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TMI Blog2017 (9) TMI 1898X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to recording of satisfaction note u/s 158BD/under section 153C should be withdrawn/not pressed, if it does not meet the guidelines laid down by the Apex Court. The circular of the Board, though is not binding on this Tribunal but same is binding on the department. In view of the CBDT Circular No. 24 of 2015 we have no hesitation to hold that because of the legal proposition laid down by the various courts and in the light of CBDT circular, the very assuming of jurisdiction and initiation of assessment proceedings in the case of the assessee under section 153C of the Act was bad in law and subsequent assessment order passed u/s 153C is null and void and is to be treated as nonest in the eyes of law. Since the base order passed u/s 153C of the Act has been held to be null and void, the subsequent revision order passed by the CIT u/s 263 of the Act is also accordingly held to be void. The assessee therefore, succeeds on the legal issue. - Decided in favour of assessee. - ITA No. 401/CHD/2012 and ITA No. 483/CHD/2013 - - - Dated:- 28-9-2017 - Shri Sanjay Garg, Judicial Member And Dr. B.R.R.Kumar, Accountant Member Assessee by: Shri Parikshit Aggarwal, Respondent b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 263 of the Act. The assessee also preferred an appeal before the First Appellate authority against the said order dated 22.02.2012 passed by the Assessing Officer giving effect to the order of the CIT u/s 263 of the Act. It was contended in the said appeal before the Ld. CIT (Appeals) that no opportunity of hearing was given to the assessee while making the fresh assessment while giving effect to the order of the CIT passed under section 263 of the Act. The ld. CIT(Appeals), after considering the submissions of the assessee observed that the principles of natural justice were violated while framing the fresh assessment. Even no notice was issued to the assessee by the Assessing Officer while framing the said assessment. He therefore, held that the order passed by the Assessing Officer was not in conformity with the law; he, accordingly, quashed the said assessment order dated 22.02.2012 The Revenue has come in appeal against the said order of the Ld. CIT (Appeals). ITA No. 401/2012 (Assessee's Appeal) 4. Now coming to the assessee's appeal relating to the validity of the order passed under section 263 of the Act, the assessee has not only contested the valid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n examination of satisfaction note it is clear that the documents referred in satisfaction note were seized from the residential premises of Sh. S.L Arora resident of #123, Phase-3B1, Mohali and H. No. 4918 Panchnama Society, Sector 68, Mohali. Further it is also clear that Shri S.L Arora is also one of the major director/share holder in assessee company M/s Vision Land Promoter Builders Pvt Ltd. (ii) Further it is convey that the Assessing officer of Shri S.L Arora and M/s Vision Land Promoters Builders Pvt Ltd were the same and Shri S.L Arora is one of the director of Assessee Company. There was no need to transfer the documents to any other officer and to record a separate a satsifciton note in the case of Shri S.L Arora. 7. A perusal of the above reproduced letter reveals that no separate satisfaction note was recorded in the case of searched person that the seized documents belonged to the assessee and that the same will have a bearing on the determination of the total income of the assessee. However, it has been further pointed out that a satisfaction note was recorded in the case of the assessee, copy of which has already been provided to the assessee. Further, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 2. The Hon'ble Supreme Court in the case of Calcutta Knitwears in its detailed judgment in Civil Appeal No. 3958 of 2014 dated 12.3.2014(available in NJRS at 2014-LL-0312-51) has laid down that for the purpose of Section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that the satisfaction note could be prepared at any 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; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 978) 113 ITR 0022 (Guj HC) v) CIT v. Income Tax Appellate Tribunal, (2012) 78 DTR 113 (Del HC) vi) Mavany Brothers v. CIT Tax Appeal No. 8 of 2007 dated 17.04.2015 11. The ld. DR, on the other hand, has relied upon the findings of the ld. CIT and has submitted that the Ld. CIT has rightly invoked the revision jurisdiction u/s 263 of the Act. 12. We have considered the rival submissions and have also gone through the record. So far as the question as to whether the legality or validly to the original order passed u/s 153C of the Act can be challenged by the assessee in this appeal contesting the exercise of revision jurisdiction u/s 263 of the Act is concerned, the issue is no more res integra in the light of the various case laws relied upon by the Ld. counsel of the assessee as mentioned in para 10 above. Now coming to the question of validity of original proceedings carried out u/s 153 of the Act, admittedly, in this case the search action was carried out under section 132 of the Act in the case of S.L Arora Group. As per the law, laid down by Hon'ble Supreme Court in the case of Calcutta Knitwears (supra), the Assessing Officer of the searched person is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The circular of the Board, though is not binding on this Tribunal but same is binding on the department. 14. In view of the proposition of law as laid down by Hon'ble Supreme Court and various High Courts as discussed above, and also in view of the CBDT Circular No. 24 of 2015 (supra), we have no hesitation to hold that because of the legal proposition laid down by the various courts and in the light of CBDT circular, the very assuming of jurisdiction and initiation of assessment proceedings in the case of the assessee under section 153C of the Act was bad in law and subsequent assessment order passed under section 153C of the Act is null and void and is to be treated as nonest in the eyes of law. Since the base order passed u/s 153C of the Act has been held to be null and void, the subsequent revision order passed by the CIT u/s 263 of the Act is also accordingly held to be void. The assessee therefore, succeeds on the legal issue. 15. Now coming to the appeal of the Revenue in ITA no. 483.Chd/2013 relating to Assessment Year 2007-08. The same is the offshoot of the assessment proceedings carried out by the Assessing officer while giving effect to the order of the Ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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