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TMI Blog2016 (5) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 declaring an income of Rs. 4,64,619/-. Notices u/s 153C of the Act were issued for both the years on 14.12.2012 and for both the years, the assessee had responded that the original return filed u/s 139 of the Act may be treated as return filed u/s 153C. It is seen that during the search and seizure operation in the Amrapali group of cases, documents were seized from the premises of Shri Shiv Priya, Director of M/s Ultra Home Construction Pvt. Ltd. (UHCPL) in which agreements entered by the assessee company with M/s UHCPL were seized as per the following details pertaining to Assessment Year 2009- 10:- Documents seized from the premises of Sh. Shiv Priya, Sector-62, Noida on 09.09.2010, as per Annexure A-2, Party AB-1 "Page. 74-81 This is copy of MOU dated 26.08.2009 entered between M/s Ultra Home Construction Pvt Ltd. (Builder) & M/s Moon Buildtech l*vt. Ltd., C-119 Preet Vihar Delhi-92 (Investor) - for investment in two flats at Amrapali Platinum, Tower, 1495 sqft. For Rs. 42,00,000/- which has been paid by investor as per following details. Cheque No. Date Amount in Rupees Tower NoJ Flat No./Size Receipt No. (Issued by Builder) 605955 CASH 13.08.2008 14.08.2008 15,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... q. Ft. - Do- TOTAL 2,25,00,000/-- All the cheques are drawn on Indian Bank, Preet Vihar, New Delhi-110092 - With the condition to continue to hold or take refund after expiry of one year - for which builder has issued post dated cheque of Rs. 2,25,00,000/- dated 13.07.2010 drawn on Syndicate Bank, Raj Nagar Ghaziabad. - Along With assured return of Rs. 5,62,500/- per month for 12 months starting from 13.09.2009 totaling to Rs. 67,50,000/- and 12 cheques have also issued. - In case of delay/bouncing of cheque on the part of builder penalty of 4% per month." 4. For Assessment Year 2009-10, the assessment was completed at a taxable income of Rs. 39,90,631/- after making additions as under:- (i) Rs. 22,55,000/- u/s 68 of the Act on account of undisclosed investment in cash as per seized documents. (ii) Rs. 8,82,000/- on account of assured return as per the seized documents. 5. The assessment for Assessment Year 2010-11 was completed at the taxable income of Rs. 5,00,32,119/- after making the following additions- (i) Rs. 4,50,00,000/- on account of undisclosed investment u/s 69A of the Act as per seized documents. (ii) Rs. 45,67,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... power to proceed is actually there, the mere reference to a wrong section for authority to act will not vitiate the action taken. It is not enough if a wrong section or provision of law is cited in a notice or order if the power to proceed is actually there under another provision." 3.5 In the present case a MOU dated 26.08.2009 between the appellant and M/s Ultra Home Construction Pvt. Ltd. (UHC) was found at the premises of Sh. Shiv Priya, Director of UHC. Since the appellant was signatory to the MOU, the said document belonged to the appellant. Further, the same seized document indicated that the appellant had paid cash to UHC which was prima-facie unaccounted. Therefore, a reasonable presumption of unaccounted money / income in the hands of the appellant also arose. The AO of the appellant is also the AO of UHC and Sh. Shiv Priya. In both these cases assessments have been completed u/s 153A. Therefore, recording of the satisfaction by the AO on 14.12.2012, even in the manner it has been recorded, cannot lead to the conclusion that satisfaction was not recorded by the AO of the person searched, i.e. Sh. Shiv Priya. In my respectful view, this is the correct legal position in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Assessing Officer who shall proceed against such other person and issue such person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. The Ld. AR submitted that in the present case in the alleged satisfaction note nowhere it has been recorded that the seized documents in the shape of MOU belong to the third party i.e. M/s Moon Buildtech Pvt. Ltd. which is the basic condition as observed from the language of the section 153C. The Ld. AR further submitted that the Hon'ble Delhi High Court has held in the case of Pepsi Foods Pvt. Ltd. vs. AC1T 270 CTR 459 that before initiating proceedings u/s 153C, the AO of the searched party has to be satisfied that the documents seized belong to person other than the searched person. It is only then that the AO of the searched person can hand over the documents to the AO having jurisdiction over the other person. In light of the decision of the Hon'ble Delhi High Court, it was submitted that before a notice u/s 153C can be issued, two steps have to be taken. The first step is that the AO of the person who is searched must arrive at a clear satisfaction that a document seized from him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 on the basis of documents seized allegedly belonging to the assessee was provided to the assessee through a communication dated 17.1.2013 and is placed at pages 9 and 10 of the paper book. It has also been reproduced in this order elsewhere. The point urged by the Ld. AR with reference to the satisfaction note is that the basic ingredient of section 153C of the Act has not been satisfied and, therefore, the notices were without jurisdiction and, hence, ought to be quashed. A perusal of section 153C reveals that section 153C permits the issuance of a notice by the Assessing Officer of a person who has not been searched on the basis of satisfaction note prepared by the Assessing Officer of a searched person indicating that during the search, certain documents belonging to the other person (the person not searched) were found. However, before a notice u/s 153C can be issued in the manner indicated, the Assessing Officer of the searched person must arrive at a positive satisfaction that the documents belong to the person not searched. In the first instance, a presumption is created by virtue of provision of return u/s 132(4A)(i) of the Act that the documents belong to the searched pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of 'satisfaction'. 14. A perusal of the satisfaction note in the present appeals would show that nowhere has it been recorded that the seized documents in the form of MOU belong to the third party i.e. M/s Moon Buildtech Pvt. Ltd. or the assessee which is the basic condition envisaged in section 153C. Further, the perusal of the satisfaction note also leads us to the conclusion that it has been recorded as the Assessing Officer of the third party i.e. the assessee and there is no satisfaction note of the Assessing Officer of the searched party. The Ld. DR has vehemently contended that since the Assessing Officer of the person searched and the assessee is the same, it does not make any difference whether the satisfaction is recorded in the case of person searched or the other person. In our considered opinion, this contention advanced on behalf of the revenue is devoid of any 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 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. 16. Hence, on the facts and circumstances of the case, it is our considered opinion that the Assessing Officer of the searched person has failed to record his satisfaction that the seized documents belonged to the assessee i.e. other than the searched person. The recording of such a satisfaction is sine qua non for commencing any proceedings u/s 153C of the Act. Hence, no action could have been initiated against the assessee in absence of recording of satisfaction by the Assessing Officer of the searched person. Sans such satisfaction, the Assessing Officer has invalidly taken recourse to the initiation of proceedings u/s 153C of the Act. Hence, the action u/s 153C is not justified. The lack of jurisdiction by the Assessing Officer cannot be brushed aside under the guise of a technical defect. No assessment can be lawfully taken up and completed unless the concerned authority has the jurisdiction to do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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