9911796707
TMI Blog2015 (2) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 as had been passed by the ACIT, Central Circle-l, Lucknow under section 153C read with section 143(3) of the Act. 2. BECAUSE the view taken by the "CIT(A)" is based on nonappreciation of ratio of various case laws (as have been referred to by him in the appellate order) and erroneous assumption of facts and consequently the assessment order dated 31.12.2010 as passed under section 153C read with section 143(3) was not valid. WITHOUT PREJUDICE TO THE AFORESAID 3. BECAUSE investment in purchase of mini-truck stood fully proved from the income/resources available with the appellant and view to the contrary as has been taken by the Authorities below is wholly erroneous and the addition made/sustained by the Authorities below is not sustainable. 4. BECAUSE the income from transport business as sustained by the "CIT(A)" at Rs. 25,200 is much too high and excessive as the estimate is based on non-consideration of facts of the case. 5. BECAUSE income from brokerage business at Rs. 40,000 has wrongly been upheld by the "CIT(A)", as the "appellant" did not carry on any such business, with regularity. 6. BECAUSE in any case there is no basis to make an estimate of such income at Rs. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f not recorded, the assessment framed under section 153C of the Act is bad in law. Copy of this judgment is placed on record. 4. The ld. D.R., on the other hand, has placed reliance upon the order of the ld. CIT(A) with the submission that satisfaction was not required to be recorded by the Assessing Officer of the searched person, as the proceedings initiated under section 153C of the Act cannot be equated with the proceedings initiated under section 158BD of the Act. 5. Having given a thoughtful consideration to the rival submissions and from a careful perusal of the orders of the authorities below, we find that the ld. CIT(A) has not given any specific finding with regard to recording of satisfaction by the Assessing Officer of the searched person before initiating proceedings under section 153C of the Act. The ld. CIT(A) has rather rejected the contentions of the assessee in this regard by holding that the Assessing Officer of the searched person was not required to record satisfaction as required under section 158BD of the Act before initiating proceedings under section 153C of the Act. During the course of hearing, various opportunities were afforded to the Revenue to place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction over both the persons, i.e. 'searched person' and the 'other person' (not searched). Sri Agrawal relied upon a Division Bench judgment of this Court rendered in the case of Commissioner of Income Tax Vs. Classic Enterprises, (2013) 358 ITR 465. It was contended that the Tribunal was not justified in quashing the notice under Section 153C, instead of deciding the question on merits as to whether additions are to be made and/ or to what extent the income is to be assessed in the hands of Gopi Apartments. Sri Agrawal also contended that by the Finance Act, 2003, Amendment in Section 153A w.e.f. 01.06.2003 was made and Sections 153A and 153C were added in place of Sections 153BC and 153BD. Section 158BC is equivalent to Section 153A and Section 158BD is equivalent to Section 153C. He also contended that the reliance placed by the I.T.A.T. upon the judgment of the Supreme Court in Manish Maheshwari (supra) was misplaced and the case, at hand, was squarely covered by the Division Bench of this Court in the case of Classic Enterprises (supra). In this regard, Sri Agrawal referred to the observation in Manish Maheshwari's case to the effect that "No procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other 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 [under section 158BC] against such other person and the provisions of this Chapter shall apply accordingly." The meaning and scope of the aforesaid provision contained in Section 158BD came up for consideration before the Supreme Court in the case of Commissioner of Income Tax-III Vs. M/s Calcutta Knitwears, Ludhiana (supra). The issue that fell for consideration before the Supreme Court, as mentioned in paragraph-3 of the judgment is being quoted hereinbelow: "3. The issue that falls for our consideration and decision in all these appeals is: at what stage of the proceedings under Chapter XIV-B does the assessing authority require to record his satisfaction for issuing a notice under Section 158BD of the Income Tax Act, 1961 ('the Act' for short)." After considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and (c) immediately after the assessment proceedings are completed under Section 158BC of the Act of the searched person. 45. We are informed by Shri Santosh Krishan, who is appearing in seven of the appeals that the assessing officer had not recorded the satisfaction note as required under Section 158BD of the Act, therefore, the Tribunal and the High Court were justified in setting aside the orders of assessment and the orders passed by the first appellate authority. We do not intend to examine the aforesaid contention canvassed by the learned counsel since we are remanding the matters to the High Court for consideration of the individual cases herein in light of the observations made by us on the scope and possible interpretation of Section 158BD of the Act. 46. With these observations, the appeals are disposed of." The provisions of Section 158BD being pari materia with the provisions of Section 153C, the ratio of the aforesaid judgment clearly applies to the present case also. The reference to the assessment proceedings under Section 158BC by the Supreme Court in the extracts quoted above is with regard to the 'assessment proceedings' in relation to the 'searche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or at the time of initiation of assessment proceedings against the 'searched person', or even during the assessment proceedings against him or even after completion of the same, but before issuance of notice to the 'such other person' under Section 153C. Even in a case, where the Assessing Officer of both the persons is the same and assuming that no handing over of documents is required, the recording of 'satisfaction' is a must, as, that is the foundation, upon which the subsequent proceedings against the 'other person' are initiated. The handing over of documents etc. in such a case may or may not be of much relevance but the recording of satisfaction is still required and in fact it is mandatory. In this regard, the ratio of the judgment of the Supreme Court in the case of Commissioner of Income Tax-III Vs. M/s Calcutta Knitwears, Ludhiana (supra), as noted above, clearly applies to the proceedings under Section 153C also. The 'satisfaction' has to be in writing and can be gathered from the assessment order passed in respect of the 'searched person', if it is so mentioned/ recorded or from any other order, note or record maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat satisfaction for issuing notice under Section 153C was recorded, however, on examination, recording of such satisfaction alleged to be recorded by the Assessing Officer was not available. In view of the legal position, as already discussed above and the admitted factual position as aforesaid, we are unable to accept the contentions of Sri Agrawal. We are also of the view that plea, which is being raised in this appeal, was not raised in the grounds of appeal before the I.T.A.T., however, even otherwise such plea does not have any merit. The contention of Sri Agrawal that Section 153C is only procedural in nature, therefore, the non-recording of prior satisfaction does not vitiate the assessment order, as, such satisfaction, has been recorded in the assessment order passed subsequently with regard to the other person, is also not acceptable for the reason that the Supreme Court in the case of M/s Calcutta Knitwears (supra) has already considered this aspect of the matter in the context of Section 158BD, and after taking note of the fact that the said provision is a machinery provision has interpreted the same. In the light of the interpretation given by it and in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
