TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 345
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....th section 153A of the Act on the basis of such documents. The AO computed total income at Rs. 22,49,330/-. The assessee unsuccessfully argued before the ld. CIT(A) that a proper satisfaction was not recorded by the correct AO before taking up the proceedings u/s 153C against the assessee. The ld. CIT(A) dismissed the appeal of the assessee on all the legal issues taken up before him and also on merits. 4. Before us, the ld. Counsel for the assessee emphasized on the improper recording of satisfaction by the AO to contend that the search action and the consequential assessment be annulled. This was strongly countered by the ld. DR. 5. We have heard the rival submissions and perused the relevant material on record. It is apparent from the assessment order of the assessee that a search was carried out u/s 132 of the Act on Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., and in such search proceedings some incriminating material belonging to the assessee was found which led to the making of assessment u/s 153C read with section 153A of the Act. In order to appreciate the contention made by the ld. AR on the question of recording of proper satisfaction, ....
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....urisdiction. Unless such jurisdictional condition is satisfied, there can be no question of making assessment or reassessment of the 'other person.' 7. At this juncture, it would be relevant to note the provisions of section 158BD, which is a predecessor provision of section 153C, under the scheme of block assessment. The relevant part of this section is as under :- "158BD. Undisclosed income of any other person. Where the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or any assets were requisitioned under section 132A, then, the books of account, other documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed under section 158BC against such other person and the provisions of this Chapter shall apply accordingly." 8. It is discernible from a careful perusal of section 158BD that where the AO of the person searched is satisfied that undisclosed income belongs to any person other than the person search....
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....the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the 'other person.' On a close comparative study, it is overt that in so far as the question of acquiring jurisdiction by the AO of the person other than the person searched is concerned, the provisions of section 153C are in pari materia with section 158BD. Since the relevant part of section 158BD is similar to that of section 153C, the ratio decidendi of the judgments of the Hon'ble Summit Court to this extent will apply with full force in the context of sec. 153C as well. 12. Let us examine the facts of the instant case more elaborately. It is seen that some satisfaction was recorded, a copy of which is available on page 4 of the paper book, as under:- "Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 in the case of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi, PAN: AACCT6679D for A.Y. 2003-04 to 2008-09. 08.09.2010 In the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd., search & seizure took place u/s 132 on 20.10.2008. The undersigned is the jurisdictional AO of this ca....
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....ote and replies given by the Department to the persons searched under the RTI Act, it clearly emerges that no satisfaction was recorded by the AO in the cases of the persons searched u/s 132(1) of the Act (i.e. Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt. Ltd.) that some books of account or documents etc. belonging to the assessee were found which were handed over to the AO of the 'other person' (i.e. the assessee). The Satisfaction note as reproduced above has been prepared by the AO of the assessee. 15. The ld. DR vehemently accentuated on the point that since the AO of the persons searched and the assessee is same, it does not make any difference whether the satisfaction is recorded in the case of the persons searched or other person. She emphasized on the factum of recording satisfaction by the AO, which condition in her opinion stood satisfied, by virtue of it having been recorded by the common AO. 16. In our considered opinion, this contention advanced on behalf of the Revenue is devoid of merit. We fail to comprehend as to how the requirement of recording satisfaction by the AO of the person searched provided by the statute can be substit....
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....cial to note is capacity of the AO and not his identity. In view of the fact that when the statutory stipulation is for recording the satisfaction by the AO of the person searched, then, it cannot be substituted with the satisfaction of the AO of the 'other person.' This contention also fails. 18. At this stage, it is relevant to note that the legislature has substituted the latter part of section 153C(1) by the Finance (No.2) Act, 2014 w.e.f. 1.10.2014. The hitherto part of sub-section (1): "and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person .........referred to in sub-section (1) of section 153A.' has been substituted as under : - 'and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-sec....
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....he ld. DR contended that the above referred two Tribunal orders are per incurium and should not be followed. The main reason for declaring the tribunal orders as per incurium was the non-consideration of the judgment of the Hon'ble jurisdictional High Court in judgment in the case of SSP Aviation Ltd. VS. DCIT (2012) 252 CTR (Del) 291. 23. Let us examine the case of SSP Aviation Ltd. (supra) for evaluating the contention that the instant assessment be declared as per law. The Hon'ble High Court in that case has held that the Assessing Officer having jurisdiction over the searched person should be satisfied that the valuable article or books of account or documents seized during the search belong to a person other than the searched person and there is no requirement in section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must conclusively reflect or disclose any undisclosed income. We find that there is no such controversy before us as was there before the Hon'ble High Court. It is not the case of the assessee before us in this ground that the documents etc. found f....