The Income Tax Appellate Tribunal (ITAT) Delhi Bench while dismissing the appeal filed by the revenue held that issuing notices under Section 153C of Income Tax Act, 1961 should be from six Assessment Year immediately preceding the assessment year.
Assessee, Opal Buildwell P. Ltd. filed its return of income for A.Y. 2010-11 declaring income of Rs. 2,81,421/- which was processed under Section 143(1) of the Income Tax Act.
Subsequently, the assessment has been reopened under Section 153C of the Income Tax Act on the allegation that certain documents/papers belonging to the appellant were found during the course of search under Section 132 Income Tax Act at the premises of Appu Ghar Group of cases.
After verifying the all documents from the assessee, the AO randomly selected 20 parties and issued summons to them under Section 131 of the Income Tax Act through his inspector. According to his report, none of them were found at the given address. Therefore, subsequently AO made addition.
Aggrieved by the order, the assessee filed an appeal before the First Appellate Authority who allowed the appeal. Thereafter, the revenue filed an appeal before the tribunal.
During the proceedings M.K. Patel, the counsel for the assessee submitted that proviso to Section 153C of the Act, the date of search is applicable and the proviso itself says that date of initiation of search under Section 132 Income Tax Act in the second proviso to sub section 153A of the Income Tax Act shall be construed as reference to the date of receiving the books of account or document or assets seized.
Ramesh Kumar, Counsel for Revenue submitted that issuing a notice for Assessment Year 2009-10 and 2010-11 was within the purview of law in view of the amendments inserted in Section 153C vide Finance (No. 2) Act, 2014 with effect from 01.10.2014.
Further, the counsel argued that the Assessing Officer was having jurisdiction to issue notices for assessment year 2009-10 and 2010-11.
It was observed by the tribunal that a satisfaction note for initiating the proceedings under Section 153C by the Assessing officer having jurisdiction over the case of “other person” has been recorded on 14.10.2016 and accordingly notice was issued on 18.10.2016.
The tribunal after reviewing the facts and submissions of the both parties the single member bench of G.S.Pannu, (President) and Anubhav Sharma, (Judicial Member) observed that the assessment order passed under section 153C of the Income Tax Act, is wholly without jurisdiction.
Thus, the bench confirmed that issuing notices under Section 153C of Income Tax Act, 1961 should be from six Assessment Year immediately preceding the assessment year.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
