TMI Blog2016 (11) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... to our notice. Even it was also not shown whether any notice u/s 143 (2) was issued. Accordingly, we set aside the order passed by the lower authorities and the appeals of the assessee are allowed. - ITA No.926 to 931/Mum/2013 - - - Dated:- 30-9-2016 - SHRI R.C.SHARMA, AM AND SHRI C.N.PRASAD, JM For The Assessee by : Shri Bhupendra Shah For The Revenue : Shri Rahul Raman ORDER PER BENCH : These are the appeals filed by the assessee against the order of CIT(A), Mumbai, for the assessment years 2002-03 to 2007-08, in the matter of order passed u/s.143(3) r.w.s.153C of I.T.Act. 2. Common grounds have been raised in all the years under consideration. 3. Rival contentions have been heard and record perused. Facts in brief are that there was a search u/s.132 in the Raisoni-Sancheti group of cases. As a part of the said group, the director of assessee-company Shri Chaitanya Kochar was also covered under the search conducted. During the course of the search undertaken, it was found that the assessee-company was a paper company used by the Raisoni-Sancheti group as a conduit for brining unaccounted income of the group into its regular books by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmitting that approval to issue' notice U/s 148 taken by I.T.0.6(3)(2) has nothing to do with approval as required U/s'153 D before passing the order of assessment by ACIT 6(3) on 31-12-2010. 3) Learned AO erred in passing assessment order U/s 143(3)without any service of notice U/s 153 C, 143(2) and 142(1). Learned CIT appeal erred in not holding the assessment order passed by AO without service of any notice U/s 153C or U/s 143(2) or 142(1) as illegal. Statement of facts filed by appellant before CIT Appeals very clearly mentions that the impugned assessment order is passed without service of any notice U/s 153 C or 143(2) or 142(1) and hence bad in law and null and void and assessee clearly mentioned that the only communication received by the assessee was a telephone call at Directors Mobile No.9822224177 on 23-12-2010 from ACIT 6(3) Shri Alok Singh stating that proceedings under section 153 C are initiated against appellant. Learned CIT Appeals also admitted in her order that Statement of Facts filed by appellant was never objected by AO irrespective of ITNS 51 issued and served on him by CIT Appeals on 2-05-2011. 4) Learned CIT Appeals erred in giving be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information to the AO of the appellant Company, the Dy.ClT CC 2(3),Nagpur was the AO for Mr. C. Kochar by virtue of jurisdiction conferred upon him by the order passed on 7-03-2008 bY,ClT-11 Nagpur even though Mr. C. Kochar Challenged the said Jurisdiction before the Hon'ble Bombay High Court. Assessee filed. copy of order of Honourable Bombay High Court quashing the order U/s 127 passed by CIT 11 Nagpur dated 7-03-2008 and their Honour also quashed the assessment orders against shri C. Kochar being passed without jurisdiction by Dy. CIT Central Circle2(3) Nagpur. Learned AO and CIT Appeals failed to understand that by virtue of order of Hon'ble Bombay High Court quashing order U/s 127 dated 7-3-2008 Jurisdiction of person searched never vest in AO at Central Circle Nagpur for a single' day but is for all the period vest only with Income Tax Officer, Wardha: Thus satisfaction of the Dy.ClT CC 2(3) Nagpur and forwarding of document by him to the' AO of appellant is of no value as regards provisions of section 153 C are concerned. 7) Learned AO and learned CIT Appeals erred in not considering the fact that assessment was made without fallowing the principa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction that income belongs' to appellant by the AO of person searched. 10) Learned AO erred in making additions in the hand of assessee even though the AD of person searched (Mr. CKochar) informed him to make only protective assessment . Learned CIT Appeals though observed that A protective assessment is made to ensure that same income does not get taxed twice a different hands, erred in not considering that it was already been added substantively in the hands of person searched Mr. C. Kochar by order U/s 143(3) r.w.s. 153A by AO Central Circle Nagpur on 23-12-2009. So question of adding same again in the' hands of assessee does not arise irrespective of the letter of the AO of person searched that substantive additions are made in the hands of person searched Mr. C Kochar and AO of the appellant is only required to make protective additions. 11) learned ClT Appeals erred in not considering the fact that assessee was regularly assessed to ITO 6(3)(2) Mumbai and his case was transferred to ACIT 6(3) without any communication of the' order to the assessee. As per order of CIT Appeals , case of the assessee stood transferred from ITO 6(3)(2) to ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned CIT Appeals erred in not considering the submission filed by assessee that assessment U/s 153 C is time barred. The AO of assessee received information from I\CIT C.C.1(1) Nagpur AND further received a letter dated 19-09-2008 from Dy. ClT Central Circlc2(3) Nagpur on the basis of this reason notice U/s 153 C of the Act was issued.(Page 2 para 3 of Assessment order for A.Y.2005-06).The Search Action u/s 132 on Mr. Chaitanya Kochar was completed on 8-09-2007 and thus as per provisions of section 153 B assessment U/s 153 C was to be completed before 30-12-2009.The order passed by AO of assessee is on 31-12-2010 and thus barred by time as per provisions of section 153B. 14) Learned CIT Appeals erred in not considering the fact that order of assessment was not even passed on 31-12-2010. It was served on the assessee on 15-03-2011. There was no record available to justify that order was passed and issued to the assessee on 31-12-2010. There is no reason for such a delayed service of order along with demand notice after a lapse of 75 days of passing of the order. 15) Learned AO erred in not considering that Appellant had fully disclosed with all necessary documents th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued by ld. AR that AO erred in passing assessment order u/s.143(3) rws 153C without obtaining prior approval of JCIT u/s.153D and hence bad in law. Since no approval is taken before passing the assessment order it was not mentioned in the body of assessment order. Our attention was also invited to application filed u/s.6 of the RTI Act on 9-4-13, 16-4-13, 22-5-13 and 28-5-13 asking for copy of proof of approval obtained u/s.153D for the assessment year 2002-03 to 07-08. However, no such approval was given. We found that in reply to the RTI application, department has only supplied copy of the order of Commissioner of Income Tax-6, Mumbai dated 23-7-2010 and no approval was obtained by AO u/s.153D was supplied in reply to the RTI application. However, CIT(A) has treated approval to reopen the case u/s.147 r.w.s.148 to be the approval available to the AO for passing assessment u/s.153D. 6. It was contended by ld. AR that AO erred in passing assessment order u/s.143(3) rws 153C even though there was no satisfaction report as contemplated u/s.153-C and hence any proceedings u/s.153-C were rendered null and void. Reliance was placed on the decision of the Supreme Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 may be brought to the 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 judgment. 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. In view of the above, recording of satisfaction before proceedings u/s.153C is mandatory, which is lacking in all these cases. 10. From the record we found that these appeals were filed on 04/02/2013 and the Bench has asked DR to produce copy of approval from Joint Commissioner of Income Tax as prescribed u/s 153D. The department was also asked to confirm as to whether u/ ..... 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