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2014 (12) TMI 54 - AT - Income TaxAssumption of jurisdiction by the AO before issuing notice u/s 153C - Validity of order passed u/s 153C/143(3) – Search and seizure u/s 132 – Held that:- There was nothing wrong in the satisfaction note and the forwarding of the entire matter by the Income Tax Officer, Ward-Ill (2), Ahmedabad to the AO of the petitioner at Bareilly - all the requirements of Section 153(c) were complied with by the Income Tax Officer, Ward-Ill (2), Ahmedabad - a search u/s 132A was carried out and bullion was seized - assessee established that the seized silver belongs to M/s Sarvesh Jewellers, Bareilly - the ownership and consignment of the petitioner was also confirmed by the AO of the petitioner at Bareilly - The Income Tax Officer, Ward-Ill (2), Ahmedabad did not commit any error in law, in recording the satisfaction note requesting the petitioner’s Assessing officer to proceed under Section 153(c) - the officer u/s 153C, where he find that seized articles belong to some other person, has to forward a satisfaction note to the AO on such person - The satisfaction in such case is in respect of the material and disclosures of the person with which the articles or assets are found and not in respect of the person who whom they belong. In DSL Properties Pvt. Ltd. Vs. DCIT [2013 (9) TMI 123 - ITAT DELHI] it has been held that if the AO is assessing the person searched as well as other person whose assets, books of account or documents were found at the time of search, then also, first while making the assessment in the case of the person searched, he has to record the satisfaction that the money bullion, jewellery or other valuable article or thing or books of account or documents belonged to the person other than the person searched - Then the copy of this satisfaction note is to be placed in the file of such other person and the relevant document should also be transferred from the file of the person searched to the file of such other person - the documents referred to in section 153C which is found during the search u/s. 132, which are seized or requisitioned belongs to a person other than the person searched and there should be a clear finding to that effect based on which only satisfaction as envisaged u/s. 153C can be inferred – there was no mention of any valuable articles or things or any books of account or documents have been referred even in the assessment order for framing assessment u/s 153C - the returns were originally filed and processed and no additional material is found pertaining to the assessee which it is held to be belonging to the assessee, the AO does not assume jurisdiction for framing assessment u/s. 153C read with section 153A - The AO lacks jurisdiction to initiate proceedings u/s. 153C against the assessee and the issuance of notice itself is null and void and is set aside – Decided in favour of assessee.
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