Assessee's Appeal Granted, Revenue's Appeals Dismissed, Assessment Orders Quashed

The tribunal found that the delay in filing the appeal by the assessee was condoned due to significant jurisdictional issues raised. The tribunal also held that the initiation of proceedings under Section 153C was invalid as the satisfaction was not recorded by the correct authority. Consequently, all assessment orders were quashed, the revenue's appeals were dismissed, and the assessee's appeals were allowed.

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Issues Involved:
1. Condonation of delay in filing the appeal by the assessee.
2. Validity of jurisdiction acquired by the Assessing Officer under Section 153C of the Income Tax Act.
3. Recording of 'satisfaction' by the Assessing Officer for initiating proceedings under Section 153C.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The assessee's appeals were delayed by 201 days. The assessee argued that the delay was due to a bona fide belief that the appeal had been allowed completely, and no tax was demanded post the appeal. Later, the assessee was advised about contradictions in the CIT (Appeals) order and issues regarding the jurisdiction of the Assessing Officer under Section 153C. The delay was not due to negligence or mala fide intention. The revenue objected, stating the assessee should have filed a cross-objection within 30 days of notice and that the assessee's advocate should have provided proper advice. After considering the submissions, the tribunal found that the jurisdictional issue raised by the assessee was significant and there was no gross negligence. Hence, in the interest of substantial justice, the delay was condoned, and the appeal was heard on merits.

2. Validity of Jurisdiction Acquired by the Assessing Officer under Section 153C:
The primary issue in the assessee's appeal was the validity of the jurisdiction acquired by the Assessing Officer under Section 153C. The assessee contended that no 'satisfaction' was recorded by the Assessing Officer of the person searched, which is a prerequisite for initiating proceedings under Section 153C. The tribunal noted that in similar cases, such as Pr. CIT vs. Nikki Drugs Pvt. Ltd., the tribunal and the Delhi High Court had held that the satisfaction must be recorded by the Assessing Officer of the person searched. In the present case, the satisfaction was recorded by the Assessing Officer of the assessee, not the searched person, rendering the initiation of proceedings under Section 153C invalid.

3. Recording of 'Satisfaction' by the Assessing Officer:
The tribunal examined whether the satisfaction was recorded in accordance with Section 153C. The satisfaction note dated 15.09.2010 indicated that the satisfaction was recorded by the Assessing Officer of the assessee. According to Section 153C, the satisfaction must be recorded by the Assessing Officer of the person searched, who then hands over the documents to the Assessing Officer of the other person. The tribunal referred to the Delhi High Court's decision in Pepsi Foods Pvt. Ltd. vs. ACIT, which emphasized that the Assessing Officer of the searched person must be satisfied that the seized documents belong to another person. The tribunal concluded that the satisfaction was not recorded by the correct authority, rendering the proceedings under Section 153C invalid.

Conclusion:
The tribunal held that the initiation of proceedings under Section 153C was invalid due to the lack of proper satisfaction recorded by the Assessing Officer of the searched person. Consequently, all assessment orders for the impugned assessment years were quashed as void-ab-initio. The appeals of the revenue were dismissed as infructuous, and the appeals of the assessee were allowed. The order was pronounced in the open court on 27.04.2017.

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