Color Bar Cosmetics Pvt. Ltd. Vs DCIT (ITAT Delhi)
ACTUAL SEARCH WAS BEFORE SUNSET, BUT DEEMED SEARCH CAME TOO LATE—NOTICE u/s 153C & ₹1.70-CRORE PROTECTIVE ADDITION QUASHED
The Delhi ITAT has held that, for a person other than the searched person, the date on which seized material is handed over to his jurisdictional AO constitutes the deemed date of search. Where that date falls after 01.04.2021, the statutory bar contained in section 153C(3) applies & no notice can be issued u/s 153C, even though the actual search on the searched group occurred before the cut-off date. The notice & consequential assessment containing a protective addition of ₹1.70 crore were accordingly quashed.
Facts of the case
A search & seizure action u/s 132 was conducted on 03.02.2021 in the cases of Shri Samir Modi & Smt. Shivani Modi Group.
Certain material allegedly relating to Color Bar Cosmetics Pvt. Ltd. was found during that search. The Department therefore proposed to initiate proceedings against the assessee as a person other than the searched person.
The AO of the searched person recorded satisfaction u/s 153C on 03.11.2022. Thereafter, the jurisdictional AO of the assessee recorded his satisfaction on 04.11.2022.
Based upon these satisfaction notes, notice u/s 153C was issued to the assessee on 07.11.2022.
