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TMI Blog2019 (6) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... not operate as a bar to a writ petition under article 226 of the Constitution of India, it is not possible to non suit the petitioners on the ground of maintainability. Effect of amendment in Section 153C w.e.f .1st June, 2015 - law applicability on search prior to amendment and notice u/s 153C issued after amendment - HELD THAT:- While it is true that sections 153A and 153C are machinery provisions, but the same cannot be made applicable retrospectively, when the amendment has expressly been given prospective effect. Besides, though such provisions are machinery provisions, the amendment brings into its fold persons who are otherwise not covered by the said provisions and therefore, affects the substantive rights of such person. The test would be whether at the first point of time when satisfaction could have been recorded by the AO of the person searched, could he have recorded the satisfaction as envisaged under the amended provision. Section 153C has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A. It is also stated therein that thus, the amendment will take effect from 1st April, 2017. Therefore, even t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 53A, it is evident that the trigger point for issuance of notice under that section is a search u/s 132 or a requisition u/s 132A. Notice is required to be issued to the searched person calling upon him to file return of income for six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. Thus, insofar as computation of the six assessment years in respect of which notice is required to be issued is concerned, the relevant date is the immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made. Accordingly, in terms of clause (b) of sub-section (1) of section 153A, in case of HN Safal Group, since the search is conducted on 4.9.2013 the previous year in which such search is conducted or requisition made is 1.4.2013 to 31.3.2014 and the assessment year relevant to such previous year would be 2014-15; therefore, the six years assessment years would be the six assessment years preceding assessment year 2014-15 which would be 2013-14, 2012-13, 2011-12, 2010-11, 2009-10 and 2008-09. In case of Barter Group and Venus Group, since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IAL CIVIL APPLICATION NO. 20149 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20151 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20152 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20154 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20604 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20629 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20632 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 12849 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 18611 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19654 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19657 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19658 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19659 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19661 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19899 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19900 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19902 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 18346 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 18362 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19869 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19239 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 19868 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20236 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20245 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20272 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20276 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20825 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20828 of 2018 With R/SPECIAL CIVIL APPLICATION NO. 20830 of 2018 For The Petitioners : Mr. Sudhir Mehta, Advocate with Ms. Shailee Mehta, Advocate, Mr. Tushar Hemani, Advocate with Ms. Vaibhavi Parikh, Advocate for, Mr. B. S. Soparkar, Advocate, Mr. M.J. Shah, Advocate, Mr. Ketan Shah, Advocate, Mr. S. N. Divatia, Advocate, Mrs. Mauna M. Bhatt, Advocate And Mr. Darshan Patel, Advocate For The Respondent : Mrs. Mauna M. Bhatt, Advocate, Mrs. Mauna M. Bhatt, Advocate, Mrs. Mauna M. Bhatt, Advocate, Mrs. Mauna M. Bhatt, Advocate, Mrs. Mauna M. Bhatt, Advocate, Mrs. Mauna M. Bhatt, Advocate And Mrs. Mauna M. Bhatt, Advocate COMMON ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. In all these petitions under article 226 of the Constitution of India, notices under section 153C of the Income Tax Act, 1961 (hereina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the excel sheet data of the computer of the searched person wherein there was only reference to the petitioner s name, the Assessing Officer could not have initiated proceedings against the petitioner under section 153C of the Act inasmuch as the condition precedent for invoking section 153C of the Act as it stood on the date of the search, viz. that the Assessing Officer should be 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 the person other than the searched person was not satisfied. It was further contended that for the purpose of initiating action under section 153C of the Act, independent satisfaction has to be recorded, by the Assessing Officer of the searched person as well as the Assessing Officer of the person other than the searched person; however, on a perusal of the satisfaction note recorded by the Assessing Officer of the petitioner, it is clear that he has merely reproduced the satisfaction of the Assessing Officer of the searched person and has not recorded the requisite satisfaction as contemplated under section 153C of the Act. 2.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18, under section 153C read with section 153A of the Act for assessment year 2009-10, wherein it is stated that a search action under section 132 of the Act was conducted in the case of accommodation entry provider group (Barter Group and Pradip Birewar Group) on 4.12.2014 during the course of which, certain incriminating documents were found and seized. The Assessing Officer of various persons enlisted in the notice under section 153C read with section 153A of the Act, handed over such seized documents to the respondent since the same allegedly pertained to the petitioner and a bearing on the determination of the total income of the petitioner for the year under consideration. The petitioner was called upon to furnish the return of income under section 153C read with section 153A(1)(a) of the Act. 2B.2 The respondent provided a copy of the satisfaction note recorded by him for the year under consideration on 5.12.2018 along with a notice under section 142(1) of the Act. By a letter dated 7.12.2018, the petitioner raised objections against initiation of proceedings under section 153C of the Act for the year under consideration. By an order dated 10.12.2018, the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons are not substantive but a clarification of the previous wordings of the provisions. Furthermore, even a dictionary meaning of the words pertains/belongs/ relates show that they are synonymous. 3.3 It is further averred that the grounds raised by the assessee are not about taxability of on money payments in immovable property acquisition transactions but on the grounds of the procedure of taxation of such transactions in respect of other persons in searched cases. Through the amendment in section 153C(1) of the Act by the Finance Act, 2015, no new liability of the assessee has been created or scope of taxation has not been widened. On money payments in immovable property acquisition transactions have always been within the scope of charge of income tax. Thus, the amendment is merely procedural amendment. Every assessee has a vested right in substantive law but no such right exist in procedural law. It is accordingly, contended that the procedural amendment applicable by the legislature with effect from 1.6.2015 also covers notice under section 153C of the Act issued on 12.3.2018. 3.4 It is further contended that while deciding an issue rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial from several persons covered under section 153A, are required to be assessed under section 153C of the Act when notice is issued after the date of the amendment, that is, 1.6.2015 without any ambiguity. 3.7 It is further averred that on a perusal of the details mentioned in the satisfaction note of the Assessing Officer, it is clear that the Assessing Officer has gone through the available material carefully and recorded reasons after due application of mind. In these satisfaction notes, cogent reasons have been recorded after detailed discussion on the seized documents for invoking provisions of section 153C of the Act in respect of the assessee. 3.8 Reliance has been placed upon the decision of the Supreme Court in Commissioner of Income-tax v. Vijaybhai N. Chandrani , (2013) 35 taxmann.com 580 (SC), to contend that the writ petitions against notices issued under section 153C of the Act are not maintainable. 4. In this batch of petitions, there are in all three different groups relating to different searches. In one group of petitions, the search had been carried out in the case of HN Safal Group; in another group, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, the Assessing Officer has recorded satisfaction in terms of the amended provision of section 153C of the Act, which came into force on 1.6.2015. According to the learned advocate. the amendment dated 1.6.2015 confers a new power on the Assessing Officer and is, therefore, prospective in effect and hence, could not have been made applicable in the facts of the present case when the amendment was not in force as on the date of the search. 5.1 In support of his submissions, the learned advocate placed reliance upon the decision of the Supreme Court in the case of State of Tamil Nadu v. Star Tobacco Co. , (1974) 3 SCC 249 , wherein the court held thus: 5 . The question for decision is whether the jurisdiction to reopen is a question of procedure or power. Mr Ram Ready contended that it relates only to procedure and on that basis sought to seek support from the decision of this Court in State of Madras v. Lateef Hamid and Co., 28 STC 690. We are unable to accept this contention. In Hamid case this Court was dealing with an alleged infraction of a provision dealing with procedure. Herein we are dealing wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective operation can be necessarily inferred. We are unable to see such intent. The new Section 59 is altogether different from the old Section 62 and there is nothing in the new Section 59 from which an intent to give retrospective effect to it can be concluded. 8. The new Section 59 came into force from 1-7-1960. Much earlier, on 26-2-1960 the assessment on the accountable person had already been completed. There is a well settled principle against interference with vested rights by subsequent legislation unless the legislation has been made retrospective expressly or by necessary implication. If an assessment has already been made and completed, the assessee cannot be subjected to reassessment unless the statute permits that to be done. Reference may be made to Controller of Estate Duty, West Bengal v. Smt Ila Das, [1981] 132 ITR 720 (Cal.), where an attempt to reopen the estate duty assessment consequent upon the insertion of the new Section 59 of the Estate Duty Act was held infructuous. 9. We hold that Section 59 of the Estate Duty Act is not retrospective in operation and that the reopening of the assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment of the Gujarat High Court relied upon by the learned Solicitor General is concerned, we find that the High Court in that case has categorically held that it is an essential condition precedent that any money, bullion or jewellery or other valuable articles or thing or books of accounts or documents seized or requisitioned should belong to a person other than the person referred to in section 153A of the Act. This proposition of law laid down by the High Court is correct, which is stated by the Bombay High Court in the impugned judgment as well. The judgment of the Gujarat High Court in the said case went in favour of the Revenue when it was found on facts that the documents seized, in fact, pertain to third party, i.e. the assessee, and, therefore, the said condition precedent for taking action under section 153C of the Act had been satisfied. 5.6 It was submitted that the relevant date for applying the amended section 153C of the Act would be the date of actual search. Reference was made to the provisions of section 292C of the Act, which provides that where any books of account, other documents, money, bullion, jewellery or other valuable article or thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under article 226 of the Constitution of India, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a writ petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. Alternative remedy has been consistently held by the Supreme Court not to operate as a bar in at least three contingencies, namely, where the writ petition has been filed for the enforcement of any of the fundamental rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged. It was submitted that in the facts of the present case, the proceedings under section 153C of the Act being wholly without jurisdiction, these writ petitions under article 226 of the Constitution of India are maintainable. 7. Mr. S. N. Soparkar, Senior Advocate, learned counsel with Mr. B. S. Soparkar, learned advocate for the petitioner in Special Civil Application No.18346 of 2018, submitted that the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a right after coming into operation of Section 4(1) that is 19-5-1988, shall not lie. The legislature in its wisdom has nowhere provided in Section 4(1) that no such suit, claim or action pending on the date when Section 4 came into force shall not be proceeded with and shall stand abated. On the contrary, clear legislative intention is seen from the words no such claim, suit or action shall lie , meaning thereby no such suit, claim or action shall be permitted to be filed or entertained or admitted to the portals of any court for seeking such a relief after coming into force of Section 4(1). In Collins English Dictionary, 1979 Edition as reprinted subsequently, the word lie has been defined in connection with suits and proceedings. At page 848 of the Dictionary while dealing with Topic No. 9 under the definition of term lie it is stated as under: For an action, claim appeal etc. to subsist; be maintainable or admissible. The word lie in connection with the suit, claim or action is not defined by the Act. If we go by the aforesaid dictionary meaning it would mean that such suit, claim or action to get any property declared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch that therefore, the then existing rights got destroyed and even though suits by real owners were filed prior to coming into operation of Section 4(1) they would not survive, does not logically follow. 7.2 It was submitted that the law would be generally prospective and the exceptions are: (1) procedural law and (2) declaratory law. The amendment in section 153C of the Act is not in the nature of a procedural law, but creates a new substantive right or obligation, therefore, the first exception will not apply. It was submitted that amendment is equally not a declaratory law as it does not intend to clarify any ambiguity and that since the scope of section 153C of the Act is being expanded, such an amendment cannot be regarded as clarificatory in nature and any attempt to rely upon the amended provision is impermissible. 7.3 Reliance was placed upon the decision of the Supreme Court in Commissioner of Income Tax-19, Mumbai v. Sarkar Builders , [2015] 375 ITR 392 as well as the decision of this court in Tata Teleservices v. Union of India and others , [2016] 385 ITR 497, for the proposition that whether the prospective or retrospecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he given facts found that the assessment had been concluded on the basis of the decision in Kerala Marketing s case, [1998] 231 ITR 814 (SC) and the period for reopening such assessments had become time barred. In any event, the 1998 amendment cannot be construed as authorizing the revenue authorities to reopen assessments when the reopening is already barred by limitation. The court held that the amendment does not seek to touch on the periods of limitation provided in the Act, and in the absence of any such express provision or clear implication, the legislature clearly could not be taken to intend that the amending provision authorizes the Income Tax Officer to commence proceedings which before the new Act came into force, had, by the expiry of the period provided become barred. It was submitted that what was impermissible in law because of bar of limitation would not become permissible on account of amendment, unless the amendment expressly extends the period of limitation. 7.5 Reliance was also placed upon the decision of the Supreme Court in the case Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana , (2014) 6 SCCC 444 , wherein the court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch and seizure. It was submitted that section 158BD of the Act is unrelated to sections 132 or 132A of the Act as satisfaction has to be recorded regarding undisclosed income. It was submitted that the first termini under section 158BD of the Act is the satisfaction of the Assessing Officer that undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act. It was submitted that in case of section 153A of the Act, the point of applicability must always be the date of search or the last date of search. It was submitted that insofar as section 153C of the Act is concerned, the search or requisition under section 132 or 132A will result in assessment and therefore, at the first stage, there is no requirement of undisclosed income. It was submitted that prior to its amendment, section 153C of the Act provided that satisfaction be recorded by the Assessing Officer of the searched person that any money, bullion, jewellery or other valuable article or thing or books of account or document seized or requisitioned belong or belongs to the person other than the searched person, whereas after the amendment of section 153C ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, it is provided that the Assessing Officer shall make assessment or re-assessment in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorizations for search under section 132 or for requisition under section 132A was executed. It was submitted that in the facts of the present case, the limitation for assessment under section 153A of the Act was 31st March, 2016, whereas in the present case, the impugned notice has been issued on 21.2.2018, that is, after the period of limitation under clause (a) had expired. It was submitted that the point of initiation of proceedings under section 153C of the Act is the search proceedings and the original date of search is not given a go-bye. It was submitted that if the date on which the Assessing Officer of the other person receives the material were the relevant date, there was no need for clauses (a) and (b) in the proviso that applies to section 153C of the Act. It was submitted that there is no separate date of sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false , is not found in section 153C of the Act. It was submitted that insofar as section 153C of the Act is concerned, the first satisfaction which is to be recorded by the Assessing Officer of the searched person prior to the amendment is limited to whether the seized material belongs to the other person, and whether it pertains to or relates to the other person after the amendment. Therefore, recording of such satisfaction has to be done at the time of search, because it is at that time that such articles are recovered and the occasion arises to identify whether such articles belong to the searched person or some other person. The Assessing Officer of the searched person cannot wait for the adjudication of the searched person for recording satisfaction that some of the seized material belongs to another person. 10.1 It was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no time limit prescribed for notice under section 153A or 153C of the Act and therefore, the notice under section 153C of the Act is valid and cannot be objected to. It was contended that the contention raised on behalf of the revenue is not tenable, inasmuch as the Supreme Court in Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana (supra) has held that although there is no time limit for recording satisfaction under section 158BC of the Act, the same is required to be recorded at either of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; (b) along with the assessment proceedings under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. It was submitted that drawing an analogy, although there is no time limit prescribed for recording satisfaction under section 153C of the Act, such satisfaction is required to be recorded immediately after the search (or the receipt of documents from the Investigating Officers), more so, because unlike the requirement under section 158BD of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates a new obligation, or imposes a new duty, or attaches a new disability, in regard to events already past. There is however said to be an exception in the case of a statute which is purely procedural, because no person has a vested right in any particular course of procedure, but only a right to prosecute or defend a suit according to the rules for the conduct of an action for the time being prescribed. 10.7 Mr. Soparkar has submitted that the hard disk does not belong to the petitioner. From the date of search till the amendment of 2015, the Assessing Officer did not have jurisdiction to issue notice under section 153C of the Act because till then the jurisdiction was limited to material seized belonging to the other person. After the amendment, if it is prospective, the Assessing Officer still would have no jurisdiction. It was submitted that even if the amendment is retroactive, even then the satisfaction should have been recorded immediately after the search or upon identification of material in the hard disk and therefore, the impugned notice under section 153C of the Act is time barred. 11. Mr. M. J. Shah, learned advocate for the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. It was submitted that the amendment is, therefore, specifically with effect from 1.6.2015 and cannot be made applicable where a search has been carried out prior to that date. 12. Mr. Ketan Shah, learned advocate for the petitioner in Special Civil Applications No.12849, 18611, 19654, 19657, 19658, 19659, 19661, 19899, 19900 and 19902 of 2018, reiterated the submissions advanced by the learned counsel for the petitioners which have already been referred to hereinabove. He has further placed reliance upon the decision of the Bombay High Court in the case of Commissioner of Income Tax, Central-III, Mumbai v. Arpit Land (P) Ltd. , [2017] 78 taxmann.com 300 (Bombay) , wherein the court held thus: 6. We note that in terms of Section 153C of the Act at the relevant time i.e. prior to 1st June, 2015 the proceedings under Section 153C of the Act could only be initiated/proceeded against a party - assessee if the document seized during the search and seizure proceedings of another person belonged to the party - assessee concerned. The impugned order records a finding of fact that the seized documents which formed the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed person and that without such satisfaction having been recorded no action can be taken against the other person. 13. Mr. S. N. Divatia, learned advocate for the petitioner in Special Civil Application No.20610 of 2018, submitted that sections 153A to 153D of the Act are a complete Code. If section 153C of the Act is seen prior to the amendment, it covered only those persons to whom the material belonged to, however, now a wider classification has been made. The scope of the section has become wider affecting the rights of the other persons and therefore, cannot be applied retrospectively. 13.1 Reliance was placed upon the following extracts from the Principles of Statutory Interpretation by Justice G. P. Singh: ( iv) Statements of the rule against retrospectivity.- The classification of a statute as either substantive or procedural does not necessarily determine whether it may have a retrospective operation. For example, a statute of limitation is generally regarded as procedural but if its application to a past cause of action has the effect of reviving or extinguishing a right of suit, such an operation cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Article 14 of the Constitution. But the retrospective operation would have to be found to be unduly oppressive and confiscatory before it can be held to be so unreasonable as to violate constitutional norms of Articles 14 and 19 of the Constitution. It was submitted that for initiating proceedings under section 153C of the Act, the basic event is the search and, therefore, the amended provision which was not on the statute book on the date of the search, cannot be applied retrospectively in the facts of the present case. 13.2 Referring to the Explanation I to sub-section (1) of section 153A of the Act, which provides that for the purposes of the sub-section, the expression relevant assessment year shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made, it was submitted that all previous years relate to the date of search. Referring to the amended portion of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings are completed in the case of the searched person. Whereas in the present case, the Settlement Commission passed its order on 1.8.2016, and the satisfaction in the other person s (petitioner s) case was recorded on 6.9.2018 which is after a huge delay and is clearly in contravention of the decision of the Supreme Court in Commissioner of Income Tax v. Calcutta Knitwears (supra) and the above referred C.B.D.T. Circular. 14.3 It was also submitted that the satisfaction recorded by the Assessing Officer of the petitioner is completely identical to the satisfaction recorded by the Assessing Officer of the searched person, which clearly shows that there is no independent application of mind by the Assessing Officer and he has merely relied upon the satisfaction recorded by the Assessing Officer of the searched person while recording the satisfaction in the present case. 14.4 Reference was also made to the affidavit-inrejoinder filed by the petitioner, wherein it has been averred thus: The petitioner further submits that as per section 153B, the Assessing Officer shall pass an order of assessment or reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer of the petitioner is invalid as the same is issued in contravention to the above referred circular. 15. Mr. Ankit Talsania, learned advocate for the petitioner in Special Civil Application No.19868 of 2018 reiterated the submissions advanced by the learned advocates for the petitioners as recorded hereinabove. SUBMISSIONS MADE ON BEHALF OF THE RESPONDENTS 16. At the outset, Mrs. Mauna Bhatt, learned senior standing counsel for the respondents, raised a preliminary objection to the very maintainability of the petitions. It was submitted that the petitions challenging the notices under section 153C of the Act are not maintainable in view of the availability of an efficacious alternative statutory remedy by way of appeal. It was submitted that there is no provision under the Act to raise objections against a notice issued under section 153C of the Act and disposal of the same by the Assessing Officer and that the contention raised by the petitioners in the memorandum of petitions that the documents do not relate to/ pertain to them, cannot be decided by this court in exercise of its writ jurisdiction, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 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 of the Act. The court placed reliance upon the decision of the Supreme Court in the case of Commissioner of Income Tax v. Calcutta Knitwears (supra) and held that the petitioner s contention that the notice under section 153C of the Act could not have been issued after the search operations were over, cannot be accepted. The court further observed that with respect to the validity of the notice itself, it is not inclined to examine the same in view of the decision of the Supreme Court in Commissioner of Income Tax v. Vijaybhai N. Chandrani , [2013] 357 ITR 713 (SC) and the decision in Commissioner of Income Tax v. Chhabil Dass Agarwal , [2013] 357 ITR 357 and relegated the petitioners to remedies under the statute without expressing any opinion on the validity of the reference. 16.4 Reliance was also placed upon the decision of the Supreme Court in the case of Commissioner of Income Tax v. Vijaybhai N. Chandrani (supra), wherein the court had observed that the assessee had invoked writ jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. The Supreme Court was, accordingly, of the view that the writ court ought not to have entertained the writ petition filed by the assessee, wherein he has only questioned the correctness or otherwise of the notices issued under section 148 of the Act, the reassessment orders passed and the consequential demand notices issued thereon. 16.7 On the merits of the case, it was submitted that the amended provisions of section 153C of the Act as inserted with effect from 1.6.2015 would be applicable to the facts of the present case. It was submitted that after the search was conducted on 4.9.2013 in the case of HN Safal Group, the Safal Group made an application before the Settlement Commission on 30.1.2015. The Settlement Commission passed an order under section 245D(4) of the Act on 29.7.2016, which was received by the Assessing Officer of the searched person on 2.8.2016. The Assessing Officer of the searched perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the handing over of documents and recording of satisfaction by the Assessing Officer of the petitioner-assessee, took place after 1.6.2015. Therefore, the amended provisions of section 153C of the Act will be applicable. In other words, when the Assessing Officer of the searched person assumed jurisdiction for initiation of proceedings under section 153 of the Act, the amended provisions had already been brought into effect and, therefore, the contention of the petitioner that the unamended provisions of section 153C of the Act will be applicable, does not merit acceptance. 16.9 Referring to the decision of this court in the case of Dilip Avatar Construction , rendered on 24.12.2018 in Tax Appeal No.1 of 2017, the learned senior standing counsel submitted that relying upon the decision of the Supreme Court in Pooran Mal v. Director of Inspection (Investigation), (1974) 93 ITR 505 and the decision of this court in Gunjan Girishbhai Mehta v. Director of Investigation, 2017 (393) ITR 310 , this court has observed that once the satisfaction to assume jurisdiction as contemplated under the provision was recorded, the search has no relevance. It was submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer could not serve the notice on the assessee after expiry of twelve months from the end of the month in which the return was furnished. The outer limit as per this provision worked out to 31.08.2008. This proviso was, however, substituted w.e.f. 01.04.2008 which provided that no such notice could be served after expiry of six months from the end of the financial year in which the return was furnished. Thus, from computing the period of limitation from the end of the month during which the return was filed it was shifted to a period of six months from the end of financial year in which the return was furnished thereby bringing a greater uniformity of the last date for issuing the notice in case of commonly placed class of assessees. Whatever be the legislative philosophy for making such a change, one thing that cannot be denied is that the substitution had to take effect from 01.04.2008. We may record that the Finance Act 2008 received assent of the President on 10.05.2008 and was published in official gazette on the same day. By 10.05.2008 therefore, this provision formed part of the statute and was given effect of 01.04.2008. For two reasons the contention of the petitioner cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asmuch it was not the intention of the legislature that undisclosed income should be given a go-bye. It was submitted that once the Assessing Officer of the searched person records satisfaction that the seized documents have a bearing on the determination of the total income of such person, such meaning should not be assigned which results in income not being taxed. 16.15 It was further contended that the contention of the petitioners that the amended provision substitutes the old provision which gives rise to new liability and therefore, the old provisions will be applicable, is not correct. Section 158BD of the Act refers to undisclosed income belonging to the person other than the person searched, whereas section 153C inserted with effect from 1.6.2015, refers to the assets/documents which has a bearing on determination of income of the other person. Therefore, the legislative intent is to tax undisclosed income. The term determination of total income refers to the income which has not been disclosed. Further, no vested right has been taken away by the amendment to section 153C of the Act, nor has any accrued right been taken away by the amendment. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer of the searched person has not recorded satisfaction immediately, it was submitted that such contention has no basis. It was submitted that immediate or belated, as referred to by the Supreme Court in Calcutta Knitwears (supra), is a finding of fact and may not be amenable to the writ jurisdiction of this court. It was submitted that no limitation has been prescribed under section 153A or section 153C of the Act for issuance of notice, and as held by the Supreme Court in the above decision, a literal interpretation is to be given to the statute without destroying or twisting the language. Therefore, any presumption of limitation would amount to adding words to the statute. It was urged that while considering the provisions of section 158BC and section 158BD, which are in pari materia with the provisions of sections 153A/153C of the Act, and its scope, the Supreme Court has clearly observed that there is no limitation to issue notice under section 158BD of the Act. It was submitted that the above view has been reiterated by this court in Commissioner of Income Tax v. Bipinchandra Chimanlal Doshi , [2017] 395 ITR 632 (Guj.) , wherein the court in the context of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be allowed to be proceeded with under section 245D(1) of the Act, in view of the specific provision of section 245F of the Act, the Settlement Commission shall, until an order is passed under sub-section (4) of section 245D of the Act, have exclusive jurisdiction to exercise the power and perform the functions of the income tax authority under the Act. It was submitted that once the application under section 245C of the Act had been accepted by the Settlement Commission, it had exclusive jurisdiction and therefore, the contention of the petitioners that the Assessing Officer ought to have recorded his satisfaction immediately after the search is misconceived. 16.20 Placing reliance upon the decision of the Supreme Court in Calcutta Knitwears (supra), it was submitted that it is permissible for the Assessing Officer of the searched person to record satisfaction at any of the three stages, viz., (1) at the time of search, (2) at the time of passing of assessment order, and (3) immediately after the assessment order. It was submitted that in the present case, the searched person had filed application before the Settlement Commission and no order of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were handed over to the jurisdictional Assessing Officer in the year 2015. If the assessee s contention is accepted, then though the documents belonging to/relating to assessment year 2007-08 were seized, it is to be ignored. Further, there will be six different assessment years covered under sections 153A and 153C of the Act. Therefore, the six assessment years covered for assessment/reassessment under sections 153A/153C in this case are 2008-09 to 2013-14. REJOINDER ON BEHALF OF THE PETITIONERS 17. In rejoinder, Mr. Tushar Hemani, learned advocate for the petitioners submitted that insofar as computation of limitation is concerned, the order of the Settlement Commission does not have any bearing, inasmuch as, section 153C of the Act relates only to seized material. It was submitted that the decision of the Supreme Court in Commissioner of Income Tax-III v. Calcutta Knitwears, Ludhiana (supra) was rendered in case of a normal block assessment, whereas a settlement petition is on an admitted position. Therefore, both would stand on a different footing. It was submitted that in the proceedings before the Settlement Commission, at the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, from the facts as noted hereinabove, it is evident that the petitioners have responded to the notice under section 153C of the Act and after receipt of the satisfaction note, objected to the jurisdiction of the Assessing Officers in issuing such notices. The respective Assessing Officers, in majority of the cases, have rejected such objections and it is at this stage that the petitioners have approached this court challenging the impugned notices. Under the circumstances, the decision of the Supreme Court in the case of Commissioner of Income Tax v. Vijaybhai N. Chandrani (supra) would not be applicable to the facts of the present case. 18.3 The respondents have also relied upon the decision of the Supreme Court in Commissioner of Income Tax v. Chhabil Dass Agarwal (supra), wherein the Supreme Court has held that it has recognized some exceptions to the rule of alternative remedy, i.e., where the statutory authority has not acted in accordance with the provisions of the enactment in question, or in defiance of the fundamental principles of judicial procedure, or has resorted to invoke the provisions which are repealed, or wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, there is a remedy of statutory appeal under the provisions of the Income Tax Act, however, in the light of the above decision of the Supreme Court wherein it has been held that when the proceedings are wholly without jurisdiction, the alternative remedy does not operate as a bar to a writ petition under article 226 of the Constitution of India, it is not possible to non suit the petitioners on the ground of maintainability. ( II) WHETHER SECTION 153C OF THE ACT AS AMENDED WITH EFFECT FROM 1ST JUNE, 2015 WOULD BE APPLICABLE TO CASES WHERE SEARCH IS INITIATED PRIOR TO THAT DATE. 19. Sections 153A and 153B of the Act are special provisions carved out by the Legislature for the purpose of assessment of cases pertaining to section 132 and 132A of the Act. These provisions were introduced with effect from 1.6.2003 under Chapter XIV of the Act, which provides for procedure for assessment. The dispute in this case relates to applicability of the provisions of the section 153C of the Act which came to be amended with effect from 1.6.2015, to cases where search had been carried out prior to such amendment having come into force. For the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le at the rate or rates as applicable to such assessment year. 153-B. Time limit for completion of assessment under Section 153-A .- ( 1) Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,- ( a) in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of sub-section (1) of section 153-A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132-A was executed; ( b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132-A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132-A was executed: Provided that in case of other person referred to in section 153-C, the period of limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch under section 132 or making of requisition under section 132-A in the second proviso to section 153-A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person. ( 2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132-A and in respect of such assessment year- ( a) no return of income has been furnished by such other person and no notice under sub-section (1) of Section 142 has been issued to him, or ( b) a return of income has been furnished by such other person but no notice under sub-section (2) of Section 143 has been served and limitation of serving the notice under sub-section (2) of Section 143 has expired, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition is made and] for the relevant assessment year or years referred to in sub-section (1) of section 153-A: 19.2 Sub-section (1) of section 153C of the Act as it stands at present, reads thus: 153-C. Assessment of income of any other person .-( 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,- ( a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or ( b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 153- A, 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 notice and assess or reassess the income of the other person in accordance with the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer of the searched person is satisfied that (a) any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; (b) or books of account or documents or documents pertain to, or any information contained therein, relate to any person other than the searched person he shall hand over the books of account or documents or assets seized to the Assessing Officer having jurisdiction over such other person. The amendment further provided that that Assessing Officer shall issue notice and assess or reassess the income of the other person in accordance with the provisions of section 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. 19.4 Section 153C of the Act is a machinery provision which is inserted in the statute book for the purpose of carrying out assessments of a person other than the person searched under sections 132 and 132A of the Act. The moot question that arises for consideration in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery provisions of a taxing statute to give effect to its manifest purpose, the section should be liberally construed. The court has further held that wherever the intention to impose liability is clear, the courts ought not to be hesitant in espousing a commonsense interpretation to the machinery provisions so that the charge does not fail. The machinery provisions must, no doubt, be so construed as would effectuate the object and purpose of the statute and not defeat the same. It is contended that the legislature having the clear intent to bring in persons other than the person searched within the ambit of section 153C of the Act even if the books of account or documents seized or requisitioned pertain to or any information therein relates to such other person, the amended provisions should be so construed as would effectuate the object and purpose of the statute and not defeat the same, namely to tax the total income of the assessee. 19.7 In Calcutta Knitwears (supra) the Supreme Court has held that section 158-BD of the Act is a machinery provision and inserted in the statute book for the purpose of carrying out assessments of a person other than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to the Assessing Officer of such other person. However, subsequent to the date of search, the amendment has been brought into force and based on the amendment, the petitioners who were not included within the ambit of section 153C of the Act as on the date of the search, are now sought to be brought within its fold on the ground that the satisfaction note and notice under section 153C of the Act have been issued after the amendment came into force. Therefore, this case does not relate to the interpretation of the provisions of any of the sections, but relates to the stage at which the amended section 153C of the Act can be made applicable, as to whether it relates to the date of search; or the date of recording of satisfaction by the Assessing Officer of the searched person; or the date of recording of satisfaction by the Assessing Officer of the other person; or the date of issuance of notice under section 153C of the Act. 19.9 In the facts of the present case, the search was conducted in all the cases on a date prior to 1st June, 2015. Therefore, on the date of the search, the Assessing Officer of the person searched could only have recorded satisfaction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date other than the date of search is taken to be the relevant date for the purpose of recording satisfaction one way or the other, it would result in an anomalous situation wherein in some cases, because the notices under section 153C of the Act were issued prior to the amendment, they would be set aside on the ground that the books of account or documents seized or requisition did not belong to the other person though the same pertained to or the information contained therein related to such person, whereas in other cases arising out of the same search proceedings, merely because the notices are issued after the amendment, the same would be considered to be valid as the books of account or documents seized or requisitioned pertain to or the information contained therein relate to the other person. It could not have been the intention of the legislature to deal with two sets of identically situated persons differently, merely because in one case the Assessing Officer of the searched person records satisfaction as required under section 153C of the Act prior to the coming into force of the amended provisions and in any another case after the coming into force of the amended provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated the above legal position after discussing the decisions in Principal Commissioner of Income Tax v. Super Malls (P) Limited (supra) and Commissioner of Income Tax (Central)-2 v. Nau Nidh Overseas Pvt. Ltd. (supra). The essential jurisdictional requirement for assumption of jurisdiction under Section 153 C of the Act (as it stood prior to its amendment with effect from 1st June 2015) qua the 'other person' (in this case the assessees) is that the seized documents forming the basis of the satisfaction note must not merely 'pertain' to the other person but must belong to the 'other person'. 30. In the present case, the documents seized were the trial balance and balance sheets of the two Assessees for the period 1st April to 13th September 2010 (for ISRPL) and 1st April to 4th September 2010 (for VSIPL). Both sets of documents were seized not from the respective Assessees but from the searched person i.e. Jagat Agro Commodities (P) Ltd. In other words, although the said documents might 'pertain' to the Assessees, they did not belong to them. Therefore, one essential jurisdictional requirement to justify the assumption of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the record or in the valuation of any property or by reason of the omission of any property. The newly enacted Section 59 deals with property escaping assessment. The provision is analogous to Section 34 of the Indian Income Tax Act, 1922 and Section 147 of the Income Tax Act, 1961. It seems to us that the new Section 59 endeavours to cover a substantially different area from that treated by the old Section 62. The only area which seems common to the two provisions relates to the omission of any property , but it seems to us that the incidents of the power under Section 62 relate to a situation materially different from the incidents of the power contemplated under Section 59. The High Court has closely analysed the provisions of the two sections and has come to the conclusion that the power or re-assessment conferred by the new Section 59 is quite different from the power conferred by the old Section 62. We are in agreement with the High Court. The contention on behalf of the revenue based on the identity alleged between the new Section 59 and the old Section 62, and that, therefore, the new section should be regarded as retrospective cannot be accepted. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merely because at a later date the statutory provision came to be amended. 19.19 It may be pertinent to note that vide CBDT Circular No.2/2018 dated 15.2.2018, it has been clarified that the amended provisions of section 153A of the Act shall apply where search under section 132 of the Act is initiated or requisition under section 132A of the Act is made on or after 1st day of April, 2017. It is further stated therein that section 153C of the Act has also been amended to provide a reference to the relevant assessment year or years as referred to in section 153A of the Income Tax Act. It is also stated therein that thus, the amendment will take effect from 1st April, 2017. Therefore, even the CBDT, in the context of the amended provisions of section 153A of the Act, has clarified that it would apply when search or requisition is made after the date of the amendment. Evidently, therefore, even the amended provisions of section 153C of the Act would apply when search or requisition is made after the amendment. 19.20 In Commissioner of Income Tax v. Vatika Township (P) Ltd. , (supra), the Supreme Court has discussed the general principles conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly in the terms of the Act, or arises by necessary and distinct implication. 19.21 At this stage, reference may be made to the following extract of the notes on clauses to Finance Bill 2005 (II-A) explaining clause 46 whereby section 153B of the Act relating to time-limit for completion of assessment under section 153A was sought to be amended: This amendment will take effect retrospectively from 1st June, 2003 and will, accordingly, apply in relation to a search initiated under section 132 or in relation to books of account, other documents or any assets requisitioned under section 132A after 31st May, 2003 . Thus, when the legislature thought it fit to make the amendment in section 153B of the Act relating to time limit of assessment under section 153A of the Act retrospective from a particular date, it provided that such retrospectivity would relate to cases where the search is initiated or books of account, documents or other assets are requisitioned, from such date. Thus, even the legislature has considered the initiation of search or making of requisition as the trigger point for applying the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gal process or the procedure for the enjoyment of the said right is not protected. Section 6, normally does not apply to procedural law. The procedural law when amended or substituted is generally retroactive and applies from the day of its enforcement and to this extent it can be retrospective. The question raised is whether the amendment/substitution of the period with effect from 1.6.2001 in Section 149 of the Act, is procedural or substantive. 8. Law of limitation is a procedural law and the provision or the limitation period stipulated on the date when the suit is filed applies. (see, Mathukumalli Ramayya and Ors. v. uppalapati Lakshmayya, AIR 1942 PC 54 and C. Beepathuma v. Velasari Shankaranarayana Kadambolithaya, AIR 1965 SC 241). 9. In T. Kaliamurthi v. Five Gori Thaikkal Wakf, (2008) 9 SCC 306, it has been held as under:- 40. In this background, let us now see whether this section has any retrospective effect. It is well settled that no statute shall be construed to have a retrospective operation until its language is such that would require such conclusion. The exception to this rule is enactments dea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tanding counsel for the revenue, would not be applicable to the facts of the present case, inasmuch as the same was rendered in the context of totally different facts and the controversy involved therein was whether proceedings under section 153C of the Act would stand vitiated if the authorisation of search under section 132 of the Act has been set aside in case of the searched person. 19.24 The decision of this court in Udhna Udyog Nagar Sahkari Sangh Ltd. v. Shailendra Lodha, [2016] 75 taxmann.com 185 (Gujarat), also does carry the case of the revenue any further inasmuch as in that case the court had found that it was not a case where a vested right was being taken away by an amendment in the statute and the notice under section 143(2) of the Act had not yet become time barred by the time the amendment in the statute took place. In the facts of the present case, the legislature has specifically made the amended provisions of section 153C of the Act applicable with prospective effect from 1.6.2015. If such amended provisions are made applicable to searches carried out prior to 1.6.2015, they affect the substantive rights of persons who are brought within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 158BD, the Assessing Officer is required to be satisfied that any undisclosed income belongs to the other person, whereas in case of section 153C, the Assessing Officer should be satisfied that money, bullion, jewellery or other article or thing seized or requisitioned belong to or books of account or documents seized or requisitioned, pertains to or pertain to, or any information contained therein relates to the other person; therefore, the starting point in case of section 158BD of the Act is the undisclosed income, which may be ascertained after the assessment in case of the searched person, whereas insofar as section 153C of the Act is concerned, the starting point is money, bullion, jewellery or other article or books of account or documents seized or requisitioned and does not depend on the determination of the income of the searched person. 20.3 In the context of the above submission, it may be germane to refer to the definition of undisclosed income as defined under section 158B of the Act, which reads thus: ( b) undisclosed income includes any money, bullion, jewellery or other valuable article or thing or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false; whereas there is no such qualification insofar as section 153C of the Act is concerned. Insofar as section 153C of the Act is concerned, the trigger point is when the Assessing Officer of the searched person finds that the money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to; or books of account or documents seized or requisitioned pertains or pertain to or any information contained therein, relates to the other person. However, this distinction would have no bearing on the question of limitation for issuance of notice under section 153C of the Act, inasmuch as both, in case of section 158BD as well as section 153C of the Act, the statute does not provide for any limitation. 20.4 Sub-section (1) of section 153C of the Act provides that after the Assessing Officer of the searched person records the requisite satisfaction that any money, bullion, jewellery or other valuable article or thing seized or requisitioned belongs to or books of account or documents seized or requisitioned pertains or pertain to, or any informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of the said other documents relating to such other person, the jurisdictional assessing officer may proceed to issue a notice for the purpose of completion of the assessments under Section 158-BD of the Act, the other provisions of Chapter XIV-B shall apply. 36. The opening words of Section 158-BD of the Act are that the assessing officer must be satisfied that undisclosed income belongs to any other person other than the person with respect to whom a search was made under Section 132 of the Act or a requisition of books was made under Section 132-A of the Act and thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158-BC for the completion of the assessments of the searched person under Sections 132 and 132-A of the Act or during the course of the assessment proceedings under Section 158-BC of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... biguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. 39. Further, Section 158-BE(2)(b) only provides for the period of limitation for completion of block assessment under Section 158-BD in case of the person other than the searched person as two years from the end of the month in which the notice under this Chapter was served on such other person in respect of search carried on after 1-1-1997. The said section thus, neither provides for nor imposes any restrictions or conditions on the period of limitation for preparation of the satisfaction note under Section 158-BD and consequent issuance of notice to the other person. 40. In the lead case, the assessing officer had prepared a satisfaction note on 15-7-2005 though the assessment proceedings in the case of a searched person, namely, S.K. Bhatia were completed on 30-3- 2005. As we have already noticed, the Tribunal and the High Court are of the opinion that since the satisfaction note was pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 153C of the Act it is on the basis of the books of account or documents or assets seized or requisitioned that the Assessing Officer of the searched person is required to record satisfaction that the money, bullion jewellery or other valuable article or thing belongs to or the books of account or documents seized or requisitioned pertain or pertains to, or any information contained therein relates to a person other than the person searched. Therefore, in both cases, whether it be satisfaction as regards undisclosed income as contemplated under section 158BD or satisfaction based on books of account or documents or assets seized or requisitioned as contemplated under section 153C, the same have to be traced out when a person is searched under section 132 or the books of account or documents were requisitioned under section 132A of the Act. 20.7 It has been contended on behalf of the petitioners that at the time when the notices under section 153C of the Act came to be issued, the period of limitation as provided under clauses (a) and (b) of section 153B of the Act, had lapsed and therefore, the impugned notices are barred by limitation. In this regard it may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DT has issued Circular No.24/2015 dated 31.12.2015 in the context of the above decision, inter alia stating thus: 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/parimateria to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by the CBDT. Thus, the above decision of the Supreme Court would also be applicable insofar as recording of satisfaction as contemplated under section 153C of the Act by the Assessing Officer of the person searched is concerned. In the facts of the present case admittedly, such satisfaction has not been recorded at the time of or along with the initiation of proceedings against the searched person under section 153A of the Act. In the case of HN Safal Group the searched persons approached the Settlement Commission and hence, there was no assessment under section 153A of the Act. However, the proceedings before the Settlement Commission came to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 153C of the Act. However, in some of the petitions it has been contended that such six years have to be computed in relation to the assessment year in which the notice under section 153C of the Act has been issued and not in relation to the assessment year in which the search came to be conducted, and hence, the learned senior standing counsel for the respondent has made submissions in this regard. 21.1 Section 153C of the Act provides that after recording satisfaction as provided therein, the Assessing Officer having jurisdiction over the other person shall proceed against each such other person and issue notice and assess or re-assess the income of the other person in accordance with the provisions of section 153A of the Act, 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. Sub-section (1) of section 153A of the Act as it stood at the relevant time when the search came to be conducted provided that the Assessing Officer shall:- (a) issue notice to such person requiring him to furnish within such period, as may be specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years referred to hereinabove, such notices would be beyond jurisdiction as the same do not fall within the six assessment years as contemplated under section 153A of the Act. ( V) OTHER ISSUES RAISED IN THE PETITIONS 22. It may be noted that the learned advocates for the petitioners have made submissions in respect of individual satisfaction notes recorded by the Assessing Officer in each case. It has also been contended that the Assessing Officer of the other person has not recorded satisfaction as provided under sub-section (1) of section 153C of the Act and has merely reproduced the satisfaction recorded by the Assessing Officer of the searched person. However, considering the view taken by this court on the question of jurisdiction of the Assessing Officer to issue notice under section 153C of the Act, the court has not gone into the merits of each individual petition. FINAL ORDER 23. In the light of the above discussion, the petitions succeed, and are accordingly, allowed. The impugned notices issued under section 153C of the Income Tax Act, 1961 in each of the petitions are hereb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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