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TMI Blog2021 (12) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... n seized documents were in the nature of accommodation entries only for routing the undisclosed income of M/s Golf Link Hospitality Pvt. Ltd. and hence such documents constituted "incriminating material" for the purpose of the issue of notice u/s 153C in the context of assessee. 2. Whether on facts and circumstances of the case and in law, the Ld. C1T(A) erred in law while holding that the seized balance sheet of M/s. Golf Link Hospitality Pvt. Ltd. did not constitute "incriminating material" on grounds that the balance sheet was part of regular books, without appreciating that since all the searched entities of M/s Golf Link Hospitality Pvt. Ltd. were found to be engaged in routing the unaccounted funds by layering through various entities including assessee, controlled by them as mentioned in the satisfaction note, therefore the mere fact that the entries were recorded in regular balance sheet of the beneficiary could not by itself allow the treatment of such seized documents as non-incriminating in the context of entities providing accommodation entries i.e. assessee 3. Whether on facts and circumstances of tire case and in law, the Ld. CIT(A) erred in law while holding that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment framed u/s 153C of the Act to be bad in law, because none of the additions were based on any incriminating document found or seized during the course of search as per the very specific notice u/s 153C of the Act. Learned CIT(A) had called for the remand report from the AO with specific request to comment on the contention of the assessee which is evident from Para - 5.2 of the impugned appellate order. In response, the AO has submitted his report vide letter dated 14.05.2018, the content of which has been reproduced in Para - 5.3 running from Pages 4 to 6 of the appellate order. After calling the assessee's counter, the Learned CIT(A) first of all has incorporated 'satisfaction note', scanned copy of which has been reproduced from pages 9 to 13 of the appellate order and thereafter, he categorically noted that satisfaction note recorded by the AO has not brought out any seized material belonging to the assessee-company, in fact, there is no incriminating document. Apart from that, he also noted that in the satisfaction note there is no assessment year which has been mentioned and accordingly concluded that notice issued u/s 153C of the Act is legally invalid as it does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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, pertains or pertain to, or any information contained therein, relates 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] 70 [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 sub-section (1) of section 153A]:] " A plain reading of provision u/s 153C makes it abundantly clear that the some imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 even time barred." Thus, facts of the instant case are squarely covered by the ratio of the judgment mentioned here-in-above. 5.8 Hon'ble Delhi High Court in para 31 has held in the case of Index Security Pvt. Ltd [86 taxmann.com 84 (Del)] as follows: "As regards the section jurisdictional requirement viz., that the seized documents must b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice is hereby quashed and annulled. Thus, these legal grounds of appeals i.e. for A.Y. 2010-11 to A.Y. 2013-14 are decided in favour of the appellant. 6. Since order u/s 153C of the Act is treated as annulled for all assessment years, remaining grounds of appeal for each assessment year consequently become infructuous. Therefore; same are not being adjudicated and treated as dismissed. 5. Learned CIT-DR strongly relied upon the order of AO and submitted that, once notice u/s 153C of the Act has been issued for making assessment and re-assessment, thus AO is empowered to examine the issues arising during the course of assessment proceedings. Accordingly, the matter deserves to be decided on merits and Learned CIT(A) quashing the assessment be set aside. 6. After considering the aforesaid submissions of the Learned CIT-DR and perusal of the AO order, we find that it is an admitted fact that, firstly, the satisfaction note recorded by the AO does not mention or is based on any seized material belonging to the assessee company and consequently, the additions made by the AO has no co-relation with any seized material. The aforesaid finding of the Learned CIT(A) has not been rebutted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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