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TMI Blog2024 (3) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by the Income Tax Appellate Tribunal ['ITAT'] dated 11 December 2019. For the purposes of considering the issues that arise, we are of the opinion that Question (A) as proposed and extracted hereunder would suffice: "(A) Whether, in the facts and circumstances of the ease and in law, the ITAT was justified in setting aside the assessment proceedings under Section 153C by holding that satisfaction in terms of provisions of section 153C has not been recorded in the case of searched person without appreciating that the Assessing Officer of the assessee and of the searched person was the same and there was no question of transmitting such documents from one Assessing Officer to another?" 3. As is manifest from a reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sure about, and the note should reflect this, is that it does belong to B. Once the note says that then the requirement of section 153C is fulfilled. 28. Therefore, the court does not agree with Mr. Sabharwal that there have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t belong to the searched person would vitiate the proceedings under section 153C against the other person. 39. The Madhya Pradesh High Court in CIT v. Mechmen (supra) reiterated the settled position that it is mandatory for the Assessing Officer of the searched person to record a satisfaction note in respect of the other person. That proposition is in fact too well settled. The Central Board of Direct Taxes circular now puts it beyond the pale of doubt. It categorically states that even where the Assessing Officer of the searched person and the other person is the same, such Assessing Officer is not relieved of his statutory obligation to record a satisfaction note in respect of the other person. xxxx xxxx xxxx 41. To summarise the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) Where the Assessing Officer of the searched person and the other person is the same, such a satisfaction note qua the other person has to be recorded by the Assessing Officer of the searched person prior to the initiation of the proceedings against the other person. This is a sine qua non for triggering the proceedings against the other person under section 153C of the Act. (v) There do not have to be two separate satisfaction notes prepared by the Assessing Officer of the searched person even where he is also the Assessing Officer of the other person. In such event, the Assessing Officer need make only one satisfaction note. That satisfaction note is qua the other person. Further it is sufficient that such satisfaction note is placed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions 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 su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2017) 395 ITR 692] , the same is for the administrative convenience and the failure by the assessing officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the assessing officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings under Section 153-C of the Act against the other person. At the same time, the satisfaction note by the assessing officer of the searched person that the documents, etc. so seized during the search and seizure from the searched person belonged to the other person and transmitting such material to the assessing officer of the other person is mandatory. However, in the case where the assessing officer of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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