Adarsh Kumar, New Delhi v. DCIT, New Delhi

ITA 5096/DEL/2015 | 2010-2011
Pronouncement Date: 15-11-2017 | Result: Allowed

Appeal Details

RSA Number 509620114 RSA 2015
Assessee PAN AAAPK6345G
Bench Delhi
Appeal Number ITA 5096/DEL/2015
Duration Of Justice 2 year(s) 3 month(s) 3 day(s)
Appellant Adarsh Kumar, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 15-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted C
Tribunal Order Date 15-11-2017
Assessment Year 2010-2011
Appeal Filed On 11-08-2015
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI H.S. SIDHU JUDICIAL MEMBER AND SHRI L.P. SAHU ACCOUNTANT MEMBER ITA NOS. 5095 5096 & 5097/DEL/2015 A.YRS. : 2009-10 2010-11 & 2011-12 ADARSH KUMAR 23 SUDHARSHAN APARTMENT I.P. EXTENSION NEW DELHI (PAN: AAAPK6345G) VS DCIT CENTRAL CIRCLE-19 NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. AMIT GOEL & NIPPUN MITAL CAS DEPARTMENT BY : SH. MS. RACHNA SINGH CIT(DR) ORDER PER H.S. SIDHU JM THESE ARE THE 03 APPEALS OF ASSESSEE ARE DIRECTED AGAINST T HE SEPARATE ORDERS OF CIT(A)-XXVII NEW DELHI ALL DATED 09.6.201 5 RELATING TO A.YRS. 2009-10 2010-11 & 2011-12 RESPECTIVELY. THE ISSUES IN VOLVED IN THESE APPEALS ARE COMMON AND IDENTICAL AND THEREFORE THESE W ERE HEARD TOGETHER AND ADJUDICATED BY THIS CONSOLIDATED ORDER FOR THE SALE OF CONVENIENCE AND BREVITY BY DEALING WITH ASSESSMENT YEAR 2009-10 ON TH E FOLLOWING COMMON GROUNDS EXCEPT THE DIFFERENCE IN THE FIGURES. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W THE NOTICE UNDER SECTION 153C ISSUED IN THIS CASE IS ILLEGA L 2 AND WITHOUT JURISDICTION AND COMMISSIONER OF INCOME TA X (APPEAL) ERRED IN NOT HOLDING SO. 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW THE ADDITION OF RS. 26 91 041/- ON ACCOUNT OF UNEXPLAINED CASH SALARY IS BEYOND THE JURISDICTION OF PROVISIONS OF SECTION 153C OF INCOME TAX ACT 1961 AND COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN NOT HOLDING SO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW T HE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING THE ADDITION OF RS. 26 91 041/- ON ACCOUNT OF UNEXPLAI NED CASH SALARY. THE APPELLANT CRAVES LEAVE TO ADD ONE OR MORE GROUND OF APPEAL OR TO ALTER / MODIFY THE EXISTING GROUND BEFO RE OR AT THE TIME OF HEARING OF APPEAL. THE AFORESAID GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN I NDIVIDUAL WHO DURING THE YEAR UNDER CONSIDERATION DERIVED INCOME FR OM SALARY HOUSE PROPERTY AND OTHER SOURCES. A SEARCH AND SEIZURE OPER ATION U/S. 132 OF THE INCOME TAX ACT 1961 WAS CONDUCTED BY THE INVESTIGAT ION WING OF THE DEPARTMENT ON 22.3.2012 IN M/S FOCUS GROUP OF CASES. ON THE BASIS OF THIS 3 SEARCH PROCEEDINGS U/S 153C OF THE INCOME TAX ACT 1961 W ERE INITIATED AGAINST THE ASSESSEE BY ISSUING NOTICE DATED 26.11.2013 ON THE BASIS OF SATISFACTION NOTE DATED 26.11.2013. THE AO THEREAF TER COMPLETED THE ASSESSMENT U/S. 153C/143(3) OF THE I.T. ACT 1961 VIDE HI S ORDER DATED 25.03.2014 AT A TOTAL INCOME OF RS. 76 16 960/- WHERE IN AN ADDITION OF RS. 26 91 041/- WAS MADE ON ACCOUNT OF UNEXPLAINED CASH. AGGRIEVED WITH THE ASSESSMENT ORDER THE ASSESSEE FILED APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX(A) AND CHALLENGED THE VALIDITY OF THE PROCE EDINGS U/S 153C OF THE ACT AS WELL AS THE ADDITIONS MADE BY THE AO. THE LD. CIT(A) VIDE HIS ORDER DATED 09.06.2015 HAS DISMISSED THE GROUND OF THE ASSESSEE RELATED TO THE VALIDITY OF PROCEEDINGS U/S. 153C OF THE ACT. AGGRI EVED WITH THE ORDER OF LD. CIT(A) THE ASSESSEE IS IN APPEAL BEFORE THE TRIBU NAL. 3. IN THE GROUND NO.1 THE ASSESSEE HAS CHALLENGED THE NO TICE ISSUED UNDER SECTION 153C OF THE ACT. ACCORDING TO THE ASSESSEE TH E NOTICE ISSUED U/S 153C OF THE ACT IN THIS CASE IS BAD IN LAW. THE SUBMI SSION OF THE ASSESSEE ON THIS GROUND HAS TWOFOLD FIRST THAT THE SATISFA CTION NOTE HAS NOT BEEN RECORDED BY THE AO IN HIS CAPACITY AS AO OF THE SE ARCHED PERSON AND SECOND THAT THERE IS NO SATISFACTION THAT DOCUMENTS BELONG ING TO THE ASSESSEE WERE FOUND. IN SUPPORT OF HIS ABOVE CONTENTIO NS THE ASSESSEE HAS FILED THE WRITTEN SUBMISSIONS THE CONTENTS THEREOF A RE REPRODUCED AS UNDER :- 4 SEARCH AND SEIZURE OPERATION U/S 132(1) OF INCOME TAX ACT 1961 WAS CARRIED OUT IN THE CASES OF IENERGIZER IT SERVI CES PVT. LTD. ISERVICES PVT. LTD. GRANADA SERVICES PVT. LTD AN D IENERGIZER INDIA PVT. LTD. ON 22.03.2012. ON THE B ASIS OF THIS SEARCH PROCEEDINGS U/S 153C OF INCOME TAX ACT 1961 WER E INITIATED AGAINST THE APPELLANT BY ISSUE OF NOTICE DATED 26.11.2013 U/S 153C ON THE BASIS OF A SATISFACTION NOTE DATED 26.11.2013 ITSELF. THE NOTICE ISSUED U/S 153C IN THIS CASE IS ILLEGAL AND WITHOUT JURISDICTION. THE BRIEF SYNOPSIS A RE GIVEN AS UNDER THE FOLLOWING BROAD HEADS (WITHOUT PREJUDICE T O EACH OTHER) :- 1. THAT THE NOTICE ISSUED U/S 153C IS BAD-IN-LAW AND WI THOUT JURISDICTION AS NO SATISFACTION AS REQUIRED U/S 153C OF TH E ACT HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSO N. 2. THAT THE NOTICE ISSUED U/S 153C IS BAD-IN-LAW AND WI THOUT JURISDICTION AS THE ASSESSING OFFICER OF THE SEARCHED PERSON HAS NOT RECORDED ANY SATISFACTION THAT DOCUMENT (S) BELON GING TO THE ASSESSEE WAS FOUND AND SEIZED DURING THE COURSE OF SEAR CH. 3. THAT THERE HAS BEEN NO HANDING OVER OF THE SEIZE D DOCUMENTS AS REQUIRED U/S 153C BEFORE INITIATION OF PRO CEEDINGS UNDER THAT SECTION. 5 THE BRIEF ARGUMENTS IN RESPECT OF EACH OF THE ABOVE BR OAD HEADS IS BEING GIVEN HEREUNDER :- 1. THAT THE NOTICE ISSUED U/S 153C IS BAD-IN-LAW AND WITHOUT JURISDICTION AS NO SATISFACTION AS REQUIRED U/S 153C OF THE ACT HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. IN TERMS OF PROVISIONS OF SECTION 153C OF THE ACT THE SATISFACTION U/S 153C HAS TO BE RECORDED BY THE A.O . OF THE SEARCHED PERSON. EVEN WHEN THE ASSESSING OFFIC ER OF SEARCHED PERSON AND THE PERSON OTHER THAN THE SEARCHED PERSON (AGAINST WHOM PROCEEDINGS U/S 153C ARE SUPPOSED TO BE INITIATED) ARE THE SAME THE REQUIREMENT OF RECORDING SATISFACTION BY THE ASSESS ING OFFICER OF THE SEARCHED PERSON CANNOT BE AVOIDED AN D SUCH SATISFACTION HAS TO BE RECORDED BY THE ASSESSING O FFICER IN HIS CAPACITY AS ASSESSING OFFICER OF SEARCHED P ERSON. IN THE ABSENCE OF SUCH SATISFACTION THE PROCEEDINGS INITIATED U/S 153C ARE WITHOUT JURISDICTION. IN THE APPELLANTS CASE THE SO CALLED SATISFACTION NOTE HAS BEEN RECORDED BY THE ASSESSING OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF THE ASSESSEE (I. E. A PERSON OTHER THAN A SEARCHED PERSON) AND NOT IN HIS CAPACI TY AS 6 ASSESSING OFFICER OF A SEARCHED PERSON. THIS IS EVIDENT FRO M THE FOLLOWING :- I. IN THE SATISFACTION NOTE IT HAS NOWHERE BEEN STATE D BY A.O. THAT HE IS RECORDING SATISFACTION IN HIS CAPACITY AS A. O. OF ANY SEARCHED PERSON. II. THE SATISFACTION NOTE IN THIS CASE IS A SATISFACTION NOTE FOR TAKING UP ACTION U/S 153C AND FOR INITIATING PRO CEEDINGS U/S 153C. UNDER THE PROVISION OF SEARCH 153C THE A.O. OF SEARCHED PERSON IS REQUIRED TO RECORD SATISFACTION THAT DOCUMENTS BELONGING TO OTHER PERSON HAVE BEEN FOUND DURING THE COURSE OF SEARCH AND THEREAFTER HE HAS TO HANDOVER THOSE DOCUMENTS TO ASSESSING OFFICER OF PERSON OTHER THAN THE SEARCHED PERSON. THE A.O. OF THE SEARCHED PERSON IS NOT EM POWERED TO ISSUE NOTICE U/S 153C OR TO GIVE DIRECTION FOR ISSUE OF N OTICE U/S 153C. THIS AUTHORITY OF ISSUE / GIVING DIRECTION F OR ISSUE OF NOTICE U/S 153C LIES SOLELY WITH THE ASSESSING O FFICER OF THE OTHER PERSON. AS CAN BE SEEN FROM THE LAST LINE OF THE SO CALLED SATISFACT ION NOTE THE A.O. HAS MENTIONED THAT _ QUOTE _ _ _ THEREFORE TO ASSESS UNDISCLOSED INCOME OF SH.ADARSH AGGARWAL 7 PROCEEDINGS U/S 153C OF THE INCOME TAX ACT NEEDS TO BE INITIATED. _ _ _ UNQUOTE. FURTHER THE HEAD NOTE OF SO-CALLED SATISFACTION READ _ _ _QUOTE SATISFACTION NOTE FOR TAKING ACTION U/S 153C IN CAS E OF SHRI ADARSH AGGARWAL. _ _ _ UNQUOTE. THE AFORESAID REMARKS PROVES BEYOND DOUBT THAT THE SATI SFACTION NOTE HAS BEEN RECORDED BY THE ASSESSING OFFICER IN HIS CAPA CITY AS THE A.O. OF THE ASSESSEE (THE OTHER PERSON) AND NOT AS THE A.O. OF SEARCHED PERSON BECAUSE IT IS ONLY THE A.O. OF O THER PERSON WHO HAS THE AUTHORITY OF MAKING ASSESSMENT AND WH O CAN ISSUE / GIVE DIRECTION FOR ISSUE OF NOTICE U/S 153C AS H AS BEEN GIVEN IN THE SATISFACTION NOTE. 1.1 THIS ISSUE IS NO MORE RES-INTEGRA. THERE ARE NOW PL ETHORA OF JUDGMENTS WHERE IT HAS BEEN HELD THAT SATISFACTION N OTE U/S 153C HAS TO BE MANDATORILY RECORDED BY THE ASSESSING OFFI CER OF THE SEARCHED PERSON (EVEN WHEN THE A.O. OF THE SEARCHE D PERSON AND THE A.O. OF THE OTHER PERSON HAPPENS TO BE THE SAME). SOME OF THE JUDGMENTS ARE AS UNDER :- - PR. CIT V AAKASH AROGYA MANDIR PVT. LTD. (DELHI HIG H COURT ORDER DATED 28.07.2015) 8 - PEPSI FOODS (P.) LTD.V ACIT [2014] 52 TAXMANN.COM 22 0 (DELHI) - PEPSICO INDIA HOLDINGS (P.) LTD. V ACIT [2014] 50 TAX MANN.COM 299 (DELHI) - CIT V MECHMEN (2015 (7) TMI 538 MADHYA PRADESH HIGH COURT ORDER DATED10.07.2015). 1.2 IT WILL BE WORTHWHILE TO POINT OUT THAT IN DCIT V AAKASH AROGYA MANDIR (P) LTD. (2015) 58 TAXMANN.COM 293 (DELHI-TRIB). ALSO THE NOTICE ISSUED U/S 153C WAS HELD TO BE ILLEGAL AND ASSESSMENT PROCEEDINGS WERE QUASHED AS NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. THEREAFTER THE REVENUE WENT IN APPE AL BEFORE THE HONBLE HIGH COURT OF DELHI ( P. R. COMMISSIONER OF INCOME TAX CENTRAL-II) VS. AAKASH AROGYA MANDIR PV T. LTD .) WHEREIN THE HONBLE HIGH COURT WHILE DISMISSING TH E APPEAL OF THE REVENUE HELD AS UNDER :- 8. THE REVENUE HAS NOT PLACED ANY MATERIAL TO DISP UTE THE FACTUAL FINDING OF THE ITAT THAT THE REQUIREMEN T OF THE LAW EXPLAINED BY THIS COURT IN PEPSI FOODS REGARDIN G THE RECORDING OF SATISFACTION BY THE AO EVEN IN RESPECT OF THE SEARCHED PERSON WAS NOT FULFILLED. CONSEQUENTLY TH E FACT THAT IT WAS THE SAME AO BOTH FOR THE SEARCHED PERSO N AND THE ASSESSEE MAKES NO DIFFERENCE TO THE CONSEQUENCE OF 9 NON-COMPLIANCE WITH THE LEGAL REQUIREMENT REGARDING THE RECORDING OF SATISFACTION. THE COURT ALSO AGREES WI TH THE ITAT THAT EVEN IF THE AO WERE THE SAME SATISFACTIO N WOULD HAVE TO BE RECORDED SEPARATELY QUA THE SEARCH ED PERSON AND THE ASSESSEE. 9. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERM INATION. THE APPEAL ARE DISMISSED. 1.3 THE DELHI BENCH OF ITAT IN THE CASE OF ACIT V JNSW INFRACON PVT. LTD. 2017(6) TMI 174- ITAT DELHI VIDE ITS DECISION DATED 31.05.2017 HAS HELD THAT EVEN IF THE A SSESSING OFFICER OF THE SEARCHED PERSON AND OTHER PERSON ARE SAME THE SATISFACTION U/S 153C HAS TO BE RECORDED BY THE ASSESSI NG OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF OTHER PERSON . 1.4 SIMILAR DECISION HAS BEEN BY DELHI BENCH OF ITAT I N THE CASE OF VICTORY ACCOMMODATION PVT. LTD. V ACIT (2017)(5) TMI 1050 ITAT DELHI 1.5 THE CBDT VIDE ITS CIRCULAR NO. 24/2015 DATED 31 ST DECEMBER 2015 HAS ACCEPTED THE POSITION LAID DOWN BY HONBLE SUPREME COURT IN THE CASE OF CALCUTTA KNITWEARS (CIVIL APPEAL NO. 3958 OF 2014 DATED 12.03.2014) THAT EVEN IF THE ASSESSING OFFICER OF SEARCHED PERSON AND OTHER PERSON ARE SAME THE 10 SATISFACTION U/S 153C HAS TO BE RECORDED BY THE ASSESSING O FFICER OF THE SEARCHED PERSON. IN THIS CIRCULAR THE CBDT HAS DI RECTED THAT PENDING LITIGATION BY THE DEPARTMENT WITH REGA RD TO RECORDING OF SATISFACTION NOTE U/S 158BD / 153C SHOULD BE WITHDRAWN / NOT PRESSED IF IT DOES NOT MEET THE GUIDEL INES LAID DOWN BY THE APEX COURT. IN VIEW OF THE ABOVE IT IS SUBMITTED THAT THE NOTICE U /S 153C ISSUED BY THE A.O. IS WITHOUT JURISDICTION AND IS BAD-I N-LAW. THE SAID NOTICE IS LIABLE TO BE QUASHED AND ACCORDINGLY THE ASSESSMENT ORDER PASSED ON THE FOUNDATION OF THE SUCH NOTICE IS ALSO LIABLE TO BE QUASHED. 2. THAT THE NOTICE ISSUED U/S 153C IS BAD-IN-LAW AND WITHOUT JURISDICTION AS THE ASSESSING OFFICER OF TH E SEARCHED PERSON HAS NOT RECORDED ANY SATISFACTION T HAT DOCUMENT (S) BELONGING TO THE ASSESSEE WAS FOUND A ND SEIZED DURING THE COURSE OF SEARCH. AS PER SECTION 153C THE PRE-CONDITION BEFORE ISSUE OF NO TICE U/S 153C IS THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON SHOULD BE SATISFIED THAT ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUM ENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE 11 PERSON REFERRED TO IN SECTION 153A.THE FIRST PRE-REQUISI TE OF INVOCATION OF PROVISIONS OF SECTION 153C IS THAT THERE MU ST BE SATISFACTION BY THE ASSESSING OFFICER OF SEARCHED PERSON THAT DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH BELONGS TO OTHER PERSON AGAINST WHOM NOTICE U/S 153C IS PROPOSED TO BE ISSUED. AS PER PROVISIONS OF SECTION 132(4A)(I) PRESUMPTION IS THAT DOCUMENT BELONGS TO SUCH PERSON FROM WHOSE POSSESSION THE DOCUMENT IS SEIZE D. THEREFORE THE A.O. OF THE SEARCHED PERSON IS FIRST REQUIRED TO RECORD SATISFACTION THAT DOCUMENTS DO NOT BELONG TO SEARCHED PERSON. INFACT THE FIRST REQUIREMENT UNDER LAW IS THAT A.O. OF THE SEARCHED PERSON IS REQUIRED TO REBUT THE PR ESUMPTION U/S 132(4A)(I) AND U/S 292C(1)(I) THAT SEIZED DOCUMENTS DO(ES) NOT BELONG TO THE SEARCHED PERSON. PROVISIONS OF SECTION 132(4A)(I) 132. (1)** ** ** (4A) WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE O F A SEARCH IT MAY BE PRESUMED 12 (I) THAT SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY B ULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; ** ** ** PROVISION OF SECTION 292C(1)(I) 292C. (1) WHERE ANY BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH UNDER SECTION 132 OR SURVEY UNDER SECTION 133 A IT MAY IN ANY PROCEEDING UNDER THIS ACT BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT OTHER DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; 2.1 IN THE CASE OF PEPSI FOODS (P.) LTD.V ACIT [2014] 52 TAXMANN.COM 220 (DELHI) THE HONBLE HIGH COURT HELD AS UNDER :- 6. ON A PLAIN READING OF SECTION 153C IT IS EVIDENT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE 'SATISFIED' THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED 'BELON GS TO' A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN T HAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH 13 OTHER PERSON (OTHER THAN THE SEARCHED PERSON). FURTHERM ORE IT IS ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE- ASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THEREFORE BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STE P IS THAT THE ASSESSING OFFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT A CLEAR SATISFACTION THAT A DOCUMENT SEIZ ED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON . THE SECOND STEP IS - AFTER SUCH SATISFACTION IS ARRIVED AT - THAT THE DOCUMENT IS HANDED OVER TO THE ASSESSING OFFICE R OF THE PERSON TO WHOM THE SAID DOCUMENT 'BELONGS'. IN THE PRESENT CASES IT HAS BEEN URGED ON BEHALF OF THE PE TITIONER THAT THE FIRST STEP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY TO EXAMINE THE PROVIS IONS OF PRESUMPTIONS AS INDICATED ABOVE. SECTION 132(4A) (I) CLEARLY STIPULATES THAT WHEN INTER ALIA ANY DOCUMEN T IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SIMILARLY PR OVIDED IN SECTION 292C(1)(I). IN OTHER WORDS WHENEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEARCH ED 14 THE NORMAL PRESUMPTION IS THAT THE SAID DOCUMENT BE LONGS TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR 'SATISFACTI ON' THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THERE MUST BE SOME COGENT MATERIAL AVAILABLE WITH T HE ASSESSING OFFICER BEFORE HE/SHE ARRIVES AT THE SATI SFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE SEA RCHED PERSON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE THE PLACE OF 'SATISFACTION'. 11. IT IS EVIDENT FROM THE ABOVE SATISFACTION NOTE THA T APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE PETITIONER AND THAT THE ASSESSING OFFICER IS SATISFIED THAT IT IS A FIT CASE FOR ISSUANCE OF A NOTICE UNDER SECTION 153C THERE IS NOTHING WHICH WOULD INDICATE AS TO HOW THE PRESUMPTIONS WHICH ARE TO BE NORM ALLY RAISED AS INDICATED ABOVE HAVE BEEN REBUTTED BY THE A SSESSING OFFICER. MERE USE OR MENTION OF THE WORD 'SATISFACTION' OR THE WORDS 'I AM SATISFIED' IN THE ORDER OR THE NOTE WOUL D NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICE R OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. WE A RE 15 AFRAID THAT GOING THROUGH THE CONTENTS OF THE SATISFAC TION NOTE WE ARE UNABLE TO DISCERN ANY 'SATISFACTION' OF THE KIND REQUIRED UNDER SECTION 153C OF THE SAID ACT. 12. THIS BEING THE POSITION THE VERY FIRST STEP PRIOR T O THE ISSUANCE OF A NOTICE UNDER SECTION153C OF THE SAID ACT HAS NOT BEEN FULFILLED. INASMUCH AS THIS CONDITION PREC EDENT HAS NOT BEEN MET THE NOTICES UNDER SECTION 153C AR E LIABLE TO BE QUASHED. IT IS ORDERED ACCORDINGLY . THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHALL BE NO ORDE R AS TO COSTS. 2.2 THE HEAD NOTE OF JUDGEMENT IN THE CASE OF PEPSICO INDIA HOLDINGS (P.) LTD. V ACIT [2014] 50 TAXMANN.COM 299 (DELHI) IS AS UNDER :- SECTION 153C OF THE INCOME-TAX ACT 1961 - SEARCH A ND SEIZURE ASSESSMENT IN CASE OF - ASSESSMENT OF INCO ME IN CASE OF ANY OTHER PERSON - ASSESSMENT YEARS 2006-07 TO 2011-12 - WHETHER BEFORE PROVISIONS OF SECTION 153C CAN BE INVOKED ASSESSING OFFICER OF SEARCHED PERSON MU ST BE SATISFIED THAT SEIZED MATERIAL (WHICH INCLUDES DOCU MENTS) DOES NOT BELONG TO PERSON REFERRED TO IN SECTION 15 3A - HELD YES - WHETHER FINDING OF PHOTOCOPIES IN POSSE SSION 16 OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY 'BELONG' TO PERSON WHO HOLDS ORIGINALS; U NLESS IT IS ESTABLISHED THAT DOCUMENTS IN QUESTION WHETHER THEY BE PHOTOCOPIES OR ORIGINALS DO NOT BELONG TO SEARC HED PERSON QUESTION OF INVOKING SECTION 153C DOES NOT ARISE - HELD YES [PARAS 14 AND 15] [IN FAVOUR OF ASSESSEE] IN THE PRESENT CASE OF THE APPELLANT IN THE SATISFACTI ON NOTE RECORDED U/S 153C THERE IS NO REBUTTAL THAT SEIZED DOCUM ENTS DO NOT BELONG TO THE SEARCHED PERSON. AS A MATTER OF FACT THE A.O. HAS NOT EVEN MENTIONED THAT ANY DOCUMENT SEIZED DURING SEARCH BELONG OR BELONGS TO THE APPELLANT. 2.3 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V ARPIT LAND (P) LTD. [2017) 78 TAXMANN.COM (BOM) HAS HELD AS UNDER:- 7. THE GRIEVANCE OF THE REVENUE AS SUBMITTED BY MR.KOT ANGALE IS A SUBMISSION MADE ON THE BASIS OF SUSPICION AND NOT ON T HE BASIS OF ANY EVIDENCE ON RECORD WHICH WOULD INDICATE THAT THE RESPONDENT - ASSESSEE AND PERSONS SEARCHED WERE ALL PART O F THE SAME GROUP. BE THAT AS IT MAY THE REQUIREMENT OF SECT ION 153C OF THE ACT CANNOT BE IGNORED AT THE ALTER OF SUSPICIO N. THE REVENUE HAS TO STRICTLY COMPLY WITH SECTION 153C OF THE ACT. WE ARE OF THE VIEW THAT NON SATISFACTION OF THE CONDIT ION 17 PRECEDENT VIZ. THE SEIZED DOCUMENT MUST BELONG TO T HE RESPONDENT - ASSESSEE IS A JURISDICTIONAL ISSUE AND NON SATISFACTION THEREOF WOULD MAKE THE ENTIRE PROCEEDI NGS TAKEN THEREUNDER NULL AND VOID. THE ISSUE OF SECTION 69C OF THE ACT CAN ONLY ARISE FOR CONSIDERATION IF THE PROCEEDI NGS UNDER SECTION 153C OF THE ACT ARE UPHELD. THEREFORE IN THE PRESENT FACTS THE ISSUE OF SECTION 69C OF THE ACT IS ACADEMIC. 2.4 THE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CANYON FINANCIAL SERVICES LTD. V ITO (2017) 84 TAXMANN.COM 74 HAS HELD THAT IN THE FIRST PLACE THE SATISFACTION NOTE O F THE A.O. OF THE SEARCHED PERSON HAS TO RECORD THAT THE DOCUMENT SE IZED BELONGS OR BELONG TO THE PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. 2.5 THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V RENU CONSTRUCTIONS PVT. LTD. (2017) (A) TMI 670 DELHI HAS HELD THAT SEIZED DOCUMENTS HAD TO BE SHOWN TO BELONG TO THE OTHER PERSON AND NOT MERELY PERTAINING TO SUCH OTHER PERSON. THE HONBLE COURT HELD THAT AMENDMENT TO SECTION 153C BY IN CLUDING THE DOCUMENTS PERTAINING TO HAS BEEN GIVEN PROSPECTIVE EFFECT FROM 1 ST JUNE 2015. IN VIEW OF THE ABOVE IT IS SUBMITTED THAT IN THE SO-CA LLED SATISFACTION NOTE SINCE THE ASSESSING OFFICER HAS NO WHERE 18 RECORDED ANY SATISFACTION ABOUT ANY SEIZED DOCUMENT BEING BELONGING TO THE APPELLANT THE PROCEEDINGS INITIATE D ARE BAD-IN- LAW AND THEREFORE LIABLE TO BE QUASHED. 3. THAT THERE HAS BEEN NO HANDING OVER OF THE SEIZED DOCUMENTS AS REQUIRED U/S 153C BEFORE INITIATION OF PROCEEDINGS UNDER THAT SECTION. UNDER SECTION 153C OF THE INCOME TAX ACT BEFORE INITIA TION OF PROCEEDINGS U/S 153C AGAINST THE OTHER PERSON (I.E. A PERSON OTHER THAN A SEARCHED PERSON) BY THE A.O. OF THAT OTH ER PERSON THERE HAS TO BE NOT ONLY A SATISFACTION NOTE RECORDED BY THE A.O. OF THE SEARCHED PERSON (WITH REGARD TO S EIZED DOCUMENTS BEING BELONGING TO THAT OTHER PERSON) BUT ALSO HANDOVER OF THE SEIZED DOCUMENTS FROM THE A.O. OF THE OTHER PERSON. THIS REQUIREMENT CANNOT BE DISPENSED WITH EV EN WHEN THE ASSESSING OFFICER OF THE SEARCHED PERSON AND OF THE OTHER PERSON IS SAME. IN THE PRESENT CASE OF THE APPELLANT TH ERE HAS BEEN NO SUCH HANDING OVER OF THE ALLEGED SEIZED DOCUMEN TS. THEREFORE THE PROCEEDINGS INITIATED U/S 153C ARE WIT HOUT JURISDICTION AND BAD-IN-LAW. 3.1 ON THE OTHER HAND THE LD. CIT(DR) HAS STATED THA T NOTICE ISSUED U/S 153C OF THE ACT AND CONSEQUENT ASSESSMENT WAS WITHIN THE A MBIT OF LAW. IN HER WRITTEN SUBMISSION IT HAS BEEN SUBMITTED THAT LD . CIT(A) HAS RIGHTLY 19 UPHELD THE ORDER OF THE AO ON THIS ISSUE. IN SUPPORT OF HER CONTENTION THE LD. CIT(DR) HAS ALSO FILED THE WRITTEN SUBMISSIONS BY R ELIED UPON THE FOLLOWING CASE LAWS. THE CONTENTS OF THE WRITTEN SUBMISSIO NS ARE REPRODUCED AS UNDER:- - PR. CIT V. SHEETAL INTERNATIONAL PVT. LTD - PR. CIT V INSTRONICS LTD. - GANPATI FINCAP SERVICES (P) LTD. V CIT - CIT V SUPER MALLS (P) LTD. - PCIT V NAU NIDHI OVERSEAS PVT. LTD. - KAMLESHBHAIDHARAMSHIBHAI PATEL V CIT - RAJESH SUNDERDAS VASWANI V ACIT - SSP AVIATION LTD V DCIT - CIT V CLASSIC ENTERPRISES - SAVESH KUMAR AGARWAL V UNION OF INDIA THE ASSESSEE IN GROUND OF APPEAL 1 HAS ALLEGED THAT THE NOTICE UNDER SECTION 153 C ISSUED IN THIS CASE IS ILLEGAL WITHOU T JURISDICTION AND CIT(A) ERRED IN NOT HOLDING SO. THE REVENUE SUBMITS THAT THE NOTICE UNDER SECTION 153 C AND THE CONSEQUENT ASSESSMENT WAS WELL WITHIN THE AMBIT OF L AW AND AS PER PROVISIONS OF SECTION 153 C. THE CIT(A) THEREFOR E RIGHTLY UPHELD THE ORDER OF THE AO IN THIS REGARD. A SEARCH & SEIZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT 1961 WAS CONDUCTED ON 22.03.2012 IN M/S FOCUS ENE RGY GROUP OF CASES M/S GRANADA SERVICES (P) LTD MS IEN.ERG IZER IT SERVICES (P) LTD & ISERVICES INDIA (P) LTD. 20 INCRIMINATING DOCUMENTS FOUND DURING SEARCH A PERUSAL OF PAGE 2 & 3 OF THE ASSESSMENT ORDER DETAILS T HE NATURE OF INCRIMINATING DOCUMENTS. SEIZED MATERIAL CATA LOGUED AS FO-101 A-16 & FO- 10/AA-2 SEIZED FROM PREMISES OF MI S GRANADA SERVICES (P) LTD MS IENERGIZER IT SERVICES (P) LTD & ISERVICES INDIA (P) LTD REFLECTED AS PAYMENTS OF SALARY T O THE ASSESSEE DURING THE SAID YEARS. THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SAID RECEIPTS. NO RESPONSE FILED BY ASSESSEE. HE NCE TREATED AS UNEXPLAINED CASH INCOME BY AO. AO OBSERVATION THE AO IN PARA 1/ASSESSMENT ORDER HAS RECORDED THAT IN TH E COURSE OF SEARCH OPERATION CERTAIN INCRIMINATING DOCUMENT S PERTAINING TO THE ASSESSEE WERE FOUND AND SEIZED. ALSO THE AO IS STATED THAT SATISFACTION NOTE FOR INVOKING SECTION 153 C WAS RECORDED ON 26.11.2013 WHICH IS PLACED IN THE ASSESSMENT FO LDER OF THE AFORESAID COMPANIES. THUS IT IS CLEAR THAT THE A O OF THE SEARCHED PERSON RECORDED SATISFACTION AS REQUIRED UNDER THE PROVISIONS OF THE INCOME TAX ACT. THE REVENUE REITERATES THAT THE PROVISIONS OF SECTION 15 3C UNAMBIGUOUSLY STATE THAT 153C. ASSESSMENT OF INCOME OF ANY OTHER PERSON.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 21 139 SECTION 147 SECTION 148 SECTION 149 SECTION 151 AND SECTION 153 WHERE THE ASSESSING OFFICER IS SATISFIED THAT AN Y MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELO NGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE A SSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND TH AT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVIS IONS OF SECTION 153A 153(1) (B) CLEARLY STATES THAT IN SUCH A CASE THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH W ITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE THE RET URN OF INCOME ..... (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO TH E PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON MADE: 22 PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE REVENUE REITERATES THAT THE PROVISIONS OF SECTION 15 3A UNAMBIGUOUSLY STATE THAT 153(1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 13 9 SECTION 147 SECTION 148 SECTION 149 SECTION 151 AND SECTIO N 153 IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT OTHER DOCUMENTS OR ANY ASSE TS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY 2003 THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH W ITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE THE RET URN OF INCOME ..... (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YE AR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. 23 FROM A BARE READING OF THE PROVISIONS OF 153 A & 153 C IT IS CLEAR THAT THE BASIC PRE-REQUISITE TO ISSUE NOTICE UNDER SECTION 153C IS THAT THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY BUL LION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOK S OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. IF THE A.O IS SO SATISFIED HE SHALL ASSESS AND REASSESS SUCH INCOME ACCORDING TO THE PROVISIONS OF SECTION 153A. IN SUCH A CASE THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO TH E PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON MADE. FINDING OF CIT(A) PERTINENT THIS GROUND WAS TAKEN BEFORE CIT(A) AS WELL. THE CIT(A ) IN THIS REGARD RECORDED A PERTINENT FINDING THAT READS AS UNDE R: IT IS SEEN THAT THE AO INITIATED THE PROCEEDINGS U/S 153 C AFTER DULY RECORDING THE SATISFACTION NOTE. THE AO OF THE SEARCHED PERSON AND THE OTHER PERSON (APPELLANT) IS THE SAME. THEREFORE THER E IS NO SUBSTANCE IN THE CONTENTION OF THE APPELLANT THAT THE A D RECORDED SATISFACTION IN THE CAPACITY OF THE AO OF THE SE ARCHED 24 PERSON. FURTHER THE SATISFACTION NOTE CLEARLY REFERRED TO THE DOCUMENTS PERTAINING TO THE APPELLANT WHICH WERE INCR IMINATING IN NATURE AND ON THE BASIS OF WHICH THE AO HAD ALSO MAD E AN ADDITION IN THIS CASE. THUS THE AO INITIATED THE PRO CEEDINGS U/S 153 C AFTER COMPLYING WITH THE PROVISIONS OF THE SAID S ECTION. THEREFORE I. FIND NO MERIT LN THE APPELLANT'S SUBMISSI ON CHALLENGING THE VALIDITY OF PROCEEDINGS U/S 153C. ACCORDI NGLY THESE GROUNDS OF APPEAL ARE DISMISSED. (REF PARA 7/PAGE4/CIT(A) ORDER) SO THE A.O IS EMPOWERED BY THE INCOME TAX ACT AND ITS PROVISIONS UNDER SECTION 153A/ 153C TO ASSESS THE 'TOTAL IN COME' OF THE ASSESSEE WHICH INCLUDES UNDISCLOSED INCOME. RELIANCE PLACED ON FOLLOWING JUDGEMENTS: 1. PCIT VS SHEETAL INTERNATIONAL PVT LTD (2017-TIOL- 1355-HC- DEL- IT) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT PROCEEDINGS U /S 153C CANNOT BE INVALIDATED MERELY BECAUSE THE AO OF THE SEA RCHED WHO WAS ALSO THAT OF THE ASSESSEE DID NOT RECORD A SEPARAT E SATISFACTION NOTE. 2. PC IT VS INSTRONICS LTD [2017182TAXMANN.COM357(DELHI (COPY / ENCLOSED) 25 WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE SATISFA CTION NOTE WAS RECORDED BY ASSESSING OFFICER OF SEARCHED PERSON WHO ALSO HAPPENED TO BE ASSESSING OFFICER OF ASSESSEE (OTHER PERSON) TO EFFECT THAT SEIZED DOCUMENTS BELONGED TO ASSESSEE ISSUANCE O F NOTICE UNDER SECTION 153C AGAINST ASSESSEE ON BASIS OF SAID N OTE WAS JUSTIFIED. 3. GANPATI FINCAP SERVICES (P.) LTD. VS CIT 2017] 82TAXMAN.COM408 (DELHI (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE ASSESSING OFFICER OF SEARCHED PERSON RECORDED THAT DOCUMENTS SEIZED DURING SEARCH BELONGED TO ASSESSEE MERELY BECAUSE HE HAD NOT CATEGORICALLY STATED THAT DOCUMENTS MENTIONED THEREIN DI D NOT BELONG TO SEARCHED PERSON WOULD NOT INVALIDATE ASSUMPTIO N OF JURISDICTION UNDER SECTION 153C IN RESPECT OF ASSESSEE. WHERE PROCEEDING UNDER SECTION 153C WAS INITIATED AGAI NST ASSESSEE ON BASIS OF SEIZED DOCUMENTS WHICH COULD NOT BE SAID TO BE NON- INCRIMINATING ON BARE PERUSAL AND DESPITE OF BEING GIVEN SEVERAL OPPORTUNITIES NO SUBMISSION ON. MERITS OF CASE WAS MADE BY ASSESSEE ASSESSMENT ORDER PASSED UNDER SAID SECTION TO MAKE ADDITIONS WAS JUSTIFIED. 26 4. PCIT VS SUPER MALLS PVT LTD [2016] 76 TAXMANN.COM 2 67 / {DELHI/[2017] 393 ITR 557 {DELHIL/[2017] 291 CTR 14 2 (DELHI) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT WHERE ASSESSING OFFICER HAD ISSUED SATISFACTION NOTE UNDER SECTION 153C AFTER SATI SFYING HIMSELF WITH CONTENTS OF DOCUMENTS SEIZED TRIBUNAL COULD NOT DECLARE IT AS INVALID ON HYPER TECHNICAL GROUND OF INCO RRECT TERMINOLOGY USED IN SAID NOTE. SATISFACTION NOTE RECORD ED U/S 153C IN RESPECT OF THE ASSESSEE BEING THE THIRD PARTY COULD NOT BE SAID TO BE INVALID ON A HYPER TECHNICAL GROUND BY I NTERPRETING THE EXPRESSION 'BELONGING TO' TOO LITERALLY. 5. PCIT VS MIS NAU NIDH OVERSEAS PVT LTD. (ITA NO.58/20 17) (COPY ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT SATISFACTION R ECORDED BY THE OFFICER ISSUING NOTICE U/S 153C IS SUFFICIENT IF THE AO OF THE SEARCHED PERSON AND THIRD PARTY ARE THE SAME. 6. KAMLESHBHAI DHARAMSHIBHAI PATEL VS CIT {[2013] 31 TAXMANN.COM 50 {GUJARAT)/2013] 214 TAXMAN 558 {GUJARAT)/[2013] 263 CTR 362 (GUJARAT)} (COPY ENCLOSE D) 27 WHERE HON'BLE GUJARAT HIGH COURT HELD THAT WHERE ASSESSE E SOLD CERTAIN LAND TO PURCHASER DOCUMENTS VIZ. SALE DEEDS OF SAID LAND AND AGREEMENTS EXECUTED BETWEEN ASSESSEE AND ERSTWHI LE TENANTS REGARDING THEIR EVICTION FOUND DURING SEARCH UPON PURCHASER WOULD BE SAID TO BE BELONGING TO ASSESSEE FOR PURPOSE OF SECTION 153C 7. RAJESH SUNDERDAS VASWANI VS ACIT {[2016] 76 TAXMANN.COM 311 (GUJARATL} (COPY ENCLOSED WHERE HON'BLE GUJARAT HIGH COURT HELD THAT WHERE ASSESSIN G OFFICER OF SEARCH PERSON RECORDED THAT DOCUMENT FOUND DUR ING SEARCH WAS COPY OF A LEDGER OF BOOKS OF ACCOUNT OF ASSESSEE COMPANY WHICH EVIDENCED CERTAIN CHEQUE PAYMENTS AS WELL A S CASH PAYMENTS TO A COMPANY BY ASSESSEE THERE WAS PRIMA FACIE MATERIAL TO SUGGEST THAT SATISFACTION AS PER SECTION 153C WAS DULY RECORDED AND THUS NOTICE ISSUED TO FILE RETURN TO ASSESSEE WAS JUSTIFIED. 8. SSP AVIATION LTD VS DCIT (20 TAXMANN.COM 214) (COP Y ENCLOSED) WHERE HON'BLE DELHI HIGH COURT HELD THAT IN VIEW OF P ROVISIONS OF SECTION 153C SATISFACTION THAT IS REQUIRED TO BE REACHED BY ASSESSING OFFICER HAVING JURISDICTION OVER SEARCHED PERSON IS THAT VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING 28 SEARCH BELONG TO A PERSON OTHER THAN SEARCHED PERSON AND IT IS NOT NECESSARY THAT DOCUMENTS SO SEIZED MUST REFLECT ANY UNDISCLOSED INCOME. 9. CIT VS CLASSIC ENTERPRISES (35 TAXMANN.COM 244 219 TAXMAN 237 358 ITR 465 268 CTR 364) (COPY ENCLOSED ) WHERE HON'BLE ALLAHABAD HIGH COURT HELD THAT WHERE AF TER SEARCH AT BUSINESS PREMISES OF ASSESSEE-FIRM AND ITS PARTNER BOOK S OF ACCOUNT WERE HANDED OVER TO CONCERNED ASSESSING OFFICER WHO AFTER RECORDING SATISFACTION ISSUED NOTICE UNDER SECTION 153C AND COMPLETED ASSESSMENT UNDER SECTION 153C/143(3) ASSESSMENT WAS IN ACCORDANCE WITH LAW 10. SAVESH KUMAR AGARWAL VS UNION OF INDIA (35 TAXMA NN.COM 85 216 TAXMAN 109 353 ITR 26) (COPY ENCLOSED) WHERE HON'BLE ALLAHABAD HIGH COURT HELD THAT EVEN IF ASSESSING AUTHORITY RECEIVING SATISFACTION NOTE HAD NOT FOUND AN Y THING ADVERSE AGAINST ASSESSEE ON EXAMINATION OF ACCOUNT BOOKS A ND FURTHER SEIZED GOODS HAD ALREADY BEEN RELEASED NOTICE UNDER SECTION 153C COULD STILL BE ISSUED TO ASSESSEE TO FILE RETURN OF INCOME. WHERE BULLION SEIZED WAS RELEASED TO ASSESSEE FOR HAVING BEEN VALIDLY ENTERED IN STOCK BOOKS ASSESSING OFF ICER ON 29 RECEIVING SATISFACTION NOTE COULD STILL PROCEED UNDER SECTI ON 153A AGAINST ASSESSEE TO FIND OUT SOURCE OF INCOME. NO EVIDENCE FILED TO REBUT THE TRUTH OF RECEIPT OF SAL ARY IN CASH DESPITE REPEATED OPPORTUNITIES GIVEN BY THE AD AND A LSO THE CIT(A) THE ASSESSE DID NOT PRODUCE ANY EVIDENCE TO DISPR OVE THE CASE OF THE AO. THE SUPREME COURT HAS HELD THAT TH E PARTIES MUST LEAD EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDIN GS ( KESHAV MILLS & CO LTD 56 ITR 365 (SC). IN THE INST ANT CASE NO EVIDENCE PRODUCED BEFORE AO OR CIT (A) TO DISPROVE: - INCRIMINATING EVIDENCE AGAINST THE ASSESSE IN THE FORM O F SEIZED DOCUMENTS ALTHOUGH THE RIGORS OF INDIAN EVIDENCE ACT DO NOT APP LY TO INCOME TAX PROCEEDINGS SECTION 114{G) OF INDIAN EVIDEN CE ACT CLEARLY SAYS THAT IF EVIDENCE IS NOT PRODUCED IT IS PRESUM ED TO GO AGAINST THE PARTY NOT PRODUCING IT. INTERPRETATION OF STATUTE WITH REGARD TO INTERPRETATION OF SECTION L53A/L53C THE REVENUE ALSO SUBMITS THAT A TAXING STATUTE IS TO BE STRICTLY CONSTRU ED AND THERE IS NO EQUITY IN A TAXING STATUTE. THE INCOME TAX ACT IS A SELF-CONTAINED CODE AND PROVIDE S MACHINERY FOR IMPOSING AND COLLECTING TAX OBTAINING RE LIEFS AND 30 APPEALS AGAINST IMPROPER ORDERS ETC. WHILE TAX LAW IS A PART OF THE GENERAL LAW IT HAS GOT ITS OWN DISTINCT FEATURES. THERE ARE SOME SPECIAL PROVISIONS WHICH ARE ATTRACTED WHILE INTERP RETING TAX LAWS. THE NEED OF INTERPRETATION ARISES ONLY WHEN THE WORDS USED IN THE STATUTE ARE ON THEIR OWN TERM AMBIVALENT AND DO NOT MANIFEST THE INTENTION OF LEGISLATURE. [KESHAVJI RAVJI & CO. V/S. CIT - [(1990) 183 ITR 1 (S C)L. SIMILARLY RULE OF INTERPRETATION WOULD COME INTO PL AY ONLY IF THERE IS DOUBT WITH REGARD TO THE EXPRESS LANGUAGE USED. [PAN DIAN CHEMICALS LTD. VIS. CIT- [(2003) 262 ITR 278 (SC)L. LITERAL RULE: LANGUAGE OF STATUTE SHOULD BE READ AS I T IS : THE FIRST AND THE MOST ELEMENTARY RULE OF CONSTRUCTION IS THAT IT IS TO BE ASSUMED THAT THE WORDS AND PHRASES OF LEGISLATION ARE USED IN THEIR TECHNICAL MEANING IF THEY HAVE ACQUIRED O NE OR OTHERWISE IN THEIR ORDINARY MEANING AND THE SECOND IS THAT THE PHRASES AND SENTENCES ARE TO BE CONSTRUED ACCORDING TO THE RULES OF GRAMMAR. KRISHI UTPADAN MANDI SAMITI VS. UOI (2004) 267 ITR 460 (ALL.) 31 PURE SIMPLE AND GRAMMATICAL SENSE OF LANGUAGE USED BY LEGISLATURE IS BEST WAY OF UNDERSTANDING AS TO WHAT LEGI SLATURE INTENDED. COAL MINES OFFICERS' ASSOCIATION OF INDIA V. UO I (2004) 266 ITR 429 (CAL.) IF THE LANGUAGE OF THE STATUTE IS CLEAR AND UNAMBIGUO US WORDS MUST BE UNDERSTOOD IN THEIR PLAIN MEANING. THE WORDIN GS OF THE ACT MUST BE CONSTRUED ACCORDING TO ITS LITERAL AND GRAMMA TICAL MEANING WHATEVER THE RESULT MAY BE. WHILE INTERPRETING TAX STATUTE THE FUNCTION OF THE COURT OF LAW IS NOT TO GIVE WORDS IN THE STATUTE A STRAINED AND UNNATURAL MEANING TO COVER AND EXTENT ITS APPLICABILITY TO THE AREAS NOT INTENDED TO BE COVERED 'UNDER THE SAID STATUTE. VIDARBHA IRRIGATION D EV. CORPN. V/S ACIT [(2005) 278 ITR 521 (BORN)]. IT IS NOT PERMISSIBLE TO CONSTRUE ANY PROVISION OF A STATU TE MUCH LESS A TAXING PROVISION BY READING INTO IT MORE WORDS THAN ITS CONTAINS. CIT VS: VADILAL LALLUBHAI [(1972) 86 ITR 2 (SC)] LITERAL CONSTRUCTION MEANS THAT THERE IS NO ROOM FOR AN Y INTENDMENT. NOTHING IS TO BE READ IN NOTHING IS TO BE IMPLIED. ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED. 32 ICAI VS. PRICE WATERHOUSE (1997) 90 COMPO CASE 113 14 0 141 (SC) STATE OF WEST BENGAL VS. SCENE SEVEN P. LTD. AIR 2000 SC 3089 3094 HARBAJAN SINGH VS. PRESS COUNCIL OF INDIA (2002) 3 SCC 7 22 727. DISTRICT REGISTRAR AND COLLECTOR V. CANARA BANK (2005 ) 1 SCC 496. STRICT CONSTRUCTION: A TAX IS IMPOSED FOR PUBLIC PURPOSE FOR RAISING GENERAL REVENUE OF THE STATE. A TAXING STATUTE IS TO BE STRICTLY CONSTRUED . LORD HASBURY AND LORD SIMONDS STATED: 'THE SUBJECT IS NOT TO BE TAXED WITHOUT CLEAR WORDS FOR THAT PURPOSE; AND ALSO T HAT EVERY ACT OF PARLIAMENT MUST BE READ ACCORDING TO THE NATURAL CONSTRUCTION OF ITS WORDS.' IT IS SETTLED LAW THAT A TAXATION STATUTE IN PARTICULA R HAS TO BE STRICTLY CONSTRUED AND THERE IS NO EQUITY IN A TAXING PR OVISION. H.H. LAKSHMI BAI V/S. CIT [(1994) 206 ITR 688 691 (SC )]. 'THE SUBJECT IS NOT TO BE TAXED WITHOUT CLEAR WORDS FOR THAT PURPOSE ..... ' CIT VS. PROVIDENT INV. CO. LTD. (1954) 32 ITR 190 (S C) J.K. STEEL LTD. VS UOI AIR 1970 SC 1173 CIT VS. INDO OCEANIC SHIPPING CO. LTD. (2001) 247 ITR 247 (BOM) 33 HANSRAJ & SONS VS. STATE OF J & K (2002) 6 SCC 227 237 -39 IN A.V. FERNANDEZ VIS. STATE IF KERALA '[AIR 1957 SC 657] HIS LORDSHIP BHAGWATI J. HAS STATED THE PRINCIPLE OF TAXING LAWS AS FOLLOWS: 'IN CONSTRUING FISCAL STATUTES AND IN DETERMINING THE LIA BILITY OF A SUBJECT TO TAX ONE MUST HAVE REGARD TO THE STRICT LETTER OF LAW. IF THE REVENUE SATISFIES THE COURT THAT THE CASE FALLS STRICTL Y WITHIN THE PROVISIONS OF THE LAW THE SUBJECT CAN BE TAXED. IF ON THE OTHER HAND THE CASE IS NOT COVERED WITHIN THE FOUR COR NERS OF THE PROVISIONS OF THE TAXING STATUTE NO TAX CAN BE IMP OSED BY INFERENCE OR BY ANALOGY OR BY TRYING TO PROBE INTO T HE INTENTIONS OF THE LEGISLATURE AND BY CONSIDERING WHAT WAS THE SUBST ANCE OF THE MATTER.' IN THE LIGHT OF THE WRITTEN AND ORAL SUBMISSIONS MADE DURING COURSE OF HEARING THE APPEALS OF THE ASSESSEE MAY BE DISMI SSED AND THE ISSUE DECIDED IN FAVOUR OF REVENUE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE REL EVANT RECORDS WRITTEN SUBMISSIONS OF BOTH PARTIES AND ALSO THE IMPUGN ED ORDER PASSED BY THE LD. CIT(A). WE FIND THAT THE FIRST ISSUE CHALLENG ING THE JURISDICTION U/S. 153C OF THE ACT RAISED IS WHETHER THE SATISFACTION NOTE REQUIRED IN TERMS OF SECTION 153C OF THE ACT HAS BEEN RECORDED BY THE AO OF T HE SEARCHED PERSON 34 OR OF THE OTHER PERSON (I.E. THE ASSESSEE). IT IS APPAREN T FROM THE ASSESSMENT ORDER THAT A SEARCH WAS CONDUCTED UNDER SECTION 13 2 OF THE ACT ON FOCUS GROUP OF CASES AND IN SUCH SEARCH PROCEEDINGS CERTAIN MATERIAL WAS FOUND AND SEIZED WHICH LED TO MAKING OF THE ASSESSMEN T U/S. 153C OF THE ACT IN THE INSTANT CASE. IN VIEW OF THE ISSUE OF SATI SFACTION RECORDED BY INCORRECT AO RAISED IN THE SUBMISSION OF THE LD. COUNSEL I T IS WORTHWHILE TO REFER THE SECTION 153C(1) OF THE ACT AT THE MATERIAL T IME AS UNDER: '153C. ASSESSMENT OF INCOME OF ANY OTHER PERSON.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 SECTION 147 SECTION 148 SECTION 149 SECTION 151 AND SECTION 153 WHER E THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY BULLION JEW ELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A THEN THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO T HE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND T HAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND I SSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A : ' 4.1 AFTER CAREFUL PERUSAL OF THE ABOVE PROVISIONS IT I S EVIDENT THAT WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THA T ANY MONEY BULLION JEWELLERY BOOKS OF ACCOUNTS OR OTHER DOCUMENT S ETC. BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED THEN SUCH ASSETS OR DOCUMENTS ETC. SHALL BE HANDED OVER TO THE AO OF THE OTHER PERSON AND THE AO SHOULD PROCEED AGAINST SUCH OTHER PERSON TO ASSESS OR REASSESS THE INCOM E OF THE OTHER PERSON. THUS ACCORDING TO THE PROVISION BEFORE HANDING OVER OF SUCH ASSETS/ DOCUMENTS TO THE ASSESSING OFFICER OF THE OTHER P ERSON THE 35 SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER O F THE PERSON SEARCHED THAT MONEY BULLION JEWELLERY OR DOCUMENT ETC . FOUND FROM THE PERSON SEARCHED BELONG TO OTHER PERSON. THUS THE AO ACQ UIRES JURISDICTION UNDER SECTION 153C OF THE ACT ONLY WHEN THE AO OF THE SEARCHED PERSON RECORD THE SATISFACTION AND HANDOVER THE ASSETS OR DOCUMEN TS BELONGING TO THE OTHER PERSON TO THE ASSESSING OFFICER OF THE OTHER P ERSON. IT TRANSPIRES FROM THE PROVISION THAT RECORDING OF SATISFACTION BY TH E ASSESSING OFFICER OF THE PERSON SEARCHED IS A CONDITION PRECEDENT FOR THE ASSE SSING OFFICER OF THE OTHER PERSON TO ACQUIRE JURISDICTION AND UNLESS JU RISDICTIONAL CONDITION IS SATISFIED THERE CAN BE NO QUESTION OF MAKING ASSESSMENT OR REASSESSMENT IN THE CASE OF SUCH OTHER PERSON. 4.2 WE FURTHER NOTE THAT PRIOR TO THE INTRODUCTION O F SECTION 153C OF THE ACT UNDER THE SCHEME OF BLOCK ASSESSMENT FOR SUCH CASES THERE IS A CORRESPONDING SECTION 158BD OF THE ACT WHICH READS AS UND ER: UNDISCLOSED INCOME OF ANY OTHER PERSON. 158BD. WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON WIT H RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS OF A CCOUNT OR OTHER DOCUMENTS OR ANY ASSETS WERE REQUISITIONED UNDE R SECTION 132A THEN THE BOOKS OF ACCOUNT OTHER DOCUMENTS OR ASSET S SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICE R HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFI CER SHALL PROCEED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON AND THE PROVISIONS OF THIS CHAPTER SHALL APPLY ACCORDINGLY. 36 4.3 ON READING OF THE AFORESAID PROVISIONS IT IS CLEAR THAT WHEN THE AO OF THE PERSON SEARCHED IS SATISFIED THAT UNDISCLOSED INCOME BE LONGS TO ANY PERSON OTHER THAN THE PERSON SEARCHED THEN THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS ETC. ARE TO BE HANDED OVER TO THE ASSESSIN G OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND AFTER RECORDING OF THE PROPER SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON THE ASSESSING OFFICER OF THE OTHER PERSON CAN PROCEED FOR DETERMINING UNDISCLOSED INCOME OF SUCH OTHER PERSON. 4.4 THUS WE FIND THAT AS FAR AS RECORDING OF SATISFACTIO N BY THE ASSESSING OFFICER OF THE SEARCHED PERSON IS CONCERNED THE REQUIREM ENT OF THE SECTION 158BD AND SECTION 153C OF THE ACT ARE IDENTICAL. THE DI FFERENCE IS IN RESPECT OF WHAT BELONGS TO THE OTHER PERSON. IN SECTION 158BD IT IS THE UNDISCLOSED INCOME WHICH SHOULD BELONGS TO THE OTHER PERSON WHEREAS IN SECTION 153C IT IS THE MATERIAL WHICH SHOULD BELONGS TO OTHER PERSON. 4.5 WE FURTHER FIND THAT THE ISSUE OF RECORDING SATISF ACTION AND FRAMING ASSESSMENT UNDER SECTION 158BD OF THE ACT CAME UP FOR CONSIDE RATION BEFORE THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. CALCUTTA KNITWEAR (SUPRA) WHEREIN THE HONBLE SUPREME COURT HAS HELD T HAT FOR THE PURPOSE OF SECTION 158BD OF THE ACT THE SATISFACTION NOTE IS SINE QUA NON AND MUST BE PREPARED BY THE ASSESSING OFFICER BEFORE TRANSFER OF THE RECORDS TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON. 37 4.6 HOWEVER ON COMPARISON OF THE SECTION 158BD AND 153C OF THE ACT IT IS CLEAR THAT SO FAR AS THE QUESTION OF ACQUIRING JURISDI CTION BY THE ASSESSING OFFICER OF THE PERSON OTHER THAN THE PERSON SEARCHED IS CONCERNED THE PROVISIONS OF SECTION 153C ARE PARI MATERIAL WITH SECTION 158BD AND THE RATIO OF THE JUDGEMENT OF THE HONBLE SUPREME COURT WILL A PPLY TO THE PROVISION OF SECTION 153C AS WELL. 4.7 WE FURTHER FIND THAT THE CBDT HAS ALSO ISSUED ITS C IRCULAR NO. 24/2015 DATED 31ST DECEMBER 2015 IN VIEW OF THE AFORESAID JU DGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CALCUTTA KNITWEARS (SUPRA) WHICH READS AS UNDER: THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURPOSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HON'BLE SUPREME COURT IN THE CASE OF M/S CALCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO.3958 OF 201 4 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 INITIATI ON OF PROCEEDINGS 38 AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE A CT; OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 158BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS A RE 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 SUBSTANTIAL SIMILAR/PARI-MATERIA TO THE PRO VISIONS 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 TH E PURPOSES OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. TH IS VIEW HAS BEEN ACCEPTED BY CBDT. 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS REFE RRED 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 AO 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 ISS UE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DECIDED IN THE LIGHT O F THE ABOVE JUDGMENT. ACCORDINGLY THE BOARD HEREBY DIRECTS THAT PE NDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE UNDER SE CTION 158BD 39 /153C SHOULD BE WITHDRAWN/NOT PRESSED IF IT DOES NOT ME ET THE GUIDELINES LAID DOWN BY THE APEX COURT. 4.8 WE NOTE THAT IN THE OTHER DECISIONS OF THE HONBLE HIGH COURT AND TRIBUNAL CITED IN THE WRITTEN SUBMISSION OF THE ASSESSEE A S WELL AS BY THE LEARNED CIT(DR) AS FAR AS THE ISSUE OF RECORDING SATISFAC TION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON PRIOR TO HANDING OVER OF SUCH MATERIAL TO THE AO OF THE OTHER PERSON SIMILAR FINDI NGS ARE GIVEN AND NOW BY THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CALCUTTA KNITWEARS (SUPRA) THE ISSUE IS SETTLED. EVEN WHEN THE ASSESSI NG OFFICER OF THE SEARCHED PERSON AND ASSESSING OFFICER OF THE OTHER PER SON IS SAME EVEN THEN THE SATISFACTION HAS TO BE RECORDED BY THE AO IN H IS CAPACITY AS AO OF SEARCHED PERSON. 4.9 WE ALSO NOTE THAT WHEN THE ASSESSING OFFICER OF THE SE ARCHED PERSON AND ASSESSING OFFICER OF THE OTHER PERSON ARE DIFFERENT THEN IT CAN EASILY BE DISCERN THAT SATISFACTION HAS BEEN RECORDED BY WHICH ASSESSING OFFICER. BUT THE DIFFICULTY ARISES WHEN THE ASSESSING OFFICER OF THE SEAR CHED PERSON AND ASSESSING OFFICER OF OTHER PERSON IS SAME AND HE HAS NOT RECO RDED UNDER WHICH CAPACITY THE SATISFACTION NOTE WAS RECORDED BY HIM. IN SUCH CIRCUMSTANCES IT IS REQUIRED TO GO THROUGH THE CIRCUMSTAN TIAL EVIDENCE TO DECIDE WHETHER THE SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER IN THE CAPACITY OF THE ASSESSING OFFICER OF SEARCHED PERSON. 40 4.10 WE FURTHER NOTE THAT LD. COUNSEL OF THE ASSESSEE IN THE WRITTEN SUBMISSION HAS SUBMITTED THAT HEAD NOTE FOR THE SATISFACTI ON ITSELF STATES THAT SATISFACTION NOTE FOR TAKING ACTION U/S 153C IN CASE OF ADARSH AGGARWAL AT THE END OF THE SATISFACTION NOTE IT HAS BE EN MENTIONED THAT THEREFORE TO ASSESSEE UNDISCLOSED INCOME OF SHRI ADARSH AGARWAL PROCEEDINGS U/S 153C OF THE ACT NEEDS TO BE INITIAT ED. 4.11 HOWEVER THE SETTLED POSITION OF LAW IS THAT SO FAR AS THE ASSESSING OFFICER OF THE SEARCHED PERSON IS CONCERNED HE HAS TO O NLY RECORD A SATISFACTION THAT DOCUMENTS SEIZED BELONG OR BELONGS T O OTHER PERSON. THE ASSESSING OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF SEA RCHED PERSON IS NOT CONCERNED WITH INITIATION OF PROCEEDINGS U/S 153C OF THE ACT OR FOR MAKING ASSESSMENT AGAINST THE OTHER PERSON BECAUSE THAT CAN BE DONE BY ASSESSING OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF OTHER PERSON. IN THE PRESENT AS IS EVIDENT FROM THE LANGUAGE OF SATISFA CTION NOTE IT HAS BEEN RECORDED BY A.O. IN HIS CAPACITY AS ASSESSING OFFICER OF THE ASSESSEE I.E. THE OTHER PERSON AND NOT AS THE ASSESSING OFFICER OF THE SEARCHED PERSON. THUS THE PRE-REQUISITE OF RECORDING SATISFACTION BY THE ASSESSING OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF SEARCHED PERSON HAS NOT BEE N FULFILLED. 4.12 WE FURTHER FIND THAT LD. CIT(DR) HAS SUBMITTED THAT TECHNICALITIES AND IRREGULARITIES WHICH DO NOT OCCASION IN FAILURE OF JU STICE SHOULD NOT BE 41 ALLOWED TO DEFEAT THE END OF JUSTICE AND THE ENTIRE P ROCEEDING CONDUCTED BY THE REVENUE CANNOT BE HELD ILLEGAL WITHOUT JURISDIC TION. 4.13 THOUGH WE AGREE IN PRINCIPLE THAT TECHNICALITIES SHOULD NOT COME IN THE WAY OF DISPENSATION OF JUSTICE BUT THE ISSUE OF LACK O F JURISDICTION CANNOT BE IGNORED UNDER THE GUISE OF A TECHNICAL DEFECT. WE AR E NOT CONVINCED WITH THE ABOVE CONTENTION ADVANCED ON BEHALF OF THE REVENU E. WE FAIL TO UNDERSTAND AS HOW THE REQUIREMENT OF RECORDING SATISFACT ION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON PROVIDED IN THE STA TUTE COULD BE TREATED AS A SMALL IRREGULARITY. IN OUR OPINION IT IS THE PRIME REQUIREMENT FOR INITIATING PROCEEDINGS UNDER SECTION 153C OF THE ACT. TH E ASSESSING OFFICER IN THE CAPACITY OF THE SEARCHED PERSON ONLY EXAMINES THE RE CORDS SEIZED AND COME TO THE CONCLUSION AS TO WHICH OF THE SUCH MONEY BULLI ON JEWELLERY OR DOCUMENTS BELONGS TO THE SEARCHED PERSON AND TO THE OTHER S. THE LEGISLATURE HAS PROVIDED FOR RECORDING OF SUCH SATISFACTION BY THE ASSESSI NG OFFICER OF THE PERSON SEARCHED AND THUS THE ASSESSING OFFICER CANNOT BE ALLOWED TO RECORD SATISFACTION IN THE CAPACITY OF ASSESSING OFFICER OF OT HER PERSON. IN OUR OPINION NO ASSESSMENT OR OTHER PROCEEDING CAN BE LAWF ULLY TAKEN UP AND COMPLETED UNLESS THE CONCERNED AUTHORITY HAS JURISDICTION T O DO SO AND THE LACK OF JURISDICTION GOES TO THE FOUNDATION OF THE MATT ER AND IF THE FOUNDATION IS MISSING THE ENTIRE BUILDING COLLAPSE. THUS THE CONTE NTIONS ADVANCED BY THE REVENUE ARE REJECTED. WE FURTHER FIND THAT THE C ENTRAL BOARD OF DIRECT TAXES (CBDT) WHO IS THE APEX BODY CONTROLLING THE AD MINISTRATION OF THE 42 INCOME TAX DEPARTMENT IN THE AFORESAID CIRCULAR HAS CL EARLY DIRECTED THE OFFICERS OF THE DEPARTMENT EITHER NOT TO FILE APPEALS OR TO WITHDRAW THE APPEALS WHERE SATISFACTION NOTE IS NOT RECORDED BY THE A SSESSING OFFICER IN THE CAPACITY OF SEARCHED PERSON. IN SUCH CIRCUMSTANCES ADVANCIN G OF ABOVE ARGUMENTS ARE FUTILE AND WASTAGE OF RESOURCES OF THE IN COME TAX DEPARTMENT. 4.14 WITH REGARD TO SECOND ALTERNATE CONTENTION OF THE ASSESSEE THAT NO DOCUMENTS BELONG TO THE ASSESSEE WAS FOUND AND THERE IS NO SATISFACTION RECORDED THAT ANY DOCUMENT BELONGING TO THE ASSESSEE WAS FOUND DURING THE SEARCH IT IS SEEN THAT IN THE SATISFACTION NOTE THE ASSE SSING OFFICER HAS NOT RECORDED ANY SATISFACTION THAT DOCUMENTS BELONGING TO T HE ASSESSEE WAS FOUND DURING SEARCH. THERE IS AMENDMENT IN THE INCOME TAX ACT WITH EFFECT FROM 1 ST JUNE 2015 WHEREBY THE SEIZED DOCUMENTS EVEN IF THEY P ERTAINS TO OR RELATES TO OTHER PERSON AND DOES NOT BELONG TO OT HER PERSON CAN BE THE BASIS FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT. HOWEVER AS HELD BY HONBLE DELHI HIGH COURT IN THE RECENT CASE OF CIT V RE NU CONSTRUCTION PVT. LTD. (SUPRA) THE SAID AMENDMENT HAS BEEN GIVEN PROSPE CTIVE EFFECT FROM 1 ST JUNE 2015. THUS PRIOR TO JUNE 2015 THE SEIZED DOCUME NTS HAD TO BE MANDATORILY SHOWN TO BE BELONGING TO THE OTHER PE RSON AND NOT MERELY PERTAINING TO OR RELATING TO SUCH OTHER PERSON. THE DOCUMENTS REFERRED TO IN THE SATISFACTION NOTE EVEN IF THEY PERTAIN / REL ATES TO THE ASSESSEE HAVE NOT BEEN SHOWN TO BE BELONGING TO THE APPELLANT AN D THERE IS NO SUCH 43 SATISFACTION RECORDED. ACCORDINGLY THE REQUIREMENT OF RE CORDING SATISFACTION THAT SEIZED DOCUMENTS BELONG TO OTHER PERSON HAS NOT BEE N FULFILLED IN THE PRESENT CASE. 4.15 WE ALSO NOTE THAT THE CASE LAWS RELIED UPON BY T HE LD. CIT(DR) ARE DISTINGUISHED ON FACTS. IN THE CASES PR. CIT V. SHEETAL I NTERNATIONAL PVT. LTD. PR. CIT V INSTRONICS LTD. GANPATIFINCAP SERVICES (P) L TD. V CIT THE HONBLE DELHI HIGH COURT HAS HELD THAT WHERE THE A.O. OF THE SEARCHED PERSON AND OTHER PERSON IS SAME THERE WAS NO REQUIREMENT OF RECO RDING TWO SATISFACTION NOTES ONE BY A.O. OF SEARCHED PERSON AND ANOTHER BY A.O. OF OTHER PERSON. THE HONBLE COURT HELD THAT SATISFACT ION NOTE HAS TO BE RECORDED BY AS A.O. OF SEARCHED PERSON AND THIS IS A SINE DIE NON-FOR TRIGGERING THE PROCEEDINGS AGAINST THE OTHER PERSON U/S 153C OF THE ACT. THUS THESE CASE LAW ARE IN FACT IN FAVOUR OF THE ASSESSEE SINCE THE SATISFACTION NOTE IN THE CASE OF ASSESSEE HAS BEEN RECORDED B Y A.O. AS ASSESSING OFFICER OF ASSESSEE AND NOT AS ASSESSING OFFICER OF SEA RCHED PERSON. 4.16 FURTHER IN THE CASE OF CIT V SUPER MALLS (P) LT D.(SUPRA)THE HONBLE HIGH COURT HELD THAT WHERE THE SATISFACTION NOTE OF THE A.O. HAD USED THE WORDS THAT DOCUMENTS SEIZED BELONGED TO ASSESSEE INSTEAD O F WORDS PERTAINS OR PERTAINED TO ASSESSEE THE NOTICE U/S 153C CO ULD NOT BE DECLARED INVALID. IN THE PRESENT CASE BEFORE US THERE ARE NO SUCH FACTS. 44 THE ASSESSING OFFICER HAS NO WHERE USED THE BELONGED TO IN THE SATISFACTION. 4.17 AND IN ALL OTHER CASE LAWS IT HAS BEEN HELD THAT WHERE THE A.O. HAS RECORDED SATISFACTION THAT DOCUMENTS BELONGING TO OTHER PERSON WERE FOUND IT WAS NOT MANDATORY FOR THE A.O. TO REACH AT THE SATISFACTION AT THAT STAGE THAT SEIZED DOCUMENTS REFLECTED UNDISCLOSED INCOME. HOWEVER IN NOTE OF THESE DECISION IT WAS HELD THAT THERE WAS NO REQUIRE MENT OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON OR THAT THERE WAS NO REQUIREMENT OF RECORDING SATISFACTION THAT SEIZED DO CUMENT BELONGS TO THE OTHER PERSON. 4.18 IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND RESPECTFULLY FOLLOWING THE PRECEDENTS AS AFORESAID WE QUASH THE PR OCEEDING INITIATED UNDER SECTION 153C OF THE ACT ON THE GROUND THAT SATISFA CTION NOTE WAS NOT RECORDED BY THE ASSESSING OFFICER IN THE CAPACITY OF ASSESSING OFFICER OF SEARCHED PERSON AND IN ANY CASE SINCE THERE IS NO SATISFACTION RECORDED OF ANY SEIZED DOCUMENTS BEING BELONGING TO THE ASSESSEE HE NCE THE OTHER GROUNDS ON MERITS CHALLENGING THE ADDITIONS HAVE BECOM E ACADEMIC WHICH DO NOT REQUIRE ADJUDICATION. AS A RESULT THE APPEAL O F THE ASSESSEE STANDS ALLOWED. 45 5. FOLLOWING THE CONSISTENT VIEW TAKEN IN ASSESSMENT YEAR 2009-10 AS AFORESAID THE OTHER TWO APPEALS RELATING TO ASSESSMENT YEARS 2010-11 & 2011-12 ALSO STAND ALLOWED. 6. IN THE RESULT ALL THE 03 APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED ON 15/11/2017. SD/- SD/- [L.P. SAHU] [H.S. SIDHU] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 15/11/2017 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES