By TIOL News Service

NEW DELHI, OCT 13, 2017: THE issue is - Whether date of initiation of search/requisition proceedings u/s 132/132A, is deemed to be the date recording satisfaction u/s 153C, and hence assessment order passed u/s 153A after six years from such date, is time barred. YES is the answer.

Facts of the case:

The assessee company is part of a group of companies, known as M/s BPTP Ltd. Pursuant to search & seizure operations carried out at various premises of the group and its associated persons, the premises of the assessee were searched as well. Several books of account and documents belonging to the assessee were seized. Therefore, after recording the necessary satisfaction for initiation of proceedings u/s 153C, notice u/s 153C/153A was issued to the assessee, directing it to file return of income within 15 days of service of such notice, which was done by the assessee. A questionnaire sent by the revenue was also filled up and submitted. The revenue entertained a view that during the earlier assessment proceedings u/s 153A, it was very well proved that the assessee was used to pay part payments of the sale consideration in respect of the land purchased at the time of execution of the sale deed and the payments of balance sale consideration were invariably made through post dated cheques and for the intervening period i.e. period between the date of sale deed and the date of their encashment, interest was paid in cash to the vendors of the land by the vendee company on monthly basis @1.25% p.m. on the amount of PDCs and his cash payment of interest by the vendee company, was not accounted for by it, in its books of account. The addition on the ground has been made in the several group companies of the BPTP group during the course of earlier assessment proceedings u/s 148/153A in consequence to search. Hence the revenue proposed to make addition on post dated cheques. Thus the AO assessed the income of the assessee at Rs. 83,88,960/- by making various additions u/s 153A & 153C.

Tribunal held that,

++ in the instant case, satisfaction note as well as the notice u/s 153C has been issued on the same date. Further, on similar facts, the ITAT in the case of DSL Properties (P) Ltd. for A.Y. 2004-05, has given the ruling that date of recording of satisfaction u/s 153C may be taken as date of handling over of seized documents and other evidences and held that such date should be construed as date of initiation of search u/s 132 or date of requisition u/s 132A as per the first proviso to section 153C and accordingly ITAT has held that six A.Y. should be computed from the date of such handling over date for the purpose of section 153C;

++ therefore, in the instant case, date of receiving the seized documents and other evidences should be taken as Jan 29, 2013. By virtue of first proviso to section 153C, date of initiation of search for computing six A.Ys, has to be counted as if date of search is Jan 29, 2013. Six assessment years covered u/s 153C would be A.Y. 2007-08 to A. Y. 2012-13. Therefore, impugned assessment years 2006-07 cannot be covered within six A.Ys as envisaged u/s 153C. Accordingly, CIT(A) rightly held that the impugned assessment for A.Y 2006-07 is time barred and not covered u/s 153C.

(See 2017-TIOL-1413-ITAT-DEL)