9911796707
TMI Blog2021 (7) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment Year 2007- 08 was filed by the assessee on 15.10.2007. The Order of Assessment passed u/s.153C of the Income Tax Act, 1961 (hereinafter called 'the Act') is not clear as to whether any intimation under section 143(1) of the Income Tax Act, 1961 (hereinafter called 'the Act') was issued but no order u/s.143(3) of the Act was passed. 4. A search under section 132 of the Act was carried out in the case of one Shri. M. Krishna on 26.08.2008. Shri. D. K. Sharma, one of the members of the AoP was also searched on 25.08.2008. In the course of search of Shri. M. Krishna, certain documents were found. Consequent to the said search, the case of the assessee AoP as well as Shri. D. K. Sharma and other connected persons were centralized with the DCIT, Central Circle - 2(3), Bengaluru. The AO of the searched person and the assessee AoP were therefore one and the same. 5. The proceedings under section 153C of the Act were initiated against the assessee by issue of notice dated 19.07.2010. As already mentioned, with reference to the original return of income filed by AoP on 15.10.2007, no scrutiny assessment was completed. The assessee filed a letter dated 14.09.2010 requesting the AO to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.3958/2014 dated 12.03.2014, observed that before initiating proceedings under section 153C of the Act against the person other than the person who is searched, satisfaction needs to be recorded. Learned DR has produced satisfaction note recorded in the case of the assessee and the same reads as follows: 9. Learned DR also brought to our notice the decision of the Hon'ble Supreme Court in the case of Super Malls Pvt. Ltd., Vs. CIT Civil Appeal Nos.2006 and 2007/2020, judgment dated 05.03.2020 in which the Hon'ble Supreme Court, after referring to the decision of the Hon'ble Supreme Court in the case of Calcutta Knitwears (supra) observed as follows: "6. This Court had an occasion to consider the scheme of Section 153C of the Act and the condition precedent to be fulfilled/complied with before issuing notice under Section 153C of the Act in the case of Calcutta Knitwears (supra) as well as by the Delhi High Court in the case of Pepsi Food Pvt. Ltd. (supra). As held, before issuing notice under Section I53C of the Act, the Assessing Officer of the searched person must be "satisfied" that, inter alia, any document seized or requisitioned "belongs to" a person other than the searc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... searched person and the other person is the same, it is sufficient by the Assessing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. In case, where the Assessing Officer of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. However, as observed hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself." 10. According to him, in the present case, the AO of the searched person and the AO of the other person i.e., perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing paragraph of the aforesaid order. SI No Reference to para & page no. Conclusions(Emphasis added) 1 Substantial question of Law No.(b) in para 3 Whether the Tribunal was correct that the assessment under section 153C was valid despite there being no satisfaction recorded that the documents found during the search on 17.06.2008 were incriminating in Nature and prima facie represented undisclosed income? 2 Para 56 The Hon'ble HC answered the above as under: We answer substantial question of law number 2 was not correct in holding that the assessment under section 153C was valid Despite there being no satisfaction recorded to the effect that the document found during the search on 17/06/2008 were incriminating in nature and Prima facie represented undisclosed income. 3 Para 50 Thus, where no material belonging to a third party is found during a search, but only an inference of undisclosed income is drawn during the course of enquiry, during search or during post-search enquiry, section 153C would have no application. Thus, the detection of incriminating material leading to an inference of undisclosed income is a sine qua non for invocation of section 153C of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings under section 153C of the Act. The decision rendered by the Hon'ble jurisdictional High Court in the case of IBC Knowledge Park Pvt. Ltd.,(supra) should therefore be considered as overruled by implication, in cases where the AO of the searched person and the other person is one and the same. The decision rendered in the case of Singhad Education Society (supra) does not lay down that the documents seized should be incriminating and should disclose undisclosed income before a valid proceedings can be commenced under section 153C of the Act. We may mention that there is a difference between addition made on the basis of the documents found in the course of search and initiating proceedings under section 153C of the Act on the basis of documents found in the search. While it may be true that for making an addition under section 153C of the Act, the documents found in the course of search should be incriminating, there is no such requirement for initiating proceedings under section 153C of the Act. It is seen from the judgment of the Hon'ble Supreme Court in the case of Super Mall Pvt. Ltd.,(supra) that if in case the AO of the searched person and the other person is the same, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
