Assessment not valid for year not covered within 6 year Block period u/s 153C: ITAT

In the case of K.S. Nutrition and Foods Pvt. Ltd. V/s. Income Tax Officer, the Income Tax Appellate Tribunal (ITAT) noted that a search and seizure operation u/s. 132 of the Income-tax Act, 1961 (The Act) was carried out PNC group of Agra including the official and residential premises of Sh. Ashok Kumar Jain and Smt. Meena Jain, Directors in M/s. Oracle Credit Ltd., Shiv Kamal Impex Ltd, and Move Traders and Credit P. Ltd. During the course of the search operation, ledger accounts of the assessee in the books of M/s. Move Traders and Credit Pvt. Ltd. and Shiv Kamal Impex Ltd. were found. Based on these seized documents, a satisfaction note pertaining to the assessee was recorded by the Assessing Officer of the searched persons and was received by the Assessing Officer of the assessee on 05.01.2015.

Accordingly, the Assessing Officer initiated proceedings u/s. 153C of the Act in the present case and observed that as per seized documents, the loan of Rs.10,00,000/- received from Anil Jain could not be verified from the books of the assessee and no reply to summons issued to Shri Anil Jain u/s. 131 was furnished. The assessing officer, accordingly, made an addition of Rs.10,00,000/- to the returned income of the assessee u/s. 68 of the Act.

Aggrieved with the above order passed by AO, the assessee filed an appeal before CIT(A) who also confirmed the order passed by A.O. Aggrieved by the order of CIT(A), the assessee preferred an appeal before the tribunal.

During the course of hearing before ITAT, ld. AR submitted that the Assessing Officer was not justified in assuming jurisdiction u/s. 153C of the Act in the present case, as the assessment year under consideration, does not come within the compass of the block of six assessment years, if it is reckoned from the date of satisfaction note as per law. On the other hand, ld. DR relied on the orders of authorities below and submitted that the impugned order does not call for any interference.

ITAT was of the view that as per para 2 of the assessment order dated 30.03.2015 passed u/s. 143(3)/153C of the Act, a satisfaction note was received by the Assessing Officer on 05.01.2015. Thus, the assessment years 2009-10 to 2014-15 come within the period of six-block years. The year under consideration is the assessment year 2007-08, which is clearly barred by limitation. Accordingly, the order of the Assessing Officer is liable to be quashed and the impugned order of ld. CIT(A) is not maintainable.