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TMI Blog2021 (8) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... that the seized documents belong to other person . Without recording such a satisfaction, it cannot be presumed that the seized materials belong to other persons , in which case the AO could not have initiated proceedings against the other persons u/s 153C of the Act. Initiation of proceedings u/s 153C of the Act in the instant cases is bad in law - Decided in favour of assessee. - ITA No.926/Bang/2015, ITA No.928 & 929/Bang/2015, ITA No.930 & 931/Bang/2015 - - - Dated:- 30-7-2021 - Shri N.V. Vasudevan, Vice President And Shri B.R. Baskaran, Accountant Member For the Appellant : Shri V. Srinivasan, A.R. For the Respondent : Shri Dilip, Junior Standing Counsel for Department ORDER PERB.R. BASKARAN, ACCOUNTANT MEMBER: The appeals filed by the respective assessees are directed against the orders passed by Ld. CIT(A)-11, Bengaluru in their respective hands and they relate to the assessment years mentioned in the caption. In all these appeals, these assessees have challenged the validity of initiation of proceedings u/s 153C of the Income-tax Act,1961 ['the Act' for short]. Accordingly, all these appeals were heard on the above said prelimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income of such other person in accordance with the provisions of section 153A. The Finance Act, 2005 made following amendments:- 47. In the Income-tax Act, with effect from the 1st day of June, 2003,- (a ) section 153C shall be numbered as sub-section (1) thereof and in subsection (1) as so numbered, the following proviso shall be inserted and shall be deemed to have been inserted, namely:- Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to section 153A 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. ; (b ) after sub-section (1) as so numbered, the following sub-section shall be inserted and shall be deemed to have been inserted, namely:- (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 furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diction over such other person. After receipt of the aforesaid satisfaction and upon examination of such other documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice for the purpose of completion of the assessment under Section 158BD of the Act and the other provisions of Chapter XIV-B shall apply. 6.1 It cannot be disputed that the aforesaid requirements are held to be mandatorily complied with. There can be two eventualities. It may so happen that the Assessing Officer of the searched person is different from the Assessing Officer of the other person and in the second eventuality, the Assessing Officer of the searched person and the other person is the same. Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, there shall be a satisfaction note by the Assessing Officer of the searched person and as observed hereinabove that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P) Ltd. Sector 12, HUDA, Karnal Regd. Office at 51, Transport Centre Punjabi Bagh, New Delhi. PAN : AAICS2163F Status : Company Reasons/Satisfaction note for taking up the case of M/s Super Malls (P) Ltd. Sector-12, HUDA, Karnal Regd. Office at 51, Transport Centre, Punjabi Bagh, New Delhi under Section 153C of the Income Tax Act, 1961. The jurisdiction of this case has been assigned to this Office u/s 127 of the Income Tax Act, 1961 by the worthy Commissioner of Income Tax-III New Delhi vide order F. No. CITIII/Delhi/Centralization/1012-1312455 dated 15.01.2013. By virtue of the authorization of the Director of Income Tax (Investigation), Chandigarh, a search seizure operation u/s 132(1) of the Act was carried out on 08/09.04.2010 at the residential/business premises of Sh. Tejwant Singh Sh. Ved Parkash Bharti Group of cases, Karnal, Panipat Delhi and a survey u/s 133A of the IT. Act, 1961 was also carried out at the business premises of M/s Super Mall (P) Ltd. Karnal New Delhi. During the course of search on 08/09.04.2010 at residence of Sh. Ved Parkash Bh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are in complete agreement with the view taken by the High Court on the requirement of Section 153C of the Act being fulfilled by the Assessing Officer before initiating the proceedings under Section 153C of the Act. 7. In view of the above and for the reasons stated above, all these APPEALS fail and the same deserve to be dismissed and are accordingly dismissed. Now, the learned ITAT shall decide and dispose of the appeals afresh on merits, at the earliest, in accordance with law, as observed by the High Court in the impugned Judgment(s) and Order(s). 6. The Hon ble Supreme Court has interpreted the then existing provisions of sec.153C as under:- (a) Before issuing notice u/s 153C of the Act, the Assessing officer of the searched person must be satisfied that, inter alia, any document seized or requisitioned belongs to a person other than the searched person. (b) After recording such satisfaction by the AO of the searched person, he may transmit the records/documents/things/papers etc., to the Assessing officer having jurisdiction over such other person. (c) After receipt of the aforesaid satisfaction and upon examination of such other documents relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) Arshad Ispat A.Y. 2010-11 A search action u/s 132 was initiated in the case of Sri B. Nagendra and in connection with the same, the premises of M/s. Arshad Ispat, Khan Building, 3rd Cross, Vijay Nagar, College Road, Hospet was also searched and documents/assets were seized as per inventory A annexed to the panchanama dated 25.10.2010 and A-1/A1 annexed to the Panchanama dated 3.11.2011 for the search conducted in the premises of M/s. Arshad Ispat, Khan Building, 3rd Cross, Vijay Nagar, College Road, Hospet. Hence, a notice calling for the return of income for the A.Y. 2010-11 as envisaged u/s 153C issued. (B) Sri K. Asghar Khan (a) A.Y. 2008-09 (a) A search action u/s 132 was initiated in the case of Sri B. Nagendra and in connection with the same, the premises of Sri Asgar Khan, Near College Ground, College Road, Hospet was also searched and documents/assets were seized as per inventory A annexed to the panchanama dated 25.10.2010 for the search conducted in the premises of Sri Asgar Khan, Near College Ground, College Road, Hospet. Hence, a notice calling for the returns of income for the asst. year 2008-09 as envisaged u/s 153C is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nagendra. Hence the assessees herein are Other persons , as referred to in sec.153C of the Act. In none of the satisfaction notes, the AO has recorded a finding that the seized documents belong to the assessees herein. The Hon ble Supreme Court has held in the case of Super Malls Private Limited (supra) that the AO must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. Hence, it is the duty of the AO to apply his mind and should consciously and mandatorily state in the satisfaction note that the seized documents belong to other person . Without recording such a satisfaction, it cannot be presumed that the seized materials belong to other persons , in which case the AO could not have initiated proceedings against the other persons u/s 153C of the Act. 9. In view of the foregoing discussions, we are of the view that the initiation of proceedings u/s 153C of the Act in the instant cases is bad in law. Accordingly, we quash the orders passed by the tax authorities in the hands of the assessees herein for the years under consideration. 10. In the result, all the appeals of the assessees are treated as all ..... 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