarifications and statements as required from time to time. The a/r was heard, the materials produced were examined, and the case was discussed.
3. Preliminary Expenses :
On inspection of the Profit & Loss account and the Balance Sheet, it is found that the assessee company had introduced new share capital and premium of Rs.1.04 crores and 19.85 crores respectively during the year under scrutiny. Consequently, it had claimed a miscellaneous expenditure of Rs.70,000/- in relation to ROC fees, in the Balance Sheet. Assessee had written off one-fifth (Rs.12,500/-) part of this share issue expenses as preliminary expense in the Profit & Loss account.
The date of incorporation of the company as per the PAN details is 04.09.1990. The assessee is engaged in the business of trading and investment and the preliminary expenses incurred were not in connection with extension of existing industrial undertaking or in connection with setting up of new industrial unit. Hence, it is not eligible for any deduction u/s 35D as the expenses were incurred after the commencement of business activity.
Therefore the amount of Rs.6,000/- claimed as preliminary expenses w/o is disallowed and added back in the hands of the assessee.
4. Loss from sale of Motor car :
Assessee had showed a loss of Rs.78,013/- in the Profit and Loss account against loss on sale of motor car. Assessee was requested to produce all details in this regard. Assessee furnished a computer printout signed by its own director showing a Bill amount of Rs.4,50,000/- for "Being the sold of motor car to oskar iron p ltd". The pint out does not contain any number and is dated 12.09.2005. As the printout did not establish the transaction, assessee was requested to produce further evidence in support of the above sale. Assessee produced a bank transaction showing a receipt of Rs.4,50,000/- on 15.12.2005. But it is not clear wherefrom and for what purpose the payment was received.5 ITA No.5674/Del/2016 C.O. No.19/Del/2017
On enquiry at the address of M/s Oskar Iron Pvt. Ltd., as furnished by assessee, the inspector of Income Tax deputed for the purpose could find no such company in existence at that address.
Assessee was requested to furnish the PAN of M/s Oskar Iron P Ltd. for further verification. But it was not furnished.
As the sale details of the above transactions could neither be established nor verified, the loss Rs.78,013/- as claimed by assessee and debited in the Profit and loss account is disallowed and added back to the total income of the assessee.
5. The total income of the assessee is computed as below :
Total Income as per Return Rs.49,500/-
Add:
(1) Preliminary Expenses disallowed as discussed above Rs.12,500/-
(2) Loss from sale of Motor car disallowed as discussed above Rs.78,013/-
90,513/-
Total Income Rs.1,40,013/-
.......... ........... ......... .........."
4. The Assessing Officer issued statutory notice u/s 143(2) and 142(1) along with a questionnaire dated 03.01.2014 asking the assessee to justify the share capital of Rs.20.79 crores raised during the year which includes share application money of Rs.1.04 crores and share premium of Rs.19.75 crores. Rejecting the various explanation given by the assessee and observing that the assessee failed to fulfill the criteria laid down in the provisions of section 68 of the I.T. Act and further observing that the companies have invested in the shares of the assessee company are only paper companies which are not doing any business the Assessing Officer made addition of Rs.20,79,50,000/- to the total income of the assessee.
5. Before the ld. CIT(A), the assessee apart from challenging the addition on merit challenged the validity of assumption of jurisdiction u/s 153C of the I.T. Act. It was argued that initiation and completion of the assessment proceedings 6 ITA No.5674/Del/2016 C.O. No.19/Del/2017 u/s 153C and 153A has been done beyond the prescribed limitation period of six years from the date of handing over of material or recording of satisfaction u/s 153C as per proviso of section 153C(1) of the I.T. Act. It was argued that documents pertaining to the assessee were handed over on 03.12.2013 and, therefore, the Assessing Officer can take action u/s 153C in six preceding financial years i.e. for assessment years 2008-09 to 2013-14 only. However, the Assessing Officer has wrongly issued notice u/s 153C for assessment years 2006-07 and 2007-08 without having any jurisdiction. Relying on various decisions including the decision of the Hon'ble Delhi High Court in the case of CIT vs. M/s RRJ Securities Ltd. reported in 380 ITR 612, it was argued that the date of handing over of material belonging to the assessee has to be construed as reference date for initiation of action u/s 153C as against the date of initiation of search that has to be construed as reference date for initiation of action u/s 153A of the I.T. Act.
6. Based on the arguments advanced by the assessee and following the decision of the Hon'ble Delhi High Court in the case of RRJ Securities Ltd. (supra), ld. CIT(A) held that the assessment completed u/s 153C/153A was void ab-initio since the notice u/s 153C was issued beyond the limitation period of six years from the reference date. He, however, rejected the claim of the assessee that initiation of proceedings u/s 153C was not valid since no books of account belonging to the assessee as envisaged in that section were found and 7 ITA No.5674/Del/2016 C.O. No.19/Del/2017 seized during the course of search on the person referred in section 153A of the I.T. Act. The relevant observation of the ld. CIT(A) reads as under :-
"5.4 I have carefully considered assessment order, written submissions, case laws relied upon and oral arguments of Ld. AR. The objections/arguments of the appellant are discussed as under:-
(i) In this case B.C. Jindal group of cases, search and seizure action u/s 132 of the Act, was initiated on 14.11.2011. Case of the assessee was centralized with ACIT, Central circ1e-22, New Delhi, vide jurisdiction order dated 27.12.2012 from Kolkatta and subsequently, centralized with ACIT, Central circ1e-14, New Delhi, vide order of CIT-III, New Delhi dated 16.9.2013.
(ii) Subsequently, in the case of appellant, satisfaction note for initiating action u/s 153C, was recorded, after receiving the documents on 03.12.2013 pertaining to the assessee. Since, A.O. of both the persons, was same and therefore, physical handing over of the documents was assumed by the A.O. on 03.12.2013. Accordingly, A.O. issued notice u/s 153C, on 03.12.2013.
(iii) In the appellate proceedings, the appellant has submitted that the documents pertaining to appellant, were handed over on 03.12.2013 and therefore, A.O. can take action u/s 153C in 6 preceding F.Ys. i.e. for A.Y. 2008-09 to A.Y. 2013-14 only.
However, the A.O. has wrongly issued notices u/s 153C for A.Y. 2006-07 and A.Y. 2007-08, without jurisdiction.
For the above submission, the appellant has also relied upon the decision of jurisdictional High Court of Delhi in the case of CIT -7 vs. M/s RRJ Securities Ltd., [2016] 380 ITR 612 (Delhi), where it has been held that the date of handing over of material, will be construed as the reference date for initiation of action u/s 153C, as against date of initiation of search construed the reference date for initiation of action u/s 153A. The relevant portion of decision has also been reproduced in the written submissions (supra).
From the above, following facts emerged:
the documents were handed over to the A.O. on 03.12.2013 and action 153C was also initiated on 03.12.2013 itself, after recording satisfaction, as per proviso to section 153C (1) of the Act, the reference date for taking action u/s 153C, will be as 03.12.2013 in the case of appellant, instead of date of search on 14.11.2011, which is required for taking action 153A,and the 6 preceding A.Y.s , will be from A.Y. 2008-09 to A.Y. 2013-14 only. From the above, it is clear that A.O. has wrongly issued notices u/s 153C for A.Y. 2006-07 and A.Y. 2007-08, since the documents were handed over on 03.12.2013. Therefore, the notice issued by the A.O., is beyond the limitation period of 6 years from the reference date, prescribed in the first proviso to section 153C(1) and 153A(1) of Act.
In view of the above, I am of the considered opinion that the assessment completed u/s 153C/ 153A of the Act, is void ab-initio, as the A.O. has no jurisdiction making the assessment for A.Y. 2006-07, being beyond period of 6 years. As such, facts of the appellant are squarely covered by the ratio laid down by Hon'ble Jurisdictional High Court of Delhi, in the case of CIT-7 vs. M/s RRJ Securities Ltd., [2016] 380 : 612 (Delhi) (supra).
8ITA No.5674/Del/2016 C.O. No.19/Del/2017
In view of the above, I agree with the arguments of the appellant and therefore, I hold that the assessment completed u/s 153C/153A, is void ab initio, since notice u/s 153C was issued beyond limitation period of 6 years from the reference date."
7. Aggrieved with such order of the ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds :-
"1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in holding that the assessment completed u/s 153C/153A of the I.T. Act, 1961 is void ab-initio, as the A.O. has no jurisdiction for making the assessment for A.Y. 2006-07, being beyond period of six years relying on the judgement of Hon'ble High Court of Delhi, in the case of CIT-7 Vs. M/s RRJ Securities Ltd.
2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in holding that the reference date for taking action u/s 153C is 03.12.2013, date of initiating action u/s 153C, instead of date of search on 14.11.2011.
3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in holding that the first proviso to section 153C of the Income Tax Act, 1961 envisages the six assessment years for the purpose of assessment u/s 153C be determined from the date on which seized documents are considered to be handed over ignoring the fact that first proviso to section 153C is to be read only in the context of second proviso to sub-section 1 of section 153A, which deals with abatement of pending assessment/ reassessment proceedings on the date of initiation of search?
4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law in holding that the six assessment years for the purpose of assessment u/s 153C of the Income Tax Act, 1961 be determined from the date on which seized documents are considered to be handed over to the jurisdictional AO ignoring the fact that as per section 153C(1) of the Income Tax Act 1961, the AO has to assess or reassess income of such other person in accordance with provision of the section 153A of the Income Tax Act, 1961, itself, that the section 153A(1) has unambiguously defined that the AO shall assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the year in which such search is conducted or requisition is made?
5. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in holding that the six preceding A.Ys. will be from A.Y. 2008-09 to A.Y. 2013-14 only instead of A.Y. 2006-07 to A.Y. 2011-12.
6. That the order of the CIT(A) is perverse, erroneous and is not tenable on facts and in law.
7. That the grounds of appeal are without prejudice to each other.
8. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal."9 ITA No.5674/Del/2016 C.O. No.19/Del/2017
8. We have considered the rival arguments made by both the sides and perused the material available on record. It is an admitted fact that the search in the case of Jindal Group of cases took place on 14.11.2011 during which certain documents/bills belonging to the assessee were found and seized from the premises of the searched parties. It is also an admitted fact that the satisfaction note was prepared on 03.12.2013 and the documents were handed over on 03.12.2013. The notice u/s 153C was also issued to the assessee on 03.12.2013.
9. It is the submission of ld. counsel for the assessee that as per the proviso to section 153C(1) of the I.T. Act, the reference date for taking action u/s 153C will be 03.12.2013 in the case of the assessee and therefore, the impugned assessment year fall outside the purview of the period of six years.
10. We find the provisions of section 153C read as under :-
"Assessment of income of any other person.
153C. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,--
(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or
(b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person 17[for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153A :10 ITA No.5674/Del/2016 C.O. No.19/Del/2017
Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person :
Provided further that the Central Government may by rules18 made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 19[and for the relevant assessment year or years as referred to in sub-section (1) of section 153A] except in cases where any assessment or reassessment has abated.
(2) xxxxx
11. We find the Hon'ble Delhi High Court in the case of RRJ Securities Ltd. (supra) has held that the proviso to section 153C(1) expressly indicate that reference to the date of initiation of search for the purpose of second proviso to section 153A, shall be construed as a reference to the date on which valuable assets or documents are received by the Assessing Officer of an assessee (other than the search person). We find the Hon'ble Delhi High Court in the case of Pr.CIT vs. Sarwar Agency (P.) Ltd. reported in 397 ITR 400 after considering the decision of the Hon'ble Delhi High Court in the case of RRJ Securities Ltd. (supra) has observed as under :-
"6. The case of the Revenue is that the first proviso to Section 153 C refers only to the second proviso to Section 153 A(1) of the Act, which only indicates that any assessment relating to any AY falling within the period of six AYs which is pending as of the initiation of search shall abate. Therefore, the second proviso to Section 153 C is also concerned only with the aspect of abatement of pending assessments. According to the Revenue, this makes no difference to the computation of the block of six years preceding the AY relevant to the previous year /in which the search was conducted. In other words, according to the Revenue, the block period for both the searched person and the 'other person' would remain the same notwithstanding that 11 ITA No.5674/Del/2016 C.O. No.19/Del/2017 there may be some delay in transmitting the documents recovered during the search which belong or pertain to the 'other person' to the AO of such other person.
7. The case of the Assessee, on the other hand, is that since in the case of the 'other person' the AO issues notice only subsequent to the notices issued under Section 153 A to the searched person, the starting point for computation of the block period would be the date on which, based on the seized documents, notice is issued to the 'other person' under Section 153 C of the Act. Thus in the present case, the six year period prior to AY 2012-13 i.e. AY 2007-08 to AY 2012-13. Thus no notice could be issued under Section 153 C of the Act to reopen the Assessee's assessment for AY 2006-07. Reliance is placed on the decision of this Court in Commissioner of Income- tax-7 v. RRJ Securities Ltd. [2016] 380 ITR 612 (Del) where this very question was examined and answered in favour of the Assessee and against the Revenue.
8. In RRJ Securities (supra), the Court after noticing the decision in SSP Aviation Ltd. v. Deputy CIT[2012] 346 ITR 177 (Del), held as follows:
"21. As discussed hereinbefore, once the AO of the searched person is satisfied that the seized assets/documents belong to another person and the said assets/documents have been transferred to the AO of such other person, the proceedings for assessment/reassessment of income of the other person has to proceed in accordance with provisions of Section 153A of the Act. Section 153A requires that where a search has been initiated under Section 132 of the Act, the AO is required to issue notice requiring the noticee to furnish returns of income in respect of six assessment years relevant to the six previous years preceding the previous year in which the search is conducted. As discussed hereinbefore, by virtue of second proviso to Section 153A, the assessment/reassessment pending on the date of initiation of search abate. In the context of proceedings under Section 153C of the Act, the reference to the date of initiation of the search in the second proviso to Section 153A has to be construed as the date on which the AO receives the documents or assets from the AO of the searched person. Thus, by virtue of second proviso to Section 153A of the Act as it applies to proceedings under Section 153C of the Act, the assessment/reassessment pending on the date on which the assets/documents are received by the AO would abate. In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of concluded assessments, the AO would assume jurisdiction to reassess provided that the assets/documents received by the AO represent or indicate any undisclosed income or possibility of any income that may have remained undisclosed in the relevant assessment years.....
24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of 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 12 ITA No.5674/Del/2016 C.O. No.19/Del/2017 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."
9. The said decision in RRJ Securities (supra) has been followed by this Court subsequently in ARN Infrastructure India Ltd. v. Assistant Commissioner of Income- tax, Central Circule-28, New Delhi[2017] 394 ITR 569 (Del.).
10. Mr. Salil Aggarwal, learned counsel for the Assessee, has drawn the attention of the Court to the recent amendment made in Section 153 C of the Act by the Finance Act, 2017 with effect from 1st April 2017. This amendment in effect states that the block period for the searched person as well as the 'other person' would be the same six AYs immediately preceding the year of search. This amendment is prospective.
11. Mr. Ashok Manchanda, learned Senior Standing counsel for the Appellant, sought to pursue this Court to reconsider its view in RRJ Securities (supra). The Court declines to do so for more than one reason. First, for reasons best known to it, the Revenue has not challenged the decision of this Court in RRJ Securities (supra) in the Supreme Court. The said decision has been consistently followed by the authorities under this Court as well as by this court. Thirdly, the recent amendment to Section 153 C(1) of the Act states for the first time that for both the searched person and the other person the period of reassessment would be six AYs preceding the year of search. The said amendment is prospective.
12. Consequently, no substantial question of law arises from the impugned order of the ITAT. The appeal is, accordingly, dismissed."
12. We find the Hon'ble Delhi High Court in the case of Pr.CIT vs. R.L. Allied vide ITA No.370/2015 and batch of other appeals order dated 28.01.2016 following the decision in the case of RRJ Securities Ltd. (supra) has observed as under :-
"7. This Court reiterates the view already expressed by it in RRJ Securities (supra) when it comes to reopening of assessments of a person other than the searched person, in terms of the first proviso to Section 153C(1). In such event the date of search would get postponed to the date of receipt of the books of accounts or documents seized by the AO having jurisdiction over such 'other person' and the six earlier AYs would have to be reckoned with reference to such postponed date of search. The first proviso to Section 153 B (1) does not support the case sought to be canvassed by the Revenue. It refers to and acknowledges that the date of search qua the 'other person', in terms of the first proviso to Section 153 C (1), gets postponed to 13 ITA No.5674/Del/2016 C.O. No.19/Del/2017 the date on which documents are handed over to the AO of the 'other person'.
Consequently, the question of referring the case to a larger Bench does not arise.
8. In the present case, there is no doubt that it was only on 24th March 2009 that the AO of the Assessee received the documents seized and it was on that date a notice under Section 153C (1) was issued and served upon the Assessee. Consequently, this Court finds no legal error in the conclusion of the ITAT that notice under Section 153C (1) could not have been issued for AYs 2001-02 and 2002-03.
9. No substantial question of law arises for consideration. The appeals are dismissed."
13. Since in the instant case also the documents were handed over to the Assessing Officer on 03.12.2013 and action u/s 153C was also initiated on 03.12.2013 a finding given by the ld. CIT(A) and not controverted by the ld. DR, therefore, the six preceding assessment years will be from A.Y. 2008-09 to 2013-14. Since in the instant case, the Assessing Officer has issued notice u/s 153C to the assessee for assessment year 2006-07, therefore, the same being beyond the period of six preceding assessment years from the reference date is void ab-initio. Therefore, the assessment completed u/s 153C/153A for the impugned assessment year is void ab-initio since the Assessing Officer has no jurisdiction for making the assessment for assessment year 2006-07 being beyond the period of six years. Since the order of the ld. CIT(A) is in accordance with law laid down by the Hon'ble Jurisdictional High Court, therefore, in absence of any contrary material brought to our notice, we do not find any infirmity in the order of the ld. CIT(A) holding the assessment as void ab-initio. Accordingly, the order of ld. CIT(A) is upheld and the grounds raised by the Revenue are dismissed.
14ITA No.5674/Del/2016 C.O. No.19/Del/2017 C.O. No.19/Del/2017 (Assessee) :
14. The assessee in the Cross Objection has raised the following ground :-
"1. That the CIT(A) erred on facts and in law in not appreciating that the initiation of proceedings under section 153C was not valid inasmuch as no books of accounts or documents 'belonging' to the appellant as envisaged under that section were found and seized during the course of search on the person referred to in section 153A of the Act."
15. Since the appeal filed by the Revenue has been dismissed, the Cross Objection filed by the assessee becomes infructous. We, therefore, dismiss the ground raised by the assessee in the Cross Objection being academic in nature.
16. In the result, the appeal filed by the Revenue as well as Cross Objection filed by the assessee are dismissed.
Order pronounced in the open Court on this 28th day of May, 2018.
Sd/- Sd/-
(SUDHANSHU SRIVASTAVA) (R. K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 28-05-2018.
Sujeet
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
By Order
//True Copy//
Assistant Registrar
ITAT, New Delhi