TMI Blog2018 (10) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the assessee are arising out of the order of Commissioner of Income Tax (Appeals)-51, Mumbai [in short CIT(A)], in appeal No. CIT(A)-51/IT-14/2013-14, dated 11.09.2015. The Assessment was framed by the Asst. Commissioner of Income Tax, Central Circle 34, Mumbai (in short ACIT/ AO ) for the A.Y. 2008-09 vide order dated 29.12.2011 under section 143(3) read with section 153C of the Income Tax Act, 1961 (hereinafter the Act ). 2. At the outset, the learned Counsel for the assessee stated that the assessee has raised jurisdictional issue in its cross objection against the order of CIT(A) upholding the validity of assessment under section 153C of the Act in the absence of any incriminating material found during the course of search under section 132 of the Act. Further, according to the learned Counsel there is no satisfaction recorded by the AO of the searched person as required under section 153C of the Act. For this assessee has raised the following two grounds in its Cross Objection: - 1. The Ld. CIT(A) has erred in law and in facts in upholding the validity of assessment under section 153C of the Act in absence of any incriminating material found during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need not be reduced in writing. The CIT(A) dismissed this issue vide Para 9 of its order as under: - 9. In general, Ground No. 1 to 4 relate to challenging of the authority of assessment order passed u/s 143(3)/153C of the I.T. Act. In this case, a search was conducted in the Gangadhar Shetty group. This group is engaged in the business of dealership of motor cars of Tata Motors, Motorcycles c. Hero Honda and dealership of car and motor cycle spare parts. The appellant company was floated by Shri Dinesh Punia alongwith Shri Madhusudhan Budhia. After its formation, the appellant company entered into the development agreement with MIs Sagar Developers, a partnership firm of Mr. Gangadhar Shetty and Mr. Diwakar Shetty with 3 other partners, for buying development rights in respect of sale component area of 5344.74 sq.mt. involved in the SRA project at Gundavali Village, Andheri (E), Mumbai. While perusing the assessment records and the seized material it is found that the development agreement entered into by the appellant company and M/s Sagar Developers Pvt. Ltd. was apparently for the consideration of ₹ 8.5 Crs. Shri Gangadhar Shetty in his statement on oath dated 15.10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on this ground. Accordingly, Grounds 1 to 4 are dismissed. Aggrieved, now assessee is in second appeal before Tribunal. 5. At the outset, we have gone through the order sheet entries recorded by the Tribunal on various dates, which reads as under: - 08.05.2018 Ld. Departmental Representative is directed to convey to the Assessing Officer to provide the document like satisfactory notes within one month from today. Hearing is adjourned to 27.06.2018. Both parties informed.(a/w Co 257/M/17) Sd/- sd/- (MKA (JS) AM) (JM) 27.06.2018 Hearing is adjourned to 31.07.2018 at the request of Ld. DR. The case records related this case are not available. Both parties informed (a/w Co 257/M/17) Sd/- sd/- (RJK) (CNP) AM) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the Ld. CIT-DR to provide the copy of the satisfaction note within one month to the assessee. The same was not provided to the assessee. At the time of hearing on 27.06.208, the Ld. CIT-DR once again requested for time to obtain the copy of satisfaction note. Subsequent to the aforesaid hearing and the directions given by the Hon ble Bench, the assessee had also followed up with the Assessing Officer. However, till date, the copy of satisfaction note has not been provided to the assessee. 7. From the above and the fact that the assessee has also requested for copy of satisfaction note before the AO during the course of assessment proceedings vide letter dated 20.04.2012. But the assessee was not granted the copy of any satisfaction note recorded by the AO of the search person or any other satisfaction note. This fact is also recorded by CIT(A) in his order and particularly in para 9 while adjudicating this issue he recorded that, as regards the issue of satisfaction is concerned, the AO of the searched person and the person assessed u/s 153C is the same. Hence, it is not required to record a separate satisfaction in this regard. Several judicial pronouncements have establ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rson searched is a condition precedent for the AO of the 'other person' to acquire jurisdiction. Unless such jurisdictional condition is satisfied, there can be no question of making assessment or reassessment of the 'other person.' Subsequently, the Central Board of Direct Taxes (in short CBDT) vide Circular No. 24/2015 F. No. 273/Misc./140/2015/TTJ dated 31-12-2015 for implementation of the judgment in the case of Calcutta Knitwears (Supra), has explained the procedure in case the AO of the search person and the the other person is one at the same then also he is required to record his satisfaction as has been held by the Courts. 9. The relevant circular issued by CBDT reads as under:- Subject: Recording of satisfaction note under section 158BD/153C of the Act - reg.- The issue of recording of satisfaction for the purposes of section 158BD/ 153C has been subject matter of litigation. 2. The Hon ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No.3958 of 2014 dated 12.3.20 14(available in MRS at 2014-LL-0312-5 1) has laid down that for the purpose of Section 158BD of the Act, recording of a satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressed in the following manner :- 18. The concomitant of this conclusion, is that, the legal position as applicable to Section 158BD regarding satisfaction in the first instance of the first Assessing Officer forwarding the items to the Assessing Officer having jurisdiction; and in the second instance of the Assessing Officer having jurisdiction whilst sending noticee to such other person (other than the person referred to in Section 153A), must apply proprio vigore. The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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