TMI Blog2014 (1) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Section 68 were not related to the seized material but based upon the books of account of the assessee, hence, out of the purview of the search assessment - Decided against Revenue. - IT(ss)A No.92, 93, 94, 95, 96 & 97/Ahd/2013 - - - Dated:- 31-10-2013 - Mukul Kr Shrawat And N S Saini, JJ. For the Appellant : Shri T P Krishnakumar, CIT-DR For the Respondent : Ms Urvashi Sodhan, AR ORDER:- PER : Bench These appeals have been filed by the Revenue arising from the order of learned CIT(A), Gandhinagar, dated 30th November, 2012. Revenue has raised identically worded ground for all the years as follows: The learned CIT(A) has erred in law and on facts in holding that the notice issued u/s. 153C r.w.s. 153A of the Act was not valid ignoring the fact that the seized material pertains to the assessee and the same had been recorded in para 1 of the assessment order passed u/s. 153A(b) of the Act. 2. Facts in brief as emerged from the Assessment Year 1998-99,the lead year, a per an order passed u/s. 153A(b) of IT Act, dated 28.03.2006 were that there was a search on Bata group on 04.09.2003. There was also a search at the residence of one Sri Kirit B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted an additional ground and thereupon restored the matter back to the stage of learned CIT(A) to adjudicate the said additional ground in the following manner:- Having heard both the sides, we have carefully gone through the orders of the authorities below. Keeping in view the judgment of the Hon ble Supreme Court in the case of National Thermal Power (supra), we admit the additional ground of appeal. The Hon ble Madhya Pradesh High Court in the case of CIT v/s. Tollaram Hospital reported in 298 ITR 22 (MP) held that the Tribunal permitting additional ground to be raised for the first time, Tribunal should remand the case to the Commissioner (Appeals). We, therefore, following the judgement of the Hon ble Madhya Pradesh High Court, set aside the order of the ld. CIT(A) and direct the ld. CIT(A) to decide the additional ground raised in all the six appeals. After adjudicating the additional ground, if necessary, the ld. CIT(A) will decide all the grounds, raised originally, afresh, after giving opportunity of being heard to both the sides. 4. In consequence, the learned CIT(A) has decided the issue on the directions of the respected co-ordinate Bench in the following ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e such other person notice and assess or reassess income of such other person. However, there is a distinction between the two provisions in as much as under s. 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belong to such other person, whereas under s. 158BD if the AO is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132 or whose books of account or other documents or assets were requisitioned under s. 132A, he shall proceed against such other person under s. 158BC. Thus a condition precedent for issuing notice under s. 153C and assessing or reassessing income of such other person, is that the money, bullion, jewellery valuable article or thing or books of account or documents seized or requisitioned should belong to such person. If the said requirement is not satisfied, resort cannot be had to the provisions of s. 153C of the Act. In the present circumstances, discussed in detail as above; it is held that the condition precedent for issuance of notice is not fulfilled and therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adjudication of that legal ground. According to her, learned CIT(A) was duty bound to act upon the directions of the Tribunal. Learned CIT(A) has asked the concerned AO to give the report and once he was satisfied that the required satisfaction note was not available in the assessment record then he has proceeded to decide that the condition precedent for invoking the proceedings u/s.153C was not fulfilled. She has further pleaded that learned CIT(A) has rightly placed reliance on the case of Sri Vijaybhai N. Chandrani, 231 CTR 474 (Guj.). On this issue, learned AR has also placed reliance on DSL properties (P.) Ltd Meghmani Organics (Tax Appeal No.2077, 2078 2086 of 2009) order dated 27.4.2011 of Hon ble Gujarat High Court. She has also objected the argument of learned CIT-DR revolving around the provisions of Section 124 of IT Act. In this connection, she has placed on record a portion of the commentary of Kanga, Palkhivala and Vyas, (The that irregular exercise of jurisdiction is a different thing, however, an assumption of jurisdiction should necessarily be as per law. In respect of an irregular exercise of jurisdiction Section 124 prescribes that the assessee has to ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that AO who has jurisdiction over such other person shall proceed against such other person. Therefore, the pre-condition is that the AO must be satisfied that it belonged to other person and on being recording satisfaction the case record/seized material is required to be forwarded to the AO of such other person. This is not the question of an incompetency in the jurisdiction but according to us if a satisfaction is not recorded then this is an irregular exercise of assumption of jurisdiction. There are several cases cited by the assessee wherein the importance of the condition precedent for issuance of notice u/s. 153C has been appreciated and held that the recording of satisfaction by the AO of the person searched is a sine qua non before handing over of the seized material to the AO of such other person. 7.1 After analyzing this legal position we have examined the factual aspect that whether there was a satisfaction recorded before the initiation of proceedings u/s. 153C of IT Act ?. We have noted that the learned CIT(A) had given ample opportunity to the Revenue Department to place the required satisfaction if available on record. However, the Revenue Department had failed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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