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TMI Blog2016 (6) TMI 1220X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent By : Sh. Sushi l Kumar ORDER Per Annapurna Gupta A. M. The present appeal has been preferred by the Assessee against the order of Principal CIT (OSD), Gurgaon, dated 12.03.2015. 2. The assessee has raised the following grounds of appeal:- 1. That the order of Learned Commissioner of Income Tax(Appeals) is bad and against the facts & Law. 2. That the Learned Commissioner of Income Tax (Appeals) has erred in allowing the impugned assessment orders u/s 153C against the appellant whereas the provisions of Section 153C are not applicable over the transaction on the basis of which proceedings were initiated against the appellant. 3. That the Learned Commissioner of Income Tax (Appeals) has erred in confirming the additions in the hands of Sh. Pawan Mangla (Individual) when the whole transaction (excluding the alleged receipt of ₹ 25,15,173/-) was carried out by Pawan Mangla & Sons (HUF). 4. That the Learned Commissioner of Income Tax (Appeals) has erred in sustaining the addition of ₹ 25,15,173/- when the property in question was owned and sold by Pawan Mangla & Sons (HUF) and not by Sh. Pawan Mangla (Individual). 5. That the Learned Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction was recorded by the A.O. of the searched person and therefore, the very issue of notice u/s 153C was bad. The additional ground is purely legal ground and goes to the root of the matter and therefore, such legal issue raised in the additional ground is admitted. It goes without saying that the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income Tax (1998) 229 ITR 0383 have held that pure legal question of law which does not require fresh facts to be investigated should be admitted as additional ground. Therefore, Addl. Ground is admitted. Adverting to the merit of the Additional Ground, Ld. Counsel for the assessee submitted that no satisfaction has been recorded by the A.O. of the searched person in the file of the searched person and all that has been recorded is in the file of the appellant vide the order sheet entry dated 17.08.2012 which reads as under:- Reasons recorded for issuing notice u/s 153C A search was conducted on 17.11.2010 at the residential premises of Dr. Naresh Mittal at H. No. 212, Sector-6, Panchkula. During the course of search, documents marked as A1, A2 and A3 were found and seized. Pages 21-25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensively. Ld. CIT DR in the end submitted that the Addl. Ground may be dismissed on merit also. 8. We have heard the rival submissions and perused the orders passed by the authorities below and have taken ourselves to the material placed before us. Undisputedly A.O. of the searched person and the A.O. of the appellant assessee is one and the same A.O. There is no dispute on this fact also that A.O. of the assessee recorded 'reason' u/s 153C on 17.08.2012 on the order sheet of the case records of the appellant assessee. It is also undisputed fact that no satisfaction for assuming jurisdiction u/s 153C was recorded in the case records of the person searched i.e. Dr. Naresh Mittal. In the setting of the above undisputed facts, we have to examine as to whether assumption of jurisdiction u/s 153C was in accordance with law. Section 153C provides that if books of accounts, documents etc. belonging to the third person are found during the course of search, the A.O. shall hand over such documents, books of accounts etc. to the A.O. of such third person and thereafter the A.O. of such third person shall proceed to assess or reassess the total of income of third person in terms the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 132(1) or has been proceeded under Section 132A, 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, 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 againsteach such other person and issue such other person notice and assessor reassess income of such other person in accordance with theprovisions of section 153A. 26. Thus, there are two stages: (1) The first stage comprises of a search and seizure operation under Section 132 or proceeding under Section 132A against a person, who may be referred as 'the searched person'. Based on such search and seizure, assessment proceedings are initiated against the 'searched person' under Section 153A. At the time of initiation of such proceedings against the 'searched person' or during the assessment proceedings against him or even after the completion of the assessment proceedings agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable. In this regard, reference may be made to the pronouncements in the case of C.I.T. Vs. Radhey Shyam Bansal, (2011) 337 ITR 217 (Delhi) and the Division Bench judgment of this Court in the case of C.I.T. Vs. Classic Enterprises reported in (2013) 358 ITR 465 (Allahabad). 31. In the case of Manish Maheshwari Vs. Assistant Commissioner ofIncome Tax and another, (2007) 289 ITR 341 (SC), their Lordships had the occasion to consider the provisions of Sections 158BC and 158BD and held that the conditions precedent for taking recourse to a block assessment interms of Secton 158BC and 158BD (i) were as under: "(i) Satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under Section 132 of the Act; (ii) The books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer havingjurisdiction over such other person; and (iii) The Assessing Officer has proceeded under Section 158BC against such other person. 11. The conditions precedent for invoking the provisions ofSection 158BD, thus, are required to be satisfied before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the Department must be negatived. 19. After receipt of the materials, the Assessing Officer having jurisdiction is expected to conduct enquiry and due verification of the relevant facts; before forming his prima facie satisfaction. The Assessing Officer having jurisdiction will be well within his rights to form an independent view before issuing notice to the other person (person other than the person referred to in section 153A) under his jurisdiction on the basis of his own enquiry. In our opinion, the view formed by the Assessing Officer after his own enquiry does not entail in seating in appeal over the satisfaction of the first Assessing Officer, who had handed over the items to him. 20. As a result, we hold that there is no infirmity in the view taken by the Tribunal on the questions under consideration. The view taken by us is reinforced from the decisions of other High Courts in the cases of CIT V. Gopi Apartment (supra), Pepsi Foods P.Ltd. (supra), Pepsico India Holdings P. Ltd.(supra) and, lastly, CIT v. Smt. Madhu Keshwani (supra). The observations of the Delhi High Court in the case of SSP Aviation Ltd. (supra) have been explained in the subsequent case of Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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