TMI Blog2013 (11) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in such books of account or documents. The language used in section 153C is materially different from the language used under section 158BD. As per section 158BD, if any undisclosed income relates to other person, then action against such other person can be taken provided such undisclosed income is referable to the document seized during the course of search. However, section 153C says that if valuable or books of account or documents belonging to other persons are seized then action under section 153C can be taken against that person. In the instant case, books of account or documents do not belong to the assessee and, therefore, the AO was not justified in initiating action under section 153A read with section 153C of the Act – In the instant case, primary condition for issue of notices under section 153C of the Income-tax Act are not satisfied and, hence, the assessing officer was not justified in initiating proceedings under section 153C of the Incometax Act for all the assessment years under dispute – Decided against the Revenue. - ITA Nos. 1375 to 1378/Bang/2010 - - - Dated:- 13-1-2012 - Shri N. Barathvaja Sankar And Shri George George K, J.M,JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgement of the Hon ble High Court of Gujarat in the case of Vijaybhai N. Chandrani v. ACIT reported in 231 CTR 474 (Guj) and also the findings of (i) the earlier Bench in the case of P Srinivasa Nayak reported in 117 ITD 201 and (ii) the Hon ble ITAT, Ahmedabad Bench in Meghmani Organics Ltd v. DCIT [129 TTJ 255], the CIT (A) had observed thus: (On page 14) In view of the fact and judicial pronouncements discussed above as the primary condition for issue of notices under section 153C of the Incometax Act are not satisfied, hence, the assessing officer was not justified in initiating proceedings under section 153C of the Income-tax Act for the above assessment years, accordingly, the appeals in Ground No.6 9 are allowed . 6. Not satisfied with the finding of the CIT(A), the Revenue has come up with the present appeals. The Revenue s submissions were the following : (i) that the CIT (A) had overlooked the fact that the documents seized from the premises of Shri R.K.Miglani, Secretary of UPDA contained the details of illegal payments by various distilleries including the assessee company and that Sri Miglani had maintained the documents on behalf of the members of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le or books of account or documents belonging to other persons are seized, then action u/s 153C of the Act can be taken against such persons. Illustrating further with regard to s. 153C (1) of the Act, the Ld. A R argued that for assumption of jurisdiction u/s 153c of the Act, the AO, of the searched person: (i) has to arrive on a satisfaction that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized belongs or belong to other person respect of which the proceeding u/s 153C are to be initiated, and then (ii) hand over such money, bullion, jewellery or other valuable article or thing or books of account or documents to the AO having jurisdiction over the other person. Only after the satisfaction of the above two conditions by the AO having jurisdiction over the searched person, the AO having jurisdiction over the other person is empowered to issue notice u/s 153C of the Act and assess or reassess the total income in accordance with the provisions of s. 153A of the Act. The basic difference of the provisions u/s 158BD and 153C of the Act is in regard to the satisfaction to be arrived by the AO of the person searched. In the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments, the Ld. AR submitted that the valid proceedings u/s 153C of the Act can only be initiated when the books of accounts or documents belongs to the appellant are seized from the premises of the person searched and those documents are handed over to the AO having jurisdiction over the appellant. 7.1. In conclusion, the Ld. A R submitted that in the case of the present appellant, it is quite evident as there were no documents belonging to the appellant seized and, hence, the same were not handed over to the AO who was having jurisdiction over the appellant, but, only Xerox copies were made available to the AO of the appellant. Without receiving the documents belonging to the appellant seized from the AO having jurisdiction over the searched person, the proceedings u/s 153C of the Act cannot be initiated. 8. We have carefully considered the rival submissions, perused the relevant records and also the case laws on which reliance was placed. 8.1. During the course of action u/s 132 of the Act at the residential premises of Sri Miglani, some incriminating documents purported to have been unearthed which, according to Revenue, revealed illegal payments made by various distilleri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A . However, in the present appellant s case, no books of account nor any incriminate documents pertaining to the appellant were seized when a search was conducted in the residential premises of Sri Miglani and that no books of account or documents or assets seized or requisitioned were handed over to the assessing officer having jurisdiction over the appellant, but, only (Para 3 of Asst. order) 3 .A satisfaction note for initiation of action u/s 153C/148 in the case of CBDL was also received from the DCIT, CC-19, New Delhi . Thus, the AO, in our considered view, was not within his realm for initiation of proceedings u/s 153A r.w.s 153C of the Act in the case of the present appellant. 8.1.3. Even from the legal angle too, the AO was not justified for initiation of action u/s 153A r.w.s 153C of the Act, as held by the Hon ble Bench in the case of P Srinivas Naik v. ACIT reported in (2008) 114 TTJ (Bng) 0856 wherein it has been declared that: 7. We have heard both the parties. It is an undisputed fact that books of accounts or documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verall consideration of the facts and circumstances of the issue as deliberated upon judicial as well as on merits in the foregoing paragraphs and in conformity with the findings of the jurisdictional Hon ble Bench as well as the Hon ble Gujarat High Court cited supra, we are of the firm view that when the conditions precedence for issuance of notice u/s 153C r.w.s. 153A were not fulfilled, as rightly ruled by the Hon ble Gujarat High Court, any action taken u/s 153C of the Act stand vitiated . 8.1.5. On an identical issue, the Honble High Court of Gujarat in the case of Vijaybhai N Chandrani v. ACIT reported in (2010) 231 CTR 474 (Guj) ruled in a similar way thus: 13. Thus, a condition precedent for issuing notice under section 153C and assessing or reassessing income of such person, is that the money, bullion, jewellery or other 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 section 153C of the Act. 8.2. Taking all the above facts into consideration and also the judicial pronouncements on a similar issue as discussed ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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