TMI Blog2019 (2) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... e in as much as the satisfaction of the Assessing Officer as required under Section 153-C of the Act. On this ground alone, the proceedings initiated by the revenue cannot be sustained. The aforesaid aspect goes to the root of the matter. Further proceedings initiated under Section 153-C of the Act are without jurisdiction and can be held to be vitiated in law. In such circumstances, there is no bar for the writ Court to entertain the writ petition dehors the alternative remedy of appeal available under the Act. Proceedings quashed - Decided in favor of assessee. - W.P.No.36004/2018 C/W, W.P.No.36005/2018 (T – IT) - - - Dated:- 24-1-2019 - Mrs. Justice S. Sujatha For the Petitioner : Smt. Vani H., Adv. For the Respondents : Sri K.V. Aravind, Adv. ORDER These petitions involving similar and akin issues, have been considered together and are taken up for final disposal at this stage itself, with the consent of the learned counsel appearing for the parties. 2. Petitioner is challenging the validity of initiation of the proceedings under Section 153-C of the Income Tax Act,( Act for the sake of brevity) 1961, as well as the assessment order dated 31/12/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, the assessing officer should be satisfied that there is an undisclosed income which has been traced out when a person was searched under Section 132 or whose books of account or other documents or any assets were requisitioned under Section 132-A of the Act, as held by the Hon ble Apex Court in the decision referred to supra. The said judgment of the Hon ble Apex Court has been applied to the proceedings under Section 153C of the Act for the purposes of assessment of income other than the searched person in terms of the Circular No.24/2015 [F.NO.279/ MISC./140/2015/ITJ] dated 31/12/2015 issued by the Central Board of Direct Taxes. 6. However, no satisfactory note of the officer of searched person is forthcoming and the satisfactory note said to have been passed, stated in the objections/reply filed by the respondents, do not satisfy the requirement of Section 153-C of the Act. Accordingly, the assessment order passed without fulfilling the mandatory requirement of recording the satisfactory note of the Assessing Officerof the searched person and handing over of the seized or requisitioned belongs or belonged to a person other than the person referred to in Section 153-A t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person The Hon ble Apex Court in the case of Calcutta Knitwears, Ludhiana (supra) has observed thus: 35. Having said that, let us revert to the discussion of Section 158-BD of the Act. The said provision is a machinery provision and inserted in the statute book for the purpose of carrying out assessments of a person other than the searched person under Sections 132 or 132-A of the Act. Under Section 158-BD of the Act, if an officer is satisfied that there exists any undisclosed income which may belong to any other person other than the searched person under Sections 132 or 132-A of the Act, after recording such satisfaction, may transmit the records/documents/chits/ papers, etc. to the assessing officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of the said other documents relating to such other person, the jurisdictional assessing officer may proceed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emonstrative material is germane to the assessing officers satisfaction in concluding that the seized documents belong to a person other than the searched person is necessary for initiation of action under Section 158BD. The bare reading of the provision indicates that the satisfaction note could be prepared by the assessing officer either at the time of initiating proceedings for completion of assessment of a searched person under Section 158BC of the Act or during the stage of the assessment proceedings. It does not mean that after completion of the assessment, the assessing officer cannot prepare the satisfaction note to the effect that there exists income tax belonging to any person other than the searched person in respect of whom a search was made under Section 132 or requisition of books of accounts were made under Section 132A of the Act. The language of the provision is clear and unambiguous. The legislature has not imposed any embargo on the assessing officer in respect of the stage of proceedings during which the satisfaction is to be reached and recorded in respect of the person other than the searched person. 12. It is not in dispute that the Department has appl ..... 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