9911796707
TMI Blog2020 (1) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction over such other persons. In the present case, no satisfaction was recorded by the AO of the searched person. It is mandatory to record satisfaction by the AO of the searched person before transmitting record to the AO of other persons to whom documents were found during the course of search; circumstances at which this satisfaction could be recorded has also been contemplated by the Hon ble Supreme Court. We allow these Misc. Applications, and recall the impugned order of the Tribunal. We direct the Registry to re-fix the appeals on 2.3.2020 for hearing afresh. Issue notice to both parties. X X X X Extracts X X X X X X X X Extracts X X X X ..... as common, therefore, there was no requirement to record any satisfaction for taking cognizance against the assessee. Hence, the Tribunal has not committed any apparent error. 4. We have duly considered rival submissions and gone through the record carefully. At this stage, before we embark upon an inquiry on the facts of the present case, in order to find out whether any apparent error was committed by the Tribunal or not while passing impugned order dated 29.3.2016, we think it appropriate to bear in mind certain basic principles for exercising powers contemplated in section 254(2) of the Income Tax Act. There are series of decisions at the end of the Hon'ble Supreme Court as well as Hon'ble High Court expounding scope of exercising powers under section 254(2) of the Act. We do not deem it necessary to recite and recapitulate all of them, but suffice to say that core of all these authoritative pronouncements is that power for rectification under section 254(2) of the Act can be exercised only when mistake, which is sought to be rectified, is an obvious and patent mistake, which is apparent from the record and not a mistake, which is required to be established by arguments and lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction note is available in the record of Yakub Ahmed Coldrink for issuance of notice under section 153C to Bharat Ginning & Pressing Factory. On the strength of these details he submitted that there is no need to adjourn the hearing. 4. We have duly considered contentions of the ld.counsel for the assessee. However, at this stage without getting these details verified from the Revenue, we are not inclined to accept them on its face, because if these details were available, during the appeal hearing, they could have been considered on that time also. In proceedings under section 254(2) our jurisdiction is very limited. Therefore, we grant some more time to the Revenue, and direct the Assessing Officer to remain present on the date of next hearing with relevant record. Copy of this order be supplied to Administrative Commissioner for ensuring the compliance. 5. Matter now stands adjourned to 17th January, 2020. Sd/- Sd/- (AM) (JM) WASEEM AHMED RAJPAL YADAV" 5. In response to this query, the AO appeared in person, and filed a copy of letter dated 14.1.2020. He admitted that during the course of assessment proceedings in the case of searched person, no satisfaction w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and interest income of the partner is held business income in the hands of partner. viii. CIT vs. Late J. Chandrasekar (HUF) [2011] 338 ITR 61 (mad) - wherein proceeding u/s. 153C is held invalid as the Revenue do not possess any material to show that materials were available at the hand of the Assessing Officer at the time of issuing notice. Besides above, number of cases have also been referred by the ld. A.R. Therefore, he requested that the proceeding initiated u/s.153C is to be declared null and void. At the outset, ld. CIT D.R. argued that both the lower authorities were right in confirming the action u/s.153C of the IT Act as during the course of search at the residence premises of Shri Yakub A. Colddrink, books of the firm as per Annexure A/11 & A/12 were found and seized which were admitted by the partner belonging to the appellant firm in his statement dated 29.08.2003 recorded u/s. 132(4) of the IT Act. Thus, he prayed to confirm the action of the CIT(A). 5. We have heard the rival contentions and perused the material on record. The search operation was carried out at the residence as well as business premises of Shri Yakub A. Colddrink where from the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Hon'ble Supreme Court in the case of CIT Vs. Calcutta Knitwears, reported 362 ITR 673 (SC) has considered procedure required to be followed in assessment order under section 158BD of the Act. The conditions enumerated in section 158BD are identical to section 153C of the Act. In other words, section 153C is successor of section 158BD. In both these sections fundamental requirement is, before taking cognizance of section 153C, a satisfaction note is required to be recorded by the AO of the searched person exhibiting the fact that during the course of search certain incriminating material belonged to the assessee found and seized, who reveals escapement of taxable income. After recording the satisfaction, record would be transmitted to the AO of such other person who has territorial jurisdiction over other person. Hon'ble Supreme Court in the case of Calcutta Knitewear (supra) laid down when this satisfaction could be recorded. It has been summarized in paragraph-44 of the judgment which reads as under: "44. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he trans ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
