INCOME TAX ACT, 1961

Section 153C

Search and seizure - Assessment under section 153C - Block period - Barred by limitation

Assessee company was engaged in business of brokers/marketing related activities. AO noted that a search seizure operation under section 132 was conducted on premises of assessee. Subsequently, notice under section 153C was issued after recording satisfaction note. In response to aforesaid notice, assessee electronically filed its return of income declaring total income at Rs.318. Thereafter, case was taken-up for scrutiny and consequently, assessment was framed under section 153C read with section 143(3) and total income of assessee company was determined at Rs.7,85,00,320, inter-alia, by making addition of Rs.7,85,00,000 being share application money received from various companies under section 68. Aggrieved by order of AO, assessee carried matter in appeal before CIT(A). Before CIT(A) assessee apart from challenging addition made by assessing officer also challenged assessment framed under section 153C. CIT(A) held assessment framed under section 153C to be invalid and need to be annulled. Aggrieved by order of CIT(A), revenue preferred this appeal. Held: CIT(A) after considering submissions of assessee, remand report from AO and assessee's reply to remand report concluded that notice under section 153C was issued by AO on 16-9-2016 and, therefore, as per provisions of Act financial year of search shall be deemed financial year in which notice under section 153C was issued i.e., financial year 2016-17 relevant to assessment year 2017-18 and, therefore, in such a situation block period for which action under section 153C could be contemplated would include assessment years 2011-12 to 2016-17 and would not include assessment year 2010-11. CIT(A), therefore, held notice issued by AO under section 153C for assessment year 2010-11 to be barred by limitation. Revenue did not place on record any contrary binding decision in its support nor had placed any material to demonstrate that decision rendered by Delhi High Court in case of RRJ Securities (2016) 380 ITR 612 (Del.) : 2015 TaxPub(DT) 4278 (Del-HC) has been set aside, overruled or stayed by any higher judicial forum. In view of aforesaid facts, no reason found to interfere with order of CIT(A) and thus, grounds raised by revenue were dismissed.

Relied on:RRJ Securities (2016) 380 ITR 612 (Del.) : 2015 TaxPub(DT) 4278 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2010-11

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