TMI Blog2021 (7) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2007-08 was available to the AO till 30.09.2008. Since the search was conducted on 26.08.2008 in the case of Shri. N. Krishna, the proceedings against the assessee would not be hit by the proviso to section 153A of the Act and the proceedings can be initiated and additions can be made even in the absence of any incriminating material because such proceedings will be considered as abated proceedings in which scope of making additions will be much greater. The issue with regard to validity of initiation of proceedings under section 153C of the Act has to be held in favour of the Revenue. - ITA No.347/Bang/2012 - - - Dated:- 23-7-2021 - Shri N.V. Vasudevan, Vice President And Shri B. R. Baskaran, Accountant Member For the Appellant : Shri. Pradeep Kumar, CIT(DR)(ITAT), Bengaluru For the Respondent : Shri. Balachandran and Shri. Shiva Prasad Reddy, Advocates ORDER PER N.V. VASUDEVAN, VICE PRESIDENT The facts and circumstances under which this appeal by the revenue is listed for hearing before the Tribunal is as follows: 2. The assessee is an Association of Persons (AoP). One Shri. D. K. Sharma with 10% share and M/s. Akme Projects Ltd., with 90% s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sum was nothing but part of the sale consideration for sale of the land. According to the assessee, the sum of ₹ 2.44 Crores was nothing but money given to the assessee to settle dispute and litigation in respect of the properties that was sold to M/s. Sobha Developers Ltd., and was not in the nature of income in the hands of the Assessee. 7. Ultimately, a sum of ₹ 2.44 Crores was assessed to tax in the hands of the assessee. The CIT(A), however, agreed with the plea of the assessee and deleted the addition. On further appeal by the Tribunal in ITA No.347/Bang/2012 order dated 29.07.2016 reversed the order of the CIT(A) and restored the order of the AO by allowing the appeal of the Revenue. The assessee preferred an appeal before the Hon ble High Court against the order of the Tribunal and the Hon ble High Court in ITA No.666/2016 by order dated 30.11.2017 remanded the case with the Tribunal to decide the issue with regard to the existence of satisfaction for initiating proceedings under section 153C of the Act. It is pursuant to the aforesaid order of the Hon ble High Court that this appeal has been listed before the Tribunal for hearing. 8. We have heard the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 documents to the Assessing Officer of the other person, to make a note in the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Counsel for the assessee on the other hand submitted that the satisfaction note does not disclose as to how the material found in the course of search of Shri. M. Krishna belongs to the assessee and therefore the satisfaction required for initiating proceedings under section 153C of the Act does not exist. He also submitted that the impugned addition made in the Order of Assessment under section 153C of the Act was not based on any seized material but only based on evidence already available on record of assessment and therefore addition was not warranted. We may observe that this submission of the learned Counsel for the assessee is beyond the scope of the present proceedings. The addition made on merits has already been confirmed by this Tribunal and the Hon ble High Court has remanded the case for the limited purpose of examining the existence of satisfaction for initiation of proceedings under section 153C of the Act. This argument of the learned Counsel for the assessee is therefore beyond the scope of present proceedings. 12. Learned Counsel for the assessee submitted that proceedings under section 153C of the Act can be initiated only if incriminating material is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee that the satisfaction note produced by the Department before the Tribunal does not refer to any incriminating material revealing undisclosed income. Reference was also made to the decision of the Hon ble Karnataka High Court in the case of Star PVG Exports (2019) 112 taxmann.com 163 (Karnataka) wherein it was held that addition in an Assessment under section 153C of the Act has to be based on incriminating material found during the course of search. Reference was also made to the decision of the Hon ble Supreme Court in the case of Singhad Technical Society Civil Appeal No.11080/2017. According to the learned Counsel for the assessee, the Hon ble Supreme Court has taken a view that as per provisions of section 153C of the Act, incriminating material which is found in a search had to pertain to the Assessment Year in respect of which an addition is made and this was a jurisdictional fact which should exist before making any impugned addition under section 153C of the Act. 14. We have examined the satisfaction note filed by the Department. From a perusal of the same, we find that the AO has recorded that the seized document referred to in the satisfaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 153C of the Act. 15. The learned counsel for the Assessee has placed reliance on a decision of the ITAT Bangalore Bench in the case of Sree Lakshmi Venkateshwara Minerals Vs. DCIT (2021) 123 taxmann.com 255 (Bangalore-Trib) in support of his contention that the satisfaction note should spell out the nature of the seized document and how the same prima facie should reveal undisclosed income. We have perused the said decision and we find that in the aforesaid decision, additions were deleted on the ground that the same were not based on incriminating seized material found in the course of search. In paragraph-32 of the said order, the tribunal has made it very clear that the issue of validity of initiation of proceedings 153C of the Act is not being adjudicated. Moreover, the said case pertained to assessment years where the assessments stood concluded prior to the date of search, whereas in the present case, the assessment for the relevant AY was open assessment not having been concluded pursuant to the original return of income filed by the Assessee either by an order u/s.143(3) or by non issue of notice u/s.143(2) of the Act, within the time period prescribed for issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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