TMI Blog2021 (2) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... t is case of the department that Jewellery or other valuable article or things seized 'belongs' to the petitioner and also document 'pertains' to and that any information contained therein 'relates' to the petitioner. The ingredients of Section 153(1)(a) and (b) both are complied with. In the satisfaction note, it has been recorded that the version put forth by the searched person that the Jewellery being given to the writ-applicant for job work was found not correct. Further, there was complete failure in producing the Forms 402 and 403 respectively of the GST which is a statutory requirement for the interstate transafer of goods for job work or sales. We are convinced that we should not interfere at the stage of showcause notice under Section 153C of the Act, 1961. Ultimately, if the assessment order goes against the writ-applicant (assessee), he/it shall avail and exhaust the remedies available to him/it under the Act, 1961 - writ-applications fail and are hereby rejected. - R/Special Civil Application No. 20844 of 2019 With, 20845 of 2019 With, 20846 of 2019 With, 20847 of 2019 With, 20848 of 2019 With, 20849 of 2019 With, 20850 of 2019 With, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Sureshkumar of the Jay Matadi Air Service and one Shri Jagdish Prashad of the Bright Courier. 4.2 The writ-applicant came to be served with a notice under Section153C of the Act, 1961 dated 12.09.2019 for the Assessment Years 201213 to 2017-18. The respondent provided the writ-applicant with the satisfaction note for initiation of the assessment proceedings under Section153C of the Act. The satisfaction note reads thus: During the course of assessment proceedings u/s. 153A in the case of Shri Suresh Kumar Jaikishan Bangarwa and Shri Jagdish Prasad Pranlal, some facts about the assessee emerged/ noticed, which is discussed in details as below; 2. In view of the requirement expressed by the Election Commission of India, vide order issued by the Honourable Principal Chief Commissioner of Income Tax, Gujarat bearing No. Pr. CC/ABD/HQ/Election duty/201718 dated 06.10.2017, officers and officials of Income Tax Department, Gujarat were deployed at various stations and Airports for Gujarat State Assemble Election. Accordingly officers and officials of the Income Tax Department were deployed as Rajkot Airport for establishing the Air Intelligence Unit (AIU) at Rajkot Air ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aikishan Bangarwa under oath u/s 131(1A) r.w.s 131 of the I.T. Act, 1961 was concluded. After giving ample opportunities and more than 18 hours, he failed to submit anything new the what he had submitted earlier. It was reported to the Joint Director of Incometax(Inv.), and further proceedings were initiated to convert the inquiry into search action. Subsequently, this office had received a warrant no. 006601 duly signed by PDIT(Inv.), Ahmedabad to seize the unaccounted parcels found in the possession of Shri Sureshkumar Jaikishan Bangarwa. The said warrant was executed to Shri Sureshkumar Jaikishan Bangarwa at 03:30 PM on 28.10.2017 and search proceedings were started by the team in presence of two witnesses. Thus, the inquiry initiated u/s 131 was converted into search u/s 132. 6 During the course of search, statement of Sureshkumar Jaikishan Bangarwa u/s 132(4) was recorded on oath. He was once again asked to produce the evidence if any gathered by him in support of the goods contained in the parcels. In response to the opportunity given to him, he categorically denied having anything to submit before the department. 7. During the course of search action u/s 132 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the above seized Gold articles from above mentioned parcel nos containing Fine Gold weighing 622.48 grams valued at ₹ 1837561/seized from searched party named Shri Suresh Kumar Jaikishan Bangarwa (PANDBBPK4089Q) / Shri Jagdish Prasad (PAN EKHPP3432A) covered u/s. 153A of the I T Act belongs to and information in this regard and is related to Jitendra Mansukhlal Adesara Prop. Of Amrut Jewellers PAN: ACEPA7985N i.e. assessee being other than the person 153A of the Act. 11. As per amended section 153C(1)(b), where the Assessing Officer is satisfied that nay books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to a person other than the person referred to in section 153A, then the proceedings u/s 153C shall be initiated. 12. Thus I am satisfied that the gold seized and statement recorded have a bearing on the determination of the total income of the assessee, Jitendra Mansukhlal Adesara Prop. Of Amrut Jewellers, Hence, I am sttisfied that it is a fit case for issuing notice u/s. 153C of the Incometax Act, 1961 and n otice u/s. 153C of the Act is issued for A.Y. 2012-13, 2013-14, 2015-16, 2016-17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to declaration of election in the state of Gujarat, code of conduct was imposed with effect from 25.10.2017. (ii)Two couriers were searched at the Airport of Rajkot on 27.10.2017 and parcel of 25 KG of gold was seized by the Deputy Director of Income-tax, Investigation1, Rajkot (herein after referred to as the DDIT ). Candidly and spontaneously, they admitted that the consignments were sent by the different consigners of Delhi, Hyderabad and other cities and were to be delivered to Rajkot based consignees. Thus, the parcel / consignment of Gold was not belonged to them. (iii) In order to verify the facts of the case DDIT summoned majority/ all the consignees on different dates and their statements were recorded in post search inquiries wherein all the consignees have accepted the version of courier and they have submitted all the requisite information as demanded in the summons to prove the genuineness of transactions. (iv) As regards the nature of transaction, consignees have, depending upon the facts of each case stated / asserted that it is either related to (i) Job Work (making of ornaments), (ii) Purchase (iii) Sales return; (iv) repairing / polishing wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made . Thus, in this case there is no mandatory requirement to issue notice blindly or irrespective of materials bearing on determination of the total income. Here in this case, on verification of the satisfaction note the AO has nowhere mentioned or stated that the gold seized / under consideration / any incriminating materials seized relates to those six years i.e. AY 2012-13 to 2017-18. (iii) Therefore, in absence of that specific satisfaction, which is prerequisite for issue of notice u/s 153C of the Act, issue of notice for those six years i.e. AY 201213 to 2017-18 is beyond the jurisdiction and bad in law. (iv) It may not be out of place to reiterate that before recoding satisfaction, the AO must establish a corelation of incriminating materials / valuable or gold seized from the person searched with the concerned assessment years for which notice u/s. 153C had to be issued . Since this requirement u/s. 153C is essential for assessment under that section, it becomes as jurisdictional fact. In the case under consideration the gold wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of India, Election Commission is attached at page 112 to 117 of common paperbook . Though the election period is not defined in the Circular, but it can be believed that the election period starts when the schedule has been notified for public at large and code of conduct starts from that date. Further here it is important to notice that after declaration of election, the Department carried out inquiry at Airport, Rajkot and found the Gold under consideration form courier. Therefore, on this ground also the notice issued u/s 153C of the Act is bad in law. (xi) The AO under para 8 of the Satisfaction Note had held that the parcels containing gold was sent for job work purpose. However, simultaneously the same AO had issued notice to the carriers (against whom he had initiated proceedings u/s. 153A of the Act). In the notice issued to the carriers (two individuals), the AO has inquired about the source of the gold and if the same does not belong to them, they are required to furnish the name and address of the persons to whom it belongs. Interestingly, even before receiving any reply or satisfying about the nomenclature of the transaction, the AO satisfied himself in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame. In the instant case, it is understood that the satisfaction has been recorded at once in the single note in my case, wherein, it is alleged that the AO is satisfied that the gold seized from the courier belongs to the assessee and the same have a bearing on the determination of total income of the assessee for AYs 201213 to 2017-18. Therefore, in the absence of any specific and separate satisfactions recorded in the case of searched person, i.e. courier and other person, i.e. me, impugned notices issued are invalid. (xvii) Thus, it is clear that notices u/s.153C of the Act had been issued without following directions of CBDT as above and hence, the same is illegal. (xviii) Notwithstanding to the above, even in the case where valid satisfactions recorded at both the levels, indiscriminate issue of notices u/s. 153C of the Act for all the six assessment years are not valid. The AO of other person may issue notice u/s.153C of any assessment year comprising from block of six years, if there is incriminating material/asset for such year. Where single/combined satisfaction note has been prepared for all the six assessment years without referring year-wise incriminating m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfaction note, it is not clear as to whether the seized asset has any bearing on the inocme of the person covered u/s. 153C, i.e., me. (xxiii) Lastly, it is seen that satisfaction recorded in all the consignees are verbatim without considering facts in each case. It is observed that in various cases where the parcel of Gold was sent by the consignors on account of transaction of sale/purchase return etc. but the satisfaction note contains that the same was for job-work. Therefore, on this ground also, issue of notices in mechanical manner is objected. 4. Considering the above facts and judicial pronouncement, it is clear that there is a failure on the part of the Assessing Officer to satisfy that the gold seized belonged to the assessee, particularly when all the relevant materials and proofs were on record and transaction was settled by banking channel. Thus, apart from saying that both the parties failed to prove the genuineness of transaction, the AO has nothing in his possession to establish that he was satisfied that it was a fit case for issuing of notice under section 153C. The satisfaction recorded by the Assessing Officer is neither adequate nor proper and si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner who is the assessee, other than the person under section 153A of the Act. It was submitted that in the present case all that is seized is parcels containing gold. No books of account or documents have been seized. It was submitted that, therefore, reference to amended section 153C(1)(b) by the Assessing Officer is misconceived, inasmuch as, in the absence of any books of account or document having been seized or requisitioned, there is no question of the same pertaining to or any information contained therein relating to the petitioner. It was submitted that from the satisfaction note it is evident that the gold has been sent to the petitioner for job work. It was submitted that the expression job work has not been defined in the Income Tax Act but has been defined under subsection (68) of section 2 of the Central Goods and Services Tax Act, 2017, to mean any treatment or process undertaken by a person on goods belonging to another registered person and the expression job worker shall be construed accordingly. It was submitted that, therefore, from the definition of job work it is evident that the goods belong to another person and not the person to whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b work, the gold was to be sent back to Chhunumal M. Jain. 9. Mr. Patel would submit that the fact that the gold was sent for job work is not in dispute as the same is evident on perusal of the satisfaction note itself. Mr. Patel would submit that the search was conducted on 27.10.2017 and therefore, even assuming without admitting that the seized material is of the ownership of the writ-applicant , the same should have been added in the regular course of the assessment. As the date of search is 27.10.2017, the relevant assessment year would be A.Y. 201819 and for that matter, a notice under Section143(2) had already been issued on 12.09.2019. 10. He would argue that as the relevant assessment year is A.Y. 201819, for which a scrutiny notice under Section143(2) of the Act came to be issued on 12.09.2019, the invoking of the provision under Section153C of the Act for earlier 06 years is absolutely without jurisdiction. 11. Mr. Patel would submit that in the case on hand, the provisions of Section153C(b) are not applicable as no books of account and documents were seized or requisitioned. 12. In such circumstances referred to above, Mr. Patel prays that there being merit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medy is available by way of an Appeal to the CIT(A) and thereafter to the Appellate Tribunal as per the provisions of the Act. On this ground alone, I humbly submit that the petition is devoid of any merits and be summarily rejected. 4. At the outset, I submit that Airport Intelligence Unit, Rajkot found that Suresh Kumar from Jai Mata Di Air Services and Jagdish Prasad from Bright Courier had come to the Rajkot Airport on 27.10.2017 to get delivery of 3 and 2 parcels respectively which had come through Jet Airways Flight from Hyderabad and Delhi. The above parcels were containing 70 small parcels mentioning the names and mobile numbers of the parties/ persons to whom such parcels were to be delivered. Upon inquiry being made, the above two persons failed to furnish the details of ownership of such parcels ad the relevant documents to prove genuineness of the Gold intercepted. Firstly, the statement of Shri Suresh Kumar Jaikishan Bangarwa under oath u/s.131(1A) r.w.s. 131 of the Act came to be recorded by ADIT (Inv), UnitII, Rajot on 27.10.2017 at the Rajkot Airpor. Shri Sureshkumar was asked to produce the supportive evidence in support of the ownership of the parcels li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y bearing on the income of the petitioner. The petitioner has also contended that the seized gold bars belong to Chhunnu Mal Mahendra Jain being the owner of seized gold. The above contentions are selfserving, baseless and contrary to the facts and denied. I submit that the Assessing Officer of the searched person has clearly recorded satisfaction to the effect that the gold seized belongs to the petitioner in as much as the parcel carrying such gold bars bears name of Amrut Jewellers, petitioner's proprietory concern. Such being the case, the petitioner cannot contend that such parcel containing gold does not belong to the petitioner. The petitioner's contention that the seized gold was sent for job work as evident from the satisfaction note is not correct and misleading. I submit that Para 8 of the satisfaction note which states that the seized gold was sent for job work is nothing but the statement of the respective parties that the seized gold was sent for job work. The assessing officer has not recorded satisfaction to the effect that the seized gold was sent for job work and the same is evident from para 9 of the satisfaction note. Para 9 of the satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is self serving and contrary to the plain language of clause (b) to Section 153C(1) of the Act. I submit that a document is nothing but a piece of written, printed or electronic record that provides information or evidence. The assessing officer of the searched person has clearly recorded satisfaction to the effect that the information contained on the document being the parcel and courier on the document being the parcel and courier receipt pertain/relates to the petitioner. (v) With reference to paragraphs II(14) to II(18), the petitioner has reiterated that the absolute owner of the seized gold is Chhunnu Mal Mahendra Jain and the gold does not belong to the petitioner. The petitioner has also contended that the respondent has supplemented the satisfaction recorded by him at a later stage while disposing of the objections. The aforesaid contention is erroneous, misleading and denied. I submit that the Assessing Officer of the searched person has clearly recorded satisfaction to the effect that the seized gold belongs to the petitioner and the statement/ information relates to the petitioner. I reiterate the submissions made in the forgoing paragraphs. 7. In view ..... 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(1)] [ Notwithstanding anything contained in section 139. section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that,- (a) any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, ~ belongs to; or (b) any books of account or documents, seized or requisitioned, or any information contained therein, 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 ] [ and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in subsection (1) of section 153A] :] 21. A perusal of the above noted provisions would reveal that in the case of search action, ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the revenue as regards the maintainability of this writ-application is concerned. As noted above, in this regard reliance is placed on the decision of the Supreme Court in the case of Vijaybhai N. Chandrani (Supra) . The said case, travelled to the Supreme Court from this very High Court. This High Court set aside the showcause notice issued by the Assessing Officer under Section153C of the Act, 1961. The respondent assessee purchased a plot of land from a cooperative housing society. A search was conducted under Section132 of the Act in the premises of the society. During the search, certain documents were seized under Section-132 of the Act. Upon scrutiny, it was found that the seized documents reflected the names of certain individuals including the assessee therein. Accordingly, for further proceedings, the Assessing Authority transmitted the seized documents to the jurisdictional Assessing Authority in whose jurisdiction the assessee was being assessed. After receipt of the said information/documents, the Assessing Authority recorded a satisfaction note that he had reason to believe that a case of escapement of income may exist and in such circumstances, issued notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in Indo Asahi Glass Co. Ltd. v. ITO, (2002) 10 SCC 444, wherein the assessee had approached this Court against the judgment and order of the High Court which had dismissed the Writ Petition filed by the assessee wherein challenge was made to the show cause notice issued by the Assessing Authority on the ground that alternative remedy was available to the assessee. This Court concurred with the findings and conclusions reached by the High Court and dismissed the said appeal with the following observations: 5. This and the other facts cannot be taken up for consideration by this Court for the first time. In our opinion, the High Court was right in coming to the conclusion that it is appropriate for the appellants to file a reply to the show-cause notice and take whatever defence is open to them. 16. In the present case, the assessee has invoked the Writ jurisdiction of the High Court at the first instance without first exhausting the alternate remedies provided under the Act. In our considered opinion, at the said stage of proceedings, the High Court ought not have entertained the Writ Petition and instead should have directed the assessee to file reply to the said noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vailable to him under the Act, 1961. However, even on merits, we find no case in favour of the writ-applicant . An exhaustive reading of the satisfaction note referred to above would indicate that the Assessing Officer was satisfied and it is specifically mentioned therein that the gold belongs to the writ-applicant and was not sent by Chhunnumal for the purpose of job work and the documents so seized pertains to the writ-applicant / other persons, therefore, it cannot be said that the mandatory requirement of Section153C of the Act in the facts and circumstances of the case have not been complied with. At the cost of repetition, we once again quote the relevant averments made in the satisfaction note. 9. Further appraisal report and the details of investigation done in the matter and statement recorded by the Investigation wing is examined and it is found that the documents furnished to substantiate the transaction by both the parties are failed to prove the genuineness of the transaction and the documents and submissions made by both these parties nothing but more than a futile effort based on after thoughts for coloring the unaccounted transaction vis- -vis transfer of unacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to the date of receiving the books of account, assets etc. by the Assessing Officer having jurisdiction over such other persons. 27. A statement on oath is required to be recorded under Section 132(4) of the Act which is during the course of the search....... . Thus, a statement on oath under Section 132(4) of the Act has its own evidentiary value. In the instance case, in the statement as recorded under Section 132(4), no credible evidence was produced by the searched person viz. Shri Sureshkumar Bangarwa. During the search proceeding, 70 parcels were seized, which also contained some papers related to booking of the same which is a document . The said papers contained relation to the assessee. A Document , is nothing but a piece of written, printed or electronic record that provides information or evidence and in the instant case such information was in the form of parcel and courier receipts which pertained or related to the petitioner. In the instant case, therefore, it is case of the department that Jewellery or other valuable article or things seized 'belongs' to the petitioner and also document 'pertains' to and that any information contained th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d with. There can be two eventualities. It may so happen that the Assessing Officer of the searched person is different from the Assessing Officer of the other person and in the second eventuality, the Assessing Officer of the searched person and the other person is the same. Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, there shall be a satisfaction note by the Assessing Officer of the searched person and as observed hereinabove that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall forward his satisfaction note to the Assessing Officer of the other person and is also required to make a note in the file of a searched person that he has done so. However, as rightly observed and held by the Delhi High Court in the case of Ganpati Fincap (supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 153C of the Income Tax Act, 1961. The jurisdiction of this case has been assigned to this Office u/s 127 of the Income Tax Act, 1961 by the worthy Commissioner of Income TaxIII New Delhi vide order F. No. CITIII/Delhi/Centralization/10121312455 dated 15.01.2013. By virtue of the authorization of the Director of Income Tax (Investigation), Chandigarh, a search seizure operation u/s 132(1) of the Act was carried out on 08/09.04.2010 at the residential/business premises of Sh. Tejwant Singh Sh. Ved Parkash Bharti Group of cases, Karnal, Panipat Delhi and a survey u/s 133A of the IT. Act, 1961 was also carried out at the business premises of M/s Super Mall (P) Ltd. Karnal New Delhi. During the course of search on 08/09.04.2010 at residence of Sh. Ved Parkash Bharti who is a Director in the assessee company M/s Super Mall (P) Ltd., Pen drives were found and seized as per Annexure-3 from vehicle No. HR06N0063 parked in front of the residence of Sh. Ved Parkash Bharti. Some documents as per Annexure A1 were seized after taking print out of the above said pen drives. These documents contain the details of cash receipt on sale of shop/offices at M/s Super Mall, Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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