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TMI Blog2016 (12) TMI 1424X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Assessing Officer of the person searched is the primary condition for initiation of proceedings u/s 153C. Admittedly, no satisfaction note is recorded by the Assessing Officer of the person searched. Therefore, in our opinion, the proceeding u/s 153C is not validly initiated. The same is quashed. Once the proceedings u/s 153C are quashed, consequently, the assessment orders passed in pursuance thereto are also quashed. Accordingly, for assessment years 2004-05, 2006-07, 2007-08 & 2008- 09, the proceedings u/s 153C and the consequential assessment orders passed in pursuance to such notice are quashed. - Decided in favour of assessee - ITA Nos.569/Del/2013, 570/Del/2013, 651/Del/2013 & 652/Del/2013, ITA Nos.928/Del/2013 & 929/Del/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee under Right to Information Act. He stated that in such reply, the Assessing Officer categorically stated that no satisfaction was recorded by the Assessing Officer of the person searched. The Assessing Officer stated that since the Assessing Officer of the person searched and the assessee are the same, the recording of statement in the file of the assessee i.e., M/s Sheetal International Pvt.Ltd. is suffice to initiate proceedings u/s 153C. He stated that the above issue has been dealt with in the Circular No.24/2015 dated 31st December, 2015 of CBDT in which the CBDT has clarified that even if the Assessing Officer of the searched person and other person is one and the same, then also satisfaction has to be recorded as held by H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h by the CBDT in its Circular No.24/2015 dated 31st December, 2015 as under :- The issue of recording of satisfaction for the purposes of section 158BD/153C has been subject matter of litigation. 2. The Hon'ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No.3958 of 2014 dated 12-3-2014 [2014] 43 taxmann.com 446 (SC) (available in NJRS at 2014-LL-0312-51) has laid down that for the purpose of section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon ble Court held that the satisfaction note could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the guidelines laid down by the Apex Court. 6. From the above, it is evident that the CBDT has held that recording of satisfaction note is pre-requisite and satisfaction note must be prepared by the Assessing Officer before he transmits the record to the other Assessing Officer who has the jurisdiction over such other person. Thus, the satisfaction note is to be recorded by the Assessing Officer of the person searched because only he has the seized record and along with this satisfaction note, he has to hand over the seized record to the other Assessing Officer who has jurisdiction over such other person. In paragraph 4, the CBDT has also mentioned that there should be strict compliance of the provisions of Section 153C. The CBDT ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. M/s Sheetal International Pvt.Ltd.) was same. 2. If you are not satisfied with the above reply, you may file 2nd appeal to the Addl. Commissioner of Income Tax, Central Range-7, Delhi. The Addl. Commissioner of Income Tax Central R-7, Room No.328, E-2, ARA center, Jhandewalan Extn. New Delhi 110055. Yours faithfully, Sd/- (Dr. Preeti Singh) Asst. Commissioner of Income Tax, Central Circle-26, New Delhi. 7. From the above reply, it is evident that the satisfaction note is recorded in the file of the assessee by his Assessing Officer and not in the file of the person searched i.e., Shri Bal Kishan Saraf. The satisfaction note reads as under:- Satisfaction note u/s 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not the Assessing Officer of the person searched i.e., Shri Bal Kishan Saraf. Recording of satisfaction note by the Assessing Officer of the person searched is the primary condition for initiation of proceedings u/s 153C. Admittedly, no satisfaction note is recorded by the Assessing Officer of the person searched. Therefore, in our opinion, the proceeding u/s 153C is not validly initiated. The same is quashed. 9. Once the proceedings u/s 153C are quashed, consequently, the assessment orders passed in pursuance thereto are also quashed. Accordingly, for assessment years 2004-05, 2006-07, 2007-08 2008- 09, the proceedings u/s 153C and the consequential assessment orders passed in pursuance to such notice are quashed. 10. Once the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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