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TMI Blog2015 (3) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... Shailesh Gupta, CA For the Respondent : Smt. A. Misra, CIT DR ORDER Per Bench: These cross appeals by the assessee and the department are directed against the separate orders each dated 26.07.2013 for the assessment years 2003-04 2004-05 and dated 29.07.2013 for the assessment years 2005-06 to 2008-09 of ld. CIT(A)-II, New Delhi. 2. In these appeals some issues involved are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience. 3. First we will deal with the appeal of the assessee in ITA No. 4944/Del/2013. Following grounds have been raised in this appeal: 1. That on the facts and circumstances of the case and the provision of law the Ld. CIT(Appeals) has failed to appreciate that the notice issued u/s 153C and assessment order passed by the Ld. AO u/s 153C is illegal, bad in law, time barred and without jurisdiction. 2. That the Ld. CIT(Appeals) has failed to appreciate that on the facts and circumstances of the case and the provisions of the law, the proceedings initiated u/s 153C is illegal, bad in law and without jurisdiction and as such the assessment order passed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly charged. 11. That the Appellant craves the right to amend, append, delete any or all grounds of appeal. 4. The assessee mainly challenged validity of the assessment order passed u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act). The facts related to this issue in brief are that a search operation on 20.10.2008 was conducted on Sh. B. K. Dhingra, Smt. Poonam Dhingra, M/s Madhusudan Buildcon Pvt. Ltd., M/s Mayank Traders Pvt. Ltd. and M/s Horizons Solutions Integrations Pvt. Ltd. During the course of search on the above said persons certain incriminating documents belonging to the assessee were seized and proceedings u/s 153C r.w.s 153A of the Act were initiated. The assessee in response to the notice u/s 153C of the Act filed a return on 02.11.2010 for the assessment year under consideration declaring Nil income. However, the assessment was framed by the AO at an income of ₹ 38,96,700/- vide order dated 31.12.2010. 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the validity of the initiation of the proceedings u/s 153C of the Act. The ld. CIT(A) did not find merit in the submissions of the assessee by ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch A , New Delhi Pepsico India Holdings (P.) Ltd. Vs ACIT, (2014) 50 Taxmann.com 299 (Del.) DCIT Vs Devi Dayal Petrochemicals Pvt. Ltd., ITA Nos. 5430 to 5436/Del/2013 order dated 10.09.2014 of ITAT Delhi Bench B , New Delhi Trishul Hi-Tech Industries Vs DCIT, IT(SS)A Nos. 82, 84 to 86/Kol/2011 order dated 24.09.2014 of ITAT Kolkata Bench A , Kolkata DCIT Vs Kurele Paper Mills Pvt. Ltd., ITA No. 3761/Del/2011 order dated 14.11.2014 of ITAT Delhi Bench D , New Delhi CIT Vs Bharati Vidyapeeth Foundation, ITA Nos. 36, 37 39 of 2012 order dated 10.06.2014 of Hon ble Bombay High Court Dr. D. Y. Patil Pratishtan Vs DCIT, ITA Nos. 1587 to 1611/PN/2011 order dated 07.09.2012 of ITAT Pune Bench B , Pune Natural Products Bio Tech Ltd. Vs DCIT, ITA Nos. 3086 to 3089/Del/2013 order dated 28.11.2014 of ITAT Delhi Bench E , New Delhi Nageshwar Investment Ltd. Vs DCIT, ITA Nos. 5393 to 5396/Del/2012 of ITAT Delhi Bench E , New Delhi Global Heritage Venture Ltd. Vs DCIT, ITA No. 3196/Del/2013 order dated 26.12.2014 of ITAT Delhi C , New Delhi CIT Vs DSL Properties Pvt. Ltd., ITA 585/2013 order dated 05.12.2014 of Hon ble Delhi High Court Sanjay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded, a copy of which is available on page 4 of the paper book, as under :- Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 in the case of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi, PAN: AACCT6679D for A.Y. 2003-04 to 2008-09. 08.09.2010 In the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., search seizure took place u/s 132 on 20.10.2008. The undersigned is the jurisdictional AO of this case. During the course of search seizure documents/papers at pages 101 to 132 of Annexure A-30, Page 144 of Annexure 7 and pages 33 to 48 of Annexure 22 seized by Party R-2, are found to belong to M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar park, New Delhi. I have examined the above mentioned documents/papers and provision of section 153C is invokeable in this case. As the undersigned is also the jurisdictional AO of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi. This satisfaction note is recorded and is placed in the file before issuing notice u/s 153C. ACIT, Central Circle - 17, New Delhi 13. It can be seen from the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the persons searched or other person. She emphasized on the factum of recording satisfaction by the AO, which condition in her opinion stood satisfied, by virtue of it having been recorded by the common AO. 16. In our considered opinion, this contention advanced on behalf of the Revenue is devoid of merit. We fail to comprehend as to how the requirement of recording satisfaction by the AO of the person searched provided by the statute can be substituted with anything else. There is an underlying rationale in providing for recording of such satisfaction by the AO of the person searched. As the money, bullion, jewellery, books of account or documents etc. always come to the possession of the AO of the person searched who has to frame assessment, it is only he who can find out that which of such documents etc. do not belong to the person searched and are relevant for the assessment of the other person. It is not as if all the books of account and documents etc. found during the course of a search are evaluated by a separate authority to figure out that which of these documents belong to the person searched and to the others and thus handed over to the concerned AOs of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 19. The above substitution has the effect of now making it mandatory for the AO of the other person also to record satisfaction that the books of account or documents, etc., have a bearing on the determination of the total income of such other person before embarking upon the exercise of his assessment or reassessment. Therefore, now under the law, w.e.f. 1.10.2014 it has become obligatory not only for the AO of the person searched to record satisfaction before handing over books of account or documents, etc., to the AO of the other person , but, such AO of the other person is also required to record satisfaction that the books of account or documents, etc. have a bearing on the determination of the total income of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must conclusively reflect or disclose any undisclosed income. We find that there is no such controversy before us as was there before the Hon ble High Court. It is not the case of the assessee before us in this ground that the documents etc. found from the persons searched did not positively indicate the existence of some income in the hands of the assessee. The argument is simply confined to non-recording of satisfaction by the AO of the persons searched. Instead of supporting the Department s case, we find that this judgment strengthens the assesasee s case by making it clear in no uncertain terms that the AO of the person searched is obliged to record the satisfaction. The relevant observations of the Hon ble High Court contained in para 15 merit reproduction as under: - It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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