TMI Blog2010 (4) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... . We are persuaded to agree that once there is no proper assumption of jurisdiction, an assessment made pursuant to such proceedings would have to be annulled. Though we hold that assessment stands quashed, in line with the decision of Shelly Products [ 2003 (5) TMI 4 - SUPREME COURT] we have to add that the assessee would be entitled to a refund only of the amount of tax paid, in excess of the tax due by him, on the basis of the income disclosed in his return. Appeal of the Revenue is dismissed. Levy of penalty - As we have already upheld the order of the Commissioner of Income-tax (Appeals) and quashed the assessment made on the assessee under section 153C read with section 143(3) of the Act for the impugned assessment year. Therefore the substratum for the levy of penalty has disappeared. Decided in favour of assessee. - Order The order of the Bench was delivered by Abraham P. George (Accountant Member).-The first two among the above are an appeal and the cross-objection by the Revenue and the assessee respectively, relating to the assessment year 1999-2000 and both arise out of the order of the Commissioner of Income-tax (Appeals) dated July 21, 2008. The last ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed cash balance for want of proof and the assessment was completed after making an addition of Rs. 35,54,943 to the returned income. While assailing the order of the Assessing Officer, one of the main grounds taken by the assessee was that there was absence of requisite satisfaction for invoking the provisions of section 153C of the Act. Relying on the notices issued by the Assessing Officer under section 153C of the Act, it was submitted by the assessee that no satisfaction was recorded with reference to materials assessed. Reliance was placed on the decision of the hon'ble apex court in Manish Maheshwari v. Asst. CIT [2007] 289 ITR 341. The learned Commissioner of Income-tax (Appeals) after comparing section 153C with section 158BD, was of the opinion that both these were couched in the same language and, therefore, the decision of the hon'ble apex court in Manish Maheshwari's case [2007] 289 ITR 341 applied with equal force for a proceeding initiated under section 153C of the Act as well. According to him, the notice issued in the assessee's case was very similar to the one issued in Manish Maheshwari's case [2007] 289 ITR 341. The Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied the requirements of section 153C of the Act and therefore, the assessment proceedings under section 153C were validly initiated. Reliance was placed on the decision of the Delhi Bench of the Tribunal in the case of Shivnath Rai Harnarain (India) Ltd. v. Deputy CIT [2008] 304 ITR (AT) 271 and that of Ms. Shyam Lata Kaushik v. Asst. CIT [2008] 306 ITR (AT) 117 (Delhi) ; 114 ITD 305 and the decision of the co-ordinate Bench in the case of Harvey Heart Hospitals Ltd. v. Asst. CIT (I. T. A. Nos. 1840, 1841 and 1843/Mds/08). Per contra the learned authorised representative submitted that both under section 158BD as well as under section 153C, the Assessing Officer has to be satisfied that undisclosed income belonged to any other person, for initiating proceedings of assessment on such other person. Relying on the decision of Manish Maheshwari's case [2007] 289 ITR 34, the learned authorised representative submitted that the words used in both sections 153C and 158BD were in pari materia. Hence according to him, the law laid down by the hon'ble apex court, if applied would show that the proceeding initiated was null and void. Adverting to the order sheet dated November 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the abovesaid assessee Sri M. N. Rajaraman has made huge deposits in M/s. Valliammai Society (Rs. 1.37 crores, as informed by the wing) and M/s. SRM Benefit Fund (Rs. 36 lakhs, as per wing) in his own name as well as in the names of his Hindu undivided family and family members and that the deposits are unaccounted. It was also found that there are some bank accounts which were not at all disclosed by the assessee till then. In view of this information, action is initiated under section 153C of the Income-tax Act and a notice under section 153C read with section 153A is issued herewith for the assessment year 1999-2000. Any assessment or reassessment proceedings pending for the abovesaid assessment year gets abated accordingly. (Sd.) November 21, 2005. Deputy Commissioner of Income-tax, Central Circle-I(3), Chennai-34. Notice under section 153C served on November 23, 2005. The contention of the assessee is that the above notice would not suffice the requirement of section 153C of the Act. The Commissioner of Incometax (Appeals) has given a clear finding that the assessee had for the assessment year 2004-05, filed revised return showing entire deposits as income way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 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 the 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. Section 158BD.- Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other 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 the Assessing Officer shall proceed (under section 158BC) against such other person and the provisions of this Chapter shall apply accordingly. No doubt both the sections use a starting terminology, which cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which you as individual/HUF/company/firm/AOP/BOI, are assessable/reassessable for the period mentioned above. The return should be in the form as prescribed in sub-rule (1) of rule 12 of the Income-tax Rules, 1961, and should be delivered in this office within 30 days of the service of this notice, duly verified and signed in accordance with the provisions of section 140 of the Income-tax Act, 1961. The notice obviously does not speak of any satisfaction at all. As already mentioned by us, the order sheet entries dated November 21, 2005 would not be sufficient to hold that the Assessing Officer was satisfied on any items of the nature mentioned in section 153C of the Act, to belong to the assessee. On the date of recording of the so-called satisfaction, viz, November 21, 2005, the assessee had already filed revised returns disclosing such deposits as its income and taxes due thereon stood paid. No doubt, the satisfaction need not be specifically stated in so many terms, but it should be discernible from the recordings made by the Assessing Officer. We are therefore of the opinion that the learned Commissioner of Incometax (Appeals) rightly held the satisfaction required und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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