TMI Blog2022 (4) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... SINHGAD TECHNICAL EDUCATION SOCIETY [ 2017 (8) TMI 1298 - SUPREME COURT] - Decided in favour of assessee. - ITA Nos.5164 And 5165/Del/2018 - - - Dated:- 12-4-2022 - Shri Saktijit Dey, Judicial Member And Shri Pradip Kumar Kedia, Accountant Member For the Appellant : Sh. Ishtiyaque Ahmed, CIT For the Respondent : None ORDER PER SAKTIJIT DEY, JM: Captioned appeals by the Revenue arise out of a common order, dated 17.05.2018, of learned Commissioner of Income Tax (Appeals)-IV, Kanpur. Though, learned Commissioner (Appeals) in his order has disposed of the appeals relating to assessment years 2009-10, 2010-11, 2011-12 and 2014-15, however, presently, we are concerned with assessment years 2010-11 and 2011-12. 2. The common grounds raised by the Revenue in both the appeals read as under: 1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law while holding that there was no incriminating material for the issuance of notice u/s 153C, without appreciating that in the satisfaction note the AO had clearly brought out all the facts and circumstances, which indicated that the names of the entities includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice u/s 153C of the Act without appreciating that while recording the satisfaction for issue of 153C the test for incriminating material has to be only in nature of prima facie belief base on some material having live nexus and not in nature of absolute evidence established after detailed investigation of facts or law. 6. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) erred in applying the decision of the Hon'ble Supreme Court in the case of M/s Sinhaad Technical Education Society, which was distinguishable on the facts of the present case. 7. The order of the CIT (A) is erroneous in law and on facts of the case and is liable to be set aside and the order of the AO be restored. 2. When the appeals were called out for hearing none appeared for the assessee. However, the assessee has furnished letter dated 15.12.2021 submitting that the appeals may be decided in terms with the order passed by the Tribunal for assessment year 2009- 10. In view of the aforesaid, we proceed to dispose of the appeals with the assistance of learned Departmental Representative and based on materials available on record. 3. Briefly the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 and 81, 95 are for AY 2014-15, i.e., Balance sheet as at 31.03.2014. There is nothing incriminating. ii) TW-1: A-12, pages 74 to 77: These are the print out of books of account maintained by BBPL, assessee company. Page 74 75 are trial balance print out taken from tally books maintained by the assessee company for the financial year 2013-14. Nothing is incriminating in these documents. P.76 is profit A loss account print of Tally for, the period 1.4.2014 to 1 Dec. 2014. It has nothing incriminating. It is part of regular books of account maintained on tally by assessee company. P.77 is balance sheet print of tally for the period 1.4.2013 to 31.3.14. iii) TW-1: A-104 105 at the residential house of Mukul Supta: Page 104 105 is Bank of India, B.S. Zafar Marg a/c no.64 for the period 15.05.2007 to 13-06-2007, which is relevant to AY 2008-09. This is part of regular books of account of M/s. Balaji Banquets Pvt. Ltd., being a disclosed regular bank account. The' document is for the A.Y. 2008-09, which is time barred period and further not incriminating at all. iv) TW-11, found and seized from 117, Hans Bhawan, 1 BSZ Marg, New Delhi, which is the register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, no addition is made by the Assessing Officer on the seized document. Thus, there is clear absence of incriminating material, hence, it is concluded that there exist no incriminating seized material for these relevant assessment year to justify issue of notice u/s 153C of the Act. Further, it is settled preposition of law that notice u/s 153C of the Act is bad in law in absence of any undisclosed assets or incriminating documents found as a result of search. Findings of Hon'ble Supreme Court given in the case of PCIT-3, Pune Vs Sinhgad Technical Education Society (2017.) 397 ITR 344 (SC) is squarely applicable in present cases. The Assessing Officer has not made any addition on the basis of any incriminating document found and also, additions made by Assessing Officer does not co-relate with satisfaction noted by him. In absence of incriminating seized material relating to assessment year under consideration, actjion u/s 153C of the Act cannot be treated as valid in the eye of law. 5.10 The proceedings u/s 153C of the Act are very specific and clearly explained in the Act. For the sake of clarity, relevant provisions of Act are as under; 153C.[(l)][Notwithstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by Assessing Officer does not have any co-relation with any incriminating document because addition made by Assessing Officer is not based on any incriminating material found as a result of search. Undoubtedly, no incriminating document was found. Therefore, decision of Hon ble Supreme Court in the case of Sinhgad Technical Educational Society (Supra) is clearly applicable to the facts of the present case, wherein it is held that existence of incriminating material is imperative pre-condition for issue of notice u/s 153C of the Act for the relevant assessment years. 5.12 Hon'ble Supreme Court in the case of PCIT-3, Pune Vs Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) has held that the nexus between issue of notice u/s 153C and the incriminating material found as a result of search must exist. Hon'ble Supreme Court in para 13 of the order has observed that one of the jurisdictional conditions precedent to the issue of a notice u/s 153C of the Act is that money, bullion, jewellery or other valuable article or thing or any books of account or document must be seized or requisitioned for the relevant assessment year for issue of notice u/s 153C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at in order to justify the assumption of jurisdiction under section 153C of the Act the documents seized must be incriminating and must relate to each of the AYs whose assessments are sought to be reopened. 5.14 Thus, from the plain reading of language of section 153C of the Act and various judicial pronouncement cited here-in-above, it is abundantly clear that in order to reopen the assessment of other person u/s. 153C of the Act for the assessment year earlier to the year of search, direct correlation must exist between existence of incriminating material and relevant assessment years. In the instance case, admittedly, additions are not based on any incriminating document found as a result of search. In fact, no incriminating document is mentioned in the satisfaction recorded by Assessing Officer. In view of the detailed discussion mentioned here in above and respectfully following the judgment of the Supreme Court in the case of Sinhgad Technical Educational Society, it is concluded that notice u/s 153C of the Act issued by the Assessing Officer need to be treated as void ab-initio, invalid and legally not sustainable and hereby quashed. Therefore, assessment framed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is an uncontroverted fact that the seized documents as mentioned in the impugned appellate order, none of these pertains to Assessment Year 2009-10; and secondly, the seized documents are only financial statement that to be for the Assessment Years 2008-09, 2012- 13 and 2014-15 and nothing is for Assessment Year 2009-10. Even the additions made by the Assessing Officer are based on the balance sheet and not on any seized documents or any incriminating material. Admittedly, the assessment for the Assessment Year 2009-10 had attained finality at the time of recording of satisfaction/issuance of notice u/s.153C, and therefore, any addition which could have been made by framing the assessment u/s.153C/153A, the same could have been only on the basis of incriminating document. The aforesaid detailed finding of the Id. CIT(A) is inconsonance with the judgment of Hon ble Supreme Court in the case of PCIT vs. Singhad Technical Educational Society (2017) 397 ITR 344 (SC) and also by the Hon ble Jurisdictional High Court as noted by the Id. CIT(A). Thus, we do not find any infirmity in the order of the Id. CIT(A), the same is confirmed. Accordingly, the appeal of the Revenue is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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