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TMI Blog2014 (11) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... on note u/s 153C, which had not yet been received, therefore she wanted some time to file the same as and when the same are received. Therefore, before dictating the order, it was considered appropriate to refix the matter, therefore, the same was refixed and was finally heard on 26.09.2014. 2. At the outset, Ld. A.R. invited our attention to 1st ground of C.O. and argued that since assessee had raised legal ground for initiation of proceedings of assessment u/s 153C these should be first disposed off before hearing the matter on merits. Ld. A.R. invited our attention to paper book pages 34 to 38 and submitted that these are copies of letters obtained by assessee under RTI from various files of assessees whose premises were searched and action was initiated u/s 153A of the Act. It was submitted that from the letters obtained from the files of persons searched, it clearly emerges that no satisfaction note relating to other entities was available in the files of searched persons. In these circumstances, it was submitted that Hon'ble High Court in the case of DSL Properties Pvt. Ltd. 33 Taxman.com 420 and Hon'ble Delhi Tribunal in the case of Pepsi Foods Pvt. Ltd. Vs. ACIT in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assessee had not taken such legal grounds before Ld. CIT(A) and, therefore the assessee should not be allowed to take up such a stand at this stage. 4. Ld. A.R. in his rejoinder submitted that such ground was taken before Ld . CIT(A) also who had summarily dismissed this ground and in this respect, our attention was invited to paper book page 25 where a copy of written submissions before Ld . CIT(A) were placed. Our specific attention was invited to para 4-5 of such written submissions and commenting upon satisfaction note produced by Ld. D.R., the Ld. A.R. submitted that this satisfaction note as produced by Ld. D.R. relates to the satisfaction note recorded by A.O. of other person therefore, his contention that no satisfaction note was recorded by A.O. of searched persons with regard to other persons is correct. He submitted that the case law relied upon by him squarely covers the facts and circumstances of the present appeals. 5. We have heard rival parties and have gone though the material placed on record. The argument of Ld. D.R. that no such ground of not recording satisfaction was taken before, Ld. CIT(A) does not hold any force as from the copy of submissions before L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so becomes verifiable from the fact that assessee under RTI Act had obtained information regarding the fact that satisfaction note in respect of other entities was not found in the files of A.O. of searched persons as is evident from paper book pages 34 to 38. 6. In such circumstances, Hon'ble Delhi High Court in the case of Pepsi Foods P. Ltd. Vs ACIT has held as under: "6. On a plain reading of Section 153C, it is evident that the Assessing Officer of the searched person must be "satisfied" that inter alia any document seized or requisitioned "belongs to" a person other than the searched person. It is only then that the Assessing Officer of the search person can handover such document to the Assessing Officer having jurisdiction over such other person (other than the searched person). Furthermore, it is only after such handing over that the Assessing Officer of such other person can issue a notice to that person and assess or re-assess his income in accordance with the provisions of Section 153A. Therefore, before a notice under Section 153C can be issued two steps have to be taken. The first step is that the Assessing Officer of the person who is searched must arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of Section 158BD of the said Act which are entirely different from Section l53C. Under Section 158BD the Assessing Officer's satisfaction is with regard to 'undisclosed income' belonging to a person other than the searched person. It is obvious that such satisfaction under Section l58BD by its very nature has to be prima facie and tentative. The same methodology cannot be imported into Section 153C where, in our view, the Assessing Officer is required to arrive at a conclusive satisfaction that the document belongs to a person other than the searched person because such Assessing Officer has to rebut the normal presumptions which are suggested by the statute under Sections 132( 4A)(i) and 292C( 1 )(i) of the said Act. Therefore, the decision of the Allahabad High Court in the case of Classic Enterprises (supra) would not come to the aid of the Revenue. 8. Insofar as the decision in the SSP Aviation Ltd. (supra) is concerned we do not find anything therein which militates against the view that we are taking. In fact the very distinction between Section 153C and 158BD (although Section l58BD is not mentioned) is indicated by the following observations of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t search investigation, summons were issued to M/s Pepsi Foods Pvt. Ltd. to furnish certain details. The complete details were not furnished. The following documents were also found and seized during the course of search and seizure action u/s 132( I) of T.T. Act, 1961 belonging to (PFL)' M/s Pepsi Foods Pvt. Ltd. (PAN:AAACP l557E) over which the jurisdiction lies with the' undersigned: Ay/Ann./Page No. Description of Annexure C-4/A-2177 This page contains summary of PFL Claims as on 29-1/-2011 (Claims up to 31 II 0/20 II C-41 A-4118-20 These pages contain a detail of DVAT impact (April' 10- June' 10) Vs PFL Support report and MRP Plan. C-4/A-4/21-23 These pages contain a details of discount per CIS PDL VS PFL. C-4/A-4/27 These pages contain a details of status of PFL claims. C-4/A-S/S4 This page contains details of concentrate stock summary as on 31.12.2010. C-4/A-5/99 This page contains a summary of PFL claims as on 8/9/2011. Claims upto 31/8/20 II. C-4/A-S/100 This page contains a detail of PFL Support year 2011 Accordingly, section l53C of the LT. Act, 1961 is applicable to M/s Pepsi Foods Pvt. Ltd. which state that "where an Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of M/s. DSL Properties (P) Ltd and had submitted that in that case as in the present cases, the A.O. of searched person and that of persons covered u/s 153C were same and the Tribunal had held that in spite of A.O. being same, separate satisfactions has to be recorded. The relevant findings of Tribunal are reproduced below: "HELD ⦁From a reading of section 153C( 1) it is evident that action under section 153C can be taken in respect of any other person than the person searched if the Assessing Officer of the person searched is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents belong to a person other than the person searched. In such circumstances, he shall hand over to the Assessing Officer of such other person money, bullion, jewellery or other valuable article or thing or books if account or documents. Thereafter the Assessing Officer of such other person shall proceed against the said person to assess or reassess his income in accordance with the provisions of section 153A Therefore, recording of satisfaction by the Assessing Officer of the person searched that any money bullion, jewellery or other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ote is to be placed in the file of such other person and the relevant document should also be transferred from the file of person searched to the file of such other person. Thereafter in the capacity of the Assessing Officer of such other person, he has to issue the notice under section 153C read with section 153A. The Assessing Officer of the person searched and such other person may be the same, but these are two different assessees and, therefore, the Assessing Officer has to carry out the dual exercise, first as the Assessing Officer of the person searched, in which he has to record the satisfaction during the course of assessment proceedings of the person searched. After recording such satisfaction note in the file of the person searched, the same is to be placed in the file of such other person. Then in his capacity as the Assessing Officer of such other person, he should take cognizance of such satisfaction note and thereafter issue notice under section 153C." In the instant case this exercise of recording the satisfaction during the assessment proceedings of the person searched has not been carried out. On the other hand, the Assessing Officer recorded the satisfaction in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r evidence recovered relates to another assessee, which may or may not lead to an assessment in the ease of the other assessee after transfer of the file to his AO. This is only an internal arrangement to be made between two Departmental Officers and in this regard the only fact that needs to be verified is whether the assessee whose books of accounts or materials are recovered in the course of search of any other assessee, is a regular assessee before another officer, and if so, to transfer the file to such other officer for his consideration and for passing orders, whether assessment or penalty or such other order permissible under the Act by that officer. Admittedly, in this case, the AO, who conducted the search and who obtained materials and evidence about the income of the assessee rightly transferred the files to the AO of the appellant at Kozhikode, who has jurisdiction to assess him, and it is only on receipt of such files and materials from the AO from Mangalore, the assessee's assessments were taken up and completed under s. 153C r/w s. 153A. Therefore, there is no merit in the contention of the assessee's counsel that satisfaction was not recorded by the AO at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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