TMI Blog2017 (4) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... While the ledger account extract may be relevant for AY 2010-11, it cannot be said to be incriminating material warranting re-opening of the assessment. The return originally filed by the Petitioner for the said AY 2010-11 was picked up for scrutiny and finalised by an assessment order under Section 143 (3) of the Act. The payments of commission to RGEPL to the tune of ₹ 4.95 crores as reflected in the ledger account was already disclosed in the Petitioner's accounts which were examined while finalising the regular assessment. Therefore, the ledger account could not have led the AO to be satisfied that any income had escaped assessment for the AY 2010-11. The net result is that neither of the documents mentioned in the Satisfaction Note could have formed a valid basis for the AO to initiate proceedings against the Petitioner under Section 153 C of the Act for AY 2010-11 or any of the other years as proposed.- Decided in favour of assessee. - W.P. (C) 2768/2016 & CM APPL. 11636/2016 W.P. (C) 2769/2016 & CM APPL. 11637/2016 - - - Dated:- 25-4-2017 - S. Muralidhar And Chander Shekhar, JJ. For the Petitioner : Mr Sanjeev Sabharwal, Senior Advocate with Mr. Anshumaan Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B-100, Indl Area Naraina, Phase-I, New Delhi on 16/01/2013. It has been brought to the notice by the AO of M/s Earth Infrastructures Ltd,(in this case the AO is same as undersigned) in whose cases-action under section 132 of the Income Tax Act was taken place that various documents/books of accounts etc were found, and seized during the course of search and statement of various persons were recorded; The AO of the searched persons has recorded his satisfaction that the following seized papers / documents belonged to the assessee i.e. M/s ARN Infrastructure India Limited. Party No Name and, address of the person searched Details of Annexure Details of papers/documents seized 1. M/s Earth Infrastructures Ltd, at B-100, Indl Area, Naraina, Phase -1 New Delhi Annexure A/27 of panchnama dated 18.01.2013 Pages 120-122 are a extract from the books (Ledger) of M/s ARN Infrastructures India. Limited relating to M/s Real Gains Estate Pvt Ltd. Page no. 123 is a fetter ; written by ARN Infrastructures India Limited dated 27/1/2010. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year of search and not for the earlier years. It was further pointed out that as regards AYs 2007-08 to 2012-13, there was no pending assessment, and in the absence of any incriminating material, the question of re-opening those assessments that already stood completed, did not arise. Reliance was placed on the decision of this Court in CIT (Central)-III v Kabul Chawla (2016) 380 ITR 573 (Del). It was pointed out that for AY 2010-11, the payment of the commission as per the ledger account in the sum of ₹ 4.95 crores was part of its books of accounts that already stood disclosed during the regular assessment. It could not be said to be an incriminating material that pointed to concealment of income during AY 2010-11. 7. The ACIT by letter dated 18th March, 2016 responded to the above reply of the Petitioner. It was inter alia stated that decision of CIT-7 v. RRJ Securities Ltd (supra) was not acceptable since the Revenue had filed a Special Leave Petition (SLP) against the said judgment in the Supreme Court and the issue had not yet attained finality. Therefore, subject to the decision of the Supreme Court in the said case, the assessment for the AYs 2007-08 and 2012-13 we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation of proceedings under Section 153C of the Act was not bad in law. He reiterated the stand of the Revenue that since the SLP against the decision of this Court in CIT-7 v. RRJ Securities Ltd., (supra) was pending in the Supreme Court, it could not be said that the ratio of that decision was the settled legal position. 12. The decision in CIT-7 v. RRJ Securities Ltd. (supra) is categorical that under Section 153 C of the Act, the period of six years as regards the person other than the searched person would commence only from the year in which the satisfaction not is prepared by the AO of the searched person and a notice is issued pursuant thereto. The date of the Satisfaction Note is 21st July, 2014 and the notice under Section 153 C of the Act was issued on 23rd July 2014. The previous six AYs would therefore be from AY 2009-10 to AY 2014-15. This would therefore not include AYs 2007-08 and 2008-09. The decision in CIT-7 v. RRJ Securities Ltd. (supra) is also an authority for the proposition that for the proceedings under Section 153C to be valid, there had to be a satisfaction note recorded by the AO of the searched person. 13. As regards the seized documents, what is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings under section 153C of the Act, in respect of the Assessee would be without jurisdiction. 16. Therefore, it cannot be said that the letter dated 27th January, 2010 written by the Petitioner to RGEPL and recovered from the premises of RGEPL was a document which belonged to the Petitioner. 17. As regards the other document seized, and mentioned in the Satisfaction Note viz., the extract of the ledger account maintained by the Petitioner concerning the payments of commission made by it to RGEPL, even if it is held to 'belong' to the Petitioner, it could hardly be said to be an 'incriminating' document. This was a document relevant only for the AY 2010-11. It could not have been used for re-opening the assessments of the earlier years i.e. AYs 2007-08 to AY 2009-10, 2011-12 and 2012-13. This position again stands settled by the decision in CIT-7 v. RRJ Securities Ltd (supra). The fact that the Revenue's SLP against the said decision is pending in the Supreme Court does not make a difference sine the operation of the said decision has not been stayed. 18. While the ledger account extract may be relevant for AY 2010-11, it cannot be said to be inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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