TMI Blog2022 (8) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... l allowed. - I.T.A. No.532, 533, 534 And 535/Viz/2019 - - - Dated:- 22-8-2022 - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Appellant : Sri I. Kama Sastry, CA For the Respondent : Sri MN Murthy Naik, CIT-DR ORDER PER S. BALAKRISHNAN, ACCOUNTANT MEMBER : These appeals filed by the assessee are directed against the order of the Ld. Commissioner of Income Tax (Appeals)-9, Hyderabad [the Ld. CIT(A)] in ITA Nos. 10482, 10483, 10484 10490/CIT(A)-9/Hyd/2018-19, dated 23rd July, 2019 arising out of the order passed U/s. 153C of the Income Tax Act, 1961 [the Act]. 2. Brief facts of the case are that a search and seizure operations u/s. 132 of the Act was conducted in the residential premises of Palla Sankara Rao on 14/03/2014 and a prohibitory order was issued in respect of one almirah. The prohibitory order was lifted on 11/4/2014 and the search was completed on 11/4/2014. On the basis of the material from almirah, a notice u/s. 153C was issued on 05/01/2015 by the ACIT, Circle-5(1), Visakhapatnam to the assessee. The assessee filed its return of income u/s. 153C admitting a total income of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 153C of the Act to the person other than the searched person. The ld. AR further submitted that even though the searched persons has admitted the income in the hands of the assessee, it is mandatory as held by various courts that a satisfaction must be recorded by the AO. The Ld. AR further submitted that the Ld. AO cannot assume jurisdiction merely by consent or waiver made by the assessee. The Ld. AR also pointed out that the assessee has addressed letter dated 21/11/2018, 2/8/2019, 10/02/2020 and again on 19/02/2020 requesting the ACIT, Circle-5(1), Visakhapatnam being the Assessing Officer to provide copies of the satisfaction note recorded by him U/s. 153C of the Act. The Ld. AR submitted that the satisfaction note was never provided to the assessee inspite of our several repeated requests. Further, the Ld. AR also submitted that the notice U/s. 153C was issued on the assessee has also not specified the satisfaction note recorded by the AO of the searched person. The Ld. AR relied on the decision rendered in the case of CIT vs. Calcutta Knitwears [2014] 223 Taxman 0115 (SC). The Ld. AR also further placed reliance on the Circular No. 24/2015, dated 31/12/2015 wherein a clar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a separate satisfaction note is not required since the AO is the same for the assessee and the searched person, cannot be accepted. We extract below section 153C of the Act for the sake of reference: 153C. (1) Notwithstanding 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A. 7. We also find from the letter dated 9/9/2021 by the DCIT, Circle-3(1), Visakhapatnam in F.No.DCIT/C-3(1)/VSP/Misc/2021-22, the Ld. AO has accepted the fact as follows: .. .On verification of the assessment folders, satisfaction recorded before issue notice U/s. 153C was not found as per the order sheet notings. .. 8. In the light of the above, we understand that satisfaction note was not recorded by the AO before issuing the notice U/s. 153C of the Act. From the reliance placed by the Ld. DR in the decision of the Hon ble Supreme Court in the case of Super Malls (P.) Ltd (supra), it is seen from para 6.2 that a satisfaction note was recorded by the Assessing Officer and the question arose before the Supreme Court was whether there is sufficient compliance of section 153C or not with respect to satisfaction recorded by the AO? The Hon ble Supreme Court has observed that in that case the Assessing Officer was satisfied and it was specifically mentioned that the books of account seized were belonging to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , with regard to recording of satisfaction note, may he brought to the notice of all for strict compliance. It is further clarified that even if the AO of the searched person and the other person is one and the same, then also he is required to record his satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgement. Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BD /153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. 9. From the plain reading of the above Circular, it is noticed in para 4 that even if the AO of the searched person and the other person is one and the same, then also AO is required to record the satisfaction, as held by the various Courts. In the instant case, no such material has been brought before us by the ld. DR. In view of the above discussions, since the satisfaction was not recorded by the Assessing Officer before issue of notice U/s. 153C of the Act, we are of the considered view that the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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