Section 153C Assessment is without Jurisdiction if documents seized not belongs to Assessee

A.C.I.T. Vs. Empire Casting Pvt. Ltd. (ITAT Delhi)

Ld. AR submitted that the assessee’s case was covered by the judgment of the Hon’ble Delhi High Court in the case of CIT-VII vs RRJ Securities Ltd. vide order dated 30.10.2015 in I.T.A. No. 164/2015 and 175/2015. It was submitted that the Hon’ble Delhi High Court has held that reference to the date of search under the second proviso u/s 153A of the Act has to be construed as the date of handing over the assets/documents belonging to the assessee (being the person other than the one searched) to the Assessing Officer having jurisdiction to assess the said assessee. It was submitted that the Hon’ble Delhi High Court has held that further proceedings by virtue of section 153C(1) of the Act would have been in accordance with section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction which would mean that six assessment years for which assessments/ reassessments could be made u/s 153C would have to be construed with reference to the date of handing over of the assets/documents to the Assessing Officer of the assessee. Ld. AR also submitted that as in the present appeal, in the case of RRJ Securities also, the Assessing Officer of the searched person as well as the other person were the same and, therefore, the assessee’s case is identical to the facts of the case in RRJ Securities. It was also submitted that the case of SSP Aviation Limited, relied upon by the department, has also been considered by Hon’ble Delhi High Court in the case of RRJ Securities wherein the Hon’ble Delhi High Court has held that the decision in SSP Aviation cannot be understood to mean that the Assessing Officer has jurisdiction to make a reassessment in every case where seized assets or documents are handed over to the Assessing Officer. The Ld. AR also referred to the satisfaction note and submitted that as per the satisfaction note, there is no clear finding that the documents seized belonged to the assessee and, as such, even on this count, the jurisdiction u/s 153C could not be assumed.

Full Text of the ITAT Order is as follows:-

The appeal at the instance of Revenue and Cross-objection at the instance of the assessee arise out of the order of the Ld. CIT(A)-III, New Delhi dated 7.6.2011 pertaining to assessment year 2003-04 on the following grounds :

Grounds in Revenue’s appeal:

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