TaxTMI 
TaxTMI 
2015 (3) TMI 607
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....together, so these are being disposed off by this consolidated order for the sake of convenience. The assessees in their appeal and the Cross Objections have challenged the validity of the initiation of proceedings u/s 153C of the Income Tax Act, 1961 (hereinafter referred to as the Act). 3. First we will deal with the Cross Objection of the assessee in CO No. 370/Del/2014. Following grounds have been raised in this appeal: "1. (a). That the Ld. AO was not justified to assume the jurisdiction u/s. 153C of the I. T. Act in this case since the proceedings were beyond the period of six years prior to the date of recording of satisfaction u/s. 153C of the I. T. Act on 01/10/2010 and the assessment is in contravention with the provisions of Section 153C of the I. T. Act. (b) The assessment u/s. 153C of the 1. T. Act being barred by limitation period and having become time-barred may kindly be cancelled. 2. That the Ld. AO was not justified to ignore the fact that the assessment u/s 153C of the 1. T. Act be restricted to assessment in respect of seized documents and in absence of any seized documents in the case of respondents for the year under assessment, the assessment frame....
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....er consideration and in absence of any incriminating seized document in the case of respondents, assessment framed u/s. 153C of the I.T Act for the year under consideration, is time barred, bad in law and deserve to be quashed. 8. That on the facts and circumstances of the case and the provisions of law, the Ld. CIT (A)-II, has erred in holding the conclusion that the 'audited books' notwithstanding, the book results are required to be rejected, since the narrations are artificial, sham and not reflective of the actual business/commercial transactions. However, the Ld. CIT (A)-II, still relying on these books/book results for the purpose of calculating the peak from the entries in the cash book and for bank book of the respondents, amounting Rs. 7,97,069/- for the relevant year under consideration. A) That on the facts and on the circumstances of the case and the provisions of law, the Ld. CIT (A)-II, has erred in sustaining the addition of Rs. 7,97,069/- as unexplained Investment/Expenditure, ignoring the fact that the same are duly reflected/entered in the books of the accounts of the respondents for the year under consideration; B) That the Ld. CIT (A)-II, has wrongly....
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.... no male member in the family. However, the assessment was framed u/s 153C/144 of the Act by the AO at an income of Rs. 1,04,98,770/-. 5. Being aggrieved the assessee carried the matter to the ld. CIT(A) and challenged the assumption of jurisdiction u/s 153C of the Act on the plea that it is a time-barred, the assessment proceedings for the year under consideration were not pending on the date of recording of satisfaction and hence it did not abate for the purpose of section 153C of the Act. It was stated that the assessment u/s 153C of the Act was to be restricted to the seized documents and in the absence of those the assessment framed u/s 153C of the Act was bad in law and deserved to be quashed. The ld. CIT(A) after considering the submissions of the assessee held that since a number of documents belonging to the assessee were seized during search on Sh. B. K. Dhingra, the provisions of section 153C of the Act became applicable in the case of the assessee and there is no condition of satisfaction on the existence of incriminating documents for assumption of jurisdiction u/s 153C of the Act. However, on quantum addition, the ld. CIT(A) allowed part relief to the assessee. 6. N....
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.....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 case. During the course of search & seizure documents/papers at pages 101 to 132 of Annexure A-30, Page 144 of Annexure 7 and pages 33 to 48 of Annexure 22 seized by Party R-2, are found to belong to M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar park, New Delhi. I have examined the above mentioned documents/papers and provision of section 153C is invokeable in this case. As the undersigned is also the jurisdictional AO of M/s Tanveer Collection Pvt. Ltd., RZ-126, West Sagar Pur, Shankar Park, New Delhi. This satisfaction note is recorded and is placed in the file before issuing notice u/s 153C. ACIT, Central Circle - 17, New Delhi" 13. It can be seen from the assessment order that notice u/s 153C was issued to the assessee by the ACIT, Central Circle-17 on 08.09.2010, being the same date on which the above satisfaction was recorded. It is apparent that it was : ' Satisfaction Note for issuing Notice u/s 153C of the I.T. Act, 1961 in the case of M/s Tanveer Collection....
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....id 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 substituted with anything else. There is an underlying rationale in providing for recording of such satisfaction by the AO of the person searched. As the money, bullion, jewellery, books of account or documents etc. always come to the possession of the AO of the person searched who has to frame assessment, it is only he who can find out that which of such documents etc. do not belong to the person searched and are relevant for the assessment of the other person. It is not as if all the books of account and documents etc. found during the course of a search are evaluated by a separate authority to figure out that which of these documents belong to the person searched and to the others and thus handed over to the concerned AOs of the person searched and others for making assessment. As it is only the AO of the person searched who can reach a conclusion that some of the documents etc. do not belong to the person searched but to some other person, the legislature has provided for recording of such satisfaction by the AO of the person sea....
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....bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section.' 19. The above substitution has the effect of now making it mandatory for the AO of the 'other person' also to record satisfaction that the books of account or documents, etc., have a bearing on the determination of the total income of such 'other person' before embarking upon the exercise of his assessment or reassessment. Therefore, now under the law, w.e.f. 1.10.2014 it has become obligatory not only for the AO of the person searched to record satisfaction before handing over books of account or documents, etc., to the AO of the 'other person', but, such AO of the 'other person' is also required to record satisfaction that the books of account or documents, etc. have a bearing on the determination of the total income of such other person. In the presubstitution era of the relevant part of sub-section (1) of section 153C covering the period under consideration, the jurisdictional condition remains that the satisfaction is required to be recorded by and in the case of the person searched so as to enable the AO of the 'other per....
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....ase of the assessee before us in this ground that the documents etc. found from the persons searched did not positively indicate the existence of some income in the hands of the assessee. The argument is simply confined to non-recording of satisfaction by the AO of the persons searched. Instead of supporting the Department's case, we find that this judgment strengthens the assesasee's case by making it clear in no uncertain terms that the AO of the person searched is obliged to record the satisfaction. The relevant observations of the Hon'ble High Court contained in para 15 merit reproduction as under: - 'It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. 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 be shown to show to conclusively reflect or disclose any undisclosed income.' 24. It is pretty clear from t....