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TMI Blog2016 (9) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... IDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For Assessee : Shri P. Murali Mohan Rao, AR For Revenue : Shri A. Seetharama Rao, DR ORDER PER B. RAMAKOTAIAH, A.M. : This is an appeal by assessee against the order of the Commissioner of Income Tax (Appeals)-III, Hyderabad dated 17-04-2014. Assessee has preferred the following grounds in her appeal: 1. The Ld. CIT(A) - III, Hyderabad erred both in law and on facts in dismissing the appeal. 2. The Ld. CIT(A) - III, Hyderabad ought to have annulled the Order of the Assessing Officer properly appreciating that the action taken by AO in initiating proceedings U/s. 153C is bad in law. 3. The Ld. CIT(A)-III, Hyderabad ought to have appreciated the fact that at the time of search, no incriminating materials has been found justifying the additions so made. 4. The Ld. CIT(A)-III, Hyderabad ought to have appreciated the decision of the ITAT, Mumbai Special Bench in the case of M/s. All Cargo Global Logistics Ltd., vs. DCIT, Central Circle 44, Mumbai and allowed the appeal of the assessee. 5. The Ld. CIT (A)-III, Hyderabad erred in sustaining the addition towards undisclosed profit for ₹ 5,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: Order sheet SMT. SARNALA JAYALAKSHMI PAN NO: AGQPS4023B Search Seizure operations u/s. 132 of IT Act was conducted in the case of M/s. Sarnala Sridhir group of cases. As per the appraisal report, the assessee is covered u/s. 153C of the IT Act. Hence notice u/s. 153C is putup. Sd/- 10/8/06 4. It was submitted that the order sheet as recorded above is similar to the order sheet recorded in the case of M/s. Shettys Pharmaceuticals and Biologicals Ltd., which was decided by the Hon ble ITAT and was upheld by the Hon ble High Court of AP in ITTA No. 662/2014 dt. 26-11-2014 [57 Taxmann.com 282]. 5. Ld. DR submitted that the order sheet placed on record is as per the assessment record obtained by him. 6. On considering the rival submissions and perusing the documents placed on record, we are of the opinion that the proceedings initiated against assessee u/s. 153C are not as per the provisions of the Act. 6.1. Section 153A is procedural section which deals with the mode of assessment. A notice u/s. 153A can only be issued to such person where a search is initiated u/s.132 or books of account or other documents or any assets are requisitioned u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing stages: (a) At the time of or along with initiation of proceedings against the searched person u/s.153A; (b) Along with the assessment proceedings u/s.153A; (c) Immediately after the assessment proceedings are completed u/s. 153A of the searched person; 6.3. Thus, the condition precedent for issuing notice under section 153C and assessing or re-assessing income of such other person is that, the money, bullion, jewellery or other valuable articles or thins or books of account or documents seized or requisitioned should belong to such other person. If the said requirement is not satisfied recourse cannot be made to the provisions of section 153C. Thus, the provisions contained u/s. 153C can only be invoked where there was satisfaction by the AO having jurisdiction over the person searched or requisitioned u/s.132A during the course of assessment proceedings. Therefore, the proceedings u/s.153A always precede the proceedings u/s.153C and without recording satisfaction note by the AO initiating proceedings for completion of assessment u/s. 153A cannot be proceeded u/s.153C in the case of such other person not searched. 6.4. The main difference in the language is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of sect ion 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. (emphasis supplied) It is therefore clear that firstly satisfaction has to be recorded by the Assessing Officer 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 person referred to in Section 153A of the Act. Thereafter, the Assessing Officer having jurisdiction over third party on receipt of the seized material or books of accounts or document being handed over to him shall record his own satisfaction after examining the same independently without being influenced by the satisfaction of the Seizing Officer. In other words it is not an automatic action. We find satisfaction of two officers is missing. In this connection we set out the text of the order of the Assessing Officer which is as follows. A search and seizure ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h were rejected by the Assessing Officer and the petitioner was directed to comply with the assessment proceedings under section 153C. On writ: HELD In order that the Assessing Officer of the searched person comes to the satisfaction that documents or materials found during the search belong to a person other than the searched person, it is necessary that he arrives at the satisfaction that the said documents or materials do not belong to the searched person. In the instant case, it is nobody s case that the Jaipuria Group had disclaimed those documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of section 153C do not get attracted because the very expression used in section 153C is that where the Assessing Officer is satisfied 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 person referred to in section 153A .... In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing Officer of the search ..... X X X X Extracts X X X X X X X X Extracts X X X X
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