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TMI Blog2021 (5) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Validity of assessment u/s. 153C: 5.1 The plea taken by the appellant's AR, in the written submissions furnished during the course of appellate proceedings, and in the additional grounds filed, is that assessment u/s. 153C is invalid due to the following reasons: "The appellant submits that the appellants have made an application under RTI Act for copies of order sheets and also copies of information with respect to satisfaction note from the files of Sri M. Srinivasa Reddy and M/s. MSR Constructions. Copies of of order sheets and satisfaction note obtained are enclosed. The Appellant submits that the following satisfaction note was found in the file of the Appellant: Satisfaction note u/s. 153C of IT Act. In the case of M/s. MSR Constructions for A.Y. 2014-15 A search & seizure operation u/s. 132 has been conducted on 14-12-2015 in the residence of Sri Mogili Srinivasa Reddy by the DDIT (Inv.), Unit-IV(1) Vijayawada after obtaining warrant of authorization from the Pr. Director of Income Tax. (Inv.), Hyderabad. During the course of search proceedings, dairy containing details of various payments made in case by assessee firm was found at the residence of managi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e operation U/s. 132 has been conducted on 14-12-2015 in the residence of Sri Mogili srinivasa reddy by the DDIT(inv), Unit-IV(1) Vijayawada after obtaining warrant of authorization from the Pr. Director of Income Tax (inv), Hyderabad. During the course of search proceedings, dairy containing details of various payments made in cash by assessee firm was found at the residence of managing partner Sri Mogili Srinivasa Reddy. The same was seized vide annexure-A/MSR(Res)/01 to 7. These payments are not recorded in audited books of accounts. Therefore I am satisfied that above mentioned document seized from the premises of Sri Mogili Srinivasa Reddy relate to M/s. MSR constructions and has bearing on the income of M/s. MSR constructions for the AY 2014-15." The satisfaction note placed on record of M/s. MSR Constructions (the assessee) for the AY 2014-15 is as under: Satisfaction note U/s. 153C of the IT Act, in the case of M/s. MSR Constructions for the AY 2014-15 "A search & seizure operation U/s. 132 has been conducted on 14-12-2015 in the residence of Sri Mogili Srinivasareddy by the DDIT(inv), Unit -IV(1) Vijayawada after obtaining warrant of authorization from the Pr. Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r books of account or document being handed over to him shall record his own satisfaction after examining the same independently without being influenced by the satisfaction of the seizing officer. In other words, it is not an automatic action. Satisfaction of two officers is missing. ... The aforesaid section mandates recording of satisfaction of the Assessing Officer(s) is a pre-condition for invoking jurisdiction and it is not a mere formality because recording of satisfaction postulates application of mind consciously as the documents seized must be belonging to the any other person other than the person referred to in section 153A It was contended that the same Assessing Officer was involved in the matter. This fact does not dispense with above requirement. It is settled position of law that when a thing is to be done in one particular manner under law this has to be done in that manner alone and not other way. The Tribunal has correctly followed the principle. There was no element of law to be decided." The Hon'ble Supreme Court in the case of Income Tax Officer Vs. M/s. Canyon Financial Services Limited 2018 (2) TMI 1381 while dismissing the special leave petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irected to verify whether any satisfaction was recorded U/S. 153A of the Act in the case of the person searched in order to initiate proceedings u/s. 153C of the Act in the case of the assessee. The learned DR has filed before us a copy of the letter of the DOT Central Cirlce-2(1) Hyderabad dated 29.01.2016 which is as under: "Office of the Dy. Commissioner of Income Tax, Central Circle-2(1), Room No. 612, 6thfloor, Aayakar Bhavan, Basheer Bagh, Hyderabad. F. No. DCIT/CC2(11/Satisfaction Note/2016-17. Date: 29/12/16. The Senior Authorised Representative II Income Tax Appellate Tribunal A - Bench, Hyderabad. Sub: Appeal in the case of M/s. Madhucon Infra Limited - PAN: AAECM6443Q-for the assessment years 2010-11 - ITA No. 266/HI 15 - submission Report _ Regarding, Ref. 1) Letter in F. No. Sr. AR-II/ITAT/A-Bench/2661-15/2016-17, dated 05.12.2016 received from the Sr. AR-II, ITAT-II, A' Bench, Hyderabad. 2) Letter in F. No. DCIT-C-16(2)/ITAT 2016-17, dated 07.12.2016 received from the DCIT, Circle-16(2), Hyderabad. Please refer to the above. 2. As directed, I am herewith submitting that after verification of assessment record, it is found that before transmitting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equire separate adjudication. On these lines, the appeal of the assessee against the order u/s. 143(3) rws 153C, is treated as allowed, subject to the condition that the assessed income will not go below the returned/admitted income shown in return of income filed by the assessee, in pursuance of notice u/s. 153C. The grounds related to this issue are therefore ALLOWED. 6.0 In the result, the appeal of the appellant for the A.Y. 2014-15 is ALLOWED. 3. We have heard rival submissions against and in support of the CIT(A)'s impugned action quashing Section 153C assessment in the instant three cases. The Revenue's vehement contention is that since the assessing authority herein is common for both the searched as well as the instant assessee, the twin satisfaction claimed at the latter's behest forms no ground to quash the same. 4. Learned authorised representative's case, on the other hand, is that the CIT(A) has rightly gone by the CBDT circular making it clear that the Assessing Officer has to record separate satisfaction(s) qua the searched as well as the third party in issue as is the clinching fact in the instant case. 5. We have given our thoughtful considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings under Section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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. HR06N-0063 parked in front of the residence of Sh. Ved Parkash Bharti. Some documents as per Annexure A-1 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, Karnal also beside other concerns. These documents are required for assessment proceedings. During the statement of Sh. Ved Parkash Bharti at the time of search, he has also stated that these documents pertain to him and M/s. Super Mall (P) Ltd., Karnal in which he is Director. In view of the above and as per the provisions of sub-section 91 of Section 153C of the Act, I am satisfied that the document seized from the residence of Sh. Ved Parkash Bharti belongs to a person i.e. Super ..... X X X X Extracts X X X X X X X X Extracts X X X X
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