TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 53
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....At the time of hearing before us, it is submitted by the learned counsel that by way of cross-objections, the assessee has challenged the validity of the issue of notice u/s 153C of the Income-tax Act, 1961 and consequently, the validity of the assessment order passed in pursuance thereto. Therefore, the cross-objections of the assessee should be heard and decided first. Learned CIT-DR has no objection for the hearing of cross-objections first. 3. In the cross-objections for all the years, the assessee has raised similar grounds. Therefore, we reproduce herein below the ground No.1 raised by the assessee for assessment year 2003-04 :- "That the notice issued u/s 153C and the assessment order passed u/s 153C/143(3) are illegal, bad in law....
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.... the assessee wanted to raise another ground relating to Section 153C, he could have raised the additional ground. No such additional ground is raised by the assessee before the ITAT. He also stated that the search had taken place in the case of Shri B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan Buildcon Pvt.Ltd. on 20th October, 2008 and during the course of search at their premises, certain documents belonging to the assessee were seized. Thus, all the conditions for initiating proceedings u/s 153C were fulfilled and the satisfaction was duly recorded by the Assessing Officer before issue of notice u/s 153C. He, therefore, submitted that the order of learned CIT(A) on this point may be sustained and the assessee's cross-objections ....
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....the assessee were seized. In reply to the Right to Information Act, the Department has intimated that no satisfaction note is recorded in the case of Shri B.K. Dhingra and Smt. Poonam Dhingra. Copy of such information is placed at page 4, 5 & 6 of the assessee's paper book. Learned CIT-DR also could not produce any satisfaction having been recorded by the Assessing Officer of the person searched. Hon'ble Jurisdictional High Court in the case of RRJ Securities Ltd. (supra) at paragraph 13 held as under:- "13. The first and foremost step for initiation of proceedings under Section 153C of the Act is for the AO of the searched person to be satisfied that the assets or documents seized belong to the assessee (being a person other than the....
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....f the Act - reg.- The issue of recording of satisfaction for the purposes of section 158BD/153C has been subject matter of litigation. 2. The Hon'ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No.3958 of 2014 dated 12.3.2014 (available in NJRS at 2014-LL-0312-51) has laid down that for the purpose of Section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that "the satisfaction note could be prepared at any of the following stages : (a) at the time of or along with the initiation of ....
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....the decision of Hon'ble Apex Court in the case of M/s Calcutta Knitwears in Civil Appeal No.3958 of 2014 dated 12th March, 2014 issued for the purpose of Section 158BD would be squarely applicable for the purpose of proceedings u/s 153C. The Circular also observed that recording of satisfaction note is a pre-requisite and the satisfaction must be prepared by the Assessing Officer before he transmits the record to the other Assessing Officer who has jurisdiction over such other person. In paragraph 4, it has been further clarified that such satisfaction note is essential even if the Assessing Officer of the searched person and the other person is the one and the same. Admittedly, in the case of the assessee, no such satisfaction is recorded ....