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TMI Blog2023 (4) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... the action of the AO in holding that the AO has assumed proper jurisdiction to assess the case u/s. 153C of the Act. Hence, the solitary ground raised by the assessee is allowed by quashing the orders of the ld. CIT(A) and the AO. - ITA No. 344 TO 347/JP/2022 - - - Dated:- 22-11-2022 - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Mukesh Khandelwal, CA For the Revenue : Shri Shailendra Sharma, CIT-DR ORDER PER BENCH: These four appeals have been filed by the assessee against four different orders of the ld. CIT(A)-4 Jaipur dated 10-08-2022 for the assessment years 2009-10, 2010-11, 2011-12 2013-14 respectively wherein the assessee has raised following grounds of appeal in each appeals. ITA No. 344/JP/2022 A.Y. 2009-10 1. That the ld. CIT(A) has erred in law and on facts in sustaining the action of the AO in assuming jurisdiction to the case of the assessee u/s 153C for the year in appeal which is part of extended period of assessment in terms of explanation 1 to 4th proviso to Section 153A without appreciating that the assumption of jurisdiction for assessing the case of the assessee u/s 153C itse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for extended assessment year can be taken up when no such action had been taken in the case of Shri Baldeep Goyal (the searched person) on the basis of whom proceedings u/s 153C had been taken up in the case of the assessee. ITA No. 346/JP/2022 A.Y. 2011-12 1. That the ld. CIT(A) has erred in law and on facts in sustaining the action of the AO in assuming jurisdiction to the case of the assessee u/s 153C for the year in appeal which is part of extended period of assessment in terms of explanation 1 to 4th proviso to Section 153A without appreciating that the assumption of jurisdiction for assessing the case of the assessee u/s 153C itself was not valid. Relief may please be allowed by quashing the assessment so framed. 2. That the ld. CIT(A) has erred in law in holding that the case of assessee for relevant assessment year was validly proceeded ignoring the fact that the same was without proviso to Section 153A of the I.T.Act, 1961 and also ignoring the vital fact that the AO herself has considered the additional income as assessed u/s 69C of the Act. 3. That the ld. CIT(A) has erred in law and on facts in interpreting the judgement of Hon ble Income Tax Settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d) corroborate each other. (ii) The factual position is that a plot in Pratap Nagar, Tonk Road, Jaipur was purchased in auction from Rajasthan Housing Board (RHB) by a company M/s Aditya Propcon Pvt. Ltd. Sh. Baldeep Goyal and Sh. Arun Agarwal both are directors in the company. This plot was purchased for a sale consideration price of Rs. 26.11 Crore from RHB. M/s Aditya Propcon Pvt. Ltd. has taken unsecured loans from Kolkata based various entities. This unsecured loan was taken in various AYrs. Noting in Exhibit-2 makes it clear that cash was paid by Sh. Baldeep Goyal and Sh. Arun Agarwal to Kolkata based entities and same was received back in the form of unsecured loan in M/s Aditya Propcon Pvt. Ltd. and from this unsecured loan, the loan was repaid to RIICO. Page Nos. 11 and 12 reflect that total cash of Rs. 7,88,80,000/- was paid by Sh. Arun Agarwal. (iii) These papers reflect that entries have been taken in M/s Aditya Propcon Pvt. Ltd. from various parties (mostly Kolkata Companies) for which cash has been paid by Sh. Baldeep Goyal and Sh. Arun Agarwal. On perusal of these entries, it was also found that these pages also contain some of the entries which pertains to per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153C after obtaining the correct jurisdiction u/s 127 of the Act. Since the case of the person searched i.e. of Sh Baldeep Goyal was with the same AO, on the basis of which notice u/s 153C was issued to the appellant, therefore in such circumstances, it appears that the AO prepared the satisfaction note in the case of the appellant for the year under consideration, however, the fact also remains that the AO issued notice u/s 153C of the Act to the appellant after receiving the case on transfer vide order dt. 02.09.2019 passed by the Hon'ble Pr. CIT-2, Jaipur. It is further observed that the notice u/s 153C of the Act for the year under consideration was issued on 11.09.2019, in compliance to which the return of income was e-filed by the appellant on 24.09.2019 declaring a total income of Rs. (-) 10,88,612/-. 1 find that it is not a case of absence of satisfaction note. Thus, I do not find any strength in the arguments of the Ld. AR challenging the jurisdiction of the AO in initiating the proceedings u/s 153C of the Act. (vii) As regards the reliance placed by the Ld. AR of the appellant on the decision of Hon'ble Supreme Court in the case of Calcutta Knitwears, it is obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SLP I Nos. 8449-50/2017) wherein this issue has been considered in the case where the Assessing Officer of the searched person and the other person is the same. It was held that - However, as rightly observed and held by the Delhi High Court in the case of Ganpati Fincap/Supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings u/s 153C of the Act against the other person. .However, in the case where the Assessing Officer of the searched person and the other person is the same, it is sufficient by the Assessing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. In case, where the Assessing Officer of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere AO is satisfied that any money, bullion, jewellery, books of account or other documents belonged to person other than person searched, then such documents or assets, should be handed over to AO of other person'. AO has recorded the satisfaction on 01.08.2019 before issuing the notice u/s 153C which is in accordance with the said provisions. In view of the above facts, I find that the AO has rightly assumed valid and lawful jurisdiction to proceed with the matter of assessment u/s 153C in the case of the appellant. Therefore, looking to the facts of the case, I am of the view that there is no ambiguity in the legality of the assessment order passed by the AO in the case of the appellant for the year under consideration. Accordingly, the Ground of Appeal No. 1 is treated as dismissed. 2.3 During the course of hearing, the ld. AR of the assessee prayed that in this case the notice issued by the AO u/s 153C is wrong and not tenable in the eyes of law as the AO had issued the notice u/s 153C of the Act on 11-09-2019 for the year under consideration. The ld. AR further submitted that the AO recorded the satisfaction in the case of the assessee vide order sheet dated 01-08-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of the applicant. Therefore the notice u/s 153C issued to the appellant is without satisfying the conditions stipulated in section. It has been held by various judicial authorities that there has to be satisfaction more than suspicion about any undisclosed income of the other person as found in the documents seized from person searched, for proceeding u/s 153C against such other person, which condition has not been fulfilled. Therefore the action of the ld. AO in issuing notice u/s 153C is illegal and unjustified and hence the order passed consequent to such illegal proceedings deserves to be quashed. Regarding the other limb of objection this is to submit that the ld. AO recorded a satisfaction note dated 01.08.2019 (APB 17) as per which she opined that seized papers pertained to the appellant. With this satisfaction note the ld. AO did not assume juridiction to assess the case of the appellant u/s 153C of the Income Tax Act, 1961 on account of following reasons :- 1. It is pertinent to state that at the time of recording such satisfaction note the ld. AO was not having jurisdiction over the case of the appellant as the case was transferred to her vide ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v/s Super Malls P Ltd. (423 ITR 281) - (Copy at APB 19-24 of case law index)in case of common AO only one satisfaction note is sufficient. However in the cited case the jurisdiction over the case of the person searched and the other person was with the same AO at the time of recording satisfaction (as noted on APB 19 back) and under such circumstances the Hon`ble SC held like this. In this case the aggrieved party viz. Super Malls raised an issue that since recording of satisfaction note was mandatory in the case of searched person which was missing in this case and the satisfaction note had been directly prepared in the case of other person and hence request was made to quash the proceedings. The Hon`ble SC while examining the issue of recording of only one satisfaction note has reproduced the satisfaction note prepared by the ld. AO (at APB 2 - back) as per which it is evident that such satisfaction note was prepared by the ld. AO on 22.02.2013 and the juridiction over the case of other person had been assigned to him on 15.01.2013 and therefore at the time of recording such satisfaction note the juridiction over the case of both the persons viz. searched person as well as o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores AY 2010-11 3.28 Crores AY 2011-12 2.55 Crores It seems that the ld. CIT (A) has mentioned wrong details in order to justify the action of the ld. AO only and such approach is not in accordance with law. It is beyond understanding as to on what basis she changed the notings of the satisfaction note in her order. Therefore the action of the ld. CIT (A) in holding the satisfaction note as valid is wrong and unjustified. It is therefore sincerely prayed that instant order of the ld. CIT (A) may kindly be quashed and oblige. 2.4 On the other hand, the ld. DR supported the order of the ld. CIT(A). 2.5 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee is engaged in the business of commodities trading in MCX/NCDEX. The assessee is partner in the firm M/s. MAA Chandi Stone, M.s. Arun Udyog, M/s. Agarwal Mineral, M/s. Arun Industries, M/s. Yugal Transport Co. M/s. Silika King, M/s. Ashok Mineral for which the assessee received remuneration and interest and also earned income from other sources being interest fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee on 02-09-2019. It is further observed that the ld. CIT(A) had sustained the validity of notice u/s 153C of the Act on the ground that the AO has issued the Notice u/s 153C after-obtaining the correct jurisdiction u/s 127 of the Act. It is further noted from the submissions of the ld. AR of the assessee where he submitted that the ld. CIT(A) had forgotten to appreciate that in online process, no notice can be issued by any officer other than jurisdictional AO and hence her argument is not on correct footing. We feel that the submission of the ld. AR is justified which we concur. It is also observed that the ld. CIT(A) taken the resort in the case of Super Malls Pvt. Ltd. vs PCIT-8, New Delhi in Civil Appeal Nos. 2006-2007 of 2020 (arising out of SLP I Nos.8449-50/2017 wherein this issue has been considered in the case where the Assessing Officer of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. We have noted that as on 01-08-2019 when satisfaction note was prepared the AO was not having j ..... X X X X Extracts X X X X X X X X Extracts X X X X
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