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TMI Blog2017 (7) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 19th March, 2014 issued by the Deputy Commissioner of Income Tax ('DCIT'), Central Circle-2 New Delhi [hereinafter referred to the Assessing Officer ('AO') of the searched person'] and the Income Tax Officer, Ward 3(2), New Delhi [hereinafter 'AO of the Assessee'] respectively initiating proceedings against the Assessee under Section 153C of the Income Tax Act, 1961 ('Act'). 2. A search and seizure operation was carried out in the case of M/s. Dalmia Group of cases on 20th, 27th and 28th January 2012 by the Investigation Wing Unit-VI(1), New Delhi of the Income Tax Department ('Department'). In that process a search was undertaken of Mr. Parag Dalmia at Bhikaji Cama Place, New Delhi and documents comprising 249 pages were se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood prior to the amendment with effect from 1st June, 2015 applied to the case on hand. In terms of the said provision i.e., 153C(1), the AO of the searched person had to be satisfied that the documents seized 'belongs or belong to a person other than the person referred to in Section 153A' in order that the AO of the searched person could to hand over such documents to the AO "having jurisdiction over such other person". The change brought about by the prospective amendment, with effect from 1st June 2015, is that for initiating proceedings under Section 153 C arising from searches after that date it is enough for the Department to show that a particular seized document 'pertains to' the other person. However, in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 292C that the documents belonged to the searched person was also not rebutted by the Revenue. A reference inter alia was made to the decision in Pepsico India Holdings (P) Limited v. Assistant Commissioner of Income Tax (2015) 370 ITR 295 (Del). 9. The above submissions were negatived by the AO of the Assessee. This led to the filing of the present petitions. On 27th March, 2015, this Court passed an interim order staying further proceedings pursuant to the aforementioned satisfaction notes. 10. Mr. Kamal K. Jetley, learned counsel appearing for the Petitioner, submitted that in terms of Section 153C (1) of the Act as it stood prior to the amendment with effect from 1st June 2015, it was incumbent on the Department to show the document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the first place, the satisfaction note of the AO of the searched person has to record that the document seized "belongs or belong to the person other than the person referred to in Section 153A" of the Act. It was explained in Pepsico India Holdings (P) Ltd v. Assistant Commissioner of Income Tax (supra) and reiterated in Pepsi Foods (P) Ltd. v. Assistant Commissioner of Income Tax (supra) that, given the nature of a particular seized document, in the process of recording his satisfaction, the AO of the searched person may have to note the reasons for his conclusion that the said document does not belong to the searched person but to the other person. It is not necessary that this should be done in each and every case. If, as in the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... document in fact does not belong to DEPL but to the Assessee. That is not possible on a collective reading of Section 132 (4A) and Section 292 C of the Act. These provisions do not dilute the obligation on the Department and in particular the AO of the searched person, under Section 153 C (1) of the Act as it stood prior to 1st April 2015 of showing that the seized document belongs to the other person (here, the Assessee) and not the searched person from whom it was seized. 16. The application submitted by the Assessee for subscription of shares of DEPL can certainly be said to be 'pertaining to' to the Assessee. However, once it was submitted by the Assessee to DEPL, and was found in possession of DEPL, it cannot be said to 'belong&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the possession of DEPL. Here, again, it cannot be presumed that such documents having being found in the possession of the DEPL did not belong to DEPL but to the Assessee. Here again, while the documents may 'pertain to' the Assessee, but in the context explained above, they cannot be presumed to be documents that 'belonged to' the searched person. Consequently, even with regard to these documents, the jurisdictional requirement under Section 153 C (1) of the Act, of the AO of the searched person having to be satisfied that the said documents do not belong to searched person but to the Assessee, has not been fulfilled. 19. As a result, the Court holds that the satisfaction note prepared by the AO of the searched person does not fulfil t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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