Jaideep Halwasiya Vs ACIT (ITAT Kolkata)
153C Proceedings Time-Barred: ITAT Kolkata Quashes Notice Issued After 01.04.2021 Based on Handing-Over Date of Seized Digital Material
The Kolkata Bench of the ITAT condoned a substantial delay of 326 days in filing the appeal by an NRI assessee and allowed the appeal on a pure question of law, holding that the proceedings initiated under Section 153C were invalid and void ab initio.
The Tribunal held that for an “other person” under Section 153C, the date of initiation of search is the date on which the seized material is handed over by the AO of the searched person to the AO of the other person. In the present case, although the original search was conducted on 06.02.2019, the seized digital material (WhatsApp chats) was admittedly received by the AO of the assessee only on 26.09.2022. Consequently, the initiation of search for the assessee fell after 01.04.2021, attracting the bar under Section 153C(3).
Relying on the Supreme Court decisions in PCIT v. Shalimar Town Planners (P.) Ltd. and CIT v. Jasjit Singh, and the Madras High Court ruling in Harigovind v. ACIT, the Tribunal held that the first proviso to Section 153C governs not merely abatement but also the reckoning of limitation and initiation of proceedings. Since Section 153C does not apply to searches initiated on or after 01.04.2021, the notice dated 13.12.2022 and the consequent assessment were held to be without jurisdiction and were quashed. Accordingly, the assessee’s appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
This is an appeal preferred by the assessee against the order of the Commissioner of Income-tax (Appeals) Kolkata-27, (hereinafter referred to as the “Ld. CIT (A)”] dated 31.08.2024 for the AY 2019-20.
