TaxTMI 
TaxTMI 
2011 (8) TMI 801
X X X X Extracts X X X X
X X X X Extracts X X X X
....n with regard to disclosure of the satisfaction note has been considered by this Court in several decisions beginning from Dr. Nand Lal Tahliani vs. CIT 170 ITR 592 (Alld) to City Montessory School (Regd) vs. Union of India and Ors. (Writ Petition No. 2818 (MB) of 2000 along with two other connected petitions in 2007. The consistent view taken is that the material on the basis of which warrant of authorisation under Section 132 was issued and the search and seizure operations were carried out should be disclosed to the assessee unless privilege is claimed. Shri Dhananjay Awasthi has pleaded but has not filed application and affidavit claiming privilege of the documents. He prays for and is allowed two weeks time to have consult with the department and if advised claim privilege. We are informed that after the search and seizure was carried out, the assessment orders were passed by ACIT under Section 153 on 28th December, 2007, making some additions. None of the assets seized were considered undisclosed and there was no mention of any seized documents in the order. There is no mention of computer data also in the order. By order dated 29th June, 2009 CIT (Appeals), M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll as the application for return of the articles be brought on record by supplementary affidavit within a week. The assessment and appellate orders will be filed by Shri Shubham Aggrawal along with supplementary affidavit before the date fixed. List again in the additional cause list on 17th May, 2011. A copy of the order be given to Shri Dhananjay Awasthi appearing for the Income Tax Department." The department claimed privilege to disclose the satisfaction note, put up by the Assistant Director of Income Tax (Investigation) before the Joint/Additional Director of Income Tax (Investigation). The application claiming privilege filed under Section 123 of the Evidence Act, 1872 was rejected by us on 17.5.2011. It was thereafter brought to our notice that against the assessments on the basis of seized material in the searches carried out on 27th and 28th October, 2005, and against the orders of CIT (A), the department has filed appeals in the Income Tax Appellate Tribunal (ITAT) and that the finality of the assessment proceedings and interest of revenue will suffer in case the directions dated 4.5.2011 are to be followed. The department prayed for modifying the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assessee it will jeopardize the whole functioning of the department irreparably and on the broader terms whole search and seizure actions of the future will get affected. 6. That the source of information and method of verification is confidential and cannot be disclosed to the petitioner or to any other person. The satisfaction note prepared before the signing of the authorization is highly confidential and its revelation to the assessee or to general public may prove detrimental to the potential information given as well as the department. 7. That in view of the above stated facts I, Director of Income Tax (Investigation) under Section 123 and 124 of the Evidence Act, 1972 hereby claim privilege in the instant case for not showing this satisfaction note to the petitioner." We find that none of the grounds, taken in the affidavit of Shri Umesh Takyar, Deputy Director of Income Tax (Investigation)-I, Meerut in support of the application under Section 123 of the Evidence Act, is relevant for claiming privilege. The confidentiality of the information by itself cannot be a ground to claim privilege. The claim of the department, that the authorisation is highly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....artment was required to complete the proceedings of assessment and return the articles, if nothing was required to be recovered from such articles in consequence to the assessment, long ago. The department has also attracted, in the process the penalty of simple interest at the rate of one and half per cent for every month or part of the month of the amount which was seized. In order to alley any apprehension and to conclude the issues, we find it appropriate to direct that pending appeals be decided by ITAT within a period of one month from the date a certified copy of the order is produced and that within a week from the decision of the appeal, unless the orders of the ITAT otherwise provide, the entire article seized may be returned to the petitioner within a week of the decision of the appeal. Our order dated 4.5.2011 is modified to that extent. List this matter for final hearing on 19.7.2011. The sealed envelop shall be retained by the Registrar General to be produced on 19.7.2011." Shri Dhananjai Awasthi appearing for the department has filed an affidavit of Smt. Beena Jaiswal, Income Tax Inspector, in the office of Income Tax (Investigation)-I, Meerut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....011 as it is no longer feasible to do so, hence the Hon'ble High Court may condone the non-compliance of direction regarding return of the seized material within 7 days after decision of the ITAT. The Hon'ble Court may take a lenient view and may suitably modify the order dated 17.5.2011." From the order of the ITAT we find that the Tribunal has upheld the order of CIT (A) for deletion of Rs. 8 lacs received as gift, but has set aside the order of CIT (A) regarding a sum of Rs. 15 lacs. In the circumstances the objections raised by Shri Dhananjai Awasthi for the revenue, that since the CIT (A) has to decide the appeal denovo, there is no justification to return the seized gifts at this stage, is liable to be rejected. The ITAT has observed in paragraph - 3 of the order that the AO initiated assessment proceedings under section 153A by issuing a notice on 10.9.2007 for six assessment years from assessment year 2000-01 to 2005- 06, and also for the assessment year 2006-07. The Tribunal concerned itself only with the appeals relating to assessment made by AO for the assessment years 2003-04 and 2004- 05. No other appeal was filed by the assessee or by revenue for any previous ....