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2016 (5) TMI 962 - ITAT AHMEDABAD

2016 (5) TMI 962 - ITAT AHMEDABAD - TMI - Correctness of assessment made u/s. 153A r.w.s. 153C - Held that:- On pertinently questioned about the satisfaction of the Assessing Officer in the case of searched person i.e. Garden Group of Surat, revenue is unable to point out any such satisfaction of Assessing Officer in case of Garden Group. It had been emphatically argued before us that the Assessing Officer is the same person, such satisfaction when recorded in case of the present assessee should .....

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u/s. 153C has not been fulfilled. It would be appropriate and as per the ratio laid down in case of Assistant Commissioner of Income-tax v. A.R. Enterprises reported in (2013 (1) TMI 345 - SUPREME COURT ) to quash the notice issued against the assessee and the assessment order passed pursuant thereto. As the order of the First Appellate Authority is not in consonance with the law laid down by the Hon’ble Supreme Court (supra), we set aside the same and quash the assessment order. - IT(SS)A. No: .....

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53A r.w.s. 153C of the Act. It is the claim of the assessee that the ld. CIT(A) erred in upholding the validity of the proceedings initiated by the A.O. u/s. 153A r.w.s. 153C and the consequential assessment order. 3. Before going into the merits of the case let us first examine the correctness of this ground of appeal qua the assessment order made u/s. 143(3) r.w.s. 153C of the Act. 4. A search action u/s. 132 of the Act was carried out at the business as well as residential premises of the Gar .....

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back up. 7. After considering the facts and the submissions to the queries raised during the course of the assessment proceedings, the A.O made an addition of ₹ 53,27,398/-. 8. Assessee carried the matter before the ld. CIT(A) and vehemently challenged the correctness of the assessment order so made. The main contention of the assessee was that no satisfaction was recorded prior to the issue of notice u/s. 153C of the Act, which has made the entire assessment order bad in law and without j .....

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tated before the lower authorities. In support of his claim, the ld. counsel relied upon the decision of the Hon ble High Court of Gujarat ( Jurisdictional High Court ) in the case of Lalitkumar M. Patel in Tax Appeal No. 192 of 2012. Per contra, the ld. D.R. could not bring any distinguishing decision in favour of the revenue. 10. We have given a thoughtful consideration to the orders of the authorities below. We have also gone through the decision of the Hon ble Jurisdictional High Court (supr .....

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ssessment in terms of Section 153A in respect of any other person, the condition precedent where for is that satisfaction must be recorded by the Assessing Officer that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to; or any books of account or documents seized or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to Section 153A, then, the books of account or docum .....

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ction 132, or documents or assets have been requisitioned under Section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under Section 132A or documents or assets have been requisitioned under Section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of Section 158BC in respect of any other person, the conditions precedents wherefor are : (i) Satisfaction must be recorded by the Assessing Officer .....

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be satisfied before the provisions of the said chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under Section 132A of the Act. Xxx 16. Law in this regard is clear and explicit. The only question which arises for our consideration is as to whether the notice dated 06.02.1996 satisfies the requirements of Section 158BD of the Act. The said notice does not record any satisfaction on the pa .....

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the person other than the person with respect to whom search was made under sec. 132 or whose books of account or other documents or any assets were requisitioned under sec. 132A, shall proceed against such other person as per the provisions of Chapter XIV-B which would mean that on such satisfaction being reached that any undisclosed income belongs to such other person, he must proceed to serve a notice to such other person as per the provisions of sec. 158BC of the Act. If the Assessing Offic .....

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t Commissioner of Income-tax v. A.R. Enterprises reported in (2013) 350 ITR 489 (SC) has held thus: 14. A bare reading of the afore-extracted provision makes it clear that the condition precedent for invoking a block assessment is a search conducted under section 132, or documents or assets requisitioned under section 132A. Moreover, section 158BD permits the application of the provisions of this Chapter only on the satisfaction of the Assessing Officer that the seized documents show undisclosed .....

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made under Section 132 of the Act; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person; and (iii) the Assessing Officer has proceeded under Section 158BC against such other person. 14. In Asst. CIT v. Hotel Blue Moon [2010] 3 SCC 259 at page 264, one of us (H L Dattu J.), while explaining the purport of Chapter XIV-B of the Act, has observed that a search is the sine qua non for th .....

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Chapter XIV-B. Further, according to section 158BD of the Act, the Assessing Officer must record his or her satisfaction that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act. 10. Thus the law laid down on the subject is very clear that for taking recourse to block assessment under section 158BC in relation to the person not searched, whenever search has been conducted under section 132 or the documents have be .....

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n 158BC against such person who has not been searched. 15. In the instant case, as could be seen from the record, search had been carried out in case of Garden Group of Surat. On examination of the relevant documentary evidence, we find that the A.O has issued notice u/s. 153C of the Act which contains a reference to the satisfaction. However, it can be seen that the satisfaction recorded by the A.O is in the case of this very assessee. The relevant notice read as under:- Notice u/s. 153C of the .....

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nt/documents seized belongs to you. Therefore your income of six assessment years immediately preceding the assessment year relevant to previous year in which the search was conducted i.e. from A.Y. 2003-04 to A.Y. 2008-09 is required to be assessed/reassessed in accordance with the provisions of section 153 of the Act. You are, therefore, required to furnish return of your income u/s. 153C of the I.T. Act 1961 for A.Y. 2007-08, being one out of the above six assessment years in respect of which .....

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