2016 (5) TMI 1372

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.... 19,53,440/- as on 30.9.2013. The assessee raised an objection against initiation of proceedings under section 153C of the Act before the Assessing Officer. After rejecting the said objection and discussing the case on merits, an assessment on an income of Rs. 91,94,940/- was completed making an addition of an amount of Rs. 72,41,500/-. 4. Aggrieved by this, the assessee went in appeal before the learned Principal Commissioner of Income Tax (OSD). Elaborate submissions with regard to the merits of the case as well as on legal issue were made before the learned Principal Commissioner of Income Tax (OSD). The main argument advanced by the assessee before the learned Principal Commissioner of Income Tax (OSD) was that notice issued under section 153C of the Act is bad in law and against the provisions of law. It was stated that the satisfaction recorded by the Assessing Officer did not state that the material seized belongs to the assessee, the same merely referred to the property transaction of the assessee. It was also put-forth that this satisfaction cannot be the basis as the document found during the course of search is non-incriminating in nature, nor the assessee could be said....

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....WP(C) No.415, 568, 570, 571, 575, 576 of 2014 and Pepsico India Holdings Pvt. Ltd. (supra). In conclusion, it was stated that in the facts and circumstances of the case relying on the ratio laid down by the Delhi High Court in these cases, it is quite clear that no document belonging to the assessee was found during the search. No satisfaction about any document belonging to the assessee was recorded. No finding of any document belonging to the assessee was given even in the order of the assessment. Further, no such finding was given by the learned Principal Commissioner of Income Tax (OSD). In this manner, it was stated that the fundamental Jurisdictional facts for invoking section 153C of the Act are thus missing in the present case. 7. The learned D.R. relied on the orders of the lower authorities and further stated that on perusal of the seized document found during the course of search, it can be seen that there are transactions entered into by the assessee which may also have an element of undisclosed income on the part of the assessee. The nature of the document being that of self-explanatory document, there is no need for the Assessing Officer of the searched person to rec....

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....f section 153C of the Act as it stood for the relevant assessment year, which read as under :  "153C "Notwithstanding anything contained in section 139, section 147, section 149, section 151 and section 153, where the Assessing Off icer is satisf ied that any, bullion, je wellery 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 by the Finance Act, 2015, w.e.f. 1-6-2015." 10. On a plain reading of the section, it is evident that the Assessing Officer of the searched person must be satisfied that the documents seized during the course of search 'belong' to a person other than the one who was searched. It is only when the Assessing Officer of the searched person got satisfied about this condition, he can handover such document to the assessee having jurisdiction over such other person. 11. Since a very heavy reliance was placed on the judgment of the Delhi High Court in the case of Pepsi Foods ....

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....ould not meet the requirement of the concept of satisfaction as used in Section 153C of the said Act. The satisfaction note itself must display the reasons or basis for the conclusion that the Assessing Officer of the searched person is satisfied that the seized documents belong to a person other than the searched person. We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of the kind required under Section 153C of the said Act." 13. On perusal of the above and applying the proposition as laid down by the Hon'ble Delhi High Court in the facts of the present case, we see that there is nothing coming out of the satisfaction note that the seized documents belong to the assessee. Further, there is nothing which would indicate as to how the presumption which was to be raised against the person searched have been rebutted by the Assessing Officer. The satisfaction note does not at all display the reason or basis for the conclusion that the Assessing Officer is satisfied that these documents 'belong' to the assessee. 14. Similar judgment has been delivered by the Delhi High Court in the case of Pepsico India Holdings ....