TMI Blog2018 (12) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... and 2009-10 and are directed against the orders of Ld. Commissioner of Income Tax (Appeals) (in short Ld.CIT(A) ], Ujjain dated 27.04.2015 which is arising out of the order u/s 143(3) r.w.s. 153C of the Income Tax Act 1961(In short the Act ) dated 14.3.2014 framed by ACIT (1)1, 2. The assessee has raised following grounds of appeal; Assessment Year 2008-09 1. That the learned CIT(A) erred in dismissing the ground raised by the appellant regarding validity of initiation of proceedings u/s 153C. That on the facts and in the circumstances of the case, the initiation of proceedings u/s 153C in the case of the appellant being illegal and bad in law, the assessment proceedings is liable to be quashed. 2. That the learned CIUT(A) erred in maintaining the addition of ₹ 12,50,000/- made u/s 69D of IT Act by totally ignoring the facts of the case and case laws cited on this issue. The addition so maintained being illegal and wrong, the same, therefore, requires to be deleted. Assessment Year 2009-10 1. That the learned CIT(A) erred in dismissing the ground raised by the appellant regarding validity of initiation of proceedings u/s 153 THAT the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed person and therefore in view of judgment of Hon ble High Court of Delhi in the case of Pepsico India Holding P. Ltd V. ACIT 50 Taxmann.com 299 (2014) Delhi, the proceedings initiated u/s 153C of the Act are void ab initio. Ld. Counsel for the assessee also placed reliance on the judgment of Hon ble Apex Court in the case of CIT Vs Calcutta Knitwears (2014) 43 taxmann.com 446 (SC) and Circular No.24/2015 issued by Central Board of Direct Taxes dated 31.12.2015. 6. Per contra Ld. Departmental Representative though supported the finding of Ld.CIT(A) but failed to controvert the submissions of the Ld. Counsel for the assessee accepting that there is no satisfaction note of the Ld.A.O of searched person on record. 7. We have heard rival contentions and perused the records placed before us and carefully gone through various judgments referred and relied by the Ld. Counsel for the assessee. Sole legal issue for both the years under appeal raised by the assessee is against the validity of the proceedings initiated u/s 153C of the Act. 8. Brief facts as culled out from the records are that a search and seizure operations were carried out at various premises of Satellite Group a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be supplied to the undersigned. Thanking you, Yours faithfully, Sd/- ( Ajay Jain) Chartered Accountant For Shri Sushil Golecha 10. During the course of hearing before us sufficient opportunity was provided to the Ld. Departmental Representative to produce the satisfaction note recorded by the Assessing Officer of the searched person i.e. Nilesh Ajmera, Director of M/s. Phoenix Devcons Pvt. Ltd which was the part of Satellite Group. However Ld. Departmental Representative is fair enough to accept that after thorough examination of records no such satisfaction note was found to be recorded by the Assessing Officer of the searched person i.e. Nilesh Ajmera wherein information relating to the alleged incriminating material relating to the assessee i.e. other person has been found. In this situation where the basic condition before initiating the proceedings u/s 153C of the Act are initiated in the case of other person has not been complied to by way of not recording a proper satisfaction note by the Assessing Officer of the searched person then whether such proceedings initiated u/s 153C of the Act are valid or not needs to be examine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished that the documents in question, whether they be photocopies or originals, do not belong to the searched person, the question of invoking Section 153C of the said Act does not arise. 16. Thirdly, we would also like to make it clear that the assessing officers should not confuse the expression belongs to with the expressions relates to or refers to . A registered sale deed, for example, belongs to the purchaser of the property although it obviously relates to or refers to the vendor. In this example if the purchasers premises are searched and the registered sale deed is seized, it cannot be said that it belongs to the vendor just because his name is mentioned in the document. In the converse case if the vendor s premises are searched and a copy of the sale deed is seized, it cannot be said that the said copy belongs to the purchaser just because it refers to him and he (the purchaser) holds the original sale deed. In this light, it is obvious that none of the three sets of documents _ copies of preference shares, unsigned leaves of cheque books and the copy of the supply and loan agreement - can be said to belong to the petitioner. 17. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 judgement. 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. Sd/- ( Ramanjit Kaur Sethi) DCIT (OSD) (ITJ), CBDT, New Delhi. 13. The above CBDT circular issued, following the guidelines of Hon ble Apex Court in the case of CIT Vs Calcutta Knitwears makes amply clear that satisfaction note has to be prepared by the Assessing Officer of the searched person setting out properly the details of various incriminating material/document belonging to the other person at the time of handing o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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