TaxTMI 
TaxTMI 
2017 (9) TMI 633
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....ellant submit that recording of satisfaction by the Assessing Officer of searched person is a prerequisite for issuance of notice u/s 153C of the Act and failing of which renders the proceeding u/s 153C of the Act illegal and bad in law. (b) The CIT(A) erred in confirming the action of AO in passing order u/s 143(3) r.w.s 153C of the Act and failed to appreciate that since no money, bullion, jewellery or other valuable article or thing or books of accounts or documents 'belonging to the appellant' were seized as a result of search and hence notice issued u/s 153C of the Act was illegal, invalid and unsustainable. (c) On the facts and circumstances of the case and law, the order u/s 143(3) r.w.s. 153C of the IT Act passed by the AO is contrary to the provision of law and ultra vires; hence, the same deserves to be vacated and quashed. 2. The CIT(A) erred in confirming the action of AO in making addition of Rs. 1,93,57,057/- on account of alleged 'On Money' cash payment made by the appellant to M/s Layer Export Pvt Ltd towards purchase of flat. The Appellant denies of payment of any "On money' for purchase of flat and on the facts and cicumtances of the case ....
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....f information which came to the notice of the search party during search proceedings u/s 132 of the Act on Bharat Shah Group in which it was found that a flat was purchased from Laya Export Pvt Ltd for a total consideration of Rs. 3,97,07,251/- out of which Rs. 2,03,15,200/- was paid by account payee cheque and balance of Rs. 1,93,57,051/- was paid in cash by observing as under : "25. The above seized material is also an evidence to prove that the assessee has actually purchased Flat No.14 from M/s. Layer Exports P. Ltd. for a consideration of Rs. 3,97,07,251/- Out of the sale consideration, Rs. 2,03,50.2001- was paid by cheque and the balance of Rs. 1,93,57,051/- was paid by cash. The assessee has not accounted the payment of cash component of Rs. 1,93,57,051/- in his books of accounts and, hence, the same forms undisclosed income being unexplained investment made from sources not declared to the department. Therefore, the Assessing Officer has rightly brought the said amount of tax while completing the assessment u/s. 153C of the Act. Hence the action of the Assessing Officer is confirmed." Aggrieved by the said action of the ld.CIT(A) the assessee is in second appeal befor....
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.... u/s 153C of the Act should be dismissed. 7. We have carefully considered the rival contentions and perused the material placed before us including the impugned orders and case law. In the present case before us a search was conducted at Bharat Shah Group on 13.3.2008 and the information thereof was received by the AO from the ACIT Central Circle vide letter dated 21.12.2009 that the M/s Layer Exports Pvt Ltd has received on-money of Rs. 3,87,14,102/- out of which Rs. 1,93,57,051/- was received in cash and the notice was issued u/s 153 of the Act accordingly on on the basis of said letter. Now, the issue before us is whether the notice u/s 153C of the Act issued to the assessee was valid or not as the said notice was issued without recording any satisfaction by the AO of the searched person and only intimation qua on money was sent to the AO of the assessee. It is the settled legal position that the notice issued u/s 153C of the Act without recording satisfaction is invalid and so is the consequent assessment based thereon. • In the case of Smt.Jyotsna Desai (supra) and Chandravadan Desai (supra) it has been held : "9.3. We find that from the annexure referred to....
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....faction in terms of section 153C of the Act were recorded by the Assessing Officer of the searched person u/s 132 of the Act to reach to a conclusion that the contents in the seized documents belongs to the assesses ( i.e a person other than the searched person) and accordingly, we hold that the search assessments framed u/s 153C read with IT(SS) A Nos. 114,115/Kol//2011- A Smt. Jyotsna Desai & IT(SS) A Nos.116 -119/Kol//2011-A- Sh. Chandravadan 13 Desai -A- AM section 143(3) of the Act on the assesses herein are declared illegal and void abinitio. Since the appeals of the assessee are allowed on assumption of jurisdiction , we refrain to give our findings on the merits of the issue. 10. In the result, the appeals of the assessee are allowed." • In the case of Shri ASHOK MEHTA (supra) the Mumbai Bench of Tribunal has held as under: "5. We have heard the rival contentions and perused the record. We have gone through the order passed by Ld CIT(A) on this issue and notice that the first appellate authority has made detailed discussion on this issue and hence, for the sake of convenience, we extract the same below:- "2.4.24 Ground No.1 and 3 to 8 are....