TMI Blog2024 (3) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... ons therefor, the requirement of section 153C stands satisfied. The failure by the AO in such case to record in the satisfaction note that such document does not belong to the searched person will not vitiate the proceedings u/s153C against the other person. The said opinion as expressed by this Court in Ganpati Fincap was not interfered with by the Supreme Court [ 2024 (2) TMI 1051 - SC ORDER] dismissed the Special Leave Petition preferred by the assessees. It is also apposite to observe the findings as rendered by the Supreme Court in Super Malls Private Limited [ 2020 (3) TMI 361 - SUPREME COURT] held 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 sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly as far as the other person B is concerned, the Assessing Officer is expected to prepare a satisfaction note stating that the 2 documents belong to B. The failure by the Assessing Officer to add in the said satisfaction note that the 2 documents do not belong to A will not vitiate the entire proceedings against B under section 153C of the Act for the simple reason that there is no such requirement. 27. What the settled legal position as explained in several cases, which will be discussed shortly, is that the recording by the Assessing Officer of the searched person that some documents seized during the search belong to the other person is mandatory in order to assume jurisdiction qua the other person under section 153C of the Act. This is mandatory even where the Assessing Officer of the searched person and the other person is the same. This is also what the Central Board of Direct Taxes Circular now clarifies. In a particular case, given the nature of the document, it may become necessary for the Assessing Officer to indicate the basis of his satisfaction that the document belongs only to B and not to A. But then that is dictated by the nature of the document. What he has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the other person. xxxx xxxx xxxx 41. To summarise the legal position: (i) No search under section 132(1) of the Act can be initiated without a satisfaction note being recorded by the Assessing Officer of such searched person. This is followed by issuance of a notice to such searched person under section 153A of the Act. At that stage the Assessing Officer does not have to record another satisfaction note qua the searched person. (ii) Where proceedings are proposed to be initiated under section 153C of the Act against the other person , it has to be preceded by a satisfaction note by the Assessing Officer of the searched person. He will record in this satisfaction note that the seized document belongs to the other person. Depending on the nature and contents of the document he may be required to give some reasons for such conclusion. (iii) Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, the Assessing Officer will simultaneous with transmitting the documents along with his satisfaction note to the Assessing Officer of the other person, make a note in the file of the searched person that he has done so. But this is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Commissioner of Income Tax, 8, New Delhi [2020(4) SCC 581] and which are extracted hereinunder: 7. This Court had an occasion to consider the scheme of Section 153-C of the Act and the conditions precedent to be fulfilled/complied with before issuing notice under Section 153-C of the Act in Calcutta Knitwears [CIT v. Calcutta Knitwears, (2014) 6 SCC 444] as well as by the Delhi High Court in Pepsi Food (P) Ltd. [Pepsi Food (P) Ltd. v. CIT, 2014 SCC OnLine Del 4029 : (2014) 367 ITR 112] As held, before issuing notice under Section 153-C 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 searched person. That thereafter, after recording such satisfaction by the assessing officer of the searched person, he may transmit the records/documents/things/papers, etc. to the assessing officer having jurisdiction over such other person. After receipt of the aforesaid satisfaction and upon examination of such other documents relating to such other person, the jurisdictional assessing officer may proceed to issue a notice for the purpose of completion of the assessment under Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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