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TMI Blog2015 (4) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ate to: i) Whether the CIT (A) was justified in deleting the disallowances of expenditure made by the AO; . ii) Whether the CIT (A) was justified in deleting the additions made on account of unexplained purchases u/s 69C of the Act. 2.1 In the AY 2007-08, apart from the above grounds, the Revenue also challenges the CIT(A) s order in deleting the addition of ₹ 40,00,00/- added by the AO on account of unexplained cash credit u/s 68 of the Act. 3. In the assessee s cross objections, several grounds are raised. All the grounds relate to the issue of challenging the initiation of proceedings u/s 153C of the Act. 4. At the very outset, the ld. Counsel for the assessee, referring to the grounds raised in the COs, submitted that assessments made u/s 153C of the Act were invalid, since satisfaction was not recorded by the AO in the files of the searched person prior to initiation of proceedings u/s 153C of the Act. The said issue, it was submitted, is covered in favour of the assessee by the orders of the Coordinate Benches of this Tribunal which, in turn, had placed reliance on the judgment of the Hon ble jurisdictional High Court in the case of M/s. Pepsico India Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ralized in the Central Circle-17, New Delhi vide orders 14/Dec/09 of CIT-V, New Delhi. Sd/- DCIT, Central Circle - 17, New Delhi. 7. On the basis of RTI application of the assessee, a letter was issued by the AO [F.NO.DCIT/CC-17/RTI/2013-14/122 dated 10.6.2013] stating that no satisfaction is recorded in the file of the searched person for initiation of proceedings u/s 153C of the Act in the case of the assessee. The letter of the AO reads as follows: Sub: Application for seeking information under RTI Act, 2005 - reg - Please refer to your application on the above mentioned subject. 2. From the assessment records of Sh. Bhupesh Kumar Dhingra which is covered under section 153A, for the asst. years from 2003-04 to 2008-09 (block period), it is noticed that there is no satisfaction note available/recorded in respect of other entities. Similar letter addressed to the other searched persons, namely, Smt. Poonam Dhingra and M/s. Madhusudan Buildcon Pvt. Ltd are also placed on record at pages 4 and 5 of the PB filed by the assessee. 8. The contention of the ld. Counsel of the assessee was that it is apparent from the assessment records of the searche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., under the provisions of RTI Act, 2005. The relevant part of the reply dated 10.6.2013 given to Sh. B.K. Dhingra, is as under:- 2. From the assessment records of Sh. Bhupesh Kumar Dhingra, which is covered under section 153A, for the Asst. years from 2003-04 to 2008-09 (Block period) it is noticed that there is no satisfaction note available/recorded in respect of other entities. Para 14 . Similar replies have been given to Smt. Poonam Dhingra and M/s adhusudan Buildcon Pvt. Ltd. On a consideration of the above replies given by the Department to the persons searched, it is manifest that there is no satisfaction note available/recorded in respect of other entities . On a conjoint reading of the Satisfaction note and replies given by the Department to the persons searched under the RTI Act, it clearly emerges that no satisfaction was recorded 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the recording of satisfaction in the case of the persons searched is concerned. What is relevant for this purpose is not the identity of the person assessing but his position and the capacity. When the law requires the AO of the person searched to record the necessary satisfaction, it is the AO having jurisdiction over the person searched who is obliged to record such satisfaction in the capacity of that AO and that too in the case of the person searched. The mere fact that the AO of the person searched and the assessee is the same person, does not, in any manner, obliterate the requirement of law necessitating the recording of satisfaction in the case of the person searched that money, bullion, jewellery, etc., found from the person searched belongs to the other person. What is crucial to note is capacity of the AO and not his identity. In view of the fact that when the statutory stipulation is for recording the satisfaction 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. Para 18 . At this stage, it is relevant to note that the legislature has substituted the latter pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant to note that the lack of jurisdiction by the AO cannot be put under the carpet in the guise of a technical defect. It goes without saying that no assessment or other proceedings can be lawfully taken up and completed unless the concerned authority has jurisdiction to do so. Lack of jurisdiction goes to the very root of the matter and cuts the tree of assessment if the foundation of jurisdiction is missing. Para 22. The ld. AR has brought to our notice two orders passed by the Delhi Benches of the Tribunal, namely, ACIT vs. Inlay Marketing Pvt. Ltd. (ITA No.4200/Del/2012), etc. and DCIT vs. Aakash Arogya Mandir Pvt. Ltd. (ITA No.5437/Del/2013), etc., in which the notices and the consequential assessments u/s 153C, under identical circumstances, have been quashed. The ld. DR contended that the above referred two Tribunal orders are per incurium and should not be followed. The main reason for declaring the tribunal orders as per incurium was the non-consideration 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. Para 23 . Let us examine the case of SSP Aviation Ltd. (supra) for evaluat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he follow an earlier order of a co-ordinate bench on the point. It is only if the subsequent bench feels itself unable to concur with the view taken earlier that it is required to refer the case for consideration by a special bench. In our considered opinion, these two orders of the co-ordinate benches are perfectly in accordance with law. Para 26. Coming back to facts of the instant case, it is palpable that the AO of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., did not record any satisfaction that some money, bullion, jewellery or books of accounts or other documents found from these persons belonged to the assessee. The absence of such satisfaction, in our considered opinion, failed to confer any valid and lawful jurisdiction on the AO of the assessee to proceed with the matter of the assessment u/s 153C of the Act. We, ergo, set aside the initiation and the ensuing assessment on the assessee as void ab initio. Para 27. The reliance of the ld. DR on some decisions 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 ..... 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