9911796707
TMI Blog2021 (3) TMI 732X X X X Extracts X X X X X X X X Extracts X X X X ..... the case are stated in brief. The Revenue carried out search and seizure operations u/s 132 of the Act, in the hands of a group concern of the assessee named M/s. India Builders Corporation on 17.06.2008. During the course of search certain documents belonging to the assessee were found. Accordingly, proceedings u/s 153C of the Act was initiated in the hands of the assessee for assessment years 2004-2005 to 2008-2009 on the strength of those documents. The assessee challenged the validity of initiation of proceedings u/s 153C of the Act for all the five years before the CIT(A). However, the learned CIT(A) delinked the assessment years 2007-2008 and 2008-2009 from the rest of the three years. The learned CIT(A), in assessment years 2004-2005 to 2006-2007, upheld the validity of proceedings initiated u/s 153C of the Act and his decision was affirmed by the ITAT also. Hence the assessee filed appeals before the Hon'ble High Court of Karnataka, challenging the decisions so rendered by the Tribunal for assessment years 2004-2005 to 2006-2007. The Hon'ble High Court of Karnataka in its decision dated 28.04.2016, reported in (2016) 385 ITR 346, held that it is necessary that the satisfact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. The appeals of the appellant for A Y 2004-05, 2005-06, 2006-07 and 2009- 10 were decided by CIT(A) vide his order dt 21.03.2013. The ground of the appeal of the appellant relating to invoking of the provisions of under Section 153C and consequent assessment u/s 153C read with section 143(3) in relation to A Ys 2004-05, 2005- 06 and 2006-07 were dismissed by the CIT(A) and thus assumption of the jurisdiction by the AO and consequent passing of assessment order was upheld. The order of the CIT(A) for A Y 2004-05 to A Y 2006-07 was challenged by the appellant before ITAT in CO Nos. 103 to 105/Bang/2013 (in ITA Nos. 903 to 905/Bang/20 13) and the appellant raised the issue of validity of proceedings u/s 153C of the Act in its case. However, this ground of appeal of the appellant was dismissed by the ITAT in its order dt 25.04.2014. The said order was challenged by the appellant before High Court in ITA Nos. 410- 41212014. Following was one of the substantial questions of law before the High Court: "Whether the tribunal was correct in holding that the assessment under Section 153C was valid despite there being no satisfaction recorded that the documents found during the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) of Section 153A inter alia deals with assessment in case of search or requisition. It begins with a non-obstante clause and states that notwithstanding anything contained in Sections 139, 147, 148, 149, 151 and 153, in the case of a person where a search is initiated under Section 132 or books of account, other documents or any valuable assets are requisitioned under Section 132A, the Assessing Officer shall issue notice to such person requiring him to furnish within such period, as may be specified in the notice, return of income in respect of each assessment year falling within six assessment years referred to in clause (b) of Section 153(1) in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of the Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139. The Assessing Officer can assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made. However, assessment or reassessment, if any, relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (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 valuable assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue notice and assess or reassess total income of such other person of such assessment year in the manner provided in Section 153A." Then the Hon'ble High Court has examined the erstwhile provisions of sec.158BD dealing with search cases. Accordingly it has come to the conclusion that that the satisfaction should record that the material found during the course of search is incriminating one and further it represented undisclosed income of the assessee. 9. We noticed that the learned CIT(A) has followed the decision rendered by the Hon'ble High Court of Karnataka in assessee's own case. For the sake of convenience, we extract the relevant portion of the decision rendered by the Hon'ble jurisdictional High Court on the legal issue:- "54. On a consideration of the relevant sections as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 com pleted 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/parimateria to the provisions of section 158BD of the Act and therefore, the above guidelines of the hon'ble Supreme Court, apply to proceedings under section 153C of the Income-tax Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by Central Board of Direct Taxes. 4. The guidelines of the hon'ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, may be brought to the notice of all for strict compliance. It is further clarified that even if the Assessing Officer of the searched person and the 'other person' is one and the same, then also he is required to record his satisfaction as has been held by the courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder consideration. Further the same provisions of sec.153C are applicable to the years under consideration. Admittedly, no specific observation has been made in the satisfaction recorded by the Assessing Officer that the incriminating material shows availability of any undisclosed income. Hence the decision rendered by Hon'ble Karnataka High Court in the assessee's own case (referred supra) shall squarely apply to both the years under consideration. 11. In view of the foregoing discussions and further, since the Ld CIT(A) has followed the binding decision rendered by Hon'ble jurisdictional Karnataka High Court, we do not find any reason in interfering with the order passed by Ld CIT(A) cancelling the initiation of proceedings u/s 153C of the Act. Accordingly, we uphold the order passed by the learned CIT(A) in both the years under consideration. 12. Since we have upheld the decision of the learned CIT(A) on the legal issue, we are of the view that the learned CIT(A) was justified in not adjudicating the grounds urged by the assessee before him on merits, since they would be rendered academic in nature. Accordingly, we decline to adjudicate the grounds urged in the cross objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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