TaxTMI 
TaxTMI 
2019 (1) TMI 695
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....ial relating to the assessee was found and seized in the premises of the searched person. Therefore, a notice u/s 153C r. w. s. 153A of the Act dated 25. 02. 2009 was issued to the assessee and the assessments were completed u/s 143(3) r. w. s. 153C of the Act for the A. Y. 2007-08 and 2008-09 on total income of Rs. 2, 04, 28, 114/- and Rs. 6, 28, 89, 893/- respectively. The assessee went on appeal before the CIT(A) and the Ld. CIT(A) allowed the appeal partly. 3. Against the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. Before us, the assessee has raised two additional grounds with a petition for admission of the additional grounds. The Ld. AR during the appeal hearing submitted that the AO of the searched person as well as the AO of the assessee have not recorded the satisfaction as required u/s 153C of the income tax act and as per the guidelines of Hon'ble Supreme Court in the case of CIT Vs. Calcutta Knitwears, [2014] 43 taxmann. com 446 (SC) dated 12. 03. 2014 followed by Board Circular No. 24/2015 dated 31. 12. 2015 recording of satisfaction is mandatory and non recording the satisfaction renders the assessment made u/s 153C r. w. s. 143(3) as inv....
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....s found during the course of search in the premises of Sai Teja Builders group relating to the assessee and as per the statutory requirement and as decided by the Hon'ble Supreme Court in Calcutta Knit Wears and the Board Circular dated 31. 12. 2015, the AO of Sai Teja Housing Estates required to record satisfaction for transfer of the material and to take action u/s 153C before transfer of the material to the AO of the assessee. There is no such satisfaction recorded by the AO, hence, contended that the assessment orders passed u/s 153C r. w. s. 143(3) are bad in law and required to be quashed. The assessee relied on the decision of Shri Srinivas Babu Vs. ACIT, Hyderabad in I. T. A. No. 952 and 953/Hyd/2013 dated 10. 02. 2016 and the decision of ITAT, Delhi Bench in the case of Narsi Creations reported in (2016) 70 taxmann. com 156 (Delhi). 6. The second additional ground is related to not recording of satisfaction u/s 153C by the AO of the assessee before issuing the notice u/s 153C of the Act. 7. We have heard both the parties and in our considered opinion the assessee has demonstrated the sufficient reasons for not canvassing the ground before the First appellate authority an....
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....As the order sheet pertains to the assessee but not pertaining to the AO of the searched person, it is clear that the AO of the searched person has not recorded a separate satisfaction for transfer of the material found during the course of search and the department did not place any material to substantiate that the AO of the searched person has recorded separate satisfaction for transferring the material to the AO of the assessee and to initiate proceedings u/s 153C. The Ld. DR contended that if the AOs of both the searched person and the assessee are one and the same no separate satisfaction is required to be recoded and relied on the decision Hon'ble Delhi High court in case of Instronics Ltd and Ganapati Fincap Services Pvt. Ltd. In the case of Instronics Ltd the Hon'ble High Court of Delhi restored the matter back to the file of the ITAT since there is no discussion on whether the documents referred to in the ITAT's order in fact incriminating and the AO of the searched person has recorded the satisfaction that the seized documents belonged to the assessee. The decision of Hon'ble High Court of Delhi in the case of Ganapati Fincap Services Pvt. Ltd. Vs. CIT (supra) is against....
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.... that the satisfaction of the AO of searched person has to record satisfaction even if he is also the AO of the other person u/s 153C. 13. Similar issue was considered by the coordinate bench of ITAT Ahmedabad in Parshwa Corporation. v. Deputy Commissioner of Income tax, Central Circle2, Baroda [2017] 88 taxmann. com 43 (Ahmedabad - Trib. ) and held that "18. From the above, it is clear no satisfaction is recorded by the Assessing Officer of person searched. The Assessing Officer of assessee did not record any satisfaction prior to issue of notice u/s 153C. The so-called satisfaction recorded in the notice u/s 153C is totally vague. It has not specified which valuable articles/things/books of accounts/documents were found from Shri Rameshbhai B. Shah which belongs to the assessee. In the assessment order the Assessing Officer has mentioned that in the laptop of Shri Rameshbhai B. Shah the data pertaining to the assessee were found and on that basis notices u/s 153C have been issued. However, in the notice u/s 153C, wherein the Assessing Officer is claimed to have been recorded the satisfaction for issue of the notice, there is no mention about such laptop or the alleged data in ....
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....son who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or "satisfaction" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of "satisfaction". ------- 11. It is evident from the above satisfaction note that apart from saying that the documents belonged to the petitioner and that the Assessing Officer is satisfied that it is a fit case for issuance of a notice under Section 153C, there is nothing which would indicate as to how the presumptions which are to be normally raised as indicated above, have been rebutted by the Assessing Officer. Mere use or mention of the word "satisfaction" or the words "I am satisfied" in the order or the note would 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 c....
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....d required to be quashed. 16. On the other hand, the Ld. DR argued that though the satisfaction note was unsigned it is part of the record, therefore to be taken as valid satisfaction note and requested to uphold the Notice and the assessment made u/s 153C r. w. s. 143(3) of the Act. 17. We have heard both the parties and perused the material placed on record. From the perusal of the order sheet both for the A. Y. 2007-08 and 2008-09, it is evident that though the reasons for issue of notice u/s 153C was typed on plain paper, it was not signed by the officer who has recorded the satisfaction and it was also undated. Similarly, the direction for issue of notice u/s 153C was also remained unsigned and undated. The order sheet is a manually maintained record and not a digital document which does not require signature. An order or endorsement required to be dated and duly signed by the officer who is recording the reasons being satisfied that the case is fit case for taking action u/s 153C. An order, without having signature of the person, who recorded the satisfaction or issued the direction for taking action loses its relevance and to be treated as invalid. An order without signatu....
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....of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 19[and for the relevant assessment year or years as referred to in sub-section (1) ofsection 153A] except in cases where any assessment or reassessment has abated. " 18. From the plain reading of sub section 1 of section 153C, it is the requirement of satisfaction of the assessing officer of the searched person for transfer of the material found during the course of search to the assessing officer having jurisdiction over the assessee and the satisfaction of assessing officer having jurisdiction for issue of notice. There must satisfaction of the AO that the money, bullion, jewellery or other valuable article or thing and any books of accounts or documents seized or requisitioned pertain to the assessee and has bearing on the determination of income. If AO does not satisfy that the money, bullion, jewellery or other valuable article or thing and any books of accounts or documents seized or requisiti....