TMI Blog2023 (6) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) TMI 361 - SUPREME COURT] and is rejected - ITA No.2404, 2405, 2406, 2407 And 2408/Ahd/2007 - - - Dated:- 14-6-2023 - Smt.Annapurna Gupta, Accountant Member And Shri T.R.Senthil Kumar, Judicial Member For the Assessee : Shri Nimesh Vayawala, AR For the Revenue : Shri Atul Pandey, Sr.DR ORDER PER BENCH: These five appeals have been filed by the assessee against separate orders passed by the ld. Commissioner of Income Tax(A), Ahmedabad of even dated i.e 17.1.2007 under section 250(6) of the Income Tax Act, 1961 [hereinafter referred to as the Act for short]for the above five assessment years. 2. At the outset, it was stated that the present appeals have been recalled for hearing vide order in MA Nos.56 to 60/Ahd/2016 dated 29.1.2020, being earlier disposed of by the ITAT vide its order dated 12/4/2013. Copies of both the orders were filed before us. 3. Perusal of the order of the ITAT in the MA filed by the assessee reveals that the ITAT recalled the order for the limited purpose of adjudicating the issue of validity of the assessment framed under section 153C of the Act in all the present appeals, noting the mistake of the issue having not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, if the Tribunal failed to take cognizance of the proposition laid down by the Hon ble jurisdictional High Court, then it would be construed that the Tribunal has committed an apparent error. 5. The ITAT found merit in this contention of the assessee noting that in view of various judicial pronouncements including that of the Hon ble Apex Court and the jurisdictional High Court, it was mandatory for the AO of the searched person to record satisfaction of documents found during search belonging to other persons, before transmitting the record to the AO of other persons to whom documents were found during the course of search; that the Tribunal having failed to consider the authoritative pronouncements of the Hon ble Apex court as well as Hon ble Gujarat High Court referred to by the assessee, during the course of hearing, in the right perspective, there was an apparent error committed by the ITAT, and accordingly, all the MAs were allowed and the order of the Tribunal was recalled. The detailed finding of the ITAT at para-4 to 6 of the order, in this regard are as under: 4. We have duly considered rival submissions and gone through the record carefully. At th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction is required to be recorded. This finding of the Tribunal is contrary to the decision of the Hon'ble jurisdictional High Court. In view of the above, we are of the view that Department is required to produce copy of the satisfaction, if any, recorded in the case of searched person. The Department is further required to produce any material belonging to the assessee, if found, at the premises of the assessee. The Department has been taking adjournments for a quite sufficient time; therefore, we direct the Assessing Officer to produce these details by next date of hearing. The hearing is adjourned to 6 December 2019. Copy of this order be supplied to both the parties. 3. He further pointed out that all the material was collected by the assessee under Right to Information Act, and these are already being taken on record during the course of appeal hearing. For this purpose, he brought to our notice copy of the letter dated 18.5.2012 wherein Dy.CIT, Bharuch Circle, Shri R.V. Patel informed Yakub Ahmed Coldrink for issuance of notice under section 153C to Bharat Ginning Pressing Factory. On the strength of these details he submitted that there is no need to adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 2009 - wherein documents not written by the assessee. The proceeding held invalid. iii. CIT vs. Jyotindra V Vasa in Tax Appeal No. 99 of 2011- wherein proceeding u/s. 153C held invalid on the ground that no books of account and other valuables were found belonging to the assessee. iv. Vijaybhai N. Chandrani vs. ACIT [2011] 333 ITR 436 (Guj.) - wherein proceeding u/s. 153C is held invalid on the basis ofassessee's name referred in different columns. v. Shri Alkesh M. Patel vs. DCIT, Central Circle-1(1), Ahmadabad in IT(SS)A Nos. 144 to 146/Ahd/2010 C.O. Nos. 90, 91, 105/Ahd/2010 - wherein Co-ordinate 'D' Bench, Ahmedabad held that diary belonging to the assessee was found, therefore, initiation proceeding u/s.153C is held valid. vi. DCIT, CC-1(2), Ahmadabad vs. Shri AbhalbhaiArjanbhai Jadeja in ITA Nos. 174, 175 176/Ahd/2009 for A.Y. 03-04, 04-05 05-06 - wherein Co- ordinate 'B' Bench, Ahmadabad held that proceeding u/s. 153C is held valid. vii. Vishnu Anant Mahajan vs. ACIT, Circle 5, Baroda - wherein salary and interest income of the partner is held business income in the hands of partner. viii. CIT vs. Late J. Chandrasekar ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he course of search. Therefore, proceeding u/s.153A was invalid. The case laws cited by the appellant in case of ACIT vs. M/s Pratibha Industries Ltd. (supra) is totally on different footing which was on apportionment of the disclosure between 80IA unit or non 80IA unit. In assessee's case, in all the years, no scrutiny assessment has been made by the A.O. The return of the appellant had been process u/s. 143 (1) (a) and it was held by the Hon'ble Apex Court in case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd, 291 ITR 500 (SC), intimation u/s.143(1)(a) cannot be treated to be an order of assessment and there being no assessment u/s.143(1)(a). The Section 153D has been amended w.e.f. 01.06.2007 whereas the ld. A.O. has passed orders u/s. 153C in all the years on 24/03/2006. Thus, no approval of JCIT/ACIT is required. Keeping in view of the facts and legal position on this issue, we have considered view that CIT(A) was right in confirming the action of the A.O. u/s.153 of the IT Act. Thus, the first ground of appeal in all the years is dismissed. 6. The Hon'ble Supreme Court in the case of CIT Vs. Calcutta Knitwears, reported 362 ITR 673 (SC) has considered pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, and recall the impugned order of the Tribunal. We direct the Registry to re-fix the appeals on 2.3.2020 for hearing afresh. Issue notice to both parties. 6. We have also gone through the order of the ITAT in the first round, and we have noted from para-5 of the order that the ITAT had dismissed this contention of the assessee of satisfaction of the AO of the searched person to be recorded for a valid assumption of jurisdiction under section 153C of the Act by the AO of the assessee, by holding that the AO of the partners as well as of the firm,(the assessee before us) was the same, and since it was partners who were subjected to search action, the AOs of both firms and partners being the same, the ITAT held that there was no separate satisfaction required to be recorded by the AO of such searched persons while transmitting documents to the AO of the assessee, and in this regard, it relied upon the decision of the Kerala High Court in the case of CIT v. Panchajanyam Management Agencies Services [2011] 333 ITR 281. 7. Before that we have noted from para-5 of the ITAT order that the ITAT also recorded a finding of the fact that during search operation at the residential a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found during the course of search. He placed reliance on the decision of the Hon ble Apex Court in the case of CIT Vs. Sinhgad Technical Education Society, (2017) 84 taxmann.com 290 (SC) for the same. 10. We have heard contentions of the ld.counsel for the assessee at length. We also went through all the documents to which our attention was drawn, which included copy of response of the department to RTI application filed by the assessee stating that with respect to the assessee, nothing was found during the search, and he even pointed out to the assessment order passed stating that it did not refer to any seized material found. We see no reason to entertain these fresh pleas now raised by the assessee before us for the simple reason that it has nothing to do with the mistake which was noted by the ITAT in the order passed in the first round, and for which purpose, the appeal was recalled. As noted above, the only mistake which was noted by the ITAT was with regard to its finding that no satisfaction note of the AO of the searched person is required regarding documents relating to the assessee found during the course of search on some other persons for a valid assumption of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is before us in all the years. Ld. Counsel for the appellant contended that there is no books of account were found during the course of search belonging to the firm. Therefore, no proceeding u/s. 153C could be initiated against the firm. He relied upon the decision of ITAT, Special Bench, Mumbai, in case of All Cargo Global Logistics Ltd. vs. DCIT in ITA Nos. 5018 to 5022 5059/M/10, order dated 6th July, 2012, wherein it was held that proceeding u/s. 153A will be made on the basis of incriminating material. He further relied upon the decision of ITAT, 'C' Bench, Mumbai, in case of ACIT vs. M/s Pratibha Industries Ltd. in ITA Nos. 2197 to 2199/Mum/2008, A.Y. 2000-01 to 2002-03, ITA Nos. 2200 to 2201/Mum/2008, A.Y. 2003-04 to 2004-05 ITA No. 2202/Mum/2008, A.Y. 2005- 06, wherein it was held that CIT(A) was right in apportionment of offered amount of Rs. 1.95 Crore to the income eligible for deduction u/s.80IA for the A.Y. 05-06 and proceeding u/s. 153A is to be made on the basis of incriminating document found indicating undisclosed income. Then the addition was only be restricted to those documents/incriminating materials and clubbed only to the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate In ITA Nos. 144 to 149/Agra/2011 for A.Y. 2003-04 to 2008-09, order dated 30.11.2012, wherein the issue was no satisfaction recorded by the A.O. of the search party. Again, he further relied upon in case of Akil Gulamali somji vs. ITO, Pune [2012] 20 taxmann.com 380 (Pune), wherein the issue of prior approval of ACIT/ JCIT is required to pass the order u/s.153C r.w.s. 153A of the IT Act. The assessee further relied upon following cases: i. CIT vs. M/s Gambhir Silk Mills in Tax Appeal No. 1493 of 2010 - wherein assessment proceeding u/s. 153C was completed and documents not written by the assessee. Held, proceeding invalid. ii. CIT vs. Meghmani Organics Limited in Tax Appeal Nos. 2077, 2078 to 2086 of 2009 - wherein documents not written by the assessee. The proceeding held invalid. iii. CIT vs. Jyotindra V Vasa in Tax Appeal No. 99 of 2011- wherein proceeding u/s. 153C held invalid on the ground that no books of account and other valuables were found belonging to the assessee. iv. Vijaybhai N. Chandrani vs. ACIT [2011] 333 ITR 436 (Guj.) - wherein proceeding u/s. 153C is held invalid on the basis of assessee's name referred in different columns. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch place of the partner of the firm, the A.O. is fully empowered to initiate proceeding u/s. 153C of the IT Act against the firm i.e. other person. 12. Therefore the arguments now being raised before us have already been dealt with by the ITAT in the first round and no grievance against the findings of the ITAT on the issue was raised by the assessee its MA, this issue stand adjudicated by the ITAT for all purposes, and the assessee is not entitled to, therefore, rake up this issue again during the hearing in recall, which as we have noted above is limited in scope, to adjudicate only the mistake in the order of the ITAT in the first round. 12. In view of the above, we hold that the argument of the assessee that for a valid assumption of jurisdiction under section 153C of the Act, the AO of the searched person has to mandatorily record satisfaction of material or documents found during the course of search belonging to the assessee, is misplaced and against principles of law admittedly laid down by the Hon ble Apex Court in the case of Super Mall P. Ltd. (supra), and is rejected. 13. This order forms part of the original order dated 12.4.2013 passed in ITA No.2404, 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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