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TMI Blog2024 (7) TMI 1560X X X X Extracts X X X X X X X X Extracts X X X X ..... seized material as per Section 153C of the Act? 2. Whether on the facts & circumstances of the case and in law, the Ld. CIT(A) has erred in the considering the fact that satisfaction note drawn by AO of the searched person is a necessary requirement for initiation of proceedings u/s 153C of the Act and information in this case was disseminated by investigation wing of the department? 3. Whether on the facts & circumstances of the case and in law, the Ld. CIT(A) has erred in overlooking the fact that no satisfaction note of the AO of the searched was sent to the AO of the assessee? 4. Whether on the facts & circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition ignoring the fact that there are no provisions in the Act that limit the scope of assessment/re-assessment u/s 147 of the Act in cases arising from information received on the basis of seized material? 5. (a) The Order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal." 3. We have heard the rival submissions and perused the mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by observing as under:- 5.4.1 The paper on the basis of which addition has been made pertains to the appellant as It has the name of the appellant 1.e. Mr. Deepak Gambhir It relates to transactions of security (Alankit Limited) on National Stock Exchange (NSE). The details as per contract note Issued by M/s Rajgul Securities Pvt Ltd to the appellant in this regard matches with details on this seized sheet 5.4.2 The seized paper has some extra details other that what is available in contract note. These details are as under: Commission @ 5.5% (second last column) Our share: Calculation given in third last column and distribution of commission is given at the bottom. As per the distribution, the share of Alankit Group is 70%. Bhallaji Share: Calculation given in second last column and distribution of commission is given at the hottom. As per the distribution, the share of Mr. Sunil Bhalla is 30%. Remark: received". In this column, it has clearly been mentioned that "Commission This commission was over and above the brokerage and received in cash as stated by Mr. SK Gupta in his statement. 5.4.3 Further, the name of Mr. S K Bhalla is also appearing in the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not followed, block assessment proceedings would be illegal. The CIT(A) has correctly observed that the provisions of s. 153C are exactly similar to the provisions of s. 158BD of the Act in block assessment proceedings. Thus, considering the entire facts and the circumstances of the present case, we hold that the CIT(A)was fully justified in quashing the reassessment order. 5.5.2 Rajat Shubra Chatterji Vs. ACIT, ITAT Bench, ITA No. 2430/Del/2015 New Delhi "7. On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), we find that in that case as in the present case before us, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Santosh Group of institution and Dr. P. Mahalingam. Certain documents/ books of account were seized from the above premises which revealed that donation/capitation fee over and above the regular courses, During the course of recording statement u/s 132(4) of 1 T. Act, 1965 relevent seized materials were confronted to Dr. P. Mahalingam, chairman of the Trust. He has cotegorically admitted of accepting donation/capitation fee in cash and offered unaccounted money so received for taxation. On perusal of list given with the above information, it is revealed that Sh. Girish Chand Sharma, 38, Chhoti Holi, Near Ganga Mandir, Khurja, Bulandshahr, has given donation/capitation fee for the admission of his son Sh. Shiv Kumar Gaur for the course of MS ENT on 27.04.2010 amounting to JJ 40,01,000/-. In view of the above facts, I have reason to believe that income of JJ 40,01,000/- has escaped assessment due to failure on the part of the assessee to disclose true and correct particulars of income. In order to assess the some, notice u/s 148 of the 1.T. Act needs to be issued." 11. It can been from the above that search operation was carried on in the premises of Santosh Group of Institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016 hold that provisions of sec. 153C of the Act were applicable in the present case for framing the assessment, if any, which that the Assessing Officer has initiated reassessment proceedings in the present case on the basis of information received based on the material found excludes the application of sec. 147 of the hence, notice issued under sec. 148 of the Act and assessment framed in furtherance thereto under sec. 147 read with section 143(3) of the Act are void ab initio. Hence, the reassessment in question is accordingly quashed. Since I have already quashed the reassessment, there is no need to adjudicate other grounds. 12. In the result, both the appeals filed by the different Assessees stand allowed in the aforesaid manner." 13. A similar view was taken by Lucknow Bench of the Tribunal in ITA No. 205/LKW/2016 wherein also the search in the premises of Santosh Medical College was under consideration and coordinate bench was pleased to delete the impugned addition. 14. Respectfully following the findings of the coordinate bench (supra). I am inclined to hold that the notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 249 (Amritsar), Cargo Clearing Agency vs. JCIT-307 ITRI(Guj.); Rajat Shubra Chatterji vs. ACIT, New Delhi ITA No. 2430/Del/2015 dated 20.5.2016. 9. On the contrary, Ld. DR relied upon the orders of the authorities below and has tried to justify the action of the Assessing Officer in initiating reopening proceedings. 10. I have heard both the parties and perused the records, especially the impugned order as well as the Paper Book. On having gone through the decisions cited above especially the decision of Amritsar Bench in the case of ITO vs. Arun Kumar Kapoor (supra), I find that in that case as in the present case before me, reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds of appeal are not adjudicated separately." 5. It is not in dispute that the addition of Rs.3,64,21,799/- has been made based on incriminating material found in the course of search of M/s Alankit Group as information pertaining to the assessee herein. Hence, the same becomes a search material/ incriminating material found during the course of search of M/s Alankit Group which pertains to assessee herein. Hence, the right course of action to be initiated on the assessee qua such incriminating material would be initiation of proceedings u/s 153C of the Act and not u/s 147 of the Act. This has been rightly addressed by the ld CIT(A) while deleting the addition in the hands of the assessee. Further, we find that the issue in dispute is squarely covered by the decision of the Hon'ble Karnataka High Court in the case of Sri Dinakara Suvarna v. Dy. CIT reported in 454 ITR 21 (Kar.) dated 08.07.2022 wherein it was held that the provisions of section 153C of the Act are pari materia with Section 158BD of the Act (erstwhile block assessment proceedings under Chapter XIVB of the Act). Hence, the ratio laid down by the Hon'ble Supreme Court in the case of Manish Maheshwari Vs. AC ..... X X X X Extracts X X X X X X X X Extracts X X X X
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