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2022 (4) TMI 27 - AT - Income TaxAssessment u/s 153A - valid satisfaction recorded u/s. 153C or not ? - specified incriminating seized material belongs to a person other than the searched parties - HELD THAT - DR could hardly rebut the fact that the Assessing Officer herein had only recorded the corresponding seized material as relates to the assessee whereas the said statutory expression stood inserted in the Act w.e.f. 1.6.2015 only. We are dealing with the search in question dated 11.03.2010 in M/s. MBS Jewellers (P) Ltd. and that the corresponding satisfaction on the Assessing Officer's part had to be only to the effect that the specified incriminating seized material belongs to a person other than the searched parties. Coupled with this, learned counsel has already filed a copy of the tribunal's order in M/s. Ashi Plywood Industries relating to the very search that the Assessing Officer had not recorded a valid satisfaction u/s. 153C as well. We thus follow judicial consistency to affirm the CIT(A)'s identical lower appellate findings in the absence of any distinction on facts and circumstances involved herein.
Issues Involved:
1. Delay in filing the appeal. 2. Validity of proceedings under Section 153C of the Income Tax Act, 1961. Detailed Analysis: 1. Delay in Filing the Appeal The Revenue's appeal for the assessment year (A.Y.) 2009-10 was delayed by 09 days in filing before the ITAT. The assessee submitted a petition for condonation of delay, citing ambiguity in the CIT(A)'s order as the cause for the delay. The tribunal relied on the case laws of *Collector Land Acquisition vs. Mst. Katiji & Ors* (1987 AIR 1353) and *University of Delhi vs. Union of India* (Civil Appeal No. 9488 & 9489/2019 dated 17 December 2019) to condone the delay, holding that the delay was neither intentional nor deliberate but due to circumstances beyond the assessee's control. Consequently, the delay was condoned, and the case was taken up for adjudication on merits. 2. Validity of Proceedings under Section 153C of the Income Tax Act, 1961 The primary issue raised by the Revenue was that the CIT(A) erred in quashing the assessment order for want of a valid satisfaction recorded under Section 153C of the Act. The CIT(A) held that the proceedings under Section 153C were not validly initiated as there was no material belonging to the appellant that was seized, and no satisfaction was recorded as required. During the appellate proceedings, it was contended that the order was quashed in a group case of the appellant (P.S. Prasad for A.Y. 2006-07, ITA No. 1211/H/2014) due to non-satisfaction under Section 153C. The appellant argued that since no valid satisfaction was recorded, their case was covered by the same order, and thus, the assessment order for A.Y. 2009-10 should also be quashed. The CIT(A) referenced a similar case (Mr. P.S. Prasad for A.Y. 2009-10, ITA No. 0160/2015-16) where the assessment was quashed due to the lack of recorded satisfaction. The CIT(A) concluded that the proceedings under Section 153C were invalid as the Assessing Officer (AO) did not record the required satisfaction that the seized documents belonged to the assessee. This conclusion was supported by the judicial decision in *Shettys Pharmaceuticals & Biologicals Ltd.*, which mandates that satisfaction must be recorded by the AO conducting the search and the AO having jurisdiction over the third party. The tribunal noted that the AO had only recorded that the seized material "relates to" the assessee, whereas the statutory requirement was that the material "belongs to" a person other than the searched parties. This distinction is crucial, as the search in question occurred on 11.03.2010, and the relevant statutory expression was inserted into the Act only w.e.f. 1.6.2015. The tribunal affirmed the CIT(A)'s findings, emphasizing judicial consistency and the absence of any factual distinction. Conclusion: The tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to quash the assessment order due to the lack of valid satisfaction recorded under Section 153C. The order was pronounced in the Open Court on 21st March 2022.
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