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TMI Blog2021 (1) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... essment so framed u/s 153C of the Act is bad in law deserves to be quashed. This ground of the assessee s appeal is allowed. - IT(SS)A Nos.126 And 127 And 128/Ind/2016 - - - Dated:- 8-1-2021 - Shri Kul Bharat, Judicial Member And Shri Manish Borad, Accountant Member For the Appellant : Shri Girish Agrawal Miss Nisha Lahoti, ARs For the Revenue : Smt. Ashima Gupta, CIT- DR ORDER PER KUL BHARAT, J.M: These three appeals by the assessee are directed against the different orders of ld. Commissioner of Income Tax (Appeal)in short Ld. CIT(A)-2, Bhopal all dated 21.03.2016 pertaining to Assessment Years 2005-06, 2006-07 2007-08. All these appeals were taken up together and are being disposed of by way of consolidated order as the grounds are identical except the change into figures. 2. We take the assessee appeal in ITANo.126/Ind/2016 for A.Y. 2005-06 as a lead case. In this appeal the assessee has raised following grounds of appeal: On the facts and in the circumstances of the case, the Ld. CIT(A) was not justified in upholding that the addition of ₹ 20,00,000/- by treating the deposits made by the members of the society as unexplainable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s set aside and assessment was restored back to the file of assessing officer vide order dated 03.09.2012. In pursuance of the Tribunal order the assessing officer issued a notice u/s 143(2) dated 30.01.2014, no one appeared before the assessing officer on the dates so fixed. Thereafter, again a notice was issued, in response thereto, the Authorized Representative (AR) of the assessee, Shri Rohit Pathak, advocate attended the hearing and filed written submission which were placed on record. The Assessing Officer recorded that the assessee failed to give any documentary evidences in support of its claim. Therefore, he made an addition of ₹ 20,00,000/-. 6. Aggrieved against this the assessee preferred an appeal before the Ld. CIT(A) who after considering the submissions dismissed the appeal. It is also noted that before the ld. CIT(A) the assessee had furnished certain evidences. Those evidences were not found to be sufficient, hence, Ld. CIT(A) sustained the addition. Now the assessee is in appeal before this Tribunal. During the course of hearing the assessee filed additional grounds of appeal. First we would decide the issue of admissibility of additional grounds taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l importance. It is only on the basis of satisfaction recorded in the case of searched persons that proceedings u/s 153C could have been initiated in the case of assessee. 4. Assessee filed a reminder application for the supply of certified true copy of satisfaction recorded in the case of searched persons to the office of Ld. CIT(A) 2, Bhopal as well as to the office of Ld. ACIT 3(1), Bhopal on 02-03 August 2018 which was in continuation to the erstwhile pending application dated 16.08.2012.[PB 194] Another reminder dated 25.08.2018 was filed before the ACIT 3(1), Bhopal for supply of required satisfaction recorded in the case of searched persons. Till date,copies of the required satisfaction note recorded in the cases of searched persons have not been provided to the assessee.[copy annexed to this submission] Assessee also filed an application under the Right to Information Act, 2005 (RTI)on 17.09.2018 requesting to provide the status of above referred pending applications and also to make available certified true copy of the satisfaction note recorded in the case of searched persons,viz.Mohd. Atique, Mohd. Shafique and M/s. Ekta Transport Company. [copy anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 ITD 160 [CLPB - xx] 8. Assessee prays that the additional grounds of appeal being legal grounds on fundamental issue of jurisdiction and go the root of matter and hence please be admitted for adjudication of matter. In the course of hearing held on 06.02.2019, Hon ble Bench was kind in giving an opportunity to the Ld. CIT(DR) to make her submission on the case laws relating to the additional grounds filed by the assessee. 2. A written submission on the additional grounds along with relevant judicial decisions is already on record. This further submission may please be considered in continuation to the earlier submission already on record which specifically deals with admission of additional ground challenging the legal and jurisdictional issue for the first time in the second round of appellate proceedings before the Tribunal. 3. Assessee vide application dated 04.09.2018 filed on 07.09.2018 raised additional grounds of appeal. These additional grounds of appeal go the root of the matter and are vital to the disposal of the said appeals. Their admittance shall help appellant in getting justice. 4. Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27 HEAD NOTE Section 254 of the Income-tax Act, 1961 - Appellate Tribunal - Powers of - Assessment years 1962-63 to 1971-72 - During assessment assessee did not claim deduction of amounts transferred to 'reserve' as per Electric Supply Act, 1948, either before ITO or AAC - Later, on basis of a High Court decision holding such amounts as deductible on revenue account assessee claimed deduction of same before Tribunal by way of additional ground while appeal was pending before Tribunal - Tribunal refused to permit assessee to raise such additional ground - Whether phrase 'pass such order thereon' occurring in section 254(1) confers widest possible jurisdiction on Tribunal including jurisdiction to permit any additional ground of appeal if in its discretion and for good reasons it thinks it necessary and permissible to do so - Held, yes - Whether Tribunal had jurisdiction to permit additional grounds to be raised before it even though these might not have arisen from AAC's order, so long as these grounds were in respect of subject-matter of entire tax proceedings - Held, yes [emphasis supplied] d) Hon ble Gujarat High Court in the case of P.V. Doshi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessments for such years were pending on the date of search? [emphasis supplied] 6. The above judicial precedents adequately fortify the case of the appellant. Addition made in absence of incriminating material relating to such addition found and seized during the course of search of Mohd. Atique and Mohd. Shafique, assessee being other person and assessed under section 153C, ought to be deleted. The above issue of admittance of additional legal ground raised for the first time before Hon ble Tribunal in second round of appellate proceedings is also raised in the case of searched persons namely, Mohd. Atique and Mohd. Shafique. The ratio of submission made in the case of searched persons applies with equal force in the instant case also, without prejudice to the other legal grounds of appeal. 8. Ld. CIT-DR opposed these submissions and submitted that at this belated stage these additional grounds as raised should not be admitted. Ld. CIT-DR further submitted that the case laws relied by the Ld. counsel for the assessee are distinguishable. The Ld. CIT-DR further submitted that the assessee ought to have been vigilant and should not be allowed to raise the stale is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restored this legal issue to the file of CIT(A) and direct him to decide the same as per law keeping in view various decisions discussed herein above. The tribunal allowed the contention of the assessee for raising the legal issue, but remanded the matter to the CIT(A) to consider the aforesaid legal issue. In this appeal the sole contention of the appellant before this court is that in place of remand the Tribunal itself ought to have adverted itself to the legal issue and remand in the matter was not required. While the learned counsel for revenue supported the remand order. In this case, as per the finding recorded by the Tribunal in para 10 of the order, we find that all the facts were before the Tribunal and the Tribunal in this para specifically have recorded this fact. When all the facts for deciding the legal issue were already on record, in the aforesaid circumstances, whether the Tribunal could have remanded the matter or ought to have decided the matter itself it to be seen. The powers of the Tribunal are vested under section 254 of the Income Tax Act. Section 254(1) of the Income Tax Act, 1961 provides thus, 254(1) the Appeal Tribunal may, af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal has not set aside the finding of the appellate authority and remitted the entire issue to the file of the AO. The Tribunal had merely contended itself by saying that neither the AO nor the appellate authority had examined the relevant details and that it is not clear whether the records were before the AO. But, it does not appear to be correct since there were materials before the AO as well as the appellate authority for them to draw the respective conclusions. Therefore, we remit the matter back to the Tribunal to decide the matter afresh as expeditiously as possible on the basis of the available materials. In the aforesaid both the judgments, it has been held that when the entire material is before the Tribunal, the Tribunal in place of remand ought to have decided the matter on its own merits. In this case a pure legal issue was before the Tribunal and the Tribunal itself has recorded that all the facts are already on record, then in the aforesaid circumstances the Tribunal itself ought to have decided the matter itself. Apart from this, the matter relates to the assessment year 2000-01. Earlier the matter was remanded by the Tribunal vide Annexure A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention has also been invited to Rule 27 of the ITAT Rules, 1963. The said rule reads as under: 27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. 16. Reference has also been made to the decision of the apex Court in National Thermal Power Co. Ltd. v. CIT in which their Lordships have observed that the power of the Tribunal in dealing with appeals is expressed in widest possible terms. The purpose of assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If, for example, as a result of judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, there is no reason why the assessee should be prevented from raising that question before the Tribunal for the first time, so long as the relevant facts are on record in respect of the item. From the above position it is clear, that if the material is on record on the basis whereof objection can be raised, the parties to the appeal cannot be precluded from raising such contentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the TDS in relation therewith, is rendered redundant. 11. In the light of the above judgments of the Hon'ble jurisdictional High Court additional ground raised by the assessee are admitted for adjudication. 12. Additional Ground No.1 is qua the addition made without reference to any seized documents. Ld. Counsel for the assessee contended that the impugned addition deserves to be deleted on the sole ground that there is no reference to the seized material. The addition has been made purely on the basis of material already available with the revenue. Such conduct of the Assessing Officer is not justifiable and is contrary to the judicial pronouncements. To buttress this contention Ld. Counsel for the assessee has relied upon the decision of Tribunal rendered in the case of Shri Kamal Kishore Kotwani IT(SS) A No.186 to 190/Ind/2016 dated 04.07.2018, Kanta Prasad Dwivedi IT (SS)A No.182 to 185/Ind/2016 dated 19.09.2018 and decision of the Delhi Tribunal rendered in the case of Jay Dee Securities Finance Ltd (2017) 88 taxmann.com 626. Ld. Counsel submitted that the assessee is a cooperative society vide Registration No.D978 dated 29.4.2004 with main object to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also furnished inaccurate particulars of income within the meaning of the section 271 (1) (c) of the Income Tax Act 1961. Hence, penalty proceedings u/s. 271(1)(c) are being initiated separately. 16. From the above observation of the A.O it is evident that the A.O has not made any specific reference to the incriminating material found during the search. Under these facts non reference to the incriminating material by the A.O is contrary to the settled position of law. We hold accordingly. This ground of assessee s appeal is allowed. 17. Ground No.2 of the additional ground is against non recording of satisfaction by the A.O of the searched person. Ld. Counsel for the assessee reiterated the averments made in the written submissions. He contended that during the course of hearing the revenue was directed to furnish the satisfaction recorded by the assessing officer of the searched person. However, the revenue has grossly failed to furnish the satisfaction note recorded by the assessing officer of the searched person. He submitted that the law is clear on this issue as per section 153C. The assessing officer of the searched person is required to record a satisfaction note in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that some documents seized during the search 'belong to' the other person is mandatory in order to assume jurisdiction qua the other person under Section 153C of the Act. This is mandatory even where the AO of the searched person and the other person is the same. This is also what the CBDT Circular now clarifies. In a particular case, given the nature of the document, it may become necessary for the AO to indicate the basis of his satisfaction that the document belongs only to B and not to A. But then that is dictated by the nature of the document. What he has to be sure about, and the note should reflect this, is that it does belong to B. Once the note says that then the requirement of Section 153C is fulfilled. 28. Therefore, the Court does not agree with Mr. Sabharwal that there have to be two separate satisfaction notes prepared by the AO of the searched person even where he is also the AO of the other person. In such event, the AO need make only one satisfaction note. That satisfaction note is qua the other person. Further it is sufficient that such satisfaction note is placed in the file of the other person by the AO in his capacity as the AO of such other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conducted or requisition is made except in cases where any assessment or reassessment has abated. . (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 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under subsection (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 subsection (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before 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, such Assessing Officer shall issue the notice and assess ..... 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