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TMI Blog2015 (9) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 153C itself is bad in law. Therefore, consequential proceedings are bad in law and orders are to be cancelled. Even on merits, there is no justification for estimating the low withdrawals on assumptions and presumptions, without there being any basis. In view of that also, the addition made in all the years about the low withdrawals cannot be sustained. Addition on amount received from friend - Held that:- As submitted that assessee was working as software engineer in United Kingdom (UK) during the period September 2000 to October 2001 and before he left for UK, he handed over his personal belongings to his friend for sale and the amount of ₹ 74,980/- sent by his friend was shown in the capital account and treated as ‘income of assessee’. As can be seen from the order of AO, and CIT(A), they only disbelieved assessee’s version. Since this issue does not arise out of any incriminating material and as assessee has shown the amount as a receipt in 2002-03 itself in the capital account, we are of the opinion that addition cannot be made in the proceedings U/s. 153C, without any evidence to contrary to disbelieve assessee’s contentions. Be that as it may, as we have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Assessee apart from raising various grounds contesting the additions made, also raised additional grounds commonly in all the cases as under: 9. We would like to submit that as per the ratio laid down by the Hon'ble Supreme Court of India in the case of National Thermal Power Co. Ltd., V. CIT (1998) 229 ITR 383 (SC) the ITAT has jurisdiction to examine the question of law which though not arose before the AO but arose before the ITAT for the first time. 10. The Ld. CIT(A) erred in upholding the order of the Assessing Officer by invoking the provisions of Section 153C of the Act for the assessment year 2003-04, there being no satisfaction recorded by him as well as by the Assessing Officer having jurisdiction over the company searched. 11. The Ld. CIT(A) ought to have annulled the Order of the Assessing Officer appreciating that invoking of the provisions U/s. 153C without recording satisfaction by him as well as by the Assessing Officer having jurisdiction over the searched party becomes invalid as held by the Hon'ble AP High Court in the case of CIT Vs. M/s. Shettys Pharmaceuticals Biologicals Ltd. In ITTA No. 662 of 2014 dated 26-11-2014. 12. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ney, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or ( b ) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153A, then, the books of account or 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 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 153A] : Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to sub-section (1) of section 153A shall be construed as ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer having jurisdiction over such other person by the Finance Act, 2015, w.e.f. 1-6-2015. 20. Substituted for and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A by the Finance (No. 2) Act, 2014, w.e.f. 1-10-2014 . 7. As can be seen from the above, if there was incriminating material AO should come to a satisfaction while initiating proceedings. The Hon'ble AP High Court in the case of CIT Vs. M/s. Shettys Pharmaceuticals Biologicals Ltd. In ITTA No. 662 of 2014 dated 26-11-2014 (supra) has considered similar facts and held as under: The learned Tribunal in this case did not accept the initiation of the action under Section 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act). This action has to be taken against a third party in respect of the incriminating material brought out in connection with search and seizure conducted on another party. Section 153C of the Act specifically says that the Assessing Officer must be satisfied that such action is required to be initiated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In this connection we set out the text of the order of the Assessing Officer which is as follows. A search and seizure operation u/s. 132 was carried out in the group case of Dr. T. Yadhaiah Goud and others on 25 3 2010. During the course of search operation documents belonging to SHETTY PHARMACEUTICALS BIOLOGICAL LTD., has been seized. Hence it is considered to initiate proceeding u/s. 153C of the I. T. Act. The aforesaid Section mandates recording of satisfaction of the Assessing Officer(s) is a pre-condition for invoking jurisdiction and it is not a mere formality because recording of satisfaction postulates application of mind consciously as the documents seized must be belonging to the any other person other than the person referred to in Section 153-A of the Act. It is contended that the same Assessing Officer is involved in the matter. This fact does not dispense with above requirement. It is settled position of law that when a thing is to be done in one particular manner under law this has to be done in that manner alone and not other way (See Nazir Ahmed v. King Emperor). We think the learned Tribunal has correctly followed the principle. We do not find any e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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