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DATE: August 19, 2015 (Date of pronouncement)
DATE: September 11, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 153A/ 153D: Approval to the assessment order granted by the Addl. CIT in a casual and mechanical manner and without application of mind renders the assessment order void

The Legislative intent is clear inasmuch as prior to the insertion of Sec.153D, there was no provision for taking approval in cases of assessment and reassessment in cases where search has been conducted. Thus, the legislature wanted the assessments/reassessments of search and seizure cases should be made with the prior approval of superior authorities which also means that the superior authorities should apply their minds on the materials on the basis of which the officer is making the assessment and after due application of mind and on the basis of seized materials, the superior authorities have to approve the assessment order. The Addl Commissioner/Joint Commissioner is required to apply his mind to the proposals put up to him for approval in the light of the material relied upon by the AO. The said power cannot be exercised casually and in a routine manner.

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DATE: August 28, 2015 (Date of pronouncement)
DATE: September 1, 2015 (Date of publication)
AY: 2002-03, 2005-06, 2006-07
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CITATION:
S. 153A/ 153C: Entire law on the scope of additions that can be made in a pending assessment and in a completed assessment pursuant to a search u/s 132 explained

Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment

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DATE: July 10, 2015 (Date of pronouncement)
DATE: July 15, 2015 (Date of publication)
AY: 2000-01 to 2006-07
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CITATION:
S. 153C: Even if the AO of the searched person and of the "other person" (i.e. the assessee) is the same, the proper satisfaction has to be recorded before assuming jurisdiction over the assessee. Failure to record satisfaction renders the assessment order null and void

The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view.

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DATE: June 24, 2015 (Date of pronouncement)
DATE: June 30, 2015 (Date of publication)
AY: 2007-08 to 2009-10
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CITATION:
S. 271(1)(c): Law on levy of penalty in a case where satisfaction is recorded in s. 153C/153D assessments by AO who is common to the searched party and the assessee explained

The attempt at the end of the assessee is that there should be a straight jacket system, whereby the satisfaction recorded even by the same AO then, that should be placed in the file of searched person and if it is placed in some other cupboard in his room by the AO then, there cannot be any satisfaction, we fail to appreciate that technical approach at the end of the assessee. The law does not require the manner and the procedure of keeping the files. The section only requires that a satisfaction be recorded and it should be during the period propounded by Hon’ble S.C. in CIT vs. Calcutta Knitwears 362 ITR 673

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DATE: June 20, 2015 (Date of pronouncement)
DATE: June 22, 2015 (Date of publication)
AY: 1999-00 to 2005-06
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CITATION:
S. 153A: There is no requirement to issue a notice u/s 143(2) before making an assessment u/s 153A

There is no specific provision in the Act requiring the assessment made under section 153A to be after issue of notice under section 143(2) of the Act. Learned counsel for the assessee places heavy reliance on the judgment of the Hon‟ble Supreme Court in Hotel Blue Moon v. DCIT 321 ITR 362 (SC) wherein it was held that the where an assessment has to be completed under section 143(3) read with section 158BC, notice under section 143 (2) must be issued and omission to do so cannot be a procedural irregularity and the same is not curable. It is to be noted that the above said judgment was in the context of Section 158BC. Clause (b) of Section 158BC expressly provides that “the AO shall proceed to determine the undisclosed income of the block period in the manner laid down in section 158BB and the provisions of Section 142, sub sections (2) and (3) of Section 143, Section 144 and Section 145 shall, so far as may be, apply. This is not the position under section 153A. The law laid down in Hotel Blue Moon, is thus not applicable to the facts of the present case

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DATE: April 21, 2015 (Date of pronouncement)
DATE: May 7, 2015 (Date of publication)
AY: 2008-09
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CITATION:
S. 153A: No addition can be made in respect of an unabated assessment which has become final if no incriminating material is found during the search. An ICD is an "infrastructural facility" for s. 80-IA(4)

Once it is held that the assessment has attained finality, then the AO while passing the independent assessment order under Section 153A read with Section 143 (3) of the I.T. Act could not have disturbed the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/ reassessment were contrary to the facts unearthed during the course of 153A proceedings

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DATE: February 13, 2015 (Date of pronouncement)
DATE: February 16, 2015 (Date of publication)
AY: 2002-03 & 2004-05
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CITATION:
S. 153A: Assessments which have attained finality cannot be disturbed or varied if no incriminating material is found qua the addition made

Since the assessment had attained finality before the date of search and does not get abated in view of second proviso to section 153A, therefore, without there being any incriminating material found at the time of search, no addition over and above the income which already stood assessed can be made

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DATE: January 16, 2015 (Date of pronouncement)
DATE: January 19, 2015 (Date of publication)
AY: 2003-04
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CITATION:
S. 153C: Even if the AO of the person searched and the 'other person' is the same, the recording of satisfaction by the AO having jurisdiction over the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the ‘other person. Impact of amendment by Finance (No. 2) Act 2014 w.e.f. 1.10.2014 considered

It is a clear-cut proposition that the recording of satisfaction by the AO having jurisdiction over the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the ‘other person.’ On a close comparative study, it is overt that in so far as the question of acquiring jurisdiction by the AO of the person other than the person searched is concerned, the provisions of section 153C are in pari materia with section 158BD

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DATE: December 5, 2014 (Date of pronouncement)
DATE: December 8, 2014 (Date of publication)
AY: 2008-09 to 2010-11
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CITATION:
(i) S. 153A: Even in non-pending assessments where no incriminating material is found, AO is not limited to assessing “undisclosed” income, (ii) revenue expenditure on leased premises is not hit by sub-section (1A) to s. 32 or Explanation 1 to s. 32, (iii) Even income voluntarily disclosed in search is liable for 2. 234B/C interest

(i) The circumstance where proceedings are not pending and no incriminating material is found in the course of search has been left unanswered by the Delhi High Court in Anil Kumar Bhatia 352 ITR 493 (Del). In this case, the …

M/s. Nandini Delux vs. ACIT (ITAT Bangalore) Read More »

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DATE: November 28, 2014 (Date of pronouncement)
DATE: December 1, 2014 (Date of publication)
AY: 2003-04 to 2008-09
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CITATION:
S. 153C: Whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the AO to rebut that presumption and come to a conclusion or "satisfaction" that the document in fact belongs to somebody else based on cogent material

On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be “satisfied” that inter alia any document seized or requisitioned “belongs to” a person other than the searched person. It is …

DCIT vs. Aakash Arogya Mindir P.Ltd (ITAT Delhi) Read More »