TMI Blog2018 (11) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... LA, JM AND SHRI ANIL CHATURVEDI, AM For The Assessee : Shri Rajendra Agiwal For The Revenue : Shri O.A. Mao ORDER PER SUSHMA CHOWLA, JM: . Both the appeals filed by assessee are against consolidated order of CIT(A)-2, Pune, dated 03.03.2016 relating to assessment years 2003-04 and 2004-05 against respective orders passed under section 143(3) r.w.s. 153C of Income Tax Act 1961 (in short the Act ). 2. Both the appeals filed by assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate the issues, we make reference to the facts and issues in ITA No.1384/PUN/2016, relating to assessment year 2003-04. 3. The assessee in ITA No.1384/PUN/2016, relating to assessment year 2003-04 has raised the following grounds of appeal:- On the facts and in the circumstances of the case and in law, the learned AO/CIT(A) has: General Ground 1. erred in assessing the total income at ₹ 36,90,900 as against returned income of ₹ 34,80,900 computed by the Appellant; Invalidity of assessment proceedings under section 153C of the Act 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.2003. The said documents related and belonged to Shri Kewal Kumar Jain i.e. assessee before us. The said documents were forwarded by Addl. CIT, Central Range 2, Pune vide letter dated 30.05.2007 to the Assessing Officer incharge of assessee. On receipt of said documents, notice under section 153C of the Act was issued to assessee. In response thereto, the assessee filed reply stating that return of income originally filed, may be treated as return filed in response to notice issued under section 153C of the Act. The assessee was also supplied copies of seized documents and the case of assessee was taken up for scrutiny. Various additions were made in the hands of assessee on the basis of documents seized. 6. Before the CIT(A), assessee challenged initiation of proceedings under section 153C of the Act on the ground that conditions of said section were not satisfied in the case of assessee, hence assessment be treated as invalid and hence, annulled. The assessee also raised the issue on merits. The CIT(A) first decided the issue of validity of initiation / conduct of proceedings under section 153C of the Act. Referring to the provisions of section 153A of the Act, it pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the Assessing Officer in charge of assessee received information from the Assessing Officer of searched person along with seized documents on 15.06.2007. He pointed out that information was received much after the close of assessment in the case of searched person, hence provisions of section 153C of the Act have not been satisfied. He further pointed out that Assessing Officer having jurisdiction over the searched person has not recorded satisfaction within time frame allowed before handing over the documents to Assessing Officer of assessee and hence, initiation of proceedings under section 153C of the Act are vitiated. He further referred to Circular No.24/2015, dated 31.12.2015, wherein it has been proposed that the issue of recording of satisfaction for the purpose of section 158BD / 153C of the Act are pari-materia and the Courts have held that the stages at which satisfaction note has to be prepared. The CBDT Circular provides that the issue has been settled in respect of 158BD proceedings and since section 153C of the Act was substantially same/para-materia to section 158BD of the Act, therefore guidelines of the Hon'ble Supreme Court in the case of M/s. Calcutt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Calcutta Knitwears (supra) have laid down the proposition for section 158BD of the Act that recording of satisfaction note is pre-requisite and satisfaction note must be prepared by Assessing Officer before he transmits the record to the other Assessing Officer, who has jurisdiction over other person under section 158BD of the Act. The Apex Court held that the satisfaction note could be prepared at any of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC 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 are completed under section 158BC of the Act of the searched person. 12. The Hon ble High Courts have also held that provisions of section 153C of the Act are substantially similar / para-materia to the provisions of section 158BD of the Act. The CBDT recognizing the above said position has issued circular No.24/2015, dated 31.12.2015 in respect of proceedings under section 153C of the Act i.e. for the purpose of assessment of income of other person other than searched person. The CBDT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(3) r.w.s. 153C of the Act was passed on 30.12.2008. In such scenario, where assessment of searched person was completed on 27.03.2006, then the handing over of seized documents by Assessing Officer of searched person to the jurisdictional Assessing Officer of assessee on 15.06.2007 is belated and is beyond the period prescribed in section 153C of the Act for initiation of proceedings under section 153C of the Act. Accordingly, we hold so. Even the Circular issued by CBDT dated 31.12.2015 lays down such proposition, in turn, applying the ratio laid down by the Hon'ble Supreme Court in the case of M/s. Calcutta Knitwears (supra). Accordingly, we hold that proceedings initiated under section 153C of the Act are beyond the time prescribed and hence, are invalid and consequently, assessment order passed under section 143(3) r.w.s. 153C of the Act stands annulled. The grounds of appeal No.4 and 5 raised by assessee are thus, allowed and all other grounds of appeal raised by assessee become academic in nature. 15. The facts and issues in ITA No.1385/PUN/2016 are identical to the facts and issues in ITA No.1384/PUN/2016 and our decision in ITA No.1384/PUN/2016 shall app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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