TaxTMI 
TaxTMI 
2018 (11) TMI 637
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....CIT(A) has: General Ground 1. erred in assessing the total income at Rs. 36,90,900 as against returned income of Rs. 34,80,900 computed by the Appellant; Invalidity of assessment proceedings under section 153C of the Act 2. erred in upholding assessment/reassessment order under section 143(3) r.w.s 153C of the Act, even though the notice under section 143(2) has not been issued within the prescribed time-limit; 3. erred in holding that issue of notice under section 143(2) of the Act, in case of assessment/reassessment made pursuant to proceedings under section 153A/153C of the Act is not prescribed under the Act and thereby there is no condition to issue notice under section 143(2) before completion of assessment in the present case; Action on documents belonging to searched person 4. erred in initiating proceedings under section 153C of the Act, on the basis of documents found in the premises of the searched person, which do not belong to the Appellant; Recording of satisfaction 5. erred in concluding that initiation of proceedings under section 153C of the Act by the learned AO is valid even in the a....
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....e assessment be treated as invalid and hence, annulled. The assessee also raised the issue on merits. The CIT(A) first decided the issue of validity of initiation / conduct of proceedings under section 153C of the Act. Referring to the provisions of section 153A of the Act, it pointed out that the said section lays down the procedure to be followed by Assessing Officer on filing of return of income in response to notice issued under section 153A / 153C of the Act. The case of assessee before the CIT(A) was that proceedings under section 153C of the Act were initiated against the assessee on lapse of almost two years after the proceedings in the case of searched person were concluded. Further, the Assessing Officer having jurisdiction over the searched party had handed over the relevant documents to the Assessing Officer on 15.06.2007 i.e. on lapse of one year after proceedings in the case of searched party, were concluded. Hence, the plea raised was that satisfaction was recorded by the jurisdictional Assessing Officer of searched party after the assessment proceedings against searched party under section 153A of the Act were concluded. The assessee pleaded that recording of satisf....
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.... to be prepared. The CBDT Circular provides that the issue has been settled in respect of 158BD proceedings and since section 153C of the Act was substantially same/para-materia to section 158BD of the Act, therefore guidelines of the Hon'ble Supreme Court in the case of M/s. Calcutta Knitwears (2014) 43 taxmann.com 446 (SC) are to be applied. He then referred to sequence of events as noted by CIT(A) at page 5 of appellate order and stressed that there was substantial delay in initiation of proceedings under section 153C of the Act. He placed reliance on the ratio laid down by the Pune Bench of Tribunal in group of cases with lead order in Shri Vijaykumar Devichand Nibjiya Vs. DCIT in ITA No.1745/PN/2013, relating to Block period 1996-97 to 2002-03, order dated 22.07.2015. 9. The learned Departmental Representative for the Revenue on the other hand, pointed out that in pre-amended provisions of section 153C of the Act, there was no requirement to record satisfaction and hence, initiation and conclusion of proceedings under section 153C of the Act were justified in the case of assessee. 10. We have heard the rival contentions and perused the record. The assessee is aggriev....
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....a-materia to the provisions of section 158BD of the Act. The CBDT recognizing the above said position has issued circular No.24/2015, dated 31.12.2015 in respect of proceedings under section 153C of the Act i.e. for the purpose of assessment of income of 'other person' other than searched person. The CBDT has issued circular to the effect that guidelines of the Hon'ble Supreme Court with regard to recording of satisfaction note, may be brought to the notice of all for strict compliance. It is further clarified by the CBDT that even if the Assessing Officer of searched person and the other person are one and the same, then also he was required to record his satisfaction as has been held by the Courts. 13. Applying the ratio laid down by the Hon'ble Supreme Court, satisfaction note has to be prepared by the Assessing Officer of searched person at the time of or along with the initiation of proceedings against searched person; or in the course of the assessment proceedings of searched person; or immediately after the assessment proceedings of the searched person. This view of the Hon'ble Supreme Court though in the context of proceedings under section 158BD of the Act h....