TMI Blog2016 (3) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... /2015 dated 31st December, 2015, hold the initiation of proceedings u/s 153C to be invalid and quash the same - Decided in favour of assessee - ITA Nos. 4228/Del/2011 to 4233/Del/2011, Cross Objection Nos.364/Del/2011 to 369/Del/2011 - - - Dated:- 24-2-2016 - Shri G. D. Agrawal, Vice President And Shri Chandra Mohan Garg, Judicial Member For the Petitioner : Shri Sanjiv Shankar, CIT-DR For the Respondent : Shri Kapil Goel, Advocate ORDER Per Bench These appeals by the Revenue and the cross-objections by the assessee are directed against the order of learned CIT(A)-II, Delhi dated 14th July, 2011. 2. At the time of hearing before us, it is submitted by the learned counsel that by way of cross-objections, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C by the Revenue. He further pointed out that there is no incriminating material and the Assessing Officer has not based addition in any of the orders on the basis of seized material. On this ground also, in view of the decision of Hon'ble Jurisdictional High Court, the initiation of proceedings u/s 153C is not sustainable. 5. Learned CIT-DR, on the other hand, relied upon the order of learned CIT(A) and he stated that this ground was not raised before the CIT(A). Before the CIT(A), the assessee has raised the general ground about the validity of notice u/s 153C which has rightly been decided by the CIT(A) in favour of the assessee. If the assessee wanted to raise another ground relating to Section 153C, he could have raised the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aised the ground relating to validity of initiation of proceedings u/s 153C as well as the consequential assessment order passed by the Assessing Officer. That once a ground is raised, then fresh arguments relating to such ground can always be taken at any stage. Therefore, the contention of learned CIT(A) that the assessee is raising the fresh ground is untenable. 7. Now, coming to the merit of the validity of notice u/s 153C, we find that the search had taken place at the residence of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt.Ltd. and, during the course of search at their premises, certain documents belonging to the assessee were seized. In reply to the Right to Information Act, the Department has intimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n searched in accordance with provisions of Section 153A of the Act. (emphasis by underlining supplied by us) 8. From the above, it is evident that Hon'ble Jurisdictional High Court has held in clear words that first and foremost step for initiation of proceedings u/s 153C is for the Assessing Officer of the searched person to be satisfied that the assets or documents seized belong to the assessee. Admittedly, no such satisfaction is recorded by the Assessing Officer of the person searched. The CBDT, vide Circular No.24/2015 dated 31st December, 2015, held as under:- Subject : Recording of satisfaction note under section 158BD/153C of the Act reg.- The issue of recording of satisfaction for the purposes of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notice of all for strict compliance. It is further clarified that even if the AO of the searched person and the other person is one and the same, then also he is required to record his satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgement. Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BD/153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. 9. From the above, it is evident that the CBDT has accepted that the decision of Hon ble Apex Court in the case of M/s Calcu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her objections with regard to validity of the notice u/s 153C but since, in our opinion, the first and foremost step for initiation of proceedings u/s 153C i.e., the recording of the satisfaction by the Assessing Officer of the person searched is missing, the proceedings are invalid and, therefore, the other arguments of the assessee need not be examined in detail. We, therefore, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of RRJ Securities Ltd. (supra) and the Circular of CBDT No.24/2015 dated 31st December, 2015, hold the initiation of proceedings u/s 153C to be invalid and quash the same. Since the notice u/s 153C itself has been held to be invalid, the assessment order passed in pursuance the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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