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2017 (4) TMI 234
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.... Income Tax Act, 1961. Common grounds of appeal raised in Revenue's appeal read as under : 1) On the facts and in the circumstances of the case and in law, whether the Ld. CIT(A) erred in ignoring the fact that Mls Ashoka Buildcon Ltd. had admitted unrecorded payments to the assessee Company, based on the evidences found during the course of search at their premises, and also disclosed this fact before the Hon'ble Settlement Commission, though a confirmation letter was issued subsequently to the effect that the payments noted in the seized diary do not refer to any payments made to M/s Artefact Projects Ltd., or its directors, and the name of 'Artefact' was used to identify the project to which the expenses relate. The confirmation does not talk about the assessee Company, i.e. Zaidun Leeng SON BHO Artefacts Ltd. (JV). Therefore, the Assessing Officer had rightly initiated action under Section 153C and taken into cognizance, the evidences, and addition was made in the case of the assessee Company, being project consultant to "NH 6" and "Lebad-Jawara" projects of the work done by Mls Ashoka Buildcon Ltd. 2) On the facts and in the circumstances of th....
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....he case records as well as the satisfaction note. Learned CIT(Appeals) further observed as under : "The case records as well as the Satisfaction Note recorded by the A.O. for issuing the notice u/s 153C have been called and examined. The Satisfaction Note is recorded on 16/2/2012 for issuing the notice u/s 153C of LT. Act 1961 in the case of assessee. In the Satisfaction Note, the A.O. has observed that document identified as Annexure B-1/6 is belonging to the assessee which was seized during the course of search at the premises of M/s.Artefact Project Ltd. The satisfaction note is reproduced hereunder for ready reference:- SATISFACTION NOTE. Proceedings u/s 153C of the Income tax Act, 1961 for assessment years 2005-06 to 2010-11 in the case of Zaidun Leeng SON BHD Artefact Projects (JV) 54/3, Chhatrapati Nagar Square, Wardha Road, Nagpur (AAAAZ0129L) During the course of search and seizure/survey operations in the case of M/s. Artefact Project Ltd. Group of cases of Nagpur on 10.03.2011, the following material was seized/impounded. Annexure - B-1/6, seized/impounded during the course of action on the residential/office premises of M/s A....
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....t Project Ltd. for assumption of jurisdiction u/s 153C of I.T. Act 1961. B) Seized documents inventorised as B-1/6 from the premises of M/s. Artefact Project Ltd. are placed in Paper Book. (P- 50 - 74) [Vol.- I]. Compilation of B-1/6 comprises of Page Nos. 1 to 22 being the bank statements of assessee for the period commencing from 1/4/2010 till March 2011. Aforesaid bank statements are relating to account of assessee with Canara Bank, Nagpur. Aforesaid bank transactions are duly recorded in regular books of account of assessee for ending 31/03/2011. Seized documents in no manner of consideration can be construed as incriminating evidence found at the premises of M/s. Artefact Project Ltd. so as to assume jurisdiction to issue notice u/s 153C of I.T. Act 1961. C) No addition has been made on the basis of such documents in assessment framed for the period ending 31/03/2011 for which the seized documents relate. Order passed u/s 143(3) of I.T. Act, 1961 for Asstt. Year 2011-12 is placed in Paper Book. This substantiates that documents seized are not of any incriminating nature. D) Impugned years under appeal are assessment years 2007-08 to 2009-10. Seized d....
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.... M/s. Artefact Project Ltd. It is specifically asserted that no satisfaction of seized documents belonging to assessee is recorded by AO. of person searched. Thus no valid notice u/s 153C of LT. Act 1961 is issued in case of assessee and assessment framed is bad in law and liable to be cancelled. Reliance on: i) (2015) 155 ITO 0501 (Delhi) CIT vs. Satkar Roadlines Pvt. Ltd.] ii) (2015) 232 Taxman 0268 (AP) CIT vs. Shettys Pharmaceuticals & BiologicalLtd. iii) Hon'ble Madhya Pradesh High Court order in ITA No. 44/2011 in the case of M/s. Mechmen vide order dated 10107/2015. iv) (2014) 365 ITR 0411 (All) CIT vs. Gopi Apartment v) Hon'ble Bombay High Court in ITA No.1337 of 2013 in the case of M/s. Ingram Micro (India) Exports Pte. Ltd. vide order dated 29/04/2015 vi) Hon'ble Delhi High Court in ITA No.422/2015 in the case of Nikki Drugs& Chemicals Pvt. Ltd. Vide order dated 03/12/2015. vii) ITTA No.254 of 2014 Judgement (per Hon'ble the Chief Justice Shri Kalyan Jyoti Sengupta) viii) ITAT order in ITA Nos.4228/De1/2011 in the case of M/s. Shield Home Pvt. Ltd. vide order dated 24/02/2016 ....
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....hed persons as envisaged u/s 153C of the I.T. Act has not been recorded before initiating the proceedings against the assessee u/s 153C of the Act which vitiates the entire impugned assessments. For this proposition, learned counsel referred to the CBDT Circular No. 24/2015 dated 31st December, 2015 which has been issued on this very subject. Learned counsel submitted that from the above said CBDT Notification it is clear that in absence of appropriate satisfaction recorded by the AO of the raided party even if he is the same AO as that of assessee, the assessment will be devoid of jurisdiction. Learned counsel submitted that no satisfaction note is there as emanating from the assessment records of the searched party. That this makes it very clear that the appropriate satisfaction has not been recorded therein. He asserted that no satisfaction of seized documents being incriminating and/or belonging to the assessee is recorded by the AO of the searched person. Thus no valid notice u/s 153C is issued in the case of the assessee and assessment framed is bad in law and liable to be quashed. Learned counsel submitted that this proposition is duly supported by case laws cited above. ....
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...., jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person 3a[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-section (1) of section 153A] :] 4[Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to 5[sub-section (1) of] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing ....
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....icular matter. A jurisdictional fact is one on existence or non-existence of which depends jurisdiction of a court, a tribunal or an authority .. It is the fact upon which an administrative agency's power to act depends. If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a Court or authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess. The existence of 'jurisdictional fact' is sine qua non for the exercise of power by a court of limited jurisdiction. As noted earlier section 153C provides for taking recourse to assessment in respect of any other person, the conditions precedent wherefore are: (i) satisfaction must be recorded by the AO that any undisclosed income belongs to any person, other than the person with respect to whom search was made under s. 132; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the AO having jurisdiction over such othe....
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....ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, may be brought to the notice of all for strict compliance. It is further clarified that even if the AO of the searched person and the "other person" is one and the same, then also he is required to record his satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgement. Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BO /153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. " 15. From the above CBDT notification it is clear that even if the AO of the searched persons and the assessee are same still proper satisfaction qua the documents etc. found relating to the assessee has to be recorded in the case of the searched persons. From the perusal of the concerned records in the case of the searched persons as mentioned above it is evident that there is no such satisfaction that any bullion, jewellery, books of accounts, other ....
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....a sine qua non. The consequences flowing from the action to be taken on the basis of such information handed over to the Assessing Officer having jurisdiction, for the assessee, who is a person other than the person referred to in Section 153A, is drastic - of assessment or re- assessment of his income falling within six assessment years. The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). Similarly, as there is no provision either express or implied (in the Act) to dispense with the requirement of satisfaction, if the Assessing Officer happens to be the same, as in this case, the arguments of the Department must be negative. We conclude that the condition precedent for resor....