TMI Blog2016 (8) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders passed by the CIT(A)-III, Hyderabad. Though the First Appellate Authority passed separate orders but the issues involved therein being common, they are taken-up together for the sake of convenience. 2. The assessee HUF raised several grounds in the grounds of appeal enclosed to Revised Form No.36. In addition thereto, a separate set of additional grounds of appeal were filed wherein it was contended that the Ld. CIT(A) erred in upholding the order of the Assessing Officer by invoking the provisions of section 153C of the Act without recording the satisfaction of the Assessing Officer who has carried out the search and forwarded the file to the Assessing Officer who has issued notice under section 153C of the Act. In short, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in person in this group and he is also covered under section 132. He is assessed to tax and he is having income from house property and other sources. A notice under section 153A was issued in this case on 28.02.2006 in the status of HUF. The assessee has not filed any returns of income. However, there was no warrant issued in the status of HUF. Hence, to avoid legal complications, notice under section 153C is issued as certain documents seized from assessee s house relating to HUF indicating undisclosed income. The Assessing Officer has already elaborately discussed in the assessment order. 2.1. The order sheet merely mentions as under : Search and seizure operation was carried out in the MVS Reddy Group. The assessee s case cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 132 of the Act. In the instant case, search proceedings were not carried out in the name of assessee HUF. However the Assessing Officer, in the order sheet, observes that assessee s case is covered under section 153A/C of the Act. The reasons recorded, apart from being vague, indicates that notice could not have been issued under section 153A of the Act. Once proceedings are initiated in the case of a person who was searched and if some incriminating material is found in respect of a person other than the person searched, the Assessing Officer should record his satisfaction that any money, bullion, jewellery or other valuable articles etc., belongs to such person, other than the person referred to in Section 153A, and there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons for initiating proceedings under section 153C are missing in the instant case. 6. It is well settled now that the provisions contained in section 153C can be invoked only when the Assessing Officer having jurisdiction over the search person records his satisfaction and thereafter, the Assessing Officer who has to initiate proceedings upon the assessee records his satisfaction; In the instant case, proper reasons were not recorded by both the Assessing Officers. At any rate nothing was brought on record by the Revenue to support its stand that appropriate reasons were recorded by the Assessing Officers concerned. 7. Under identical circumstances, the ITAT Hyderabad Bench in the case of Shettys Pharmaceuticals Biologicals Ltd., v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 153C of the Act in both the assessment years in this case. 8. On an appeal filed by the Revenue, the order of the ITAT was affirmed by the Hon ble A.P. High Court (ITTA.No.662 of 2014 dated 26.11.2014). Since no satisfaction was recorded by the Assessing Officer and the so-called reasons being vague, I am of the firm view that the initiation of proceedings under section 153C of the Act deserves to be quashed as it do not stand the test of law. Since the initiation of proceedings are held to be bad in law, it is not necessary for me to discuss the other issues urged by the assessee on merits. 9. In the result, appeals filed by the assessee are treated as allowed. Order pronounced in the open Court on 09.08.2016. - - TaxT ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
