VILDirect | Updates on Income Tax

Income Tax Act, 1961 – Sections 143(3), 153A and 254(2) – Application for rectification of mistake – Dismissal of application – Sustainability – Department conducted search at different premises of Venus Group and seized several documents pertained to Respondents/assessees – Assessing Officer initiated proceedings under Section 153C of the Act against Respondents after recording satisfaction – Based on these search proceedings, AO completed assessment under Section 143(3) read with Section 153A of the Act by making certain additions to income of Respondents – After order passed by CIT(A), issues travelled to Tribunal – Tribunal passed order in favour of Respondents – Aggrieved by findings of Tribunal, Petitioner/Revenue filed Misc. Applications under Section 254(2) of the Act before Tribunal for rectification of mistake in order of Tribunal – Tribunal dismissed said applications – Whether there is any apparent mistake in order of Tribunal as alleged by Revenue in its miscellaneous applications – HELD – Section 254(2) of the Act makes it amply clear that a 'mistake apparent from record' is rectifiable – To attract jurisdiction under Section 254(2) of the Act, mistake should exist and must be apparent from record – Power to rectify mistake does not cover cases where a revision or review of order is intended – Mistake which can be rectified under Section 254(2) of the Act is one which is patent, obvious and whose discovery is not dependent on argument – When a detailed order has been passed by Tribunal, no rectification can be made on ground that order passed by Tribunal was erroneous either on facts or in law, as in that case, only remedy was to prefer an appeal – Appreciating the provisions of Section 153A of the Act, Tribunal observed that assessment orders under Section 143(3) read with Section 153A of the Act have to be framed strictly on basis of incriminating material found during course of search carried out in case of assessee and material collected during course of search action carried out in cases of third parties cannot be considered – Tribunal after elaborate discussion on issue of reason to believe has taken a view that reason recorded by AO was nothing but borrowed satisfaction – In holding so, Tribunal analyzed facts available on record, given various reasoning and also referred several judicial precedents – Once Appellate Tribunal had considered issues on merits and undertaken a detailed discussion, no rectification could be made on grounds stated in respective Miscellaneous Applications – There is no apparent mistake in order of Tribunal as alleged by Revenue in its miscellaneous applications – Petitions dismissed

2023-VIL-151-GUJ-DT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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Date: 02.11.2023

PRINCIPAL COMMISSIONER OF INCOME TAX

HITESH ASHOK VASWANI

For the Petitioner: MR. VARUN K. PATEL, LD. SENIOR STANDING COUNSEL with MR.DEV D. PATEL, ADVOCATE (3802)

For the Respondent: MR. TUSHAR HEMANI, LD. SENIOR ADVOCATE with PARIMALSINH PARMAR (7296)

CORAM

HONOURABLE MR. JUSTICE BIREN VAISHNAV

HONOURABLE MRS. JUSTICE MAUNA M. BHATT

COMMON CAV JUDGMENT

(PER: HONOURABLE MR. JUSTICE BIREN VAISHNAV)

1. All these petitions, 94 in number, under Articles 226 and 227 of the Constitution of India, challenge the order dated 24.08.2022 passed by the Income Tax Appellate Tribunal in respective Misc. Applications filed by the Revenue under Section 254(2) of the Income Tax Act, 1961 (hereinafter to be referred to as ‘the Act’ for short).

2. These Misc. Applications were filed by the Revenue, aggrieved by the order dated 12.11.2020 passed by the Income Tax Tribunal in the Tax Appeals, 107 in number by the assessees which, the Tribunal named as ‘Venus Group’. Before the Tribunal, 71 Tax Appeals were filed by the assessees-respondents herein and 36 were filed by the Revenue.

3. Briefly stated the facts are as under:

3.1 A search under Section 132 of the Income Tax Act was conducted on 10.03.2015, 12.03.2015 and subsequently, in the case of Venus Group at various premises. During the course of search, different premises of the Venus Group were covered under Section 132 and 133A. During the course of search, at different premises, several documents were seized. One of the premises covered during the search was terrace of Crystal Arcade, C.G.Road, Ahmedabad. Various documents were seized on analysis of which it was found that several documents contained information which related to the assessee and also there were several documents that pertained to the assessee.

3.2 In view of the provisions of Section 153C(1)(b) of the Act, proceedings under Section 153C were initiated by recording satisfaction. After recording the satisfaction on 12.07.2016, a notice under Section 153C of the Act was issued on 14.07.2016 requiring the assessee to file the return of income.

3.3 Based on these search proceedings, assessment order was passed on 26.12.2017. The matter was carried in appeal before the Commissioner of Income Tax (Appeals). After the order of the CIT(A), the issues traveled to the Income Tax Appellate Tribunal in the appeals as referred to in the earlier part of this judgment.

3.4 The Tribunal in order to deal with the appeals and looking to the different issues involved and the record running into more than 20,000 pages, considered the issues in four compartments. Briefly stated, the four compartments were as under:

Category 1: - Whether the assessment proceedings undertaken under Section 153C were sustainable in the eyes of law?

Category 2: - Whether the assessment proceedings under Section 153A is to be framed strictly on the basis of the incriminating material found during the course of search in the concerned assessment?

Category 3:- Whether the assessments completed under Section 153A are within limitation or not?

Category 4:- Whether reopening of the assessments in P the year 2008-09 in the case of Ashok Sundardas Vaswani is justifiable?

3.5 As far as Category-1 issue is concerned, the Tribunal after considering the provisions held that jurisdiction under Section 153C of the Act prior to 01.06.2015 could be invoked only if the material seized during the course of search in case of third parties ‘belongs to’ some persons other than the searched person. Subsequent to 01.06.2015, the information embedded in the document is sufficient for taking action under Section 153C. On appreciation of the satisfaction recorded by the Assessing Officer of the searched person as well as the AO of the present assessees, the Tribunal found that the satisfaction indicated that the AO nowhere observed that the documents belonged to the assessee. Therefore, the Tribunal held that since the search was prior to 01.06.2015, the appeals of the assessees were allowed.

3.6 In Category-2 issue pertaining to Section 153A of the Act, the Tribunal relying on the decision of the Delhi High Court in the case of CIT v. Kabul Chawla reported in 380 ITR 573 (Del), opined that simultaneous search was carried out at the premises of Venus Infrastructure and Ashok Sundardas Vaswani and if any incriminating material belonging to the assessee is found at the premises of some other person, then the assessment has to be made under the provisions of Section 153A of the Act.

3.7 On due consideration, the Tribunal found that the additions made in the case of Rajesh Sundardas Vaswani were not sustainable because they were not based on seized material found during the course of search carried out at his premises.

3.8 With regard to Category-3 on the question whether the assessment completed under Section 153A are barred by limitation, the Tribunal held that in accordance with Section 153B of the Act, the orders were framed beyond the time limit prescribed inasmuch as, though the search was carried out on 10.03.2015 and 12.03.2015, the time limit for passing the assessment orders would expire on 31.03.2017, whereas the assessment orders were framed in the month of December, 2017, beyond a period of two years and therefore, were barred by limitation.

3.9 As far as Category-4 is concerned, which concern the case of reassessment, the Tribunal on examining the validity of the assessment framed under Section 147/143(3) of the Act held that the ‘reasons to believe’ recorded were not reasons but only conclusions and a reproduction of the information received from the Director (Investigation). Hence, it is nothing but ‘borrowed satisfaction’.

3.10 Aggrieved by these findings under the relevant categories, when the Revenue filed Misc. Applications under Section 254(2) of the Act, the Misc. Applications were dismissed on the ground that the power of rectification under Section 254(2) of the Act can be exercised only when mistake which is sought to be rectified is obvious and patent, which was not the case in the present and therefore, the Misc. Applications were dismissed.

4. Mr. Varun Patel, learned Senior Standing Counsel, with Mr.Dev D. Patel, learned advocate for the revenue made the following submissions in respect of each category of questions decided by the Tribunal in the respective appeals and consequentially in the miscellaneous applications:

With regard to Category 1:-

4.1 He would submit that the findings of the Tribunal in the appellate order were misconceived. He would submit that in accordance with Sec.153(C) of the Act, the Tribunal could not have relied upon the decision in the case of Anil Kumar Gopi Krishna Agrawal vs. ACIT, reported in [2019] 106 taxmann.com 137 (Gujarat). He submitted that Sec.153(C) was amended with effect from 1.6.2015 and with regard to material found such as books of account or documents seized, the expression “belongs to” has been eliminated and in its place expression “pertains to” or any information wherein relates to, has been used. The finding of the Tribunal that in the satisfaction note, the Assessing Officer had nowhere recorded a finding that the documents belonged to the assessee and that it had recorded that the documents contained information which related to the assessee could not have been made applicable as the amended provision had only come into effect from 01.06.2015 and since the search was prior thereto, proceedings under Sec.153(C) were bad. The Assessing Officer and in turn the Tribunal committed an error in quashing the 153(C) proceedings.

4.2 Mr. Varun Patel, learned Senior Standing Counsel, would submit that the Tribunal committed an error in holding that there was an essential jurisdictional error in assumption of jurisdiction. He would rely on a decision of the Hon’ble Supreme Court in the case of Income Tax Officer vs. Vikram Sujit Kumar Bhatia reported in [2023] 453 ITR 417. He would submit that in accordance with this decision, the change of law would not affect the proceedings though the search was conducted prior to 01.06.2015. The Apex Court had held that even though the search under Sec.132 was initiated prior to the amendment, and if the books of accounts were received by the Assessing Officer subsequent to the amendment, the provisions of law existing on that date i.e. the amended date would apply.

4.3 Mr. Patel, learned Senior Standing Counsel, would rely on the decisions of this Court as well as that of the Hon’ble Supreme Court in the case of Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Ltd., reported in [2003] 130 taxmann.com 316 and [2008] 173 taxmann 322 respectively to submit that failure to consider a decision subsequent to the order of rectification could be said to be “mistake apparent from records” and could be corrected by the Tribunal. He would submit that in light of the decision in the case of Vikram Sujitkumar Bhatia (supra), such a judicial decision would act retrospectively and the Tribunal in the miscellaneous applications in context of this category ought to have rectified the error.

4.4 Mr. Patel, learned Senior Standing Counsel would invite the Court’s attention to the memo of the miscellaneous application pertaining to this category and submit that it was pointed out to the Tribunal that the satisfaction note recorded under Sec.153(C) revealed that the “documents seized belonged to the assessee”, and therefore, when the satisfaction clearly recorded this fact, the Appellate Tribunal committed an error in holding that proceedings under Sec.153(C) were bad. He would invite the Court’s attention to the order of the Tribunal in the miscellaneous application and submit that the Tribunal fell in error in dismissing the rectification applications on the ground that there was no obvious mistake which was apparent.

With regard to Category 2:

4.5 Mr. Patel would submit that the Tribunal committed an error in holding that the assessments were not framed strictly under Sec.153(A) of the Act by relying on the decision in the case of Kabul Chawla (supra). That the addition can only be made if the incriminating material is found from the premises of the assessee, is nowhere provided in the decision.

4.6 Mr. Patel, learned Senior Standing Counsel, would submit that the finding of the Tribunal in the appellate order that the additions made by the Assessing Officer in the case of the assessees were not sustainable because they were not based on the seized material during the course of search carried out at their premises, is bad. He would invite the Court’s attention to paras 10 to 18 of the order passed in the miscellaneous applications, particularly para 13 of the order, whereby, the Tribunal while rejecting the application for rectification held that the Appellate Tribunal had analyzed the facts available on record and if the revenue was aggrieved by the order, the only remedy was to challenge the same at a higher forum. He would rely on the memo of the Miscellaneous Application annexed to the papers of Special Civil Application No. 12062 of 2023. He would submit that a specific ground was raised in the miscellaneous application and the Tribunal therefore clearly fell in error in dismissing the miscellaneous applications in context of Category 2.

With regard to Category 3:-

4.7 Mr. Patel, learned Senior Standing Counsel, would submit that in context of the assessments under Sec.153(A), the Tribunal in the orders passed in the Misc. Applications failed to appreciate that a clear mistake was pointed out. The Appellate Tribunal had decided the appeals in favour of the assessee holding that the assessment is barred by law of limitation as no justification / satisfaction was recorded by the Investigating Officer (I.O.) in prohibitory order or revocation order as to why it was not practicable to seize the documents during the search proceedings on 13.05.2015. He would submit that the Income Tax Appellate Tribunal failed to appreciate that the proceedings could not be held to be barred by limitation. Inviting the Court’s attention to the memo of the Miscellaneous Application annexed in the lead matter, i.e. Special Civil Application No. 16366 of 2023, he would submit that it was specifically pointed out in the miscellaneous application that there was error apparent on the face of the record. He would submit that the finding of the Tribunal in the appellate proceedings that the assessment orders were passed beyond the period of two years was bad.

With regard to Category 4:-

4.8 Mr. Patel, learned Senior Standing Counsel in respect to this category, would submit that the Tribunal in the appellate proceedings committed an error in recording that the satisfaction for reopening of assessment under Sec.147 of the Act was recorded based on borrowed satisfaction. The mistake apparent on the face of the record was pointed out and the Tribunal in the orders under Miscellaneous Applications, without considering this, rejected the Miscellaneous Applications only on the ground that there is no apparent mistake in the order.

5. Mr. Tushar Hemani, learned Senior Counsel with Mr. Parimalsinh Parmar, learned counsel for the assessees / respondents would make the following submissions:

5.1 He would broadly categorize the submissions wherein “Tax Appeals” are pending and submit that it is well settled that when a Tax Appeal is admitted and is pending before the High Court, the Tribunal cannot assume jurisdiction under Sec.254(2) of the Act and it shall be open for the appellant to voice all the grievances before the High Court while arguing the tax appeals. Reliance was placed on the decisions, namely, R.C. Sabharwal vs. CIT, reported in [2010] 2 taxmann.com 289 (Delhi) and CIT vs. Muni Seva Ashram., reported in [2013] 221 taxmann 27 (Gujarat). He would therefore submit that 68 petitions in which tax appeals are filed must be dismissed on this limited count alone.

5.2 With regard to other remaining 26 petitions, he would respond by making submissions, as made by the learned Senior Standing Counsel for the revenue, category wise.

With regard to Category 1:-

5.3 In respect of the controversy revolving around Sec.153(C), Mr. Hemani, learned Senior Counsel, would submit that the issue has been elaborately dealt with by the Income Tax Appellate Tribunal. He would submit that the search was commenced on 10.03.2015 and concluded on 13.3.2015 i.e. prior to 01.06.2015 being the date with effect from which Sec.153 (C) was amended and its scope was enlarged.

5.4 Mr. Hemani, learned Senior Counsel, would invite the Court’s attention to the Satisfaction Note annexed to the petition and submit that the Assessing Officer assumed jurisdiction based on this Satisfaction Note. The Satisfaction Note recorded that during the course of search, various documents were found which relates to / pertains to the assessee for the various assessment years. The Income Tax Appellate Tribunal decided the issue after considering the scheme of the Act viz-a-viz Sec.153(C). The argument of the assessee before the Tribunal was that since the search was prior to 01.06.2015, it can only be initiated if the documents “belonged to” the assessee. It was the specific contention of the assessee that the Satisfaction Note nowhere recorded a finding that the documents belonged to the assessee and what was recorded was that the documents related to the assessee. The concept of “relating to” would only be applicable with effect from 01.06.2015.

5.5 Mr. Hemani, learned Senior Counsel,would submit that relying on the decision of Anil Kumar Gopi Krishna Agrawal (supra), which held the field at the relevant time the appellate tribunal held in favour of the assessee. Relevant facts were therefore considered by the Income Tax Appellate Tribunal in light of the law and therefore no error or a mistake could be attributed and the Miscellaneous Applications were rightly dismissed. The contention of the revenue that the Tribunal did not consider the decision in the case of Kamleshbhai Dharamshibhai Patel vs. CIT., reported in [2013] 31 taxmann.com 50 (Gujarat), is misconceived. The Income Tax Appellate Tribunal in para 17 considered the jurisdictional court’s decision of Kamleshbhai Dharamshibhai Patel (supra).

5.6 The decision in the case of Kabul Chawla (supra), was also considered. As regards the contention of revenue with regard to the decision of the Hon’ble Supreme Court in the case of Vikram Bhatia (supra), Mr. Hemani, learned Senior Counsel, would submit that the date of the order of the Tribunal was 12.11.2020. The order in the Miscellaneous Applications was dated 24.08.2022, whereas the decision of the Apex Court in the case of Vikram Bhatia (supra) was 06.04.2023. The decision of the Hon’ble Supreme Court was therefore not available when the ITAT decided the main appeals and the Miscellaneous Applications.

5.7 He would submit that if the decision of the Supreme Court in the case of Saurashtra Katchchh Stock Exchange Ltd., (supra) is seen, it observed that the rectification of a mistake can be done at any time within four years from the date of the order. Section 254(2) has been amended by Finance Act, 2016, whereby the time of ‘four years’ has been reduced to ‘six months’ with effect from 01.06.2016. Thus, if the jurisdictional High Court or the Supreme Court had passed an order contrary to the view taken by Tribunal within six months from the date of the order passed by the Tribunal, then non consideration of such decision would fall within the ambit of “mistake apparent from face of the record”. Reiterating the dates, he would submit that the order in the Misc. Applications was passed on 24.08.2022. The six months from the MA order would expire on 23.02.2023, whereas, the judgement of the Supreme Court in case of Vikram Sujit Kumar Bhatia (supra), was delivered on 06.04.2023, later than the period of six months. The decision therefore would have no bearing on the Misc. Applications under Section 264(2) of the Act.

Regarding Category 2:

5.8 In this regard, in respect of controversy revolved around Section 153A, Mr. Hemani would submit as under:

I. That it was the case of the Revenue that the Tribunal has erred in not considering that authorizations were issued under Section 132 where assessments have been framed under Section 153A of the Act. The Revenue in the Misc. Application contended that the Tribunal erred in accepting the contention that the assessment under Section 153A has to be made on the basis of the material found during the search carried out in the case of the assessee concerned.

II. Relying on the findings of the Tribunal, Mr. Hemani would submit that though search was carried out in the group case simultaneously, there were separate authorization for search under Section 132 of the Act for all the respective ‘assessees and premises’.

III. Mr. Hemani would submit that it was very clear on reading Section 153A of the Act that assessments were needed to be restricted to the material found and seized from the premises of the assessee concerned. Material found and seized from the premises of some other assessee could not form part of the procedure prescribed under Section 153A of the Act without invoking Section 153C.

IV. Mr. Hemani would submit that misinterpretation and extrapolation of the decisions/judgments cannot be a ground of correction of errors when it was a judicial view which was subject to appeal. If the order of the Tribunal in appeal was erroneous on facts and in law, the only remedy available was to prefer a Tax Appeal. He would rely on a decision in the case of Commissioner of Income Tax v. Reliance Telecom Limited (2021) 440 ITR 1 (SC), Vrundavan Ginning and Oil Mill v. Assistant Registrar/President; (2021) 434 ITR 583 and in the case of CIT v. Maruti Insurance Distribution Services Limited (2012) 26 Taxmann.com 68 (Del).

Regarding Category 3:

5.9 In this category the controversy revolved around Section 153B. In the application for rectification, it was the case of the Revenue that the order under Section 132(3) is an administrative order and the Tribunal had committed an error in observing that the department had the intention to prolong the search. Mr. Hemani would submit that the authorized officer where it is not practicable to seize any such books of accounts, could pass a prohibitory order. The Tribunal had considered that only 277 pages were seized. While revoking the prohibitory order, the Revenue authorities could not bring anything on record to demonstrate as to how it had become practicable to seize the documents and revoke the prohibitory order. Mr. Hemani would submit that the Tribunal had decided all the issues after considering all the provisions and the judgments and therefore there was no error in the same.

5.10 With regard to the argument and the observation of the Tribunal with regard to locker no.58, he would submit that the Tribunal had held that placing of the prohibitory order itself was not justified. The search concluded in March 2015. The limitation for framing the assessment expired on 31.03.2017. Assessment orders were passed in December 2017 which were time barred under Section 153B of the Act.

Regarding Category 4:

5.11 Mr. Hemani would submit that the Tribunal has on the basis of the material on record come to the conclusion that reassessment proceedings under Section 147 was based on borrowed satisfaction and therefore, there was no reason for the Tribunal while exercising powers under Section 254(2) of the Act to rectify the mistakes when there were none.

ANALYSIS

6. As is evident from the proceedings before the Income Tax Appellate Tribunal and in the MA proceedings before it and the arguments canvassed by the respective counsels, the decision that follows would also be based category-wise.

A. CATEGORY-1:WHETHER THE ASSESSMENT PROCEEDINGS UNDERTAKEN UNDER SECTION 153C ARE SUSTAINABLE IN THE EYE OF LAW ?

6.1 The case of the assessees – respondents herein before the Appellate Tribunal was that the search proceedings in the case were initiated on 10.3.2015 and concluded on 13.3.2015. The satisfaction note recorded that the seized material referred to/related to/pertained to the concerned assessee. The case of the assessees before the Tribunal therefore was that prior to the amendment , Section 153C action thereunder can only be initiated if the documents “belongs to” the person other than the searched person referred to in Section 153A.

Whereas the satisfaction note nowhere recorded that the seized material belonged to the person other than the searched person and therefore, while arriving at the satisfaction, the AO had considered the provision post 1.6.2015 which could not have been so done as the search was prior thereto. The case of the assessee was therefore that this was contrary to the decision of the jurisdictional High Court in the case of Anil Kumar Gopi Krishna Agrawal (supra).

6.2 The case of the Revenue before the Appellate Tribunal was that the assessment proceedings of the searched person was pending when the amendment to Section 153C came into force and since the assessment proceedings were not concluded post 1.6.2015 and therefore the scope of the Section was widened and therefore the satisfaction note rightly recorded that the documents related to/pertained to the person other than the searched person. The law being procedural the assessee had no vested right.

6.3 After considering the submissions of the respective representatives of the Assessee and the Revenue, the Income Tax Appellate Tribunal held as under:

“14. We have duly considered rival contentions and gone through the record carefully. Before we embark upon an inquiry, whether the material found at the premises of the searched person, would indicate that these documents falls in the category of documents, which could be termed as document belong to or belongs to the assessee or entry embedded in them falls within the ambit of expression "pertains to" or "relates to". We have to determine under which clause one has to construe the documents found during the course of search. Therefore, it is imperative upon us to take note of section 153C, which reads as under:

2.2.2 UPTO 01.06.2015:

Assessment of income of any other person. –

153C. -[(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person -- [and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in subsection (1) of section 153A]:]

2.2.3 WITH EFFECT FROM 01.06.2015:

Assessment of income of any other person. –

-- 153C. -[(1)] --[Notwithstanding anything contained in section 139. section 147, section 148,

section 149, section 151 and section 153, where the Assessing Officer is satisfied that,-

(a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, ~ belongs to; or

(b) any books of account or documents, seized or requisitioned, or any information contained therein, a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person ] --[and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance -with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A] :]

15. A perusal of the above provisions would reveal that in the case of search action, carried out under section 132 of the Income Tax Act, prior to 1.6.2015, if any money, bullion, jewellery or other valuable article or thing, or books of accounts or documents, seized or requisitioned "belongs" or "belong" to a person other than the person referred to section 153A, then the AO of the searched person while passing assessment order under section 153A or prior to that, record his satisfaction about those documents, and if those documents disclosed undisclosed income of the person other than the searched person. He will transmit those documents along with his satisfaction note to the AO having jurisdiction over that other person. Jurisdiction under section 153C of the Act prior to 1.6.2015 could be invoked only if the material seized during the course of search in the case of third-person "belongs to" to some persons other than the searched person. However, after 1.6.2015, the Legislature has categorized two situations. As far as recovery of any money, bullion jewellery or other valuable article or thing seized or requisitioned belongs to person other than the searched person, then section 153C would be justified. However, with regard to the recovery of any books of accounts or documents, seized or requisitioned, then if they pertain to other person, or any information contained therein relates to person other than the searched person, then the action under section 153C could be there. The scope of section 153C after 1.6.2015 has been widened; viz. if a person at whose premises search was carried out maintaining certain details in his regular day-to-day business, and that contain certain information exhibiting the undisclosed income of the person other than the searched person, then the action under section 153C could be justified. But prior to 1.6.2015, the documents ought to be belonged to person other than the searched person. There is a clear distinction between both the conditions. Subsequent to 1.6.2015, the information embedded in the document is sufficient for taking action under section 153C, but prior to 1.6.2015 action under section 153C could be taken if documents belong to the person other than the searched person was found during the course of search.

16. Hon'ble Gujarat High Court in its decision rendered in the case of Anil Kumar Gopikrishna Agrawal Vs. ACIT (supra) considered an issue, whether post-amended section could be applicable on the pending assessments, meaning thereby, if search was conducted prior to 1.6.2015, but assessments were not concluded, whether postamended section is to be applied in such cases or not; because that would change the very nature of the disputes.

17. Hon'ble Gujarat High Court has formulated the following question "whether section 153C of the Act as amended w.e.f. 1.6.2015 would be applicable to cases where search initiated prior to that date?"

After an elaborate discussion, Hon'ble court arrived at the conclusion that this section would be applicable prospectively only on the search conducted after 1.6.2015. We would like to take note of the relevant discussion made in the judgment, which reads as under:

"19.8 While it is true that section 153C of the Act is also a machinery provision for assessment of income of a person other than the person searched, in the opinion of this court, this is not a case where by virtue of the amendment, there is merely a change in the procedural provisions affecting the assessees who were covered by the unamended provision. By the amendment, a new class of assessees are sought to be brought within the sweep of section 153C of the Act, which affects the substantive rights of the assessees and cannot be said to be a mere change in the procedure. Since the amendment expands the scope of section 153C of the Act by bringing in an assessee if books of account or documents pertaining to him or containing information relating to him have been seized during the course of search, within the fold of that section, this question assumes significance, inasmuch as in the facts of the present case, as on the date of search, it was only if such material belonged to a person other than the searched person, that the Assessing Officer of the searched person could record such satisfaction and forward the material to the Assessing Officer of such other person. However, subsequent to the date of search, the amendment has been brought into force and based on the amendment, the petitioners who were not included within the ambit of section 153C of the Act as on the date of the search, are now sought to be brought within its fold on the ground that the satisfaction note and notice under section 153C of the Act have been issued after the amendment came into force. Therefore, this case does not relate to the interpretation of the provisions of any of the sections, but relates to the stage at which the amended section 153C of the Act can be made applicable, as to whether it relates to the date of search; or the date of recording of satisfaction by the Assessing Officer of the searched person; or the date of recording of satisfaction by the Assessing Officer of the other person; or the date of issuance of notice under section 153C of the Act.

19.9 In the facts of the present case, the search was conducted in all the cases on a date prior to 1st June, 2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to the effect that the seized material belongs or belong to the other person. In the present case, the hard-disc containing in the information relating to the petitioners admittedly did not belong to them, therefore, as on the date of the search, the essential jurisdictional requirement to justify assumption of jurisdiction under section 153C of the Act in case of the petitioners, did not exist. It was only on 1st June, 2015 when the amended provisions came into force that the Assessing Officer of the searched person could have formed the requisite belief that the books of account or documents seized or requisitioned pertain to or the information contained therein relates to the petitioners.

19.10 In this backdrop, to test the stage of applicability of the amended provisions, a hypothetical example may be taken. The search is carried out in the case of HN Safal group on 4.9.2013. If the Assessing Officer of the searched person had recorded satisfaction that some of the seized/requisitioned material belongs to a person other than the searched person and forwarded the material to the Assessing Officer of the other person, had issued notice under section 153C of the Act prior to the coming into force of the amended provision. The notice under section 153C of the Act was challenged before the appropriate forum on the ground that the seized material does not belong to such other person and such issue was decided in favour of such person on a finding that the seized material does not belong to the other person. Thereafter, in view of the amendment in section 153C (1) of the Act, since the books of account or documents did not belong to the other person but did pertain to him or the information contained therein related to him, can the Assessing Officer of the searched person once again record satisfaction as contemplated under the amended provision and forward the material to the Assessing Officer of such other person. The answer would be an emphatic "no" as the Assessing Officer of the searched person after recording the earlier satisfaction would have already forwarded the material to the Assessing Officer having jurisdiction over the other person, therefore, there would be no question of his again forming a satisfaction as required under the amended provisions of section 153C of the Act.

19.11 In the opinion of this court, if a date other than the date of search is taken to be the relevant date for the purpose of recording satisfaction one way or the other, it would result in an anomalous situation wherein in some cases, because the notices under section 153C of the Act were issued prior to the amendment, they would be set aside on the ground that the books of account or documents seized or requisition did not belong to the other person though the same pertained to or the information contained therein related to such person, whereas in other cases arising out of the same search proceedings, merely because the notices are issued after the amendment, the same would be considered to be valid as the books of account or documents seized or requisitioned pertain to or the information contained therein relate to the other person. It could not have been the intention of the legislature to deal with two sets of identically situated persons differently, merely because in one case the Assessing Officer of the searched person records satisfaction as required under section 153C of the Act prior to the coming into force of the amended provisions and in any another case after the coming into force of the amended provisions.

19.12 In Pr. CIT v. Vinita Chaurasia, [2017] 394 ITR 758/248 Taxman 172/82 taxmann.com 153 (Delhi), the Delhi High Court has held that, at the outset, it requires to be noticed that the search in the present case took place on 19th June, 2009, i.e., prior to the amendment in section 153C(1) of the Act with effect from 1st June, 2015. Therefore, it is not open to the Revenue to seek to point out that the document in question 'pertains to' or 'relates to' the assessee. Against this decision the revenue filed a special leave petition before the Supreme Court being Pr. CIT v. Vinita Chaurasia [2018] 98 taxmann.com 414/259 Taxman 88 (SC) condoned the delay and dismissed the special leave petition. 19.13 In Pr. CIT v. Index Securities (P.) Ltd. , [2017] 86 taxmann.com 84 (Delhi), on which reliance had been placed on behalf of the petitioners, the Delhi High Court has held thus:

"28.4 The Supreme Court also agreed with the decision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of account or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act." The Supreme Court observed: "This proposition of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well."

28.5 The above categorical pronouncement of the Supreme Court cannot, by any stretch of imagination, be termed as obiter as has been suggested by Mr. Manchanda. Even the obiter dicta of the Supreme Court is binding on this Court.

29. The search in the case before the Supreme Court was prior to 1st June 2015. Apart from the fact the Supreme Court approved the above decision of the Gujarat High Court holding that the seized documents should 'belong' to the other person, the legal position in this regard where the search has taken place prior to 1st June 2015 has been settled by the decision of this Court in PepsiCo India Holdings (P.) Ltd. v. ACIT (supra). In Commissioner of Income Tax v. Vinita Chaurasia (supra), this Court reiterated the above legal position after discussing the decisions in Principal Commissioner of Income Tax v. Super Malls (P) Limited (supra) and Commissioner of Income Tax(Central)-2 v. Nau Nidh Overseas Pvt. Ltd. (supra). The essential jurisdictional requirement for assumption of jurisdiction under Section 153 C of the Act (as it stood prior to its amendment with effect from 1st June 2015) qua the 'other person' (in this case the assessees) is that the seized documents forming the basis of the satisfaction note must not merely 'pertain' to the other person but must belong to the 'other person'.

30. In the present case, the documents seized were the trial balance and balance sheets of the two Assessees for the period 1st April to 13th September 2010 (for ISRPL) and 1st April to 4th September 2010 (for VSIPL). Both sets of documents were seized not from the respective Assessees but from the searched person i.e. Jagat Agro Commodities (P) Ltd. In other words, although the said documents might 'pertain' to the Assessees, they did not belong to them. Therefore, one essential jurisdictional requirement to justify the assumption of jurisdiction under Section 153 C of the Act was not met in the case of the two Assessees."

19.14 Thus, it is the date of search that has been considered to be the relevant date for the purpose of applying the amended provisions of section 153C(1) of the Act. 19.15 This court is of the considered view that the trigger for initiating action whether under section 153A or 153C of the Act is the search under section 132 or requisition under section 132A of the Act and the statutory provisions as existing on the date of the search would be applicable. The mere fact that there is no limitation for the Assessing Officer of the searched person to record satisfaction will not change the trigger point, namely, the date of the search. The satisfaction of the Assessing Officer of the searched person would be based on the material seized during the course of the search or requisition and not the assessment made in the case of the searched person, though he may notice such fact during the course of assessment proceedings. Therefore, whether the satisfaction is recorded immediately after the search, after initiation of proceedings under section 153A of the Act or after assessment is framed under section 153A of the Act in the case of the searched person, the trigger point remains the same, viz., the search and, therefore, the statutory provision as prevailing on that day would be applicable. While it is true that sections 153A and 153C of the Act are machinery provisions, but the same cannot be made applicable retrospectively, when the amendment has expressly been given prospective effect. Besides, though such provisions are machinery provisions, the amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person. In the opinion of this court, the decision of the Supreme Court in M.A. Merchant (supra) would be squarely applicable to the facts of the present case wherein it was held thus:…"

18. This judgment has been followed by the Hon'ble Gujarat High Court in the cases of I) Mahendra Bhai Kasturchand Son Vs. ITO, SCA No.11817 of 2019 (Guj); ii) Charmy Sanket Naik Vs. ACIT, SCA No.13374 of 2019 (Guj); iii) Nita Chaitanya Shah, SCA No.14059 of 2019 (Guj).

19. In the light of the above position of law, let us take note of the satisfaction recorded by the AO of the searched person as well as AO of the present assessees. Though, the AO is common, but while exercising his dual capacity, he has recorded first his satisfaction in the capacity of searched person's AO, and thereafter he recorded his satisfaction in the capacity of the AO of the present assessees.

For the facility of reference, we take note the satisfaction from the lead case of Shri Dilipkumar Lalwani placed at page no.456 to 483. Relevant part of the satisfaction while issuing notice under section 153C is available at page no.457 and we deem it appropriate to take note of this part, which reads as under:

7. Satisfaction of the Assessing Officer As per Annexure - B of the person referred to in section In view of above facts as mentioned in the 153A that the seized material Annexure - B. I am satisfied that the documents referred to in S.No.5 relates/pertains seized from the premises (i) 801-802, to the person referred to in S.No.4 Broadway Business Centre, Opp. Mayor's Bungalows, Law Garden. Ellis bridge, Ahmedabad and (ii) Terrace of Crystal Arcade, Nr. Navrangpura Telephone Exchange, C.G Road, Ahmedabad - contains information, which relates to the assessee, Shri Dilip Kumar Lalwani. Further, I am also satisfied that documents seized have a bearing on the determination of the total income of the assessee, | Shree Dilip Kumar Lalwani for assessment years 2009-10 to 2014-15 The assessee being other than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee Shri Dilip Kumar Lalwani as per the provisions of Section 153C of the Income Tax Act, 1961. Therefore, it is fit case for initiation of proceeding u/s 153C of the I.T.Act .

8. Assessment years involved A.Y. 2009-10 to A.Y.2014-15.

20. Thereafter, we find that the AO has annexed annexure-A which contained the details of documents considered by him. Annexure-B is the satisfaction in the capacity of the AO of the searched person. It is a very exhaustive note, and with the assistance of the ld. representativs, we have gone through all these pages. We would like to take note of relevant part of the satisfaction viz. para- 7.3, which reads as under:

7.3 On the basis of discussion in the preceding paragraphs, it is noticed that XXX account mentioned in various documents seized during the course of search in the Venus Group refers to Shri Dilip Kumar Lalwani and the information contained therein relates to Shri Dilip Kumar Lalwani. There are various transaction recorded in the cash book and related cash vouchers."

In view of above facts (as mentioned above), I am satisfied that the above-mentioned documents seized from the from the premises (i) 801-802, Broadway Business Centre, Opp. Mayor's Bungalows, Law Garden. Ellis bridge. Ahmedabad and (ii) Terrace of Crystal Arcade, Nr. Navrangpura Telephone Exchange, C. G. Road, Ahmedabad contains information which relates to the assessee, Shri Dilip Kuriar Lalwani. Further, I am also satisfied that satisfied that documents seized have a bearing on the determination of the total income of the assessee, Shree Dilip Kumar Lalwani for assessment years 2009-10 to 2014-15. The assessee being other than the person referred to in section 153A of the Act. I have satisfaction to proceed against the assessee Shri Dilip Kumar Lalwani as per the provisions of Section 153C of the Income Tax Act, 1961. Therefore, it is fit case for initiation of proceeding u/s 153Cof the l.T. Act.

21. A perusal of both the satisfaction would indicate that the AO nowhere observed that these documents belonged to the assessee i.e. Shri Dilipkumar Lalwani. He only observed that these documents contained information which relate to the assessee. Thus, it could be construed that documents seized during the course of search; again, carried out in the cases of concerned third person, were observed as "relates to" the assessee. They do not belong to the assessee. When the assessee took this objection before the ld. first appellate authority, the ld.CIT(A) was of the view that since law has been changed, and scope of section 153C w.e.f. 1.6.2015 would be applicable on these cases, because the assessments have not been concluded when the scope of section 153C was widened. The finding of the ld.CIT(A) is worth to note in this connection i.e. in the case of Shri

Dilipkumar Lalwani, which reads as under:

"4.3. I have carefully considered the facts of the case, assessment order and submission made by the appellant. The Assessing Officer [DCIT, Central Circle-1 (1), Ahmedabad] of M/s. Venus Infrastructure and Developer Pvt. Ltd., in whose case the search was conducted and documents relating to the appellant company was found and seized has recorded his satisfaction note for initiation of assessment proceedings in the case of appellant and forwarded to the ACIT, Circle-50(l), New Delhi, being the Assessing Officer of the appellant. The AO of appellant has recorded his satisfaction and issued notice u/s. 153C of the I. T. Act, 1961. The case of appellant was subsequently transferred to the ACIT, Central Circle -1(1), Ahmedabad. The appellant had raised objection before the new Assessing Officer against the earlier notice issued by DCIT, Circle -50(1), New Delhi, u/s. 153C of the I. T. Act,1961. The AO who was also AO of M/s. Venus Infrastructure and Developer Pvt. Ltd. has withdrawn the earlier notice and issued fresh notice duly recording the satisfaction. The appellant has contended that the notice issued u/s. 153C of the Act was not valid as the seized material on the basis of which notice u/s. 153C was issued did not belong to the appellant. The appellant has also contended that there is no provision in the Income Tax Act either to drop the proceedings u/s. 153C or to issue second set of notices. The appellant has also relied upon the case laws in the case of Pepsico India Holding Pvt. Ltd. Vs. ACIT, RRJ Securities Ltd. [62 Taxmann.com 391] (2015) & Sinhgad Technical Education Society [84 Taxmann.com 290]. The AO has dealt with the argument raised by the appellant in Para 4.9, 4.10 & Para 5 of assessment order. The provision of Section 153C has been amended with effect from 01/06/2015 where if the Assessing Officer is satisfied that any books of account or documents seized pertains to, or any information contained therein relates to any person, other than the person referred to in Section 153A of the Income Tax Act, then books of account or document shall be handed over to the Assessing Officer having jurisdiction over such other person and the AO shall proceed against each such other person and issue notice and assess or reassess income of such other person in accordance with the provisions of section 153A. Earlier scope of section 153C was in the cases where the documents seized belong to the assessee, but subsequently the provision of Act has been amended by adding the word 'relating to' in the section 153C. The AO in the present case has issued notice after first day of June, 2015, therefore, the amended provision is applicable in appellant's case. The AO in the satisfaction note has referred the material relating to the appellant found during the course of search in M/s. Venus Infrastructure and Developer Pvt. Ltd. The appellant has relied on the case laws which are on the 'belonging to' prior to the amended provisions of 153C w.e.f. 01/06/2015, therefore, not relevant to the facts of the case. Appellant's contention that there is no provision for issue of second notice u/s. 153C on the same set of facts is not tenable as the Assessing Officer has withdrawn the earlier notice and issued fresh notice after recording the satisfaction. The Honourable Gujarat High Court in the case of A.G. Group Corporation Vs. Harsh Prakash [2013] [35 Taxmann. com 48] has held that, if in the earlier notice a fatal error has been crept in AO will be free to issue another notice provided jurisdiction and limitation aspects are satisfied."

22. This finding is not in the line of law laid down by the Hon'ble Gujarat High Court in the case of Anilk Kumar Gopikishna Agrawal Vs. ACIT, and further reiterated in other cases. At this stage, it is pertinent to note that, otherwise also, these 43 appeals are directly covered by the decision of Hon'ble jurisdictional High Court in the case of Anilk Kumar Gopikishna Agrawal Vs. ACIT (supra) because on the basis of entries embedded in the documents found at the premises of Venus Infra build and Shri Ashok Vaswani, notice under section 153C was issued in the case Ocean Valves Mfg. Co. Proprietor of that concern filed an SCA No.19647 of 2018. This was lead case, and notice issued under section 153C of the Act was quashed.

The above facts are contained in paragraph-2.4 of the Hon'ble High Court's decision. For ready reference, we take note of this fact from there. It reads as under:

"2.4 By an order dated 23.7.2018, the Assessing Officer rejected the objections filed by the petitioner." Being aggrieved, the petitioner has approached this court by way of present petition challenging the impugned notice dated 8.2.2018 issued by the Assessing Officer under section 153C of the Act for assessment year 2012-13."

2A In case of Venus Group, reference is made to the facts as appearing in Special Civil Application No. 19647 of 2018.

2A.1 The petitioner, who is an individual and proprietor of M/s. Ocean Valves Mfg. Co. filed his return of income for assessment year 2012- 13 on 14.3.2013 declaring total income of Rs.7,27,700/-. A search came to be conducted on various premises of Shri Ashok Sundardas Vaswani, M/s. Venus Infrastructure and Developers P. Ltd. On 13.3.2015. During the course of search various documents were seized in which information about transactions relating to the petitioner was found. The seized incriminating documents related to unaccounted cash transactions which were analysed and correlated with other seized documents. Among the cash transactions as recorded in the seized unaccounted cash book which was found during the course of search, reference was also made to the petitioner. Based on such seized material, the Assessing Officer initiated proceedings under section 153C of the Act by issuing the impugned notices dated 22.3.2018 and 14.8.2018. Subsequently notices have been issued to the petitioner under section 142(1) of the Act to which the petitioner has responded."

23. In the appeals of the present assessees, identical situation is there. A perusal of the satisfaction note would indicate that the AO nowhere held that documents belonged to the present appellants were found at the premises of searched person/entity. As far as case laws relied upon by the ld.CIT-DR are concerned they are not directly on the point. He put emphasis on the decision of Hon'ble Kerala High Court cited (supra) for buttressing his contentions that no incriminating material is required for proceedings under section 153A or 153C.

This proposition is contrary to the decision of Hon'ble Gujarat High Court rendered in the case of Pr. CIT Vs. Saumya Construction P. Ltd. (supra). Similarly, the order of the ITAT referred by the ld.CIT-DR is with respect to the presumption of truth of certain documents found during the course of search. It is not directly on the point. Other arguments raised by the ld.CIT-DR were raised by the ld. Senior standing counsel before the Hon'ble Gujarat High Court in the case of Anil Kumar Gopikishna Agrawal Vs. ACIT (supra) and those arguments have been considered. Though, section 153C is a procedural section, but the jurisdiction to assess an assessee under this section is being invoked with help of the section. The AO will be in a position to pass assessment order only if during the course of search, any money, bullion, jewellery and other valuable article or thing, or the documents found belong to other person prior to 1.6.2015, and the AO of the searched person was satisfied that such documents disclosed undisclosed income. The documents belonged to the appellants considered under this compartment of the arguments were not found, rather certain information relating to the assessees were found to be embedded in these documents, but prior to 1.6.2015, jurisdiction under section 153C cannot be invoked on the basis of such information. Therefore, we allow this preliminary ground of appeal raised by these 43 appellants (assessees) and quash all these assessment orders passed in the appeals mentioned at serial no.1 to 43 of the cause title of this order. Thus, all the appeals of the assessee are partly allowed whereas the Revenue's appeal are dismissed.”

6.4 When the Misc. Applications in respect of this category was filed in the order passed under the concerned Misc. Applications, the Tribunal in the MA Order impugned in these petitions held as under:

“21. The Revenue in these miscellaneous applications have pointed out certain errors in the order of the ITAT which are apparent from record as detailed below: It was submitted by the Revenue that the ITAT has erred in holding that the documents seized from the search premises were not belonging to the assessee. On the contrary, the satisfaction note clearly records that the seized documents show the payment against the purchase of the land. In fact the land was purchased by the assessee and the payment for the same was also made through the banking channel which can be verified from the bank statement of the assessee. In view of the above, the learned DR. & Ors. (Shri Deepak Kumar Vasvani & Ors.) before us contended that the order of the ITAT suffers from apparent mistakes and therefore, the same needs to be recalled within the provisions of section 254(2) of the Act.

22. On the other hand, the learned AR for the assessee before us contended that the ITAT has passed the order in detail after analysing all the issues raised in the impugned appeals. Furthermore, the revenue has not pointed out in its miscellaneous application any specific error in the order of the ITAT which is apparent on record. Likewise, the revenue has already preferred respective appeals before the Hon'ble Gujarat High Court which has been admitted for adjudication. Accordingly, there cannot be any apparent mistake in the given facts and circumstances. The learned AR vehemently supported the order of the ITAT.

23. We have duly considered the rival contentions and gone through the records carefully. It is settled position of law that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. In this regard an elaborate discussion has been made in previous paragraph of this order while adjudicating first set of M.A's.

23.1 In the light of the above discussion we proceed to adjudicate the issues raised by the Revenue. The grievance of the Revenue is that the ITAT has erred in holding that materials found during the search on the basis of which proceedings under section 153C of the Act were initiated, were not belonging to the assessee. However from prima facie perusal of satisfaction note it revealed that the materials seized belong to the assessee. In this regard the tribunal also erred in not considering the decision of Hon'ble Jurisdictional high court in case of Kamlesh Dharamshi Patel vs. CIT reported in 31 taxmann.com 50 where it was held that the relation and reference of seized material. & Ors. (Shri Deepak Kumar Vasvani & Ors.) to the assesse is to be seen in the light of language of satisfaction note. The ITAT further erred in not directly applying the order of tribunal in case of Anilkumar Gopikisan Aggarwal against which department is in appeal and not considering the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra) where the term undisclosed income is defined 23.2 In this regard, we note that the ITAT after elaborate discussion on the issue whether search materials belong to assessee or not, has taken a view that such materials do not belong to the assessee. In holding so the ITAT analyses the fact available on record, gives various reasoning and also refer the several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra).

23.3 It is also not out of place to mention that the Revenue against the order of the ITAT has already preferred an appeal before the Hon'ble High Court which has been admitted. This argument of the ld. AR was not controverted by the ld. DR appearing on behalf of the Revenue.

23.4 In view of the above, we hold that there is no apparent mistake in the order of ITAT as alleged by the Revenue in its miscellaneous application as discussed above. Therefore, we do not find any merit in the argument of Ld. Counsel for the Revenue. Hence, the MA filed by the Revenue is dismissed.

24. In the result, all the M. A’s in this segment filed by the Revenue are hereby dismissed. & Ors. (Shri Deepak Kumar Vasvani & Ors.).

7. Let us therefore consider the rival submissions in light of these findings of the Tribunal in the Appellate as well as the Rectification jurisdictions.

7.1 The case of the Revenue briefly recapitulated is that the Tribunal committed an error apparent in deleting the additions and ought to have verified the seized material and though the search being pre-1.6.2015, when the assessment order was passed in 2017, the amended provisions had been put in place and therefore the Tribunal had not considered the fact that the decision of the jurisdictional High Court was under challenge before the Supreme Court and even otherwise by virtue of the decision of the Supreme Court in the case of Vikram Bhatia (supra), the amendment would retrospectively apply. It was clear case of not considering a subsequent decision and therefore the case deserved a rectification in light of the decision in the case of Saurashtra Kutch Stock Exchange Ltd. (supra).

7.2 Facts that are undisputed are that the search was carried out on 10.3.2015 and concluded on 13.3.2015. True it is that the assessment order was passed in the case of the respondent assessee on 26.12.2017. The question that would deserve consideration is whether the Misc. Applications were rightly rejected. The perusal of the Misc. Applications in this category indicates that the same was filed on the ground that the Tribunal erred in not holding that various documents clearly proved that the documents seized “belong” to the assessee. The other ground was that the Tribunal erred in not considering the decision in the case of Kamleshbhai Dharamshibhai Patel (supra) which stated that the language used in the satisfaction note will have to be seen with reference to the seized material.

7.3 Reading of the satisfaction note which has been reproduced in the relevant paras of the Appellate Order indicates that the note has brought in the wider concept of correlating the documents seized pertain to/or related to the assessees. When the revenue’s case itself as per the satisfaction note wanted the scope to be considering the seized documents in “relation to/pertain to” now it is not open for them to apply for rectification on the ground that the Appellate Tribunal committed an error in not considering the fact that the seized material “belongs” to the assessees, when it was never the case of of the Revenue.

8. Coming to the second limb of the argument of the Revenue whether the Tribunal failed to consider the jurisdictional decision or failed to consider that the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra) was pending in Appeal before the Supreme Court and whether the Tribunal ought to have considered that in view of the decision in the case of Vikram Bhatia (supra) the amendment would apply retrospectively too and therefore the Appellate Tribunal fell in error may deserve our attention hereunder.

8.1 Perusal of the order of the Appellate Tribunal indicates that after considering the relevant provision of Section 153 C pre-1.6.2015 and post 1.6.2015, on reading the satisfaction note, the Tribunal found that the search was carried out prior to 1.6.2015 and the AO had to record a satisfaction about the fact that the documents belonged to the searched person, whereas in the case on hand, the note recorded a satisfaction in context of situation post 1.6.2015 which could not have been the case. In light of this the Appellate Tribunal considered the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra).

8.2 Reading of the relevant paras of the aforesaid decision as reproduced by the Tribunal would indicate that the Tribunal considered that Section 153C which is a machinery provision for assessment of income of a person other than the person searched and an amendment would not merely amount to a change in procedure but a new class of assessees are created. The amendment expands the scope of Section 153C by bringing in an assessee if books of accounts or documents pertaining to him or containing information relating to him have been seized during the course of search. In the case of Anil Kumar Gopi Krishna Agrawal (supra) like in the present case the search was prior to the date of 1.6.2015 and therefore the satisfaction could have been recorded to the effect that the seized material belongs to the other person. The court held that if a date other than the date of search is taken to be the relevant date for the purpose of recording satisfaction one way or the other it would result in an anomalous situation.

8.3 Reading the decision of the Tribunal wherein the decision of the case of Anil Kumar Gopi Krishna Agrawal (supra) has been reproduced would indicate that the essential requirement for assumption of jurisdiction under Section 153C as it stood prior to the amendment qua the “other person” is that the seized documents forming the basis of the satisfaction note must not merely “pertain” to the other person but belong to the other person.

8.4 The Delhi High Court in the case of Pr.CIT vs Index Securities, (2017) 86 taxmann.com 84 (Delhi) has reproduced the decision of the Supreme Court in the case of Pr.CIT vs Vinita Chaurasia (2017) 394 ITR 758.

The relevant paras of the decision read as under:

“Analysis and reasons

27. The recent decision of the Supreme Court in Commissioner of Income Tax-III, Pune v. Sinhgad Technical Education Society (supra) is a complete answer to both points urged by the Revenue. The said decision, therefore, requires to be discussed in some detail.

28.1 The Supreme Court noted that the Assessee had raised a challenge to the validity of the assumption of jurisdiction by the AO under Section 153C of the Act for the first time before the ITAT. It was urged on behalf of the Revenue that the ITAT erred in allowing the said challenge by the Assessee by way of additional grounds. A reference was made by the Revenue to the decision of this Court in SSP Aviation Limited v. Deputy Commissioner of Income Tax [2012] 346 ITR 177 (Del) and that of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel v. Commissioner of Income Tax-III (2013) 263 CTR (Guj) 362 which according to the Revenue held to the contrary.

28.2 The Supreme Court noted that the appeals relating to four of the AYs i.e. 2000-01 to 2003-04 were covered by the notice under Section 153C of the Act. In dealing with the question as to whether the ITAT was right in permitting the Assessee to raise this additional ground for the first time before it, the Supreme Court in paras 18 and 19 observed as under:

"18. The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any corelation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the satisfaction note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also give its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the Respondent, argued that notice in respect of assessment years 2000-01 and 2001-02 was even time barred.

19. We, thus, find that the ITAT rightly permitted this additional ground to be raised and correctly dealt with the same ground on merits as well. Order of the High Court affirming this view of the Tribunal is, therefore, without any blemish. Before us, it was argued by the Respondent that notice in respect of the Assessment Years 2000-01 and 2001-02 was time barred. However, in view of our aforementioned findings, it is not necessary to enter into this controversy."

28.4 The Supreme Court also agreed with the decision of the Gujarat High Court in Kamleshbhai Dharamshibhai Patel (supra) to the extent it held that "it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in Section 153A of the Act." The Supreme Court observed: "This proposition of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well."

29. The search in the case before the Supreme Court was prior to 1st June 2015. Apart from the fact the Supreme Court approved the above decision of the Gujarat High Court holding that the seized documents should 'belong' to the other person, the legal position in this regard where the search has taken place prior to 1st June 2015 has been settled by the decision of this Court in Pepsico India Holdings (P) Ltd. v. ACIT (supra). In Commissioner of Income Tax v. Vinita Chaurasia (supra), this Court reiterated the above legal position after discussing the decisions in Principal Commissioner of Income Tax v. Super Malls (P) Limited (supra) and Commissioner of Income Tax (Central)-2 v. Nau Nidh Overseas Pvt. Ltd. (supra). The essential jurisdictional requirement for assumption of jurisdiction under Section 153 C of the Act (as it stood prior to its amendment with effect from 1st June 2015) qua the 'other person' (in this case the assessees) is that the seized documents forming the basis of the satisfaction note must not merely 'pertain' to the other person but must belong to the 'other person'.

8.5 What is therefore evident on reading the decision reproduced herein above is that the Court had considered the decision of the Gujarat High Court in the case Kamleshbhai Dharamshibhai Patel (supra) and therefore the submission of the Revenue that the Tribunal did not consider the decision of the jurisdictional high court is baseless. What the decision in the case of Kamleshbhai Dharamshibhai Patel (supra) indicates is that the essential requirement to invoke Section 153C is that the documents seized must belong to the assessee concerned.

8.6 The Tribunal in Appeal in context of the satisfaction note which brought in the concept of “pertains to/related to” in the case on hand found that when the search was prior to 1.6.2015, the post amendment criteria could not apply. In doing so, it considered various decisions especially that of the jurisdictional high court that covered the issue in the case of Anil Kumar Gopi Krishna Agrawal (supra) and therefore the Order refusing to entertain the Rectification Application on this count cannot be faulted.

9. Now coming to the argument of the learned Counsel for the Revenue that the decision of Vikram Bhatia (supra) of the Supreme Court would squarely apply and when read in light to the decision in the case of Saurashtra Kutch Stock Exchange Ltd.(supra) which said that failure to consider subsequent decision would be a good ground to rectify an order, some dates need to be mentioned.

9.1 The order of the Tribunal in Appeal is dated 12.11.2020. The date of the Tribunal order in MA was of 24.08.2022 whereas the judgement of the Supreme Court in the case of Vikram Bhatia (supra) was dated 6.4.2023 which was not available when the Tribunal decided the main appeals. The law on that date was governed by the decision in the case of Anil Kumar Gopi Krishna Agrawal (supra) which held the field.

9.2 Alternatively, even the submission of the learned Senior Counsel Shri Hemani for the assessee with regard to the provisions of Section 254(2) post 2016 merit consideration. Section 254(2) prior to its amendment permitted rectification of a mistake within a period of four years from the date of the order. This period with effect from 1.06.2016 was reduced to six months. The order of the Tribunal in Appeal is dated 12.11.2020. The Misc. Application order is dated 24.08.2022. The Supreme Court decided the case of Vikram Bhatia (supra) on 6.4.2023 which was beyond the cap of 6 months from the date of the Misc. Application order which would be 23.03.2023 and therefore even otherwise the decision of the Supreme Court could be no ground in rectifying of the Order.

9.3 We are told that in this category 1 the Revenue has preferred Tax Appeals in only 9 cases. The relevant details thereof are as under:

Sr. No.	Assessee	Before Hon’ble High Court Assessment		Assessment	Before Income Tax Appellate Tribunal
		SCA No.	Tax Appeal No.
1	Hitesh Ashok Vaswani	12000 of 2023	5 Of 2022	2011-12	MA 38/Ahd/2 021	IT(SS)A 120/ Ahd/2019
2	Hitesh Ashok Vaswani		6 Of 2022	2012-13	MA 39/Ahd/2 021	IT(SS)A 121/ Ahd/2019
3	Hitesh Ashok Vaswani		7 Of 2022	2013-14	MA 40/Ahd/2 021	IT(SS)A 122/ Ahd/2019
4	Hitesh Ashok Vaswani		8 Of 2022	2014-15	MA 41/Ahd/2 021	IT(SS)A 123/ Ahd/2019
5	Hitesh Ashok Vaswani		14 Of 2022	2013-14	MA 48/Ahd/2 021	IT(SS)A 206/ Ahd/2019
6	Shree Sai Siddhi Corporation		13 Of 2022	2013-14	MA 65/Ahd/2 021	IT(SS)A 279/ Ahd/2019
7	Venus Township India LLP		10 Of 2022	2012-13	MA 68/Ahd/2 021	IT(SS)A 282/ Ahd/2019
8	Venus Township India LLP	12076 of 2023	11 Of 2022	2013-14	MA 69/Ahd/2 021	IT(SS)A 283/ Ahd/2019
9	Venus Infrabuild	12079 of 2023	15 Of 2022	2014-15	MA 73/Ahd/2 021	IT(SS)A 836/ Ahd/2019

In the remaining 22 petitions which are pertaining to Misc. Applications of this category 1, no Tax Appeals are preferred as a result of low tax effect.

B. CATEGORY-2: WHETHER THE ASSESSMENTS UNDER SECTION 153A IS TO BE FRAMED STRICTLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN CASE OF CONCERNED ASSESSEE.

10. Here the Tribunal in considering the Appeals considered the dispute as to whether the assessment under Section 153A is to be framed directly based on incriminating material found during the search carried out in the cases of the concerned assessees. Based on the decisions of the High Courts, the assessees contended that assessments under Section 153A have to be framed on the basis of material found during the course of the search or requisitioned under Section 132A of the Act. Material found during the search of the third person cannot be used for the purposes of Section 153A. The submission of the assessees was that the assessment orders under Section 143 (3) read with Section 153A have to be framed strictly on the basis of incriminating material found during the course of search carried out in the case of the assessee and no cognizance can be taken on any material which was not found during the course of search action. Material collected during the course of search action carried out in cases of third parties cannot be considered.

10.1 The Tribunal while deciding the Appeals held as under:

“29. We have duly considered rival contentions and gone through the record carefully. Before adverting to the facts and alleged seized material considered by the ld.AO for making the addition in the hands of the present three assessees, we deem it appropriate to bear in mind the position of law propounded in various authoritative judgments recording scope of section 153A of the Act. We are of the view that in this regard, there were large numbers of decisions. First we refer to the decision of Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla, 380 ITR 573 (Del). Hon’ble Delhi High Court after detailed analysis has summarized the following legal position:

37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under:

i. Once a search takes place under Section 132 of the Act, notice under Section 153 A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place.

ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise.

iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax".

iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material."

v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings.

vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO.

vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.”

30. ITAT, Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 (copy of the decision placed on record) has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon’ble Delhi High Court has specifically held that assessment under section 153A of the Act has to be specifically made on the basis of seized material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. Like in the present appeals, simultaneous search was carried out at the premises of the Venus Infrastructure and Ashok Sunderdas Vaswani, and the material found during the search of Venus Infrastructure Developers or Ashok Sunderdas Vaswani could be used while framing the assessment of Rajesh Sunderdas Vaswani and Deepak Budharmal Vaswani under section 153A of the Act. ITAT Delhi Bench has specifically held that material recovered from the premises of other person cannot be used in the hands of the searched person. For that purpose an assessment under section 153C or 147 is to be made. At this stage, in order to fortify ourselves, we would like to make reference to the following paragraphs of the ITAT Delhi Bench’s order. It reads as under: “15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person.”

31. Order of the ITAT Delhi Bench in other cases viz. Asha Rani Lakhotia vs. ACIT and Subhag Khattar Vs. ACIT are on the same line.

32. Hon’ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law? "

33. After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: “6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the ITAT. The ITAT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380 ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so-called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not under Section 153A. This goes to the root of the matter.”

34. Hon’ble Court has specifically observed for the purpose of section 153A that only seized material is required. However, if there is any other incriminating material belong to the assessee found at the premises of the some other person, then the assessment has to be made under other provisions and not under section 153A of the Act. Hon’ble jurisdictional high Court has also considered the decision of Hon’ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra). Hon’ble Gujarat High Court framed the following question of law in the case of Pr.CIT Vs. Saumya Construction (supra): "[A] Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? [B] Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CITIV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search?"

35. Hon’ble Court concurred with the decision of Hon’ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: “16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of subsection (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons; however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.11,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed.”

36. As far as decisions relied upon by the ld.CIT-DR are concerned, we have already considered the decision in the case of E.N. Gopakumar (supra). Other decisions are also on the similar line, but they are not in coherence with the position of law propounded by the Hon’ble jurisdictional High Court. Therefore, Tribunal being subordinate to the Hon’ble Gujarat High Court, is required to first follow Hon’ble Supreme Court and thereafter Hon’ble jurisdictional High Court. If no ratio of the law is available from Hon’ble Supreme Court as well as Hon’ble jurisdictional high Court, then the decision of non-jurisdictional High Court is to be followed. Therefore, we do not deem it necessary to recapitulate the decisions of Hon’ble Kerala High Court and make discussion on them. Ld.CIT-DR was unable to bring any authoritative decision from the Hon’ble Supreme Court or from the Hon’ble jurisdictional High Court to support the case of the Revenue. He made reference to para-18 of the Pr.CIT Vs. Saumya Construction (supra), which we have considered; but paragraph nowhere buttress the case of the ld.CIT-DR. On a detailed analysis of these case laws, it is pertinent to observe that scheme of the Income Tax Act would provide that a regular assessment of the income is to be made under section 143(3)/144. In the case of an escaped income, then a notice under section 148 should be issued and the assessment is to be made under section 147 r.w. section 143(3). In case a search is carried out on an assessee, then that search could give rise to a proceedings viz. under section 153A qua the person who has been searched. The income has to be assessed on the basis of material found during the course of search. The second category of the person is third-party and the assessment could be made under section 153C of the Act. The assessment under section 153C is to be made on a condition that during the course of search any money, bullion, jewellery, assets, documents belonged to the assessee prior to 1.6.2015, and information relates/pertains to assessee after 1.6.2015 was found qua to the person other than the searched person. In that situation, the AO of the searched person would record his satisfaction that such material belongs to third-person, and he would transmit that material along with his satisfaction to the AO having jurisdiction on such other person. The AO thereafter issue notice under section 153Cafter recording his satisfaction and the assessment proceedings under section 153C r.w. section 153A would commence. One more situation would arise, which we are going to discuss in this very group in the later part of the order that material was found during the course of search, but six years have expired, then the assessment could be reopened. In other words, the material belonged to some other person was found during the course of search. Prior to 1.6.2015, a possible angle could be that such material is to be construed, whether the income has escaped assessment or not. Broadly, these are basic parameters for making assessment under different sections. In the present group of three assessees in different assessment years, search was conducted, but the additions have been made on the basis of the material found during the search relating to some third person. In other words, the AO has not made the addition on the basis of material found during the course of search of these three assessees.”

10.2 Reading the findings of the Appellate Tribunal would indicate that the Tribunal had extensively considered the decision of the Delhi High Court in the case of CIT vs Kabul Chawla reported in 380 ITR 573. In the appeals under consideration before the Tribunal, simultaneous search was carried out at the premises of the Venus Infrastructure and Ashok Sunderdas Vaswani and the material found during the search could be used while framing assessment of Rajesh Vaswani and Deepak Vaswani. Material recovered from the premises of the other persons cannot be used in the hands of the searched persons. The Tribunal in detail analyzed the decisions of various High Courts and held that looking to the scheme of the Income Tax Act in case a search is carried out on an assessee then the search would give rise to proceedings under Section 153A qua the person searched. The income has to be assessed on the basis of the material found during the course of the search.

10.3 The Tribunal as is evident from the findings discussed had extensively considered various decisions including that of Kabul Chawla (supra). It had reproduced para 37 of the said decision and discussed it in the context of facts. The Tribunal discussed the issues and found that the revenue had framed assessments based on material seized from the premises of other persons. The only ground on which the rectification was sought was that the Tribunal had misinterpreted the judgement in the case of PCIT vs Saumya Construction P. Ltd - 387 ITR 529 (Guj) and that of CIT vs Kabul Chawla -380 ITR 573 (Del).

10.4 While dismissing the Misc. Applications pertaining to this category, the Tribunal in the MA order held as under:

“11. In all these M.A' s identical issues were raised by the Revenue. Therefore, we take up M.A. No. 13/ AHD/2021 in IT(SS)A No. 111/AHD/2019 as lead case and proceed to decide the same. However, the finding given in such MA will apply to all the above mentioned MA Numbers falling under this segment.

12. The Revenue in these miscellaneous applications have pointed out certain errors in the order of the ITAT which are apparent from record as detailed below:

i. The ITAT in its order has held that there cannot be any addition during the search proceedings in the assessment framed under section 153A of the Act until and unless such addition is based on the incriminating materials found during the course of search from the premises of the assessee. In holding so the ITAT has relied on the judgement of Hon'ble Gujarat High Court in the case of Saumya Construction P. Ltd reported in 387 ITR 529 and Hon'ble Delhi High Court in the case of Kabul Chawala reported in 380 ITR 573. However, the principles laid down by the Hon'ble Courts nowhere restricts the addition based on incriminating material found from the premises of the concerned assessee only. As such, the documents were found of incriminating nature from the premise which was controlled by the searched group and the assessee was directly belonging to the searched group.

ii. The finding of the ITAT that the Revenue to prolong the search has passed the prohibitory orders under section 132(3) of the Act is totally misplaced and which is against the principles laid down by the Hon'ble Supreme Court in the case of the VLS Finance Ltd versus CIT reported in 384 ITR 1. But the ITAT inadvertently has misinterpreted the impugned judgement of the Hon'ble Supreme Court.

iii. & Ors. (Shri Deepak Kumar Vasvani & The last Panchnama was drawn in the month of May 2015 whereas the ITAT inadvertently has taken the same as March 2015 for calculating the Limitation period of passing the assessment order.

iv. The locker No. 58, in the name of Shri Deepak Vaswani, maintained with bank of Maharashtra, SG Highway, wherefrom unaccounted jewellery of Rs. 2,48,400.00 was recovered. But the ITAT inadvertently has given a finding that such locker was not in the name of the assessee.

12.1 In view of the above, the learned DR before us contended that the order of the ITAT suffers from apparent mistakes and therefore, the same needs to be recalled within the provisions of section 254(2) of the Act.

12.2 On the other hand, the learned AR for the assessee before us contended that the ITAT has passed the order in detail after analysing all the issues raised in the impugned appeals. Furthermore, the revenue has not pointed out in its miscellaneous application any specific error in the order of the ITAT which is apparent on record. Likewise, the revenue has already preferred respective appeals before the Hon'ble Gujarat High Court which has been admitted for adjudication. Accordingly, there cannot be any apparent mistake in the given facts and circumstances. The learned AR vehemently supported the order of the ITAT.

13. We have duly considered the rival contentions and gone through the records carefully. It is settled position of law that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and long drawn process of reasoning on points, on which there may conceivably be two opinions. In this regard, an elaborate discussion has been made in previous paragraph of this order while adjudicating first set of M.A's. & Ors. (Shri Deepak Kumar Vasvani & Ors.)

13.1 In the light of the above discussion we proceed to adjudicate the issues raised by the Revenue. The 1st fold of contention of the Revenue is that the ITAT has erred in holding that in the proceeding under section 153A of Act addition or disallowance can only be made on the basis of incriminating material found in the course of search and in holding so ITAT misinterpreted the judgment of Hon'ble Gujarat High Court in case of Saumya Construction (P) Ltd. (supra) and the judgment of Hon'ble Delhi High Court in case of Kabul Chawla (supra).

13.2 In this regard, we note that the ITAT after elaborate discussion on the issue of assessment in case of search proceeding has taken a view that in the proceeding under section 153A of the Act, the addition to total income can only be made on the basis of material found from the premises of the assessee. In holding so, the ITAT analyses the facts available on record, gives various reasoning and also refers several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. (supra).”

10.5 In Category 2, the details of SCA where Tax Appeals are filed as under:

Sr. no.	Assessee / Respondent	SCA No.	A.Y.	M.A. No.	IT(SS)A No. (Assess ee (A) / Revenu e (R))	T.A. No.	Re ma rks
1		1206	2009	91/	95/A hd/	54/	Le
		2/202	-10	Ahd/	2019	2022	ad
		3		2021	(A)		ITA
							/Ap pe al
2		12060	2010-	92/Ahd/	96/Ahd/	46/20
	Rajesh	/2023	11	2021	2019 (A)	22
3	Sundardas	12059	2011-	93/Ahd/	97/Ahd/	20/20
	Vaswani	/2023	12	2021	2019 (A)	22
4		12046	2012-	94/Ahd/	98/Ahd/	37/20
		/2023	13	2021	2019 (A)	22
5		12048	2013-	95/Ahd/	99/Ahd/	33/20
		/2023	14	2021	2019 (A)	22
6		12049	2014-	97/Ahd/	100/	9/202
		/2023	15	2021	Ahd/	2
					2019 (A)
7		12053	2015-	96/Ahd/	101/	22/20
		/2023	16	2021	Ahd/	22
					2019 (A)
8		12054	2009-	58/Ahd/	235/	49/20
		/2023	10	2021	Ahd/	22
					2019 (R)
9		12045	2011-	59/Ahd/	236/	18/20
		/2023	12	2021	Ahd/	22
					2019 (R)
10		12056	2012-	60/Ahd/	237/	40/20
		/2023	13	2021	Ahd/	22
					2019 (R)
11		12027	2013-	61/Ahd/	238/	17/20
		/2023	14	2021	Ahd/	22
					2019 (R)
12		12028	2014-	62/Ahd/	239/	36/20
		/2023	15	2021	Ahd/	22
					2019 (R)
13		12024	2015-	63/Ahd/	240/	19/20
		/2023	16	2021	Ahd/	22
					2019 (R)
14		12023	2012-	81/Ahd/	95/Ahd/	LTE
	Sanjeet	/2023	13	2021	2019 (A)
	Motors
15		12021	2013-	82/Ahd/	95/Ahd/	LTE
	Finance P Ltd.	/2023	14	2021	2019 (A)
16		1202	2009	13/	111/	23/2	Le
		0/202	-10	Ahd/	Ahd/	022	ad
		3		2021	2019		MA
					(A)
17		12017	2010-	14/Ahd/	112/	61/20
		/2023	11	2021	Ahd/	22
	Deepak				2019 (A)
18	Budharmal	12016	2011-	15/Ahd/	113/	56/20
	Vaswani	/2023	12	2021	Ahd/	22
					2019 (A)
19		12014	2012-	16/Ahd/	114/	55/20
		/2023	13	2021	Ahd/	22
					2019 (A)
20		12081	2013-	17/Ahd/	115/	60/20
		/2023	14	2021	Ahd/	22
					2019 (A)
21		12082	2014-	18/Ahd/	116/	26/20
		/2023	15	2021	Ahd/	22
					2019 (A)
22		12083	2015-	19/Ahd/	117/	51/20
		/2023	16	2021	Ahd/	22
					2019 (A)
23		12084	2009-	21/Ahd/	248/	69/20
		/2023	10	2021	Ahd/	22
					2019 (R)
24		12085	2010-	22/Ahd/	249/	65/20
		/2023	11	2021	Ahd/	22
					2019 (R)
25		12086	2011-	23/Ahd/	250/	71/20
		/2023	12	2021	Ahd/	22
					2019 (R)
26		12087	2012-	24/Ahd/	251/	63/20
		/2023	13	2021	Ahd/	22
					2019 (R)
27		12089	2013-	25/Ahd/	252/	50/20
		/2023	14	2021	Ahd/	22
					2019 (R)
28		12090	2014-	26/Ahd/	253/	70/20
		/2023	15	2021	Ahd/	22
					2019 (R)
29		12091	2015-	27/Ahd/	254/	39/20
		/2023	16	2021	Ahd/	22
					2019 (R)

C.CATEGORY 3. WHETHER THE ASSESSMENTS COMPLETED UNDER SECTION 153A ARE WITHIN LIMITATION ?

11. The submission of the assessees before the Appellate Tribunal were that provisions of Section 153B(1)(a) mandate that assessment for six assessment years under Section 153A(1)(b) should be completed within a period of two years from the end of the financial year in which last of the authorisation for search under Section 132 or requisition under Section 132A of the Act was executed. It was the case of the assessees that search in the case was conducted on 10.3.2015 and 12.3.2015 which lasted up to 13.3.2015.The time limit therefore for passing the assessment orders was 31,3,2017 within a period of two years from the end of the financial year (2014-2015) whereas the assessment order was framed beyond time on 26.12.2017.No doubt, as submitted by the learned assessee’s counsel before the Tribunal that prohibitory orders can be issued and in the currency of such orders the period of limitation would get enhanced. The case of the assessees was that these prohibitory orders were issued merely to get a longer period of limitation.

11.1 After taking note of the submissions and the case law and the relevant provision, the Tribunal gave its findings in Paras 50-62 as under:

“50. We have duly considered the rival contentions and gone through the record carefully. Section 153B has a direct bearing on the controversy. Therefore, we take note of the relevant part of this Section.

153B. (1) Notwithstanding anything contained in Section 153, the Assessing Officer shall make an order of assessment or reassessment,—

(a) in respect of each assessment year falling within six assessment years referred to in clause

falling within six assessment years referred to in clause

(2) The authorisation referred to in clause (a) and clause (b) of sub-Section (1) shall be deemed to have been executed,—

(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued;

(b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the Authorised Officer.

51. A bare perusal of Section would reveal that it start with a non obsenate clause “ – notwithstanding anything contained in Section 153……” An assessment order has to be passed within two years from the end of the FY in which the last of the authorization for and each under s.132 of the Act was executed or requisition under s.132A is executed. The expression “ last of the authorization” has been explained in sub Section (2). The explanation of expression last of the authorization provided in sub Section (2) is identical in Explanation (2) of Section 158BE which read as under:

'Explanation 2.-For the removal of doubts, it is hereby declared that the authorisation referred to in sub-Section (1) shall be deemed to have been executed,- (a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued ; (b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.

52. In the large number of judgments cited before us by the parties, this provisions under s.158BE Explanation (2) has been explained elaborately and the first judgment we would like to put in service is the judgment of the Hon’ble Karnataka High Court. The relevant discussion in that judgment is contained in para 73 to 75 which reads as under:

“73. The second proviso to Section 132(1) deals with the "deemed seizure". When in the course of search, it is not possible to seize for the reasons set out in the aforesaid provisions. It is possible under four circumstances: (a) where it is not possible or practicable to take physical possession of any valuable article or thing; (b) remove it to a safe place due to its volume, weight; (c) other physical characteristics ; and (d) due to being its dangers nature.

74. Therefore, the law recognizes such a situation and has provided a remedy to tackle such problems. The authorised officer has been given a discretion for the reasons to be recorded in writing to pass a restraint order in respect of the articles, books and other material which he could not take physical possession of, i.e., by making an inventory and leaving it to the custody of the assessee and directing him not to part with the same without his permission.

75. Similarly, in circumstances not covered under those provisions, it is open for him to pass a prohibitory order under sub-Section (3) not amounting to seizure which order will be in force for a period of 60 days after securing the possession of the materials, articles, etc., in the aforesaid manner. Action under Section 132(3) of the Income-tax Act can be resorted to only if there is any practical difficulty in seizing the item which is liable to be seized. When there is no such practical difficulty the officer is left with no other alternative but to seize the item, if he is of the view that it represented undisclosed income. Power under Section 132(1)(iii) of the Income-tax Act thus cannot be exercised, so as to circumvent the provisions 3 Section 132(1)(iii) read with Section 132(1)(v) of the Income-tax Act. It is open for the authorised officer to visit the place for the purpose of investigation securing further particulars. Under the scheme, the law provides for such procedure. But not when he visits the premises for further investigation for the materials already secured. It does not amount to search as the materials to be looked into and investigated is already known and is the subjectmatter of a prohibitory order or a restraint order. Though it is not seizure or deemed seizure, it amounts to deemed possession. What is in your possession is to be looked into to find out, is there any incriminating material. It does not amount to search as understood under Section 132 of the Act. It is only because of paucity of time he has gone back and wants to come back and look into the matter leisurely. There is no provision in the Criminal Procedure Code or in the Income-tax Act or the rules for postponing the search for a long period. Then, the concept of search as understood either under the provisions of the Criminal Procedure Code or the Act which are made applicable expressly, would lose its meaning. If such a course is attracted, it is open to an authorised officer to keep the authorisation in his pocket like a season ticket and go on visiting the premises according to his whims and fancies. It seriously affects the valuable right of the assessee conferred under the Constitution. To keep the affected parties in a suspended animation about the probable continuation of search would be agonising. It is invading the right and freedom of the petitioners for a period more than required or necessary. The orders which are passed under Section 132(3) may have a very far-reaching effect on the business of an assessee. The order of restraint may adversely affect the business and, therefore, adequate safeguards are sought to be provided in the Act by the insertion of the provisions of sub-Section (8A) in Section 132. In order that the restraint order must not be continued indefinitely, sub-Section (8A) of Section 132 provides that the restraint order can be continued only if, before the expiry of 60 days, and for reasons to be recorded, the Commissioner grants an extension. The provisions of sub Section (8A) cannot be bypassed or rendered nugatory by revoking an order under Section 132(3) and, thereafter, pass another order on the same date. In the nature of things, the search is to be done expeditiously and the undisclosed income is to be unearthed and proceeding has to be initiated against such person and the tax legitimately due to the Government is to be recovered. There cannot be any laxity on the part of the authorised officer in this regard. Any other interpretation would run counter to the scheme of search provision under the Act. Therefore, by passing a restraint order, the time limit available for framing of the order cannot be intended. Once an order under Section 132(3) has been passed, then the limitation period commences and such order cannot be continued unless and until the provisions of Section 132(8A) are satisfied.”

53. Though Hon’ble Court has explained the scope of expression “ execution of last of authorization” but we are of the view that Hon’ble Court thereafter took cognizance of Explanation (2) inserted by Finance Act, 1997 and we deem it appropriate to take note of the discussion made by the Hon’ble Court from paragraph nos. 78 to 82 which reads as under:

“78. The law expressly provides for more than one authorisation. A search authorisation could specify only one building/place/vessel/vehicle/aircraft. This is clear from the use of the building, etc., in the singular sense. Section 132(1) uses building/place/vessel/vehicle/aircraft in singular sense. Further, clause (a) in Form 45 uses the word, "to enter and search, the said building/place/vessel/vehicle/aircraft. When there are multiple places to search and such places are far off, it is impractical to have a single authorisation. Different persons will be carrying out search and each one of them is required to be authorised through the search authorisation. In other words, search authorisation should authorise a particular official for executing the search. Therefore, when there are different places to be searched, , separate search authorisation should be drawn with reference to each place of search. The said authorisations may be issued on different dates in which case, the last of such authorisations is to be looked into for the purpose of limitation. However, it is possible that there may be more than one authorisation on the same day. Then the question is which is the last of such authorisations for the purpose of limitation. When all the authorisations are executed there will be one panchnama in respect of each such authorisation. The authorisations may be executed on different dates also. Then the doubt would arise regarding which authorisation to be looked into for the purpose of limitation as all of them are last authorisation. It is for removal of that doubts that the Explanation is inserted. For the purpose of computing the limitation, it is the one year from the end of the month in which the last of the authorisations was executed. If there are more than one authorisation issued on the same day, then the last panchnama drawn in relation to the warrant of authorisation issued on the same day. As the period commences from the end of the month of the execution of the authorisation, the law has provided for the authorised officer to visit the purpose of inspection regarding the material which is the subject matter of prohibitory order or the restraint order, even after search. However, the said exercise has to be done expeditiously, as the period of limitation starts from the date of search was concluded as evidenced by the panchnama, as otherwise the very object with which these provisions was introduced would be defeated.

79. Circular No. 772, dated 23rd December, 1998, issued by Central Board of Direct Taxes explains this position as under ([1999] 235 ITR (St.) 35):

"According to Section 158BE, limitation of 2 years has to be counted from the end of the month in which last of the authorisations was executed. Use of the word 'authorisations' implies issue of more than one authorisation. Supposingly two authorisations are issued one after the other and the last authorisation is executed first while the authorisation issued earlier is executed later on. In such case, limitation should be counted from the date of issue of the execution of the last authorisation, though it is executed earlier and not from the execution of the earlier authorisation which is executed later. This anomalous situation is intended to be removed by insertion of Explanation 2 below Section 158BE with effect from July I, 1995, by the Finance (No. 2) Act, 1998. This Explanation reads as follows 'Explanation 2.-For the removal of doubts, it is hereby declared that the authorisation referred to in sub-Section (1) shall be deemed to have been executed,-

(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued

(b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.' According to this Explanation, limitation is to be counted with reference to the last panchnama drawn on execution of a warrant of authorisation as referred to in Section 158BE. The main attribute of the panchnama is stated to be that it should record the conclusion of search."

80. The law does not contemplate the authorised officer to set out in any of the panchnama that he has finally concluded the search. If for any reason the authorised officer wants to search the premises again, it could be done by obtaining a fresh authorisation. There is no prohibition in respect of the same premises. It is open to the empowered authority to issue authorisation but when the authorisation is issued once, the authorised officer cannot go on visiting the Page 92 of 144 premises under the guise of search. Therefore, it is clear once .n pursuance of an authorisation issued the search commences, it comes to an end with the; drawing of a Panchnama. When the authorised officer enters the premises, normally, the panchnama is written when he comes out of the premises after completing the job entrusted to him. Even if after such scare he visits the premises again, for investigation or inspection of the subject-matter of restraint order or prohibitory order, if a panchnama is written, that would not be the panchnama which has to be looked into for the purpose of computing the period of limitation. But, such a panchnama would only record what transpires on a re-visit to the premises and the incriminating material seized would become part of the search conducted in pursuance of the authorisation and would become the subject-matter of block assessment proceedings. But, such a panchnama would not extend the period of limitation. It is because the limitation is prescribed under the statute. If proceedings are not initiated within the time prescribed, the remedy is lost. The assessee would acquire a valuable right. Such a right cannot be at the mercy of the officials, who do not discharge their duties in accordance with law. The procedure prescribed under Section 132 of the Act is elaborate and exhaustive. The said substantive provision expressly provides for search and seizure. In the entire provision there is no indication of that search once commenced can be postponed. What can be postponed is only seizure of the articles. Therefore, once search commences it has to come to an end with the search party leaving the premises whether any seizure is made or not. The limitation for completion of block assessment is expressly provided under Section 158BE which clearly declares that it is the execution of the last of authorisation which is to be taken into consideration. The word "seizure" is conspicuously missing in the said Section. The same cannot be read into the Section for the purpose of limitation. Then it amounts to rewriting the Section by the court, which is impermissible in law. 81. The aforesaid Circular No. 772, dated December 23, 1998 (see [1999] 235 ITR (St.) 35) refers to this dilemma faced by the Department

"127. Execution of last of the authorisation or requisition The word 'execute' is defined in Black's Law Dictionary, fifth edition, page 509 as follows: 'to complete; to make ; to sign ; to perform ; to do ; to carry out according to its terms ; to follow up ;to fulfil the command or purpose of ; to perform all necessary formalities ; to make and sign a contract; to sign and deliver a notes.' The word 'execution' is defined at page 510 of the said Law Dictionary as follows: Carry out some act or course of conduct to its completion. Northwest Steel Rolling Mills v. Commissioner of Internal Revenue, C.C.A. Wash., 110 F.2d 286, 290 : completion of an act : putting into force : completion fulfilment : perfecting of anything or carrying it into operation and effect "Execution" a process in action to carry into effect the directions in a decree or judgment –Foust v. Foust, 47 Cal. 2d 121, 302 p.2d 11, 13.' In the light of the above definition of the words 'execute' and 'execution', one may argue that until and unless the final act is performed, the warrant of authorisation should not be treated as executed and it order or for any other reason may not be treated as 'execution' of the warrant. But this interpretation would be hyper technical and it needs detailed discussion as is done in the following paras. The question arises as to whether execution of a warrant of authorisation or requisition refers to the conclusion of the proceedings under Section 132 and/or 132A or it refers only to the execution of the warrant even though as a result of such execution the proceedings under Section 132 or 132A are yet to he completed. The latter situation will include a case in which a restraint order132(3) is passed. In such a case, it can be said that though the warrant of authorisation has been executed, proceedings under Section 132(3) are pending. Since the word 'execute', also means 'to complete’, one has to wait for conclusion of the proceedings under Section 132(3) for the purpose of computation of limitation under Section 158BE(1) and the period of one year has to be computed from the end of the month in which the proceeding under Section 132(3) are conclude. If there are more than one warrant limitation will be counted from the execution of the last one. A contrary view is as much possible if one were to consider the spirit of the scheme which envisages expeditious disposal of the search cases and it would be reasonable to interpret that execution of warrant is not tantamount to completion of proceedings under Section 132 or 132A the period during which the proceedings under Section 132(3) remained pending has to be excluded for the purpose of counting limitation of one or two years under Section 158BE. Otherwise, it may lead to absurd results as it may take several years before restraint under Section 132(3) is lifted and it may thus extend the period of one or two years by all those years during which proceedings under Section 132(3) remained pending it may be agreed against this view that Section 132(8A) takes care that there is no extension of proceedings under Section 132(3) and that the view cannot be taken without doing violence to the language of the Act."

82. Therefore, the Explanation added to remove a doubt cannot be construed as a provision providing a longer period of limitation than the one prescribed in the main Section. When under the scheme of the Section there is no indication of a second search on the basis of the same authorisation issued under the said provision, the legislative intention is clear and plain and the interpretation to be placed by the courts should be in harmony with such an intention. Therefore, one authorisation is to be issued in respect of one premises in pursuance of which there can be only one search and such a search is concluded, when the searching party comes out of the premises, which is evidenced by drawing up a panchnama. When there are multiple places to search and when multiple authorisations are issued, on different dates or on the same date or in respect of the same premises more than one authorisation is issued on different dates, the last panchnama drawn in proof of conclusion of search in respect of the authorisation is to be taken into consideration for the purpose of limitation for block assessment. Conclusions (1) The Tribunal has got powers to look into all aspects of search and a valid search is sine qua non for initiating block assessment. (2) Materials seized during an invalid search cannot be used in block assessment proceeding but can be used in other assessment proceedings under the Act. (3) The power to put prohibitory order under Section 132(3) is under law but the reasons for doing so has to be recorded in writing and are justiciable. (4) The period of limitation starts on the date on which the last of authorisation has been executed and not when the authorised officer states that the search is finally concluded. Putting a prohibitory order under Section 132(3) does not elongate the starting point of limitation.”

54. The Revenue challenged this order before the Hon’ble Supreme Court SLP was admitted but ultimately Civil Appeal was dismissed. The next judgment which has been put in service by both the parties is the judgment of Hon’ble Delhi High court in the case of PCIT vs. PPC Business & Products Pvt. Ltd. In this case, two places were searched one authorization was for the search to be undertaken Pithampura, Delhi and other premise Ashok Vihar, Delhi. In the authorization both the premises were shown to be in possession of the assessee and his brother both being the Directors of the entity including JHM. In respect of the authorization of the search of Ashok Vihar premise of first panchnama dated 22ndMarch, 2007 and the warrant was in the case of assessee’s brother i.e. Mr. Sanjay Jain. The search was closed on 22ndMarch, 2007 as temporarily concluded. Second panchnama in relation to authorization of Ashok Vihar premises was prepared on 15thMay 2007 when prohibitory order was lifted. One Neena Jain was the person who has made acknowledgment of having received the second panchnama dated 15thMay, 2007 but according to the assessee, the jewellery belonging to Neena Jain at Ashok Vihar premise was valued on 21stMarch, 2007 when the alleged search was temporarily concluded. The case of the assessee was that search was concluded on 22ndMarch, 2007 when panchnama was prepared and restrain order was passed. The case of the Revenue, on the other hand, was that limitation for passing the assessment order is to be seen from the date when prohibitory order was lifted and second panchnama was drawn. The ITAT has held that assessment orders were time barred. Hon’ble Delhi High Court considered the judgment of Hon’ble Karnataka High Court in the case of C. Ramy Reddi also considered the Explanation (2a) to Section 158BE and observed that this Explanation (2a) is pare materia with sub-Section (2a) of Section 153B. The Hon’ble Court put reliance upon the judgment of C. Ramya Reddi and upheld the order of the ITAT.

55. The much reliance placed by the learned CITDR on the judgment of the Hon’ble Supreme Court in the case of VLS Finance Ltd. We deem it appropriate to take note of the following observations of the Hon’ble Supreme Court from this judgment on which emphasizes was put by the learned CITDR.

observed that this Explanation (2a) is pare materia with sub-Section (2a) of Section 153B. The Hon’ble Court put reliance upon the judgment of C. Ramya Reddi and upheld the order of the ITAT. 55. The much reliance placed by the learned CITDR on the judgment of the Hon’ble Supreme Court in the case of VLS Finance Ltd. We deem it appropriate to take note of the following observations of the Hon’ble Supreme Court from this judgment on which emphasizes was put by the learned CITDR.

“27. We may point out that the appellants never challenged subsequent visits and searches of their premises by the respondents on the ground that in the absence of a fresh authorisation those searches were illegal, null and void. Notwithstanding the same, it was argued that at least for the purpose of limitation the subsequent searches could not be taken into consideration, as according to the learned counsel, the legal position was that the authorisation dated 19th June, 1998, was executed on 22nd June, 1998 and the search came to an end with that when the search party left the premises on 23rd June, 1998 after making seizure of certain documents etc and issuing restraint order under Section 132(3) of the Act in respect of certain items which they allegedly could not seize due to impracticability on that day. Some judgments of various High Courts are relied upon to support this proposition. It was also argued that there was no concept of 'revalidation of authorisation' provided under the Act, which has been applied by the High Court in the impugned judgment, which according to the learned counsel for the appellants, amounts to legislating a new concept which is contrary to law.”

56. The learned counsel for the assessee submitted that in this case Hon’ble Supreme Court has not interpreted the scope of Section 153B(2) or scope of Explanation (2) to Section 158BE though attention of the Hon’ble Supreme Court was drawn by the Addl. Solicitor General from the Explanation (2) of Section 158BE but in paragraph no.29, Hon’ble Supreme Court had specifically observed that without going into legal niecety. Thus according to the learned counsel for the assessee, it is the judgment on the facts of that case. This aspect has been considered by the Hon’ble Delhi High Court in the case of CIT vs. S. K. Katiyal. In this case also, an identical issue came up before the Hon’ble Delhi High Court and Hon’ble Court has considered the judgement of Bombay High Court in the case of Sandhya P. Naik, Kerala High Court in Dr. C. Balakrishnan Nair &Hon'ble Karnataka High Court in , C. Ramaiah Reddy, while dealing with its earlier decision in the case of VLS Finance. The Hon’ble Court made following observations:

“30. The decision in VLS Finance (supra) also rests on a factual basis which is different from that of the present appeal. First of all, VLS Finance (supra) is a decision rendered in a writ petition under article 226 of the Constitution of India. In exercise of its writ jurisdiction a High Court decides cases on the basis of affidavits. It is open to the High Court to arrive at conclusions of fact (as well as of law) based upon the affidavits. The present case is an appeal from the order of the Tribunal, which is the final fact-finding authority under the Income Tax regime. The facts, as de termined by the Tribunal, unless they are held to be perverse, form the basis of the substantial questions of law which are to be determined by High Court's in appeals under Section 260A of the said Act. It ought to be remembered that the Tribunal was of the view that the search and seizure, in the present case, was completed on 17.11.2000. The Tribunal also held that the panchnama of 03.01.2001 was ―merely a release orderǁ. Secondly, in VLS Finance (supra), the search and seizure operations commenced on 22.06.1998 and continued till 05.08.1998. As many as 16 panchnama were drawn upon in respect of the visits made to the assessee's premises. There was a mass of documents which were searched and seized from time to time. The court found that the search concluded on 05.08.1998 and not on 22.06.1998. The court also found that the search was also not unduly prolonged. The court held

“Consequently, we are of the opinion that the respondents did not complete the search on 22-6-1998, as alleged by the petitioners, nor did they unduly prolong it. The search concluded on 5-8-1998, and so in terms of Explanation 2 to Section 158BE of the Act the period of limitation would begin from the end of August, 1998, that is, 31-8-1998 onwards…” (p. 297)

31. The factual basis of the decision in VLS Finance (supra) is entirely different to that of the present case. On law, there is nothing in VLS Finance (supra) which contradicts what we have explained above. If the search concluded on 5-8- 1998, as held by the court, and the panchnama of that date was the last of the string of 16 panchnama, obviously this would be the date on which the search was concluded and the date on which the warrant of authorization for search was executed. But, in the present appeal, no search whatsoever was conducted on 03.01.2001. Hence, the panchnama drawn up on 3-1-2001 cannot be regarded as a document evidencing the conclusion of a search. If that be so, 3-1-2001 cannot be regarded as the date on which the warrant of authorization was executed. Moreover, while in VLS Finance (supra), the court held that the search was not unduly prolonged, in the present case the gap between 17-11-2000 and 3- 1-2001 is unexplained.”

57. In other words, the Hon’ble Delhi High Court did not accept the contention of VLS Finance and dismissed its writ petition. The decision of Hon’ble Delhi High Court was taken up to the Hon'ble Supreme Court and Hon’ble Supreme Court affirmed the Delhi High Court. The Hon’ble Delhi High Court while dealing with this point was of the view that proposition in VLS Finance based on its facts is altogether different.

58. The next decision which was relied upon by the learned counsel for the assessee is the third member decision in the case of Nandlal M. Gandhi vs. ACIT 115 ITD 1. The facts in this case are that a search and seizure operation was carried out under s.132 of the Act at the residential premises of the assessee on 28th July, 1997 and continued till 02:30 a.m. on 29th July, 1997. During the said search, certain incriminating materials which inter alia included jewellery and shares, were found and the search party prepared an inventory in respect of search material as per para 5 of the panchnama only books of accounts and documents as per Annexure ‘A’ were seized and no seizure was affected in respect of other materials found during the course of search including jewellery and shares. In para 8 of the panchnama, it was stated that the search was temporarily concluded for the day to be commended subsequently. However, prohibitory order was issued under s.132(3) in respect of jewellery and shares found from the cupboard kept in the bed room of assessee’s son Shri Bakul N. Gandhi. The prohibitory order issued under s.132(3) of the Act in respect of jewellery therefore lifted on 1st August, 1997 at 04:00 p.m. while prohibitory order in respect of share certificates was lifted on 08th September, 1997. On 08th September, 1997, another panchnama was prepared wherein it was stated the search is finally concluded and no other comments/remarks were recorded therein. The dispute arose whether it is to be construed that search was concluded on 28th July 1997 or it was concluded on 08th September, 1997. The period of two years from the end of the month in which warrant of authorization of search was executed was required to be computed. The bench who heard the matter had divided in its opinion. The Hon'ble Judicial Member has assigned four reasons for concluding that the subsequent panchnama is not a valid panchnama for computing the limitation because there is no search carried out in September 1997 but the panchnama is prepared and this panchnama cannot be treated as a panchnama for the purpose of Section 158BE read with Explanation (2). The Hon'ble Accountant Member did not concur with and treated the second panchnama valid for computing the limitation. The dispute referred to the third member for his opinion and the question formulated 602 the third member was;

“Whether in the facts and circumstances of the case, the order under s.158BC made by the AO is time barred within the meaning of Section 158BE of the Act.?”

59. The third member has taken into consideration the judgment of Hon’ble Bombay High Court in the case of Sandhya P. Naik and Hon’ble Kerala High Court in case of Dr. C Balakrishnan Nair. The Hon’ble third member concur with the Judicial Member and held that issue in dispute is covered by the decision of Hon'ble Bombay High Court in the case of Sandhya P. Naik and it is to be construed that the search was concluded on 29th July 1997 and not from the date when panchnama was prepared while revoking the prohibitory order. The Hon'ble Bombay High Court in the case of Sandhya P. Naik while explaining the scope of Section 132(3) has observed that passing restraint order under Section 132(3), the time limit available for assessment cannot be extended. The other decisions referred by the learned counsel for the assessee are also to this effect, in the case of PPC Business Hon'ble Delhi High Court has categorically observed that when nothing was recovered while revoking the prohibitory order there cannot give rise to second panchnama. The Hon’ble Court in paragraph 26 of the judgment recorded that when nothing new for being seized was found then there would be no occasion to draw up a panchnama at all. It has been demonstrated before us that in the case of Ashok Sundardas Vasvani nothing was recovered when prohibitory order was lifted.

60. The relevant extract of the judgment of Hon’ble Kerala High court in the case of Dr. C Balakrishnan Nair v CIT reported in 237 ITR 70 reads as under:

10. From Ext.P3 second Panchanama dated 10- 11-1995 seven items, books of account and other valuable articles were seized. These articles which were available on 27-10-1995 were put in an almirah, according to the 2nd respondent, and sealed since scrutiny could not be completed during the search and investigation and prohibitory order under Section 132 was served on the petitioners. Sub-Section (3) of Section 132 empowers the authorised officer to pass an order on the owner that he shall not remove, part with or otherwise deal with articles and books of account, etc., except with the previous permission of the officer. But this can be served only if it is not practicable to seize any such books of account, other documents, etc. It is not stated as to why the books of account, documents, etc., was not practicable to be seized on 27-10-1995. The 2nd respondent had collected the listed documents from the premises and has put them in the almirah and sealed it. In the absence of any satisfactory explanation as to why the books of account, pass book and the documents were not practicable to be seized on 27-10-1995 itself, it is a case of contravention of sub-Section (3) of Section 132. The number of documents, pass book and the jewellery found and ultimately seizedwere few in number and the statement that the scrutiny could not be completed, nor practicable to seize, is impossible to accept on the face of it. It is in this context the allegation made against the second respondent that he carried away certain documents in his bag unauthorisedly on 27-10-1995 and brought them back on 10-11- 1995 assumes significance. However, the action of the search party headed by the second respondent in collecting the documents and various items from different parts of the premises and again putting them in the almirah in the bed room of the first floor of the residential premises is unreasonable and no provision is relied on for such a cause of action. Rule 112(4C) of the Income-tax Rules, 1962 empowers the authorised officer to serve an order on the owner that he shall not remove, part with or otherwise deal with it except with the previous permission only in cases where it is not practicable to seize the article or thing or any books of account or document. Therefore, the action of the second respondent and his members in dumping the documents, etc., seized in the almirah cannot be supported, but violates the mandatory requirement.

61. Likewise, the Hon’ble Bombay High Court in the case of CIT v. Sandhya P. Naik [2002] 124 Taxman 384 (Bom.) has observed that where a search party seized and removed from the premises of the assessee 5,729 gms. of gold ornaments, cash of Rs. 1,69,000 and books of account weighing nearly 500 kgs, then argument of the department that 45 kg. of silver ornaments had to be placed under PO due to their weight was not found tenable by the Tribunal and confirmed by the High Court as no impracticability was visualized in nonleisure of 45 kg. of silver ornaments.

62. Now coming to the case on hand, we find that on the revocation of the prohibitory orders, the search team has seized only 277 pages which was very much possible to seize them during the search proceedings which were concluded on 13thMarch 2015. The search team has to justify in the order passed under Section 132(3) of the Act that books/documents/valuables are not practicable to seize along with the reasons other than those mentioned in second proviso to Section 132(1).”

11.2 Appreciating the provisions of Section 153B of the Act, the Tribunal observed that the assessment orders have to be passed within two years from the end of the financial year in which the last authorisation was executed. The Tribunal, considering and reproducing the decision of the Karnataka High Court, observed that once an order under Section 132(3) has been passed then the limitation period commences and such an order cannot be continued unless and until the provisions of Section 132(8A) are satisfied. The Tribunal held that the prohibitory orders were invalid as the search team had seized only 277 pages which was very much possible to seize during search proceedings which concluded on 13/3/2015. The Tribunal also relied on a decision in the case of CIT v Sandhya P. Naik reported in (2002) 124 Taxman 384. Obviously, therefore, the Tribunal found that there could have been no justification to pass a prohibitory order as the same was not practicable. The Mumbai High Court in the case of Sandhya P Naik (supra) held as under:

“13. Admittedly, the name of Mr. Abrol does not figure here. So also admittedly, there was only one search warrant, which was issued on October 16, 1996, and executed between October 16, 1996, and October 20, 1996, and which expired thus on October 20, 1996. The warrant was issued on October 7, 1996, and the search was conducted continuously between October 16, 1996, and October 20, 1996. In between, the search was suspended only during the late hours of the night. On October 20, 1996, having seized all the relevant materials and valuables, the search party obviously had come to the conclusion that there was no further material to be seized and no more search operation to continue. The search comes to an end when the search party leaves the premises after carrying with it the seized material and thus authorisation for search is fully implemented and execution is complete. For this proposition, the Income-tax Appellate Tribunal Bench, Pune, took support of the decision of the Bangalore Bench in the case of Kirloskar Investments and Finance Ltd. v. Asst. CIT [1998] 67 ITD 504. In the present case at hand, the cupboard in which 45 kgs. of silver articles were kept was sealed by making an order under Section 132(3) of the Income-tax Act. The authorised officers were obviously very much aware of the contents of the cupboard and the nature of the articles in view of the inventory made by them. They had also come to the conclusion that the said 45 kgs. of silver articles need not be seized. There was no practical impediment to seizure of the said 45 kgs. of silver, if it was considered by the authorised officer as necessary. The contention of learned counsel for the Department that it was not practical to seize huge quantity of silver at odd hours, was rightly held to be untenable by the Income-tax Appellate Tribunal, because at the same odd hour, the search party seized and removed from the premises of the assessee 5,729 gms. of gold ornaments, cash of Rs. 1,69,000 and books of account, weighing nearly 500 kgs. on October 26, 1996, 6 kgs. of silver articles in the said cupboard were released, a panchanama was made and a further order under Section 132(3) passed with respect to the said sealed cupboard and the seal was placed again. Thus, the Income-tax Appellate Tribunal rightly held that the proceedings. On October 26, 1996, could not be considered as part of the execution of the search proceedings which concluded on October 20, 1996. Indeed, by simply staring in the panchanama that the search is temporarily suspended, the authorised officer cannot keep the search proceedings in operation by passing a restraint order under Section 132(3). Reliance placed by the Department on the judgment of the Allahabad High Court in the case of Sriram Jaiswal v. Union of India [1989] 176 ITR 261, was correct. The restraint order in view of this authority cannot be cancelled and renewed from time-to-time. Action under Section 132(3) of the Income-tax Act can be resorted to only if there is any practical difficulty in seizing the item which is liable to be seized. When there is no such practical difficulty the officer is left with no other alternative but to seize the item, if he is of the view that it represented undisclosed income. Power under Section 132(3) of the Income-tax Act thus cannot be exercised so as to circumvent the provisions of Section 132(3) read with Section 132(5) of the Income-tax Act. The position has become much moreclear after the insertion of the Explanation to Section 132(3) effective from July 1, 1995, that a restraint order does not amount to seizure. Therefore, by passing a restraint order, the time limit available for framing of the order cannot be extended.

14. The Income-tax Appellate Tribunal after perusing the search warrant in original noted that Mr. Amol Kamat, ACIT, Panaji, who was one of the authorised officers, had put the word "executed" and below it put his signature and date as October 16, 1996. It was further noted by the Income-tax Appellate Tribunal, that on October 20, 1996, at about 2.30 a.m. the authorised officer seized and removed while leaving the premises, all the materials (gold, silver, books of account, etc. as mentioned above), on the same day, i.e., October 20, 1996, after completion of the search and thereafter order was passed under Section 132(3) covering one cupboard in which all the silver articles were placed and sealed.

15. It is also very obvious that there was no warrant of authorisation for search in the name of Ashish Abrol. In his own affidavit, so also in his statement when he appeared before the Income-tax Appellate Tribunal, Mr. Abrol categorically stated that he had a very limited role in this entire episode and that he had no locus standi in the matter.

16. As far as the validity of the panchanama is concerned, one has to look to the provisions of the Criminal Procedure Code, 1973. The panchanama is to be drawn as far as possible, keeping in mind the provisions of the Criminal Procedure Code. It has to be said that obtaining of panch witnesses was not an impossible task for Mr. Abrol, who is supposed to have conducted the deemed seizure operation on December 13, 1996. In fact, the Department itself has admitted that there were many defects in the panchanama. They were repeatedly saying that there were many defects in the panchanama and still were saying that "believe in it and accept it", is not acceptable.

17. Having heard both the advocates at length and having gone through the impugned order, so also the various authorities cited by Mr. Rivonkar, in our opinion, no fault can be found with the impugned order of the Income-tax Appellate Tribunal, Pune Bench. The impugned assessment indeed is barred by limitation and also invalid. In view of this, therefore, the impugned assessment was rightly annulled. No interference is therefore warranted. Hence, the following order: All the tax appeals are dismissed in limine.”

11.3 While rejecting the Misc. Applications, the Tribunal observed as under:

“14. The 2nd grievance of the Revenue is that the ITAT erred in holding that prohibitory order under section 132(2) was passed to prolong the search proceeding and thereby taken last date of panchnama drawn in March 2015 instead May 2015 which is in contrast to the decision of Hon’ble Supreme Court in case of VLS Finance Ltd(supra). The ITAT further erred in holding that the locker against which prohibitory order under section 132(2) was passed was not belonging to assessee.

15. Again it is noted that the ITAT has considered all the materials available on record and the ITAT also analyses the decision of Hon’ble SC in case of VLS Finance Ltd (supra) and after making reference to other judgment of Hon’ble High Court held that principles laid down by the Hon’ble SC are not applicable to the facts on the hand. Thus, in our considered view, there is no mistake apparent in the order of the ITAT. At the this juncture we again feel pertinent to refer the judgment of Hon’ble Supreme Court in case of CIT vs. Reliance Telecom Ltd (supra) where it was held that even if the order passed by the ITAT is erroneous on merit, the only remedy available to the aggrieved party is to prefer an appeal before Hon’ble High Court. The relevant observation of the Hon’ble Supreme Court (supra) extracted as under:

“Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.”

16. It is also not out of place to mention that the Revenue against the order of the ITAT has already preferred an appeal before the Hon’ble High Court which has been admitted. This argument of the ld. AR was not controverted by the ld. DR appearing on behalf of the Revenue.

17. In view of the above, we hold that there is no apparent mistake in the order of ITAT as alleged by the Revenue in its miscellaneous application as discussed above. Therefore, we do not find any merit in the argument of Ld. Counsel for the Revenue. Hence, the MA filed by the Revenue is dismissed. 18. In the result all the M.A’s in this segment filed by the Revenue are hereby dismissed.”

11.4 In Category cases the SCAs that arise and the Tax Appeals if any filed against the Appellate Order details are as under:

Sr.	Asses	SCA	A.Y.	M.A.	IT(SS)A	T.A.	Remar
no	see /	No.		No.	No.	No.	ks
.	Respo ndent				(Assessee (A) /
					Revenue
					(R))
1		16366	2009-10	29/	241/Ahd/	38/2	Lead
		/2023		Ahd/	2019 (R)	022	ITA /
				2021			Appea
							l
2		16336/	2010-11	30/	242/Ahd/	35/2
		2023		Ahd/	2019 (R)	022
				2021
3	Ashok	16279/	2011-12	31/	243/Ahd/	43/2
	Sunda rdas	2023		Ahd/ 2021	2019 (R)	022
4	Vaswa	16362/	2012-13	32/	244/Ahd/	45/2
	ni	2023		Ahd/	2019 (R)	022
				2021
5		16370/	2013-14	33/	245/Ahd/	24/2
		2023		Ahd/	2019 (R)	022
				2021
6		16119/	2014-15	34/	246/Ahd/	30/2
		2023		Ahd/	2019 (R)	022
				2021
7		16131/	2015-16	35/	247/Ahd/	31/2
		2023		Ahd/	2019 (R)	022
				2021
8		16155/	2009-10	99/	88/Ahd/	21/2
		2023		Ahd/	2019 (A)	022
				2021
9		16375/	2010-11	100/	89/Ahd/	52/2
		2023		Ahd/	2019 (A)	022
				2021
10		16372/	2011-12	101/	90/Ahd/	53/2
		2023		Ahd/	2019 (A)	022
				2021
11		16359/	2012-13	102/	91/Ahd/	25/2
		2023		Ahd/	2019 (A)	022
				2021
12		16374/	2013-14	103/	92/Ahd/	27/2
		2023		Ahd/	2019 (A)	022
				2021
13		16358/	2014-15	104/	93/Ahd/	28/2
		2023		Ahd/	2019 (A)	022
				2021
14		16214/	2015-16	105/	94/Ahd/	64/2
		2023		Ahd/	2019 (A)	022
				2021
15		16090/	2009-10	74/	228/Ahd/	66/2
		2023		Ahd/	2019 (R)	022
				2021
16		16082/	2010-11	75/	229/Ahd/	58/2
		2023		Ahd/	2019 (R)	022
				2021
17	Venus Infrast ructur e and Devel opers Pvt.	16154/ 2023	2011-12	76/ Ahd/ 2021	230/Ahd/ 2019 (R)	62/2 022
18		16369/ 2023	2012-13	77/ Ahd/ 2021	231/Ahd/ 2019 (R)	68/2 022
19		16086/	2013-14	78/	232/Ahd/	LTE
	Ltd.	2023		Ahd/	2019 (R)
				2021
20		16087/	2014-15	79/	233/Ahd/	41/2
		2023		Ahd/	2019 (R)	022
				2021
21		16109/	2015-16	80/	234/Ahd/	44/2
		2023		Ahd/	2019 (R)	022
				2021
22		16177/	2009-10	83/	102/Ahd/	12/2
		2023		Ahd/	2019 (A)	022
				2021
23		16117/	2010-11	84/	103/Ahd/	57/2
		2023		Ahd/	2019 (A)	022
				2021
24		16171/	2011-12	85/	104/Ahd/	72/2
		2023		Ahd/	2019 (A)	022
				2021
25		16355/	2012-13	86/	105/Ahd/	59/2
		2023		Ahd/	2019 (A)	022
				2021
26		16371/	2013-14	87/	106/Ahd/	LTE
		2023		Ahd/	2019 (A)
				2021
27		16088/	2014-15	88/	107/Ahd/	67/2
		2023		Ahd/	2019 (A)	022
				2021
28		16115/	2015-16	89/	108/Ahd/	47/2
		2023		Ahd/	2019 (A)	022
				2021

Below Sr. No. 16 to 29 of Deepak Vaswani forming part
of the Category 2 are also forming part of Category 3
cases
16		12020	2009-10	13/	111/Ahd/	23/2	Lead
		/2023		Ahd/	2019 (A)	022	MA
				2021
17		12017/	2010-11	14/	112/Ahd/	61/2
		2023		Ahd/	2019 (A)	022
	Deepa			2021
18		12016/	2011-12	15/	113/Ahd/	56/2
	k	2023		Ahd/	2019 (A)	022
	Budha			2021
19	rmal	12014/	2012-13	16/	114/Ahd/	55/2
	Vaswa ni	2023		Ahd/ 2021	2019 (A)	022
20		12081/	2013-14	17/	115/Ahd/	60/2
		2023		Ahd/	2019 (A)	022
				2021
21		12082/	2014-15	18/	116/Ahd/	26/2
		2023		Ahd/	2019 (A)	022
				2021
22		12083/	2015-16	19/	117/Ahd/	51/2
		2023		Ahd/	2019 (A)	022
				2021
23		12084/	2009-10	21/	248/Ahd/	69/2
		2023		Ahd/	2019 (R)	022
				2021
24		12085/	2010-11	22/	249/Ahd/	65/2
		2023		Ahd/	2019 (R)	022
				2021
25		12086/	2011-12	23/	250/Ahd/	71/2
		2023		Ahd/	2019 (R)	022
				2021
26		12087/	2012-13	24/	251/Ahd/	63/2
		2023		Ahd/	2019 (R)	022
				2021
27		12089/	2013-14	25/	252/Ahd/	50/2
		2023		Ahd/	2019 (R)	022
				2021
28		12090/	2014-15	26/	253/Ahd/	70/2
		2023		Ahd/	2019 (R)	022
				2021
29		12091/	2015-16	27/	254/Ahd/	39/2
		2023		Ahd/	2019 (R)	022
				2021

D. CATEGORY 4. WHETHER THE REOPENING OF THE ASSESSMENTS IN THE CASE OF ASHOK SUNDERDAS VASWANI IS JUSTIFIABLE ?

12. In a challenge to the validity of the assessment framed under Section 147 of the Act, what emerged from the facts was that the assessee was an individual and engaged in the business of property development. A search was carried out under section 132 of the Act on 10/3/2015 and 12/3/2015 on the Vaswani group. The assessee being part of the group was also subject of search. Notice under Section 148 was issued on 30/3/2015. The CIT upheld the order of assessment thereunder. The Income Tax Appellate Tribunal in the Appeal in paras 82-86 held as under:

“82. We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, we note that the following issues arise for our consideration as detailed under:

(1) Whether in case of search under Section 132 of the Act, the proceeding under Section 153A of the can only be initiated without resorting to the provisions of Section 147 of the Act.

(2) Whether the AO can initiate the re-assessment proceeding under Section 147 of the Act on the basis of information received from the Investigation wing but without application of his mind on such materials.

(3) Whether the order under Section 147 of the Act survives in a situation where there was no addition with respect to the items which was documented in the reasons recorded but the additions were made with respect to the issues which come into notice of the AO during assessment/re-assessment proceeding under Section 147 of the Act in the final assessment/ reassessment order under Section 147 r.w.s. 143(3) of the Act.

83. The first question arises for our adjudication whether the material found during the search proceedings under Section 132 of the Act can be used for invoking the provisions of income escaping assessment under Section 147 of the Act. At this juncture were inclined to refer the provisions of Section 153A (1) of the Act which deals with the assessment proceedings in case of search being the special proceedings. The provisions of Section 153A (1) reads as under:

153A. (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132A after the 31st day of May, 2003, the Assessing Officer shall—

(a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause

(b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and for the relevant assessment year or years :

The above provisions begins with the non obstante clause overriding the provisions of Section 147 of the Act. The provisions of Section 153A (1)(a) of the Act provides that once the search under Section 132 of the Act is conducted or requisition is made under Section 132A of the Act in the case of a person, the AO shall require such person to file return of income under for six preceding assessment year immediate to the assessment year in which search or requisition was made. Similarly the provision of Section 153A(1)(b) empowers the AO to assess or reassess the income for such six assessment year preceding to the A.Y. in which search conducted or requisition made. Thus in other words, the assessment under Section 153A of the Act as a result of search is applicable for the specified number of 6 years.

84. To illustrate the above provision, if a search was conducted dated 11th June 2015 falling under P.Y. 2015-16 relevant to A.Y. 2016-17, then, the following number of assessment years will be subject to assessment or reassessment under the special proceedings (search assessment) under Section 153A of the Act.

1. A.Y. 2015-16

2. A.Y. 2014-15

3. A.Y. 2013-14

4. A.Y. 2012-13

5. A.Y. 2011-12

6. A.Y. 2010-11

85. Thus what is inferred is this that the assessment subsequent to search under Section 132 or requisition made under Section 132A of the Act, being special proceedings, are governed under the provisions of Section 153A of the Act. The provision of Section 153A(1)(b) provides that in case of search, six assessment years preceding to A.Y. in which search was conducted or requisition made will be assessed or reassessed. Thus the situation arises whether the materials discovered during search proceedings for beyond six preceding A.Y. can be used for invoking the provisions of Section 147 of the Act for the period not covered under the provisions of Section 153A of the Act. The answer stands in favour of the Revenue. It is because there is no denial under the provisions of law for using the search material under the provisions of Section 147 of the Act in a situation where the period/year in dispute is not covered within the provisions of Section 153A of the Act. It is not out of place to mention that the conditions precedent to invoking the provisions to Section 147 of the Act have to be complied by the Revenue. In holding so we draw support and guidance from the order of Hon’ble MP High Court in case Ramballabh Gupta vs. ACIT reported in 288 ITR 347 where it was held as under:

In order to decide the legality and validity of notice issued under Section 148, it is necessary to see as to whether conditions precedent provided in Section 148 are satisfied or not. Once the conditions prescribed under Section 148 are found present in the notice issued then, in that event, the notice has to be upheld being issued in conformity with the requirement of Section 148. [Para 9]

While deciding the legality of notice issued under Section 148, it is not necessary to look to the provisions of Section 153A because both Sections operate in different field and sphere. [Para 10]

The Assessing Officer does not have jurisdiction to issue notice under Section 148 in respect of those six assessment years which fall within the exclusive jurisdiction of Section 153A. Such was not the case in the instant case. [Para 11]

Admittedly, the Assessing Officer had not issued notice of reassessment under Section 153A in respect of six assessment years, i.e., 2003-04 to 1998-99 whereas he had issued impugned notice of reassessment for the assessment year 1997-98 under Section 148 which was the subject-matter of the instant writ. [Para 12]

The submission of the assessee that in cases of search, Section 148 had no application and, secondly, no order for reassessment could be passed beyond six years as provided in Section 153A could not be accepted. [Para 13]

Section 148 being an independent Section, powers exercised by the Assessing Officer cannot be curtailed if the impugned notice otherwise satisfies the requirement of Section 148. The only fetter put on the powers of the Assessing Officer in taking recourse to Section 148 is that notice under said Section cannot be issued in relation to those six assessment years which are defined in Section 153A. This fetter is due to use of non obstante clause in Section 153A. In all other cases and for all other assessment years, Section 148 can always be resorted to subject of course to the condition that it must satisfy the requirement specified in Section 148. [Para 14]

It was not the case of the assessee that the impugned notice did not satisfy the requirement of Section 148. On the other hand, it clearly appeared that firstly, notice under Section 148 could be issued for the assessment year 1997-98 being well within time, secondly, the Assessing Officer was empowered and had an authority to issue such notice. Thirdly, notice contained reasons as required under Section 148 and same were supplied to the assessee and lastly, on the strength of the material collected in the raid conducted in the premises of the assessee, a formation of belief for escape assessment could validly be formed for reopening of assessment made for the assessment year 1997- 98. The assessee did not challenge the notice on any of those grounds which alone could be made basis to challenge the impugned notice, it being issued under Section 148 and, hence, there was no difficulty in upholding the impugned notice which was rightly issued in conformity with the requirement of Section 148. [Para 16]

In view of the above judicial pronouncement, we hold that material found during the course of search proceedings can be used for invoking the provisions of Section 147 of the Act. However, it is important to note that the provisions of Section 147 of the Act can be invoked only after complying the provisions/conditions as provided under Section 147/148/149/150 and 151 of the Act.

86. We also note that case law referred by the learned AR for the assessee at the time of hearing are distinguishable from the facts of the present case. In view of the above and after considering the facts in totality, we are not inclined to disturb the finding of the authorities below. Hence the contention raised i.e. the provisions of Section 147 of the Act cannot be invoked in view of the fact that there was special proceedings under Section 153A of the Act in case of search, by the assessee is dismissed. Thus the contention of the assessee is hereby dismissed.”

12.1 On the rectification application, the Tribunal has held as under:

8.3 In this regard, we note that the ITAT after elaborate discussion on the issue of reason to believe has taken a view that reason recorded by the AO was nothing but borrowed satisfaction. In holding so the ITAT analyzed the facts available on record, given various reasoning and also referred several judicial precedent. As Such the Revenue in M.A. has not pointed out any specific mistake in the order which is apparent from the record. The issue raised by the Revenue in M.A. requires long drawn argument which is not allowed under section 254(2) of the Act. If the Revenue feels the order passed by the Revenue is erroneous on account of law or on fact then the only remedy available is to challenge the order at higher forum. In holding so we draw support and guidance from the judgment of Hon'ble Supreme Court in case of CIT vs. Reliance Telecom Ltd. reported in 133 taxmann.com 41 where in was held as under:

4. In the present case, a detailed order was passed by the ITAT when it passed an order on 6- 9- 2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 6-9-2013 which has been passed in exercise of powers under section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under section 254(2) of the Act. Therefore, the order passed by the ITAT dated 18-11-2016 recalling its earlier order dated 6-9-2013 is unsustainable, which ought to have been set aside by the High Court.

5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT.

6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors section 254(2) of the Act. As observed hereinabove, the powers under section 254(2) of the Act are only to correct and/or rectify the mistake apparent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant

12.2 In this category of cases, the list of SCAs and relevant Tax Appeals are as under:

DETAILS OF PETITIONS FILED IN VENUS GROUP OF MATTERS CATEGORY 4 CASES

Sr. no .	Assesse e / Respond ent	SCA No.	A.Y.	M.A. No.	IT(SS)A No. (Assess ee (A) / Revenue (R))	T.A. No.	Re mar ks
1	Rajesh	16361	2008	90/Ahd/	457/	42/	Lea
	Sundard as	/2023	-09	2021	Ahd/ 2019	2022	d ITA/
	Vaswani						App eal
2		16373/	2008-	57/Ahd/	805/Ahd/	29/
		2023	09	2021	2019	2022
3	Ashok	16388/	2008-	98/Ahd/	456/Ahd/	32/
	Sundard	2023	09	2021	2019	2022
4	as	16386/	2008-	28/Ahd/	806/Ahd/	48/
	Vaswani	2023	09	2021	2019	2022
5	Deepak	16385/	2008-	12/Ahd/	461/Ahd/	16/	Lea
	Budhar mal	2023	09	2021	2019	2022	d MA
6	Vaswani	16389/	2008-	20/Ahd/	807/Ahd/	34/
		2023	09	2021	2019	2022

13. Before we conclude, a brief re-look at the provisions of Section 254(2) and the decisions cited by Mr. Tushar Hemani, learned Senior Advocate needs to be considered.

A bare reading of Section 254(2) indicates that the Appellate Tribunal may at any time within six months from the month in which the order was passed with a view to rectifying the mistake apparent from the record amend any order passed. Therefore, the mistake has to be apparent from the face of the record and not one where an extensive delving into arguments and a re-look can be sought on questions decided on merits.

13.1 In the case of Commissioner of Income Tax (IT4), Mumbai vs Reliance Telecom Ltd. reported in (2021) 133 taxmann.com 41 (SC), the Hon’ble Supreme Court has held that when a detailed order has been passed by the ITAT, no rectification can be made on the ground that the order passed by the ITAT was erroneous either on facts or in law as in that case the only remedy was to prefer an appeal. The Hon’ble Supreme Court held thus:

“4. In the present case, a detailed order was passed by the ITAT when it passed an order on 06.09.2013, by which the ITAT held in favour of the Revenue. Therefore, the said order could not have been recalled by the Appellate Tribunal in exercise of powers under Section 254(2) of the Act. If the Assessee was of the opinion that the order passed by the ITAT was erroneous, either on facts or in law, in that case, the only remedy available to the Assessee was to prefer the appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court.

5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT.

Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee was to prefer an appeal before the High Court, which in fact was filed by the Assessee before the High Court, but later on the Assessee withdrew the same in the instant case.”

13.2 In the case of Vrundavan Ginning and Oil Mill v. Assistant Registrar/President reported in (2021) 126 taxmann.com 227 (Gujarat), the Division Bench considering the powers of the Tribunal to rectify the orders under Section 254(2) held thus:

“11 Section 254(2) of the Act makes it amply clear that a 'mistake apparent from the record' is rectifiable. To attract the jurisdiction under Section 254(2), a mistake should exist and must be apparent from the record. The power to rectify the mistake, however, does not cover cases where a revision or review of the order is intended. "Mistake" means to understand wrongly or inaccurately; it is an error; a fault, a misunderstanding, a misconception. "Apparent" implies something that can be seen, or is visible; obvious; plain. A mistake which can be rectified under Section 254(2) is one which is patent, obvious and whose discovery is not dependent on argument. The language used in Section 254(2) is permissible where it is brought to the notice of the Tribunal that there is any mistake apparent from the record. The amendment of an order therefore, does not mean obliteration of the order originally passed and its substitution by a new order which is not permissible, under the provisions of Section 254(2). Further, where an error is far from selfevident, it ceases to be an "apparent" error. Undoubtedly, a mistake capable of rectification under Section 254(2) is not confined to clerical or arithmetical mistakes. At the same time, it does not cover any mistake which may be discovered by a complicated process of investigation, argument or proof. As observed by the Supreme Court in Master Construction Co. (P) Ltd. v. State of Orissa (1966) 17 STC 360, an error which is apparent on the face of the record should be one which is not an error which depends for its discovery on elaborate arguments on questions of fact or law. A similar view was also expressed in Satyanarayan Laxminarayan Hegde vs. Mallikarjun Bhavanappa Tirumale [AIR 1960 SC 137].

12 Significantly, the language used in Order 47, Rule 1 of the CPC, 1908, is different from the language used in Section 254(2) of the Act. Power is conferred upon various authorities to rectify any "mistake apparent from the record". Though the expression "mistake" is of indefinite content and has a large subjective area of operation, yet, to attract the jurisdiction to rectify (an order) under Section 254(2), it is not sufficient if there is merely a mistake in the orders sought to be rectified. The mistake to be rectified must be one apparent from the record. A decision on the debatable point of law or undisputed question of fact, is not a mistake apparent from the record.

13 The contours of the jurisdiction under Section 254 (2) were examined by the Delhi High Court in Commissioner of Income Tax v. Income Tax Appellate Tribunal [(2005) 204 CTR Del 349]. It was held that:

"6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record. What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly well settled by two decisions of this Court in Ms. Deeksha Suri v. ITAT and Karan and Co. v. ITAT [2002] 253 ITR 131. This Court has in both these decisions held that the foundation for the exercise of the jurisdiction lies in the rectification of a mistake apparent from the record which object is ensued by amending the order passed by the Tribunal. The said power does not however, contemplate a re-hearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to review the order made by the Tribunal. The following passage from the decision of this Court in Karan and Co.'s case (supra) elucidates the difference between review and rectification of an order made by the Tribunal:

"The scope and ambit of application of Section 254(2) is very limited. The same is restricted to rectification of mistakes apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent. The order passed by the Tribunal under Section 254(1) is the effective order so far as the appeal is concerned. Any order passed under Section 254(2) either allowing the amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under Section 254(1). That is the final order in the appeal. An order under Section 254(2) does not have existence de hors the order under Section 254(1). Recalling of the order is not permissible under Section 254(2). Recalling of an order automatically necessitates re hearing and re-adjudication of the entire subject matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms or Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessed shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT . Judged in the above background the order passed by the Tribunal is indefensible."

7. That being the legal position, the Tribunal was not in our opinion justified in recalling the order passed by it in toto and setting the matter down for a fresh hearing. Just because a pronouncement made on the subject either by the Tribunal or by any other Court was not noticed by the Tribunal while taking a particular view on the merits of the controversy may constitute an error that would call for correction in an appropriate appeal against the order. Any such error may however fall short of constituting a mistake apparent from the record within the meaning of Section 254(2) of the Act. More importantly just because a point is debatable (which is one of the reasons given by the Tribunal in the instant case) would hardly provide a justification for recalling the order and fixing the appeal for a de novo hearing. While doing so, the Tribunal has no doubt made certain observations in regard to the levy of interest under Section 158BFA being statutory in nature with no power vested in any authority or Tribunal to condone the same, but the very fact that the Tribunal has made those observations would not render valid the order of recall passed by it. The net result of the order made by the Tribunal continues to remain the same viz, the appeal has to be heard again simply because one of the issues decided by the Tribunal is debatable or the Tribunal has not noticed an earlier decision rendered by another Bench. Both these reasons were insufficient to justify the order of recall made by the Tribunal."

In Commissioner of Income Tax v Honda Siel Power Products (2007) 293 ITR 132 (Del) the Court held that:

"It makes no difference whether the entire order is sought to be recalled or the order passed by the Tribunal on individual grounds is sought to be recalled in entirety. In other words, if the Tribunal has given its decision on say grounds 3 and 4 in a particular way in its first order while dealing with ten separate grounds and pursuant to a rectification application, it recalls its decision on grounds 3 and 4 and gives a completely different decision on the said grounds, then it would certainly amount to recall and review of its entire order in respect of those grounds."

The Court also noticed and held that:

"It must be remembered that this is not a power of review but is restricted to rectifying mistakes "apparent from the record." A liberal approach might constitute an invitation to parties to allow the period for filing an appeal to expire, anticipate a change of coram of the bench that heard the appeal in the first instance, and then at their own sweet will "take a chance" by filing a rectification application on any fancy imagined 'mistake apparent from the record' at any time before the expiry of four years."

The Supreme Court also, in T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay v. Volkart Brothers, Bombay [1971] 82 ITR 50 (SC) placed similar interpretation on the expression "with a view to rectifying any mistake apparent from the record" an expression common in section 254(2) and section 154 of the Act, holding:

From what has been said above, it is clear that the question whether Section 17(1) of the Indian Income tax Act, 1922 was applicable to the case of the first respondent is not free from doubt.

Therefore the Income tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Millikarjun Bhavanappa Tirumale [1960] 1 SCR 890 this Court while spelling out the scope of the power of a High Court under Article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the recordsee Sidhramappa v. Commissioner of Incometax, Bombay [1952] 21 ITR 333(Bom).

The power of the officers mentioned in Section 154 of the Income tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record''.

[See: Commissioner of Income Tax II vs. Maruti Insurance Distribution Services Ltd - [2012] 26 taxmann.com 68 (Delhi)]

14 The case on hand is quite unusual or rather we may say typical.

15 The case of the writ applicant is that a specific ground raised in the appeal has not been taken into consideration by the Appellate Tribunal. In other words, no finding has been recorded in that regard by the Appellate Tribunal. It is argued that in such circumstances, an application under Section 254 of the Act would be maintainable. It is argued by the learned counsel appearing for the writ applicant that although Section 254 of the Act talks about the power of rectification, yet the matter of the present type would also be covered under Section 254 of the Act.

16 In this regard, Mr. Patel seeks to rely upon a decision of this Court in the case of Dattani and Co. vs. Income Tax Officer reported in [2014] 41 taxmann.com 360 (Gujarat), more particularly, the observations made in para 4 therein.

17 On the other hand, the argument of the learned Senior Standing Counsel appearing for the Revenue, while opposing the present writ application, is that no error, not to speak of any error of law could be said to have been committed by the Tribunal in passing the impugned order.

18 The stance of the Tribunal, as it reflects on plain reading of the impugned order, is that the ground which the writ applicant is talking about relating to addition of Rs.67,59,613/ on account of suppression in the value of closing stock has been discussed. While disposing of the application, the Tribunal took the view that the scope of subsection (2) of Section 254 of the Act is restricted to rectify any mistake in the order apparent on the face of it and would not extend to review the order.

19 Having regard to the materials on record, we find it difficult to take the view that the ground No.3, which the writ applicant is talking about, has not been dealt with at all by the Appellate Tribunal. The Appellate Tribunal, in its own way, has discussed the said issue and recorded a particular finding. If the writ applicant is dissatisfied, then it is always open for him to prefer an appeal under Section 260A of the Act before this High Court and in the course of the appeal, it can be pointed out to the Court as regards the ground No.3 and if the Court is convinced, then it may remit the matter to the Tribunal for fresh consideration of the ground No.3, which the writ applicant is talking about. The power to rectify an order under Section 254(2) of the Act is extremely limited, as observed by the Delhi High Court in the case of Maruti Insurance (supra). It does not extend to correcting the errors of law or reappreciating the factual findings. Those properly fall within the appellate review of an order of Court of first instance. What legitimately falls for consideration are errors (mistakes) apparent from the record.”

13.3 The Delhi High Court in the case of Commissioner of Income Tax-II v. Maruti Insurance Distribution Services Ltd. [(2012) 26 taxmann.com 68 (Delhi)] held as under:

“9. The contours of the jurisdiction under Section 254 (2) were examined repeatedly by Division Benches of this Court. In Commissioner of Income Tax v. Income Tax Appellate Tribunal (2005) 204 CTR Del 349, it was held that:

"6. It is evident from the above that the power available to the Tribunal is not in the nature of a review as is understood in legal parlance. The power is limited to correction of mistakes apparent from the record. What is significant is that the section envisages amendment of the original order of the Tribunal and not a total substitution thereof. That position is fairly wellsettled by two decisions of this Court in Ms. Deeksha Suri v. ITAT and Karan and Co. v. ITAT [2002] 253 ITR 131. This Court has in both these decisions held that the foundation for the exercise of the jurisdiction lies in the rectification of a mistake apparent from the record which object is ensued by amending the order passed by the Tribunal. The said power does not however, contemplate a re-hearing of the appeal for a fresh disposal. Doing so would obliterate the distinction between the power to rectify mistakes and the power to review the order made by the Tribunal. The following passage from the decision of this Court in Karan and Co.'s case (supra) elucidates the difference between review and rectification of an order made by the Tribunal:

"The scope and ambit of application of Section 254(2) is very limited. The same is restricted to rectification of mistakes apparent from the record. We shall first deal with the question of the power of the Tribunal to recall an order in its entirety. Recalling the entire order obviously would mean passing of a fresh order. That does not appear to be the legislative intent. The order passed by the Tribunal under Section 254(1) is the effective order so far as the appeal is concerned. Any order passed under Section 254(2) either allowing the amendment or refusing to amend gets merged with the original order passed. The order as amended or remaining unamended is the effective order for all practical purposes. The same continues to be an order under Section 254(1). That is the final order in the appeal. An order under Section 254(2) does not have existence de hors the order under Section 254(1). Recalling of the order is not permissible under Section 254(2). Recalling of an order automatically necessitates re-hearing and readjudication of the entire subject- matter of appeal. The dispute no longer remains restricted to any mistake sought to be rectified. Power to recall an order is prescribed in terms or Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, and that too only in cases where the assessed shows that it had a reasonable cause for being absent at a time when the appeal was taken up and was decided ex parte. This position was highlighted by one of us (Justice Arijit Pasayat, Chief Justice) in CIT v. ITAT . Judged in the above background the order passed by the Tribunal is indefensible."

In Commissioner of Income Tax v Honda Siel Power Products (2007) 293 ITR 132 (Del) the Court held that:

The Court also noticed and held that:

The Supreme Court also, in T.S. Balaram, Income Tax Officer, Company Circle IV, Bombay v. Volkart Brothers, Bombay [1971] 82 ITR 50 (SC) placed similar interpretation on the expression "with a view to rectifying any mistake apparent from the record" - an expression common in section 254(2) and section 154 of the Act, holding:

From what has been said above, it is clear that the question whether Section 17(1) of the Indian Income-tax Act, 1922 was applicable to the case of the first respondent is not free from doubt. Therefore the Income-tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under Section 154 of the Income-tax Act, 1961. A mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may conceivably be two opinions. As seen earlier, the High Court of Bombay opined that the original assessments were in accordance with law though in our opinion the High Court was not justified in going into that question. In Satyanarayan Laxminarayan Hegde and Ors. v. Mallikarjun Bhavanappa Tirumale [1960]1SCR890 this Court while spelling out the scope of the power of a High Court under Article 226 of the Constitution ruled that an error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhramappa v. Commissioner of Income-tax, Bombay [1952]21ITR333(Bom). The power of the officers mentioned in Section 154 of the Income-tax Act, 1961 to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record''.

10. It can be seen from the preceding discussion that the power to rectify an order, under Section 254 (2) is extremely limited. It does not extend to correcting errors of law, or re-appreciating factual findings. Those, properly fall within appellate review of an order of court of first instance. What legitimately falls for consideration are errors (mistakes) apparent from the record. Here, whether the dealer commissions remained constant throughout the previous years, or had to dwindle, according to the Tribunal's understanding in its previous order of 30-11-2009, were matters that had to be gone into and were directed to be gone into by the Assessing officer. However, in the order by which previous order was rectified, the entire basis of its previous reasoning was substituted, and a wholly new result ensued. This court is clear that such re-appreciation did not amount to rectification of a mistake, but re-appreciation of a process of reasoning, which falls legitimately in the sphere of the appellate forum. The Tribunal - as is evident from a reading of its impugned order- took note of its order dated 9- 10-2009 in respect of the AY 2005-06, and was to quite an extent influenced by it. This court also notices that the correctness of that order is under appeal before this court (in ITA 1476/2010) and a question of law has been framed. Furthermore, the Tribunal could, in view of clear decisions of this court, have not entirely substituted and re-written its previous order.”

13.4 What is therefore evident on considering the decision of the ITAT in the Appellate proceedings where the issues have been examined threadbare on merits considering the case laws, merely because the Appellate Tribunal, which according to the Revenue has been decided by misinterpretation of facts and law, the same cannot be a subject matter of rectification.

14. In some of the cases before us in the each of the 4 Categories set out herein above, the Revenue has also filed Tax Appeals challenging the order of the Tribunal dated 12.11.2020 in various Tax Appeals under Section 260A of the Income Tax Act,1960. We have set out against each Special Civil Application numbers category wise in which Tax Appeals have been filed.

15. In light of the decisions in the case of R.C. Sabharwal v. CIT reported in (2010) 2 taxmann.com 289 (Delhi) and in the case of CIT vs Muni Seva Ashram reported in (2013) 221 Taxman 27 (Guj), in such petitions where Tax Appeals are filed by the Revenue in the respective categories, the petitions so filed are not entertained while reserving the right of the Revenue to urge the grounds raised in these petitions while arguing the Appeals. The following petitions in which the Revenue has filed Tax Appeals and are pending are not entertained reserving the liberty to urge the grounds raised in the respective Tax Appeal. These petitions are accordingly disposed-off without assigning any further reasons.

Sr. No.	Assessee	Before Hon'ble High Court		Assessme nt Year	Before Income Tax Appellate Tribunal
Sr. No.	Assessee	SCA No.	Tax Appeal No.	Assessme nt Year	Misc. Application No.	Appeal No.
1	Hitesh Ashok Vaswani	12000 of	5 of 2022	2011-12	MA	IT(SS)A
		2023			38/Ahd/2021	120/Ahd/2019
2	Hitesh Ashok Vaswani	12001 of	6 of 2022	2012-13	MA	IT(SS)A
		2023			39/Ahd/2021	121/Ahd/2019
3	Hitesh Ashok Vaswani	12042 of	7 of 2022	2013-14	MA	IT(SS)A
		2023			40/Ahd/2021	122/Ahd/2019
4	Hitesh Ashok Vaswani	12041 of	8 of 2022	2014-15	MA	IT(SS)A
		2023			41/Ahd/2021	123/Ahd/2019
5	Navin Ashok Vaswani	12010 of	14 of 2022	2013-14	MA	IT(SS)A
		2023			48/Ahd/2021	206/Ahd/2019
6	Shree Sai Siddhi	12008 of	13 of 2022	2013-14	MA	IT(SS)A
	Corporation	2023			65/Ahd/2021	279/Ahd/2019
7	Venus Township India LLP	12003 of	10 of 2022	2012-13	MA	IT(SS)A
		2023			68/Ahd/2021	282/Ahd/2019
8	Venus Township India LLP	12076 of	11 of 2022	2013-14	MA	IT(SS)A
		2023			69/Ahd/2021	283/Ahd/2019
9	Venus Infrabuild	12079 of	15 of 2022	2014-15	MA	IT(SS)A
		2023			73/Ahd/2021	836/Ahd/2019
10	Rajesh Sunderdas Vaswani	12062 of 2023	54 of 2022	2009-10	MA 91/Ahd/2021	IT(SS)A 95/Ahd/2019
11	Rajesh Sunderdas	12060 of	46 of 2022	2010-11	MA	IT(SS)A
	Vaswani	2023			92/Ahd/2021	96/Ahd/2019
12	Rajesh Sunderdas	12059 of	20 of 2022	2011-12	MA	IT(SS)A
	Vaswani	2023			93/Ahd/2021	97/Ahd/2019
13	Rajesh Sunderdas	12046 of	37 of 2022	2012-13	MA	IT(SS)A
	Vaswani	2023			94/Ahd/2021	98/Ahd/2019
14	Rajesh Sunderdas	12048 of	33 of 2022	2013-14	MA	IT(SS)A
	Vaswani	2023			95/Ahd/2021	99/Ahd/2019
15	Rajesh Sunderdas	12049 of	9 of 2022	2014-15	MA	IT(SS)A
	Vaswani	2023			96/Ahd/2021	100/Ahd/2019
16	Rajesh Sunderdas	12053 of	22 of 2022	2015-16	MA	IT(SS)A
	Vaswani	2023			97/Ahd/2021	101/Ahd/2019
17	Rajesh Sunderdas	12054 of	49 of 2022	2009-10	MA	IT(SS)A
	Vaswani	2023			58/Ahd/2021	235/Ahd/2019
18	Rajesh Sunderdas	12045 of	18 of 2022	2011-12	MA	IT(SS)A
	Vaswani	2023			59/Ahd/2021	236/Ahd/2019
19	Rajesh Sunderdas	12056 of	40 of 2022	2012-13	MA	IT(SS)A
	Vaswani	2023			60/Ahd/2021	237/Ahd/2019
20	Rajesh Sunderdas	12027 of	17 of 2022	2013-14	MA	IT(SS)A
	Vaswani	2023			61/Ahd/2021	238/Ahd/2019
21	Rajesh Sunderdas	12028 of	36 of 2022	2014-15	MA	IT(SS)A
	Vaswani	2023			62/Ahd/2021	239/Ahd/2019
22	Rajesh Sunderdas	12024 of	19 of 2022	2015-16	MA	IT(SS)A
	Vaswani	2023			63/Ahd/2021	240/Ahd/2019
23	Deepak Budharmal	12020 of	23 of 2022	2009-10	MA	IT(SS)A
	Vaswani	2023			13/Ahd/2021	111/Ahd/2019
24	Deepak Budharmal	12017 of	61 of 2022	2010-11	MA	IT(SS)A
	Vaswani	2023			14/Ahd/2021	112/Ahd/2019
25	Deepak Budharmal	12016 of	56 of 2022	2011-12	MA	IT(SS)A
	Vaswani	2023			15/Ahd/2021	113/Ahd/2019
26	Deepak Budharmal	12014 of	55 of 2022	2012-13	MA	IT(SS)A
	Vaswani	2023			16/Ahd/2021	114/Ahd/2019
27	Deepak Budharmal	12081 of	60 of 2022	2013-14	MA	IT(SS)A
	Vaswani	2023			17/Ahd/2021	115/Ahd/2019
28	Deepak Budharmal	12082 of	26 of 2022	2014-15	MA	IT(SS)A
	Vaswani	2023			18/Ahd/2021	116/Ahd/2019
29	Deepak Budharmal	12083 of	51 of 2022	2015-16	MA	IT(SS)A
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