2019 (2) TMI 453

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....h Section 153-C of the Act. 3. It is contended that a search was carried on 16/10/2008 in the case of Sri.Desu Bheemraj, Proprietor of M/s.S.V.Logistics and others at Hospet under Section 132 of the Act. Immediately, thereafter a survey was conducted under Section 133-A on 17/10/2018 in the   business premises of the petitioner, a Partnership Firm at Basaveshwara Badawane, Hospet, Bellary District in connection with the search conducted on 16/10/2008. After issuing notice under Section 153-C of the Act, assessment order under Section 143(3) read with 153-C of the Act, was passed. Being aggrieved, these writ petitions are filed. 4. Learned counsel for the petitioner would submit that initiation of proceedings under Section 153-C of the Act is without jurisdiction and as such further proceedings namely, passing of the assessment order and issuance of the deemed notice are vitiated under law. Hence, she submits that alternative remedy of appeal is no bar to invoke the writ jurisdiction under Articles 226 and 227 of the Constitution of India. Learned counsel further argued that Section 153-C of the Act, which is in pari materia with Sections.158-BD was considered by the....

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...., is not complied with. Hence, seeks for setting aside the notices/assessment orders impugned herein. 7. Learned counsel Sri.K.V.Aravind appearing for the revenue justifying the impugned proceedings submitted that before conducting the search, these files were centralized and an order was passed under Section 127 of the Act in pursuance of the order passed on 28.4.2009. The Assessing Officer of the searched person and the other person being the same, handing over of the belongs seized to the Assessing Officer having jurisdiction over such other person, would not arise. Placing the original records before the Court, the satisfactory note said to have been recorded by the Assessing Officer of the seized person, is pointed out. The said satisfactory note reads as under: "Mr. Shymraj Singh, Hospet Asst. years 2003-04 to 2008-09 9/10/2009 Sir, The search and seizure action was conducted in the case of M/s S.V. Logistics and others on 16/10/2008 and this is a connected case with the search case. Based on seized material, survey under section 133A was conducted in the case of M/s SVK Minerals, Hospet in with the assessee is a partner. Theref....

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....of completion of the assessments under Section 158-BD of the Act, the other provisions of Chapter XIV-B shall apply. 36. The opening words of Section 158BD of the Act are that the assessing officer must be satisfied that "undisclosed income" belongs to any other person other than the person with respect to whom a search was made under Section 132 of the Act or a  requisition of books were made under Section 132A of the Act and thereafter, transmit the records for assessment of such other person. Therefore, the short question that falls for our consideration and decision is at what stage of the proceedings should the satisfaction note be prepared by the assessing officer: whether at the time of initiating proceedings under Section 158BC for the completion of the assessments of the searched person under Section 132 and 132A of the Act or during the course of the assessment proceedings under Section 158BC of the Act or after completion of the proceedings under Section 158BC of the Act. 37. The Tribunal and the High Court are of the opinion that it could only be prepared by the assessing officer during the course of the assessment proceedings under Secti....

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.... the said dictum laid down by the Hon'ble ApexCourt to Section 153-C of the Act. A comprehensive reading of the provisions along with the Circular of the Department makes it clear that the Assessing Officer has  to mandatorily record the satisfaction before initiating proceedings under Section 153-C of the Act. 13. The ingredients to be satisfied to attract Section 153-C are: Firstly, the satisfaction report/note has to be prepared by the Assessing Officer of the searched person. Secondly, any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs or belonged to a person other than the searched person. Thirdly, 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. For the purpose of Section 153-C of the Act, a satisfaction note is sine qua non and must be prepared by the Assessing Officer before he transmits the records to the Assessing Officer who has jurisdiction over such other person, as held by the Hon'ble Apex Court in Calcutta Knitwears, (supra). 14. The arguments of the learned counsel for the revenue that th....