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2015 (5) TMI 362 - HC - Income TaxValidity of proceedings under section 153-C - whether no satisfaction is recorded by the AO before initiating proceedings under section 153-C as held by ITAT admitting additional evidence? - Held that:- The Assessing Officer did not allow inspection of the record to the assessee or its counsel and that is why they have raised additional ground about validity of the proceedings under section 153-C. That is about absence of any satisfaction being recorded by the officer who was assessing the search party. In terms of section 153-A and 153-C proceedings can only be initiated after the Assessing Officer arrives at a satisfaction that the seized material pertains to other persons, namely, persons other than the searched party. It is only then the persons other than the searched parties can be proceeded against. There is nothing in the assessment order which would indicate that the assessment officer arrived at such satisfaction. The Tribunal noted that it has allowed this additional ground to be raised after hearing the departmental representatives' objection. To do complete justice and to both sides the Tribunal gave enough opportunity to the Revenue to produce the files and if the same contain the satisfaction of the Assessing Officer, then, to rely upon it before the Tribunal. The Tribunal noted that more than 20 months passed after the first direction to produce the record was issued. Despite repeated adjournments and as noted by the Tribunal in paragraph 9 of the impugned order, the satisfaction requisite for initiation of the proceedings under section 153-C was not available, in these circumstances, not only did the Tribunal find that it was necessary and in the interest of justice to permit raising of an additional ground, but to answer it. No substantial questions of law. - Decided against revenue.
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