Neesa Technologies Pvt. Ltd. Vs DCIT (ITAT Ahmedabad)
Since the proceedings u/s. 153C of the Act were initiated in the present case on the basis of documents which we have held above neither belonged to the assessee nor were incriminating in nature, they were not sufficient for assuming jurisdiction u/s. 153C of the Act. The jurisdiction so assumed in the present case is clearly invalid and the assessment framed accordingly is liable to be quashed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These four appeals have been filed by the same Assessee for different assessment years against the consolidated order passed by the Commissioner of Income Tax (Appeals)-12, Ahmedabad, (in short referred to as CIT(A)), dated 02-11-2016, u/s. 250(6) of the Income Tax Act, 1961(hereinafter referred to as the “Act”) pertaining to Assessment Years (A.Ys) 2007-08 to 2010-11 .
2. At the outset itself, it was pointed out that the issues in these appeals were common arising in the back drop of identical set of facts. All the appeals were therefore taken up together for hearing and are being disposed off vide this common consolidated order.
2.1. It was thereafter pointed out that all the appeals were time barred by two days and the delay was condoned by the Bench vide its order passed on 09.10.2018, copy of which was placed before us. On going through the same, we find that it was noted by the Bench that the delay being a very small one of two days only, there could have been human error in calculating the time limit and it could not be attributed that the assessee had adopted dilatory strategy in filing its appeal and accordingly the delay was condoned.
2.2. Having noted so, the hearing in the matter was proceeded with. Ld. Counsel for the assessee pointed out that besides the grounds raised in Form No.36, additional grounds had been raised in all the appeals vide letter dated 7Th September 2018, challenging the validity of the assessment framed u/s. 153C of the act as under:
1.0 The Assessment Order passed by the learned Assessing Officer is without jurisdiction and void-ab initio and is liable to be quashed, as proceedings initiated under section 153C are without satisfying conditions envisaged under the Act and are thus illegal, time barred and bad in law.
2.0 In the facts and circumstances of the case issue of Notice u/s 153C of the Income Tax Act, 1961 is bad in law as the learned Assessing Officer(s) of the searched persons had failed to record satisfaction before initiation of the proceedings u/s 153C of the Act.
3.0 The learned Assessing Officer had mentioned in the satisfaction that impugned seized documents belonged to the third parties and therefore passing of the assessment order pursuant to such satisfaction u/s 153C is bad in law and liable to be quashed.
4.0 The Assessment Order passed is bad in law in absence of seizure of any incriminating document belonging to the appellant. Neither any addition or disallowance was made on the basis of alleged seized documents nor any reference to seized material was made in connection with additions/disallowances.
5.0 The learned Commissioner of Income-tax (Appeals) erred in law and on facts in passing an ex-parte order. The impugned order was passed without appreciating the fact that proper representation could not be made before him because its Promoter Director Shri Sanjay Gupta had been facing a lot of adversities on account of investigations launched by multiple agencies since 2013 onwards and in absence of availability of supporting staff.
6.0 The appellant may be allowed to add, amend, alter or raise additional grounds of appeal.
3. Counsel for the assessee stated that grounds No.1-4 of the additional grounds had not been raised before the ld. CIT(A) and being legal grounds ,requiring no fresh consideration of any facts ,they ought to be admitted for adjudication .He relied upon the decision of the Hon’ble Apex Court in the case of NTPC Ltd. vs CIT reported in 229 ITR 383 in this regard.
4. We have gone through the additional grounds and have noted that in Ground No 1-4 the assessee has challenged the validity of the assessment framed u/s. 153C of the Act, which we agree is a legal ground and in view of the decision of the Hon’ble Apex Court in the case of NTPC Ltd. (supra), the same is admitted for adjudication.
5. We shall first be dealing with the said grounds No.1-4, identically raised in all the appeals, since they challenged the validity of assessment framed itself, in the present case u/s. 153C of the Act.
5.1 The argument of the ld. Counsel for the assessee before us was that the requirement of law for initiating proceedings u/s 153C of the Act , was that the Assessing Officer should be satisfied that incriminating material belonging to the assessee had been found during the course of search on a third person. He contended that the requirements of documents belonging to the assessee being found and the documents being incriminating also, both were not fulfilled in the present case.
6. In this regard, he drew our attention to the satisfaction of the A.O., copy of which was filed before us vide letter dated 13th April 2021 and the contents of which are reproduced as under:
REASONS FOR ISSUE OF NOTICE U/S 153C r.w.s. 153A OF THE INCOME TAX ACT, 1961
