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TMI Blog2017 (5) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... -2017 - SHRI G.D. AGGARWAL, PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For The Revenue : Shri N.K. Grover, CIT DR For The Assessee : Shri P.C. Yadav, Advocate ORDER PER BENCH: The aforesaid cross appeals have been filed by the revenue as well as by the assessee against common order dated 14.3.2012, passed by the ld. CIT (Appeals), Meerut for the quantum of assessment passed u/s 143(3)/153A r.w.s.153C for the A.Ys. 2003- 04, 2004-05, 2005-06, 2006-07, 2007-08 2008-09. 2. Since common issues are involved in all the appeals for the aforementioned assessment years, arising out of identical set of facts, therefore, same were heard together and are being disposed off by way of this consolidated order. 3. At the outset it is noticed that all the appeal of the assessee are time barred by 201 days. In support of condonation of delay, the assessee has filed an application stating that the assessee after the receipt of the order of the Learned CIT (Appeals) was under a bona fide belief that its appeal has been allowed completely and as after appeal affect no tax was demanded from the assessee. Later on, the assessee was advised that there are various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross negligence or latches on the part of the assessee, therefore, in the interest of substantial justice, we hold that delay should be condoned and appeal of the assessee should be heard on merits. 5. Since in the assessee s appeal for the impugned assessment years, a fundamental issue of jurisdiction has been raised, therefore, we are first taking up assessee s appeal first for adjudication. The main ground which has been raised in all the appeals which goes to the very root of the framing of assessment u/s 153C r.w.s. 153A, reads as under:- On the facts and under circumstances of the case, the ld. CIT (A) has failed to appreciate that no satisfaction as envisaged under section 153C for acquiring jurisdiction has ever been recorded by the Assessing Officer. On this issue the Learned Counsel for the assessee, Shri P.C. Yadav, at the outset submitted that the exactly same issue has been considered by the Tribunal in the group cases of the assessee covered under same search and on exactly similar proceedings initiated u/s 153C, namely, Pr. CIT vs. Nikki Drugs Pvt. Ltd. in ITA Nos. 3169 to 3173 and 3026 to 3020/Del/2012; M/s. Flucky Leasing and several others, vide ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with the issue of providing share capital contribution to the main company. Based on the material seized from the premises of SVP group, assessment proceedings u/s 153C were initiated in respect of 11 persons including the assessee company. The detail of these companies in whose cases proceedings have been initiated u/s 153C have been tabulated at page 2 of the assessment order. From the name of the various concerns it is seen that almost all of them were subject matter of consideration by the Tribunal as noted above. In similar manner, the proceedings u/s 153C was initiated by the Assessing Officer in the present case also to file the return of income for six assessment years. From the perusal of the copy of the satisfaction note to initiate the proceedings u/s 153C in the case of the assessee, it is seen that the satisfaction has been recorded by the ACIT, Central Circle, Meerut which reads as under:- OFFICE OF THE 'A ASSTT. COMMISSINER OF INCOME TAX X CENTRAL CIRCLE, MEERUT DATED: 15.09.2010 Satisfaction note to initiate proceedings u/s 153C read with section 153A of the Income Tax Act, 1961 in the case of M/S Jay Dee Securities Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in section 153C which relates to assessment of income of any other person, it is the satisfaction of the Assessing Officer of the person searched which is sine qua non for acquiring the jurisdiction u/s 153C. The relevant sub section (1) of section 153C reads as under:- (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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 belong to any 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 such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A. From the plain reading of the aforesaid provision it is quite ostensible that the Assessing Officer of the searched person alone must be satisfied that any documents seized or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be upheld as here in this case the satisfaction has not been recorded by the Assessing Officer of the searched person at the time of analyzing the document seized and found during the course of search, i.e., in case of person searched. As pointed out by the Learned Counsel here in this case exactly on similar facts in the cases of Pr. CIT vs. Nikki Drugs Pvt. Ltd. and M/s. Flucky Leasing and others, that is, in the case of group concerns, the Tribunal has decided the issue in favour of the assessee after observing and holding as under:- We have considered the rival submissions, perused the material on record and judicial pronouncements cited before us. On perusal note as relied upon by the revenue to initiate proceedings u/s 153C of the Act read as under: A search operation u/s 132(1) of the Income Tax Act, 1961 was conducted in the case of SVP group of cases and concerned persons at various offices and residences by issuing warrants of authorization u/s 132(1) of the Income Tax Act, 1961 on 14.10.2016 and various documents, books of account) other valuable articles and other things were found and seized from various premises. On verification of various documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person must be satisfied that inter alia any document seized or requisitioned belongs to person-other, than the searched person? It is only then that the Assessing Officer of the searched person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or re-assess his income in accordance with the provisions of Section 153A. Therefore, before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched 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 the document is handed over to the Assessing Officer of the person to whom the said document belongs . In the present cases it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. For this purpose it would be necessary to examine the provisions of presumptions as indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not required to record such satisfaction as both the Assessee and the SVP Group were being assessed by the same officer. This contention was rejected by the ITAT by following the decision of this Court in Pepsi Foods Pvt. Ltd v. Asstt Commissioner of Income Tax : (2014) 367 ITR 112 (Del). The Allahabad High Court in the case of Commissioner of Income Tax v. Gopi Apartments . (2014) 365 ITR 411 (All.) has also held that even in cases where the assessing officer of the person searched and the assessee who is sought to be assessed under Section 153C is the same, the assessing officer is required to record his satisfaction that the assets/ documents seized belong to a person (the assessee) other than the searched person. In CITv. Mechmen 11-C: (2015) 60 taxmann.com 484 (M.P.) a Division Bench of the Madhya Pradesh High Court had expressed the above view in the following manner:- 18. The concomitant of this conclusion, is that, the legal position as applicable to Section 158BD regarding satisfaction in the first instance of the first Assessing Officer forwarding the items to the Assessing Officer having jurisdiction; and in the second instance of the Assessing Officer havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .'. (2015) 62 taxmann.com 391 (Delhi). Thus, the controversy whether it is necessary for the assessing officer of the searched person to record his satisfaction that the assets/documents seized belong to the assessee other than the searched person is no longer res integra. It is settled that recording of such satisfaction is sine qua non for commencing any proceedings under Section 153C of the Act. Thus, the decision of the ITAT in this regard cannot be faulted. It was sought to be contended before us that the assessing officer of the searched persons had, in fact, recorded the necessary satisfaction note. However, the learned counsel for the Revenue could not confirm whether such note was prepared prior to the initiation of the proceedings under section 153C of the Act. The Assessee s contention that despite its request such note had not been disclosed during the assessment proceedings has also not been controverted. In the circumstances, the categorical finding of the ITAT that it was an admitted fact that the assessing officer of the searched persons had not recorded a satisfaction note, cannot be interfered with. [Emphasis added is ours] The aforesaid judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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