TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 1036
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....ing the income of Rs. 2,10,810/- which includes agricultural income of Rs. 75,000/-. Thereafter, the A.O proceeded to complete the assessment u/s 143(3) r.w.s 153C of the Act and after disallowing the various expenses claimed by the assessee, the income was assessed at Rs. 1,74,65,690/- against which, the assessee preferred an appeal before the CIT(A) who confirmed the order of the A.O and the assessee is in second appeal before us. The assessee has raised grounds of appeal against the addition made by the A.O towards gain on sale of agricultural lands and also raised additional grounds of appeal against the validity of the proceedings u/s 153C of the Act. The assessee has raised the following original grounds of appeal: 1. The CIT(A) erred both in law and on f acts in upholding the addition of Rs. 1,44,95,000/- made by A.O towards gain on sale of agricultural lands. 2. The CIT(A) erred both in law and on facts in confirming decision of A.O to reject assessee's claim that the lands sold were agricultural lands and that the gain on sale of agricultural lands was agricultural income which is exempt from tax. 3. Any other ground that may be urged at the time of hearing. 3. The ass....
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....on'ble Supreme Court in the case of Calcutta Knitwear in civil appeal No. 3959/2014 dated 12.03.2014, the Revenue cannot pursue the appeal without there being such satisfaction recorded. He has also placed reliance upon the CBDT Circular No. 24/2015 dated 31.12.2015 in support of the above contention. 6. The Ld. DR, however opposed the admission of the additional ground of appeal. 7. Having regard to the fact that the additional grounds filed on 15.05.2017 are legal grounds and do not need any fresh verification of the facts, and also respectfully following the judgment of Hon'ble Supreme Court in the case of NTPC Limited (cited supra), we are inclined to admit the additional grounds of appeal filed on 15.05.2017. The Revenue has also filed its objections to the additional grounds of appeal and has stated that the satisfaction note for issuing a notice u/s 153C of the IT Act in the case of the assessee is not available on record but that the concerned officer who has passed the order, is confirming that the same might be available on record itself. It is further submitted that the fact that satisfaction has been made part of the assessment order dated 09.12.2010 in the first par....
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....t years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisitioned is made. Thereafter assessment would be framed as per the provisions of section 143 of the Act. Section 153C deals with the situation where the AO is satisfied that any money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisitions belongs or belong to a person other than the person ref erred to in section 153A of the Act, then the books of account or documents or assets seized or requisitioned shall be handed over to the AO having jurisdiction over such other person and that the AO shall proceed against each of such other person and issue such other person notice and assess or re-assess income of such other person in accordance with the provisions of section 153A of the Act. Meaning thereby that action u/s. 153C of the Act always depends upon the action u/s. 153A of the Act upon some other person. The AO of such person in whose case search was conducted is satisfied that the money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisitioned belong to....
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....o any person other than the searched person in respect of whom search was made u/s. 132 of the Act or requisition of books of account were made u/s. 132A of the Act. The satisfaction note is to be recorded by the AO who has initiated proceedings f or completion of assessment u/s. 153A of the Act and also it should be recorded. It is also to be noted that f or the purpose of s. 153C a satisfaction note is sine qua non and must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person. The satisfaction note could be prepared at either of the following stages: (a) At the time of or along with initiation of proceedings against the searched person u/s. 153A of the Act; (b) Along with the assessment proceedings u/s. 153A of the Act; (c) Immediately after the assessment proceedings are completed u/s. 153A of the Act of the searched person. 32. Thus, the condition precedent f or issuing notice u/s. 153C and assessing or re-assessing income of such other person is that, the money, bullion, jewellery or other valuable articles or things or books of account or documents seized or requisitioned should belong to such other person. If th....
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....onian consequences. Such a proceeding can be initiated, it would bear repetition to state, only if a raid is conducted. When the provisions are attracted, legal presumptions are raised against the assessee. The burden shifts on the assessee. Audited accounts for a period of ten years may have to be reopened. As the AO has not recorded his satisfaction, which is mandatory; nor has he transferred the case to the AO having jurisdiction over the matter, the impugned judgments of the High Court cannot be sustained. 33. The above two judgments were delivered u/s. 158BD. We have carefully gone through the language used in section 153C and 158BD of the Act. The main difference in the language is that in section 158BD the scope of jurisdiction of AO is only with respect to the undisclosed income found during the course of search. Whereas in section 153C the scope of jurisdiction of the AO is with respect to any money, bullion, jewellery, other valuable articles or things or books of account or documents with respect to which the AO is satisf ied that it belongs to such other person. But sofar as the reference to word "satisf action" is made it is same as available in section 158BD of the A....
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....rched person comes to the satisfaction that documents or materials found during the search belong to a person other than the searched person, it is necessary that he arrives at the satisfaction that the said documents or materials do not belong to the searched person. In the instant case, it is nobody's case that the Jaipuria Group had disclaimed those documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of section 153C do not get attracted because the very expression used in section 153C is that 'where the Assessing Officer is satisfied that any money, bullion, 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 .... ' In view of this phrase, it is necessary that before the provisions of section 153C can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belong to the person ref erred to in section 153A, i.e., the searched person. In the satisfaction note, which is the sub....