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TMI Blog2015 (12) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... in these appeals are common and the appeals were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. First we will deal with the appeal in ITA No. 1695/Del/2015 for the assessment year 2009-10. Following grounds have been raised in this appeal: 1. On the facts and circumstances of the case and in law, the notice u/s 153C issued by the assessing officer is bad-in-law, without jurisdiction and illegal and therefore the notice alongwith the assessment order passed on the foundation of such notice is liable to be quashed and the Commissioner of Income Tax (Appeals) should have held so. 2. On the facts and circumstances of the case and in law, the notice u/s 153C is illegal without jurisdiction. The assessing officer has not complied with the provisions of section 153C and other allied provisions for issuance of such notice. Accordingly the notice u/s 153C alongwith the assessment order passed on the foundation of such notice is liable to be quashed and the Commissioner of Income Tax (Appeals) should have held so. 3. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ncome on 15.03.2013 declaring a loss of ₹ 1,15,89,312. However, the assessment was completed u/s 153C r.w.s. 153A r.w.s. 143(3) of the Act at an income of ₹ 4,42,00,590/- by making an addition of ₹ 2,87,03,969/- on account of unaccounted cash receipts and ₹ 1,54,96,623/- on account of unexplained expenditure u/s 69 of the Act. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the validity for notice u/s 153C of the Act and submitted that the first pre-requisite of invocation of provisions of Section 153C of the Act is that there must be satisfaction by the AO of the searched person, that the documents found and seized during the course of search belonged to other person against whom notice u/s 153C of the Act is proposed to be issued. It was further submitted that as per the provisions of Section 132(4A)(i), the presumption is that the documents belong to such person from whose possession, the documents were seized. Therefore, the AO of the searched person is also required to record satisfaction that documents do not belong to the searched person and belonged to other person, but in the present case, no satisfaction h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rched person'. Your honour will appreciate that for recording satisfaction u/s 153C, the assessing officer of searched person need not be the assessing officer of person other than the searched person . By referring to his jurisdiction over the assessee's case he is establishing that he is recording satisfaction in his capacity as assessing officer of assessee (a person other than the searched person). IV. Another fact that establish that the A.O. is recording satisfaction in his capacity as A.O. of assessee and not as A.O. of searched person . U/s 153C, the A.O. of searched person is only required to record satisfaction that documents belong to other person and then to handover those documents to assessing officer of person other than the searched person. The A.O. of the searched person is not empower to issue notice u/s 153C or to give direction for issue of notice u/s 153C. This authority of issue/giving direction for issue of notice u/s 153C lies solely with the assessing officer of the other person. As can be seen from the last para of the so called satisfaction note the A.O. has mentioned that _Quote___ Accordingly it is directed to issue such person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s case, the assessee has relied upon the decision in Pepsico India Holdings (P) Ltd. Vs ACIT 270 CTR (Del) 467. These were issues not taken up before the AO and is coming for the first time before me. Be that as it may, I find that the assessee has attached a copy of the satisfaction note at page 34 of the paper book. For sake of easy reference I am reproducing the same, from which it is abundantly clear that the legal issue raised by the assessee has no substance. Name and address : M/s Super Malls (P) Ltd., Sector-of the assesse 12, HUDA, Karnal, Regd. Officer at 51 - Transport Centre, Punjabi Bagh, New Delhi PAN : AAICS2163F Status : Company Reasons/Satisfaction note for taking up the case of M/s Super Malls (P) Ltd. Sector-12, HUDA, Karnal, Regd. Office at 51- Transport Centre, Punjabi Bagh, New Delhi under section 153C of the Income Tax Act, 1961. The jurisdiction of this case has been assigned to this office u/s 127 of Income Tax Act, 1961 by the worthy Commissioner of Income Tax-III, New Delhi vide order F.No. CIT- III/Delhi/Centralization/2012-13/2455 dated 15.01.2013. By virtue of the authorization of the Director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchaser, shop no. booking amount in cash and cheque, brokerage etc. So the nature of the contents of the documents clearly shows that it was more than a mere reference of the assessee. It is also evident that materials found during survey are relatable with the materials seized during search, revealing element of income , thereby suggesting undisclosed income of the other person. Furthermore, the assessee also revised its regular return of loss of Rs.(-)2,47,96,658/- to Rs.(-)1,15,89,312/- when it responded to notice issued u/s 153A r.w.s. 153C. In view of the above, I am of the considered opinion that the assessee's contentions are unfounded, and therefore fail in Grounds of Appeal no. 1 to 3. 8. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submission made before the authorities below and further submitted that a search and seizure operation u/s 132(1) of the Act was carried out at the residence of Sh. Ved Prakash Bharti Group of cases on 08/09.04.2010, on the basis of this search, proceedings u/s 153C of the Act were initiated against the assessee by issuing the notice dated 22.02.2013 u/s 153C of the Act but no satisfaction had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO of the searched person is not empowered to issue notice u/s 153C of the Act or to give a direction for issuance of notice u/s 153C of the Act because this authority lies solely with the AO of the other person . It was stated that in the last para of the so called satisfaction note, the AO mentioned that accordingly it is directed to issue such person (M/s Super Malls Pvt. Ltd.) notice and reassess income in accordance with the provisions of Section 153A of the Act . It was contended that the aforesaid remarks proved beyond doubt that the satisfaction note had been recorded by the AO in his capacity as the AO of the assessee (the other person) and not as AO of searched person because it is only the AO of other person who can issue/give direction for issue of notice u/s 153C of the Act as has been given in the satisfaction note. It was pointed out that in the satisfaction note, the AO has stated that these documents are required for assessment proceedings which clearly establishes that the satisfaction has been recorded by the AO of the assessee and not the AO of the searched person. It was stated that had the satisfaction been recorded by AO in his capacity as AO of searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n.com 299 (Delhi) CIT Vs Mechmen (2015) 7 TMI 538 MP High Court order dated 10.07.2015 10. In her rival submissions the ld. CIT DR reiterated the observations made by the ld. CIT(A) and further submitted that the ld. CIT(A) at page nos. 7 8 of the impugned order clearly stated that satisfaction was recorded by the AO on 22.02.2013 wherein a reference was made to the documents found and seized as per Annexure-III from the vehicle no. HR06N-0063 parked in front of the residence of Sh. Ved Prakash Bharti and some documents as per Annexure-A-1 were seized after taking print out from the pen drive and those documents contained the details of cash receipts on account of sale/office by the assessee. She further submitted that the print out of the pen drives revealed the transaction relating to the sale of shops/office pertaining to the assessee bearing sr. No., name of the purchaser, shop no., booking amount in cash and cheque, brokerage etc., which clearly shows that it was more than a mere reference of the assessee and it was evident that materials found during the survey were relatable with the materials seized during search, revealing element of income, thereby suggesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied with the conditions laid down in the Act, then no consent by the assessee or waiver on his part can confer upon the AO. It was also stated that a mere acquiescence or participation in assessment proceedings cannot confer jurisdiction to an Assessing Officer who lacked jurisdiction. The reliance was placed on the following case laws: Mavany Brothers Vs CIT (2015) 62 Taxmann.com 50 (Bom) CIT Vs Ramukh Motilal AIR 1955 (Bom) 227 Raza Textiles Ltd. Vs ITO, Rampur (1973) 87 ITR 539 (SC) Valvoline Cummins Ltd. Vs DCIT 307 ITR 103 (Del) Sewlal Daga Vs CIT 55 ITR 406 (Cal) M/s Tansukhrai Bodulal Vs ITO 46 ITR 325 (Assam) P.V. Doshi Vs CIT 113 ITR 22 (Guj) Swaran Yash Vs CIT 138 ITR 734 (Del) Investors Industrial Corporation Ltd. VS CIT 194 ITR 548 (Bom) National Thermal Power Co. Ltd. Vs CIT (1998) 97 Taxman 358 (SC) CIT Vs Cochin Refineries Ltd. (1996) 220 ITR 398 (Ker) 12. We have considered the submissions of both the parties and gone through the material available on the record. In the present case, it is an admitted fact that a search was conducted at the premises of Ved Prakash Bharti Group of cases on 08/09.04. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome in accordance with the provisions of Section 153A of the Act. In such type of cases, first of all the AO of the searched person must arrive at a clear satisfaction that the documents seized from the searched person do not belong to him but to some other person and only after arriving at a satisfaction that the documents belonged to other person, those documents are to be handed over to the AO of a person to whom the said documents belonged. On receipt of the material/documents, the AO having jurisdiction on the other person is expected to conduct inquiry and due verification of the relevant facts before issuing a notice to other person under his jurisdiction on the basis of his own inquiry. Therefore, it is clear that firstly satisfaction has to be recorded by the AO who conducted search that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the searched person. In the present case, the claim of the department is that the satisfaction was recorded on 22.02.2013. We have perused the copies of the order sheet in the case of the assessee as well as the searched person S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew of the above and as per the provisions of sub-section (1) of Section 153C of the Act, I am satisfied that the document seized from the residence of Sh. Ved Prakash Bharti belongs to a person i.e. Super Mall (P) Ltd., other than the person referred in section 153A. Accordinlgy it is directed to issue such person (M/s Super Mall Pvt. Ltd.) notice and assess and reassess income in accordance with the provision of section 153A of the Act. -Sd- (VED PRAKASH KALIA) Asstt. Commissioner of Income Tax, Central Circle, Karnal Dated: 22.02.2013 15. In the aforesaid satisfaction note, it has nowhere been stated by the AO that he is recording satisfaction in his capacity as AO of any searched person i.e. Sh. Ved Prakash Bharti. In the present case, the satisfaction has been recorded by the AO of the assessee (i.e. a person other than the searched person) which is evident from the top of the satisfaction note wherein the assessee's name and address has been mentioned. Therefore, it is clear that the AO of the assessee has recorded satisfaction as Assessing Officer of the assessee and not as the Assessing Officer of the searched person. In the instant case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tep is that the Assessing Officer of the person in respect of whom the search was conducted must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person. The second step is after such satisfaction is arrived at that document is handed over to the Assessing Officer of the person to whom the document belongs . Section 132(4A)(i) clearly stipulates that when, inter alia, any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in section 292C(1)(i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or satisfaction that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he arrives at the satisfaction that the seized document does not belong to the person in respect of whom the search was conducted but to somebody else. Surmise and conjecture cannot take ..... X X X X Extracts X X X X X X X X Extracts X X X X
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