TMI Blog2013 (9) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... different assessees and, therefore, the Assessing Officer has to carry out the dual exercise, first as the Assessing Officer of the person searched in which he has to record the satisfaction, during the course of assessment proceedings of the person searched. After recording such satisfaction note in the file of the person searched, the same is to be placed in the file of such other person. In the present case, this exercise of recording the satisfaction during the assessment proceedings of the person searched has not been carried out - The Assessing Officer recorded the satisfaction in the case of such other person which does not satisfy the condition of assuming jurisdiction under Section 153C. Moreover, no original satisfaction note is available on record - The photocopy of the satisfaction note does not bear name of any assessee, name of the Assessing Officer or any seal of the Assessing Officer - satisfaction note cannot be said to be a valid satisfaction note within the meaning of Section 153C – Decided in favor of Assessee. Period of limitation - Held that:- since the Assessing Officer of the person searched and the Assessing Officer of such other person was the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change of opinion in respect of same set of facts which are already part of record and as such provisions of sec. 153C/153A are not relevant and applicable. (v) That even otherwise, in the absence of any assessment being pending on the date of initiation of proceedings u/s. 153C, it is not open to assume jurisdiction u/s. 153C read with sec. 153A of the Inco Tax Act, 1961." 3. At the time of hearing before us, the learned counsel for the assessee argued at length. He stated that there was search at Chaurasia Group of cases. However, there was no search operation at the premises of the assessee company. The Assessing Officer took action under Section 153C read with Section 153A of the Income-tax Act, 1961 by issuing notice on 21st June, 2010. He stated that notice under Section 153C was issued on the basis of photocopy of the profit loss account and balance sheet of the assessee company found from the premises of director/shareholder of the assessee company. That the search has taken place on 29th April, 2008 while the assessee has filed the return for AY 2004-05 i.e. the year under appeal on 22nd September, 2004 in which the audited profit loss account and balance shee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assessing Officer of the assessee and not the Assessing Officer of the person searched. Therefore, such satisfaction recorded by the Assessing Officer of the assessee for taking up action under Section 153C in this case cannot be said to be a valid satisfaction. 5. The learned counsel further submitted that the issue of notice under Section 153C is barred by limitation. He stated that the search has taken place at the Chaurasia Group of companies on 29th April, 2008. However, the alleged satisfaction note on the basis of which action under Section 153C is taken is dated 21st June, 2010. That as per proviso to Section 153C, for taking action under Section 153C, the date of search would be substituted by the date of receiving the books of account or the documents or the asset seized by the Assessing Officer having jurisdiction over such other person. Though the Revenue has not given any specific date on which the document was received by the Assessing Officer of the assessee from the Assessing Officer of the person searched, but, from the papers produced by the Revenue, it is evident that the satisfaction note under Section 153C is recorded on 21st June, 2010 and notice un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income-tax Act, 1961 reads as under:- "153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A:]." 9. From the above, it is evident that action under Section 153C can be taken in respect of any other person than the person searched if the Assessing Officer of the person searched is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents belong to a person other than the person searched. In such circumstances, he shall hand over to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciate the contention of the learned DR, let us compare the language of Section 153C and Section 158BD. Section 153C has already been reproduced above in paragraph No.8. Section 158BD reads as under:- "158BD. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed [under section 158BC] against such other person and the provisions of this Chapter shall apply accordingly." 11. We find that Hon'ble Gujarat High Court, in the case of CIT v. Meghmani Organics Ltd. vide Tax Appeal No.2077 of 2009, compared the language of Section 153C and Section 158BD at internal page 6 of their order held as under:- "Section 153C which is similarly worded to section 158BD of the Act, provides that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents sei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice issued under Section 153C is valid. 14. During the course of hearing, learned DR was directed to produce the satisfaction note recorded under Section 153C. Learned DR fairly admitted that the original satisfaction note is not traceable but only photocopy of the said satisfaction note is available. He produced the photocopy of the satisfaction note, copy of which is annexed herewith as Annexure "A". 15. From a perusal of the said satisfaction note, it is evident that this paper does not indicate in whose case this satisfaction was recorded and who is the officer recording the satisfaction. There is no mention of name of the assessee. There is no mention of the name of the Assessing Officer and no seal of the Assessing Officer. In the satisfaction note, the Assessing Officer has mentioned the name of various assessees who have been covered for search and seizure action under Section 132(1). The number of such assessees are eight. Now, during the search of whose premises it was found, is not mentioned. The last line of the satisfaction note reads "I am satisfied that the above documents belong to M/s DSL Properties Pvt. Ltd. and thus its case is being taken up for asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer of such other person, he should take cognizance of such satisfaction note and thereafter issue notice under Section 158BC. In this case, this exercise of recording the satisfaction during the assessment proceedings of the person searched has not been carried out. On the other hand, the Assessing Officer recorded the satisfaction in the case of such other person which does not satisfy the condition of assuming jurisdiction under Section 153C. Moreover, no original satisfaction note is available on record. The photocopy of the satisfaction note produced before us does not bear name of any assessee, name of the Assessing Officer or any seal of the Assessing Officer. Therefore, the above satisfaction note cannot be said to be a valid satisfaction note within the meaning of Section 153C. 16. Apart from above, we find that jurisdiction under Section 153C has been assumed only on the basis that during the course of search of one of the persons of Chaurasia Group, the photocopy of the audited profit loss account and balance sheet of the assessee for the FY 2003-04 relevant to AY 2004-05 was found. It is not in dispute that the assessee had filed the return for AY 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or documents or assets seized. Accordingly, the assessment can be reopened of the preceding six years than 21st June, 2010. They would be AY 2005-06 to 2010-11. The Revenue has reopened assessment for AY 2004-05 which is clearly barred by limitation. The learned DR has contended that since in this case the Assessing Officer of the person searched and the Assessing Officer of such other person was the same, there is no question of handing over and taking over of the document, therefore, for the purpose of limitation, the date of search would be relevant and not the date of initiation of proceedings under Section 153C. 19. We have carefully considered the rival submissions. Proviso to Section 153C reads as under:- "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 [sub-section (1) of] 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:]." 20. The above proviso refers to second proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... That Section 153C(1) and its proviso have to be read together in a harmonious manner. While interpreting Section 153C, we have already held that for initiating valid jurisdiction under Section 153C, even if the Assessing Officer of the person searched and the Assessing Officer of such other person is the same, he has to first record the satisfaction in the file of the person searched and thereafter, such note alongwith the seized document/books of account is to be placed in the file of such other person. The date on which this exercise is done would be considered as the date of receiving the books of account or document by the Assessing Officer having jurisdiction over such other person. Though while examining the facts of the assessee's case we have arrived at the conclusion that no such exercise has been properly carried out and therefore initiation of proceedings under Section 153C itself is invalid, however, since both the parties have argued the issue of period of limitation also, we deem it proper to adjudicate the same. Since in this case satisfaction is recorded on 21st June, 2010 and notice under Section 153C is also issued on the same date, then only conclusion that can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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