IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : A : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI GEORGE GEORGE K., JM
ITA No.3308/Del/2010
Assessment Year : 2002-03
DCIT, Vs. Apoorva Extrusion Pvt. Ltd.,
Cent. Circle-18, 305, 3rd Floor, Bhanot Corner,
ARA Centre, Pamposh Enclave, GK-1,
E-2, Jhandewalan Extension, New Delhi.
New Delhi. PAN : AAACA2120L
CO No.303/Del/2010
(ITA No.3308/Del/2010)
Assessment Year : 2002-03
Apoorva Extrusion Pvt. Ltd., Vs. DCIT,
305, 3rd Floor, Bhanot Cent. Circle-18,
Corner, ARA Centre,
Pamposh Enclave, GK-1, E-2, Jhandewalan Extension,
New Delhi. New Delhi.
PAN : AAACA2120L
(Appellant) (Respondent)
Assessee By : Shri Suresh Anantharaman, CA
Department By : Shri A. Misra, CIT, DR
ORDER
PER R.S. SYAL, AM:
This appeal by the Revenue and cross objection by the assessee
arise out of the order passed by the CIT(A) on 30.04.2010 in relation
to the assessment year 2002-03.
ITA No.3308/Del/2010
CO No.303/Del/2010
3. The case of the assessee was taken up for scrutiny u/s 153C of
the Act. In response to the notice issued, the assessee filed return of
income for the A.Y. 2002-03 declaring Nil income. The assessee had
paid taxes on `Book profit' of ` 2,68,344/- u/s 115JB. Eventual
assessment was completed u/s 153C read with section 143(3) of the
Act determining the book profit at the same level of ` 2,68,344/-, but
changing the head of income from `Business income' to `Income from
other sources'. The assessee challenged the assessment order before
the ld. CIT(A) contending, inter alia, that no addition was made by the
AO on the basis of documents seized which formed the basis for
issuing notice u/s 153C of the Act and hence the assessment be
quashed. The ld. CIT(A) observed that the documents claimed as
belonging to the assessee were not discussed in the assessment
order. Considering certain decisions, the ld. CIT(A) came to hold that
since the documents seized did not belong to the assessee or relate to
the assessment year under consideration, the AO was not justified in
initiating the proceedings u/s 153C read with section 153 of the Act.
He, therefore, set aside the initiation of proceedings u/s 153C of the
Act. In view of his decision that the AO did not have any jurisdiction to
initiate or make assessment u/s 153A read with section 153C, he did
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CO No.303/Del/2010
which were found from the premises of the persons searched. When
we peruse these documents, it can be easily noticed that the Bank
books bear the name of the assessee and relate to financial years
starting from 1.4.2004. Pages 31-35 is a print-out of the Trial balance
of the assessee as on 31.3.2004 which was again found from the
premises of the person searched. There is another document on page
No.36 which is a certificate issued by the assessee confirming that it
had given a sum of ` 10 lac to Mr. S.A. Hashmi vide cheque
No.995233 dated 2.6.2004. A close scrutiny of these documents
belonging to the assessee found from the premises of the persons
searched, indicates that these belong to the assessee but pertain to a
period from 1.4.2004. In other words, these documents relate to
assessment year 2005-06 onwards. The ld. AR bolstered the view
canvassed by the ld. CIT(A) quashing the initiation of assessment for
the year under consideration by contending that none of the seized
documents relate to the assessment year under consideration. In the
opposition, the ld. DR contended that the assessment was rightly
framed u/s 153C read with section 153A of the Act.
5. In order to answer whether the quashing of the initiation of
assessment for the year under consideration on the given count is
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CO No.303/Del/2010
Since the assessment or reassessment of such other person has to be
done in accordance with the provisions of section 153A, let us
examine the prescription of the relevant parts of section 153A(1),
which is as under :-
"Notwithstanding anything contained in section 139, section 147,
section 148, section 149, section 151 and section 153, in the case of a
person where a search is initiated under section 132 or books of
account, other documents or any assets are requisitioned under
section 132A after the 31st day of May, 2003, the Assessing Officer
shall--
(a) issue notice to such person requiring him to furnish within such
period, as may be specified in the notice, the return of income in
respect of each assessment year falling within six assessment years
referred to in clause (b), in the prescribed form and verified in the
prescribed manner and setting forth such other particulars as may be
prescribed and the provisions of this Act shall, so far as may be, apply
accordingly as if such return were a return required to be furnished
under section 139;
(b) assess or reassess the total income of six assessment years
immediately preceding the assessment year relevant to the previous
year in which such search is conducted or requisition is made:"
7. On circumspection of the clause (a) of the above provision, it is
amply clear that the AO shall issue notice to such person requiring
him to furnish the return of income in respect of each assessment
year falling within six assessment years as referred to in clause (b)
and, the latter clause, provides that the Assessing Officer shall
`assesss or reassess the total income of six assessment years
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material is found. When we read section 153C in a holistic manner, it
becomes evident that the triggering point for assuming jurisdiction on
the person other than the person searched u/s 153C is the finding of
any money, bullion, jewellery or books of account or document from
the person searched. Once any money, bullion, jewllery or books of
account or document seized or requisitioned from the person
searched are found to be belonging to the other person, then, the
assessment or reassessment of such other person is to be necessarily
completed in terms of section 153A, which in no uncertain terms
refers to six assessment years immediately preceding the assessment
year relevant to the previous year in which such search is conducted
or requisition is made. Further, the use of the word `shall' in section
153A immediately before clause (a) has left nothing to doubt that the
assessment is required to be made for all the six assessment years
immediately preceding the assessment year relevant to the previous
year in which such search is conducted or requisition is made. As the
legislature has not made the making of such assessment or
reassessment for all the six assessment years subject to any condition
of finding of any incriminating material or otherwise, we are unable to
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on the initiating or making of assessment or reassessment for some of
the years of other person, more so, when section 153C(1) has been
expressly made to accord with the provisions of section 153A. We,
therefore, jettison the contention urged on behalf of the assessee as
sans merit.
9. In order to support the impugned order, the ld. AR also took
support of sub-section (2) of section 153C to contend that the
assessment of the other person can be made only for such
assessment years for which the money, bullion, jewellery or books of
account or other documents are found and for no other years. This
was countered by the ld. DR.
10. To appreciate this contention raised on behalf of the assessee, it
would be apt to note the prescription of sub-section (2) of section
153C, which runs as under:-
"(2) Where books of account or documents or assets seized or
requisitioned as referred to in sub-section (1) has or have been
received by the Assessing Officer having jurisdiction over such other
person after the due date for furnishing the return of income for the
assessment year relevant to the previous year in which search is
conducted under section 132 or requisition is made under section
132A and in respect of such assessment year--
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assessment year relevant to the previous year in which search is
conducted u/s 132 or requisition is made u/s 132A.' Thus, it is amply
clear that whereas sub-section (2) of section 153C deals with the
assessment for the assessment year relevant to the previous year in
which search is conducted, sub-section (1) of section 153C read with
section 153A refers to `six assessment years immediately preceding
assessment year relevant to the previous year in which such search is
conducted or requisition is made.' As we are presently concerned
with one of the six assessment years immediately preceding the
assessment year relevant to the previous year in which such search
was conducted, it is the mandate of sub-section (1) of section 153C
read with section 153A which shall apply.
12. Reverting to the facts of the instant case, it is noticed that the
documents found from the persons searched, placed at pages 26-36
of the Departmental paper book, do belong to the assessee. As such,
there can be no question of lack of jurisdiction of the AO to initiate
assessment of the assessee u/s 153C read with section 153A of the
Act for the instant year, which is one of the six assessment years
immediately preceding the assessment year relevant to the previous
year in which search was conducted. In view of the foregoing
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as per law, in consonance with our above directions. Needless to say,
the assessee will be allowed a reasonable opportunity of being heard
in such fresh proceedings.
14. In the result, the appeal of the Revenue is allowed and C.O. of
the assessee is allowed for statistical purposes.
The order pronounced in the open court on 09.10.2014.
Sd/- Sd/-
[GEORGE GEORGE K.] [R.S. SYAL]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, 09th October, 2014.
dk
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.
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