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TMI Blog2015 (3) TMI 607X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014, CO No. 371/Del/2014, CO No. 372/Del/2014, CO No. 373/Del/2014, CO No. 374/Del/2014,ITA No. 4870/Del/2014 - - - Dated:- 5-3-2015 - Sh. N. K. Saini And Sh. C. M. Garg JJ. For the Appellant : Sh. Kapil Goel, Adv. For the Respondent : Smt. A. Misra, CIT DR ORDER Per Bench: The appeals by the Department and the Cross-objections by the assessee are directed against the order dated 16.6.2014 for the assessment year 2003-04, separate orders each dated 17.6.2014 for the assessment years 2006-07 and 2007-08, separate orders each dated 18.4.2014 for the assessment years 2008-09 and 2009-10 and appeal of the assessee for the assessment year 2004-05 against the order dated 1.8.2014 of the ld. CIT(A)-II, New Delhi. 2. Since, the appeals and the Cross Objections relating to the same assessee were heard together, so these are being disposed off by this consolidated order for the sake of convenience. The assessees in their appeal and the Cross Objections have challenged the validity of the initiation of proceedings u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act). 3. First we will deal with the Cross Objection of the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment proceedings by way of alleged affixture of notice at the First instance without making any attempt of properly serve the notice, which is being highly unusual and unnatural and the assessment framed against principles of natural justice may kindly be quashed. 6. That the Ld. AO was not justified to make ex-party assessment rejecting the audited accounts along with Tax Audit Report without any basis or incriminating document against the business results for the year. 7. That on the facts and circumstances of the case and the provisions of law, the Ld. CIT (A)-II, has failed to appreciate that the Ld. AO was not justified to ignore the submissions of the respondents that assessment u/s. 153C of the I.T Act be restricted to assessment in respect of seized documents of incriminating nature in the case of the respondents for the year under consideration and in absence of any incriminating seized document in the case of respondents, assessment framed u/s. 153C of the I.T Act for the year under consideration, is time barred, bad in law and deserve to be quashed. 8. That on the facts and circumstances of the case and the provisions of law, the Ld. CIT (A)-II, has erred in ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds it would be clear that the assessee mainly challenged validity of the assessment order passed u/s 153C of the I.T. Act 1961 (hereinafter referred to as the Act) on account of jurisdiction. The facts related to this issue in brief are that a search operation was conducted on 20.10.2008 on Sh. B. K. Dhingra Smt. Poonam Dhingra, M/s Madhusudan Buildcon Pvt. Ltd. and Sh. Inder Mohan Thapar group to which the assessee is related. 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 assessees in response to the notice u/s 153C of the Act stated that they are grand daughters of late Sh. Sh. Mohan Lal Chadha who has expired, their father Sh. S.P. Chadha and mother Smt. Usha Chadha have also expired and that there is no HUF in existence as there is no male member in the family. However, the assessment was framed u/s 153C/144 of the Act by the AO at an income of ₹ 1,04,98,770/-. 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the assumption of jurisdiction u/s 153C of the Act on the plea that it is a time-b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he proceedings u/s 153C r.w.s 153A of the Act were initiated on the basis of certain incriminating documents found during the course of aforesaid search conducted on 20.10.2008. Therefore, the facts are similar in assessee s case vis- -vis the case of M/s Tanvir Collections Pvt. Ltd. In the said case the issue has been decided in favour of the assessee and the relevant discussion and findings have been given in paras 12 to 27 of the order dated 16.01.2015 which are reproduced as under: 12. Let us examine the facts of the instant case more elaborately. It is seen that some satisfaction was recorded, 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 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded by the AO in the cases of the persons searched u/s 132(1) of the Act (i.e. Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd.) that some books of account or documents etc. belonging to the assessee were found which were handed over to the AO of the other person (i.e. the assessee). The Satisfaction note as reproduced above has been prepared by the AO of the assessee. 15. The ld. DR vehemently accentuated on the point that since the AO of the persons searched and the assessee is same, it does not make any difference whether the satisfaction is recorded in 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 searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction by the AO of the person searched, then, it cannot be substituted with the satisfaction of the AO of the other person. This contention also fails. 18. At this stage, it is relevant to note that the legislature has substituted the latter part of section 153C(1) by the Finance (No.2) Act, 2014 w.e.f. 1.10.2014. The hitherto part of subsection (1) : and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person referred to in sub-section (1) of section 153A. has been substituted as under : - 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. 19. The above substitution has the effect of now making it mandatory for the AO of the other person also to record satisfaction that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the judgment of the Hon ble jurisdictional High Court in judgment in the case of SSP Aviation Ltd. VS. DCIT (2012) 252 CTR (Del) 291. 23. Let us examine the case of SSP Aviation Ltd. (supra) for evaluating the contention that the instant assessment be declared as per law. The Hon ble High Court in that case has held that the Assessing Officer having jurisdiction over the searched person should be satisfied that the valuable article or books of account or documents seized during the search belong to a person other than the searched person and there is no requirement in section 153C(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 searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions on other legal issues or merits is of no consequence in view of the lack of jurisdiction of the AO to proceed with the assessments u/s 153C of the Act. In view of our decision on the first legal issue, there is no need to espouse the other grounds taken by the assessee dealing with other legal issues or merits. 11. Since the facts of the present case are identical to the facts involved in the case of M/s Tanvir Collections Pvt. Ltd. Vs ACIT. So, respectfully following the aforesaid referred to order dated 16.01.2015 in ITA No. 2421/Del/2014 for the assessment year 2003-04, the legal issue is decided in favour of the assessee and accordingly, it is held that the initiations of the proceedings u/s 153C of the Act are set aside on the ensuing assessment on the assessee is void ab initio. Therefore, there is no need to adjudicate the other issues agitated on merit by the assessee in this appeal and the department in its appeal i.e. ITA No. 5424/Del/2013. For the remaining assessment years i.e. the assessment years 2004-05 to 2008-09, the facts are similar and even the rival contention were the same, therefore, our findings given in the former part of this order shall apply mut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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