TMI Blog2016 (9) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... he is required to record his satisfaction. In the light of the factual matrix of the case duly supported by the circular, we find that the assessee has a strong case on this issue. We, accordingly, hold that proceedings u/s 153C/143(3) for both the assessment years under appeal were void ab initio as the fundamental requirement of recording the satisfaction note was not complied with. Hence, the assessments for both the years are quashed - Decided against revenue - ITA Nos. 1144 & 1145/Del/2009, ITA No. 2322/Del/2009 - - - Dated:- 11-8-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER For The Assessee : Dr. Rakesh Gupta, adv., Sh. Somil Agarwal, Adv. and Sh. Abhishek Anand, Adv. For The Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s 153C and completed the assessment without recording satisfaction in case of the person searched and hence the assessment so made u/s 153C deserves to be annulled. However, the ld. CIT(A s) noted that it was undisputed that the papers found in the residential premises of the two directors namely Shri Babu Ram Singla and Shri Harish Singla were belonging to the assessee company only. The ld. CIT(A s) also referred to some loose papers found during the course of search and noted that the transactions as appearing in these loose papers were also duly accepted by the assessee as relating to its business deals and recorded in the books. The ld. CIT (A s) also noted that even on the day of search and subsequently both the above named Dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 2007-08 2008-09. He referred to a communication bearing F.No. ACIT/CIRCLE 36(1)/2010-11/382 dated 31/03/2011 addressed to the ld. CIT DR-IV, ITAT, New Delhi and originating from the ACIT, Circle 36(1), New Delhi in which the ACIT has accepted that on going through the records in the cases of Shri Babu Ram Singla, Smt. Laxmi Singla Shri Harish Singla no satisfaction note as per section 153C recorded by the AO was on record. A copy of this communication was also placed before us. The ld. AR also drew our attention to Circular No. 24/2015 dated 31/12/2015 which specifically deals with the issue of satisfaction note and submitted that in view of this Circular issued by the CBDT the Department ought to withdraw/not press pending litigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 58BC of the Act; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings' arc completed under section 158BC of the Act of the searched person. 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were void ab initio as the fundamental requirement of recording the satisfaction note was not complied with. Hence, the assessments for both the years are quashed and ground no. 1 of the assessee s appeal for both the years is allowed. As other grounds have become academic in nature, they are not being adjudicated upon. 8. In the result, ITA No. 1144/D/09 1145/D/09 preferred by the assessee are partly allowed. 9. As far as ITA No. 2322/Del/09 preferred by the Department for AY 2006-07 is concerned. It is seen that the Department has agitated the deletion of addition of ₹ 10 lacs only. Keeping in view the CBDT Circular No.21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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