TaxTMI 
TaxTMI 
2020 (3) TMI 218
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.... brief, are that a search and seizure operation under section 132 of the Income Tax Act, 1961 (hereinafter 'the Act') was conducted on K.S. Dhingra & G.S. Dhingra and others group of cases on 16/09/2011. During the course of said search & seizure operation, certain documents/papers belonging to the assessee i.e. M/s Advantage Housing Pvt. Ltd. were found and seized. The Assessing Officer issued notice under 153C of the Act on 08/10/2013. During the course of assessment proceedings, the Assessing Officer noted that the assessee has purchased a property at 58, Sunder Nagar, New Delhi from M/s Atma Ram Properties (P.) Ltd. on 25/08/2008 at the cost of Rs. 33 Crores. However, during the course of search a writing pad was also seized from the table of Sh. Naveen Chaudhary, CFO M/s U.K. Paints India Pvt. Ltd. The value of the property recorded as Rs. 36.5 crores. Rejecting the arguments advanced by the assessee, the Assessing Officer made addition of Rs. 3.5 Crores to the total income of the assessee by recording as under:- "The assessee has contended that the said seized document was not found from the premises of the company. In this regard it is pertinent to note that M/s ....
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.... The Assessing Officer has not taken into consideration the notepad as alleged to have been found from the table of Mr. Naveen Chaudhary, CFO of UK Paints and marked as Annexure A-15, therefore, the assumption of jurisdiction is contrary to law. It was further argued that the so called seized documents are the photocopies of sale deed dated 25/08/2008 executed between M/s Atma Ram Properties and the assessee. The original copy of the sale deed is still available with the assessee. Similarly, various other pages are the photocopies of the possession letter and indemnity bond executed by the vendors in favour of the assessee and the originals are still available with the assessee. Referring to the decision of the Hon'ble Delhi High Court in the case of Pepsico India Holdings Pvt. Ltd. in Writ Petition (C)No.414/2014, it was argued that the Hon'ble High Court under similar circumstances, where photocopies were recovered and seized during the course of search has held that the proceedings initiated by the Assessing Officer under section 153C of the Act are not in accordance with law. Referring to the decision of the Hon'ble Delhi High Court in the case of M/s Pepsi Foods Pvt. Ltd. v....
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.... 132 of the Income-tax Act, 1961 on Sh. K.S. Dhingra and Sh. G.S. Dhingra. Hence, I am satisfied that in accordance with the provisions of section 153C of the Income tax Act, 1961 proceedings to assess/reassess the income of the assessee for assessment year 2006-07 to assessment year 2011-12 have to be initiated. " Since I am also the Assessing Officer for Advantage Housing Pvt. Ltd. notice u/s 153C r.w.s. 153A is hereby issued for the assessment year 2006-07 to 2011-12. 4.3.18. From the above it is clear that the Assessing Officer has only referred to pages 34 to 54 of Annexure A-23 and pages 62 to 67 of Annexure AA-4. He has, for some unknown reasons, not mentioned page 3 of Annexure A-15 which contain the incriminating facts against the assessee and on the basis of which the addition has been made. 4.3.19. The documents which are mentioned in the satisfaction note are photocopies of the sale deed and agreement to sell alongwith Indemnity Bond, possession letter etc. in respect of the Sunder Nagar property purchased by the appellant from M/s Atma Ram Properties (P) Ltd. These documents however, do not give any indication that the appellant had ....
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....the conclusion-that the A.O. of the searched person was satisfied that the seized documents belonged to a person other than the searched person. It has been held in the same case that the A.O. of the searched person must first arrive at a clear satisfaction that a particular documents seized did not belong to the person from whom it has been seized. Thereafter, he should form a satisfaction that the seized document belongs to such and such other person. U/s 132(4A)(i), there is a presumption that the documents seized from a person belonged to such person. There is also presumption u/s 292C(l)(i) that a document which is found from a person who was searched, would be belonging to that person. The Hon'ble High Court has held that the A.O. must at the first instance rebut such a presumption provided in the Act itself and only thereafter he should come to the conclusion or satisfaction that the seized document belonged to someone else. There must be some cogent material available with the A.O. before he arrives at a satisfaction that the seized document did not belong to the searched person but to somebody else and that surmises and conjectures can not take the place of satisfaction. ....
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....rson. We are afraid, that going through the contents of the satisfaction note, we are unable to discern any "satisfaction" of kind required under section 153C of the said Act. 12. This being the position the very first step prior to the issuance of a notice wider Section 153C of the said Act has not been fulfilled. Inasmuch as this condition precedent has not been met, the noticed under Section 153C are liable to be quashed. It is ordered accordingly. The writ petition are allowed as above. There shall be no order as to costs. " 4.3.25 Since such satisfaction is not coming out of the note recorded by the A.O. before issuing notice u/s 153C, the action of the A.O. is bad in law as per the above decisions of the High Court. Therefore, respectfully following the said ratio of the Hon'ble High Court Delhi in the case of M/s Pepsi Foods (P) Ltd. (supra), I hereby hold that the assumption of jurisdiction u/s 153C by the A.O. was bad in law in as such as he has not stated the reasons for holding that the documents mentioned in the satisfaction note belonged to the appellant. 4.3.26 Since the order of the A.O. is being held invalid due to the defect in assumption....
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....zure operation on 16/09/2011 issued noticed under section 153C of the Act to the assessee after recording his satisfaction note in the case of the assessee that the said sized documents were belonging to the assessee. We find the Ld. CIT(A) quashed the proceedings initiated under section 153C of the Act, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the documents so seized from the premises of Shri K.S. Dhingra & G. S. Dhingra during the course of search under section 132 of the Act on 16/09/2011 are nothing but Xerox copy of the sale deed, agreement to sale and possession letter, etc and the original documents are still available with the assessee. It is also his submissions that no satisfaction note has been recorded in the case of the searched person that these documents do not belong to the searched person but belong to some other person i.e. the assessee in the instant case. 11. We find that the Ld. CIT(A) while adjudicating the issue has gone through the documents which are mentioned in the satisfaction note and found that the documents so found or seized are photocopy of the sal....