TaxTMI 
TaxTMI 
2021 (8) TMI 1022
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....nt of unexplained cash credits of Rs. 22,82,10,000/- on substantive basis and Rs. 77,85,000/- on protective basis. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition of Rs. 11,41,050/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in arriving at the conclusion that the words 'total income' as used in Section 153C/153A would only mean undisclosed income discovered from seized / incriminating material. 5. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts in adopting a restrictive and pedantic interpretation of the scope of assessment u/s 153C/153A of the Act. 6. On the facts and in the circumsta....
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....Vs. DCIT dated 09.08.2014 has held that total income includes income unearthed during search and any other income. 7. That the grounds of appeal are without prejudice to each other. 8. That the appellant craves leave to add, amend, alter or forgo any ground(s) of appeal either before or at the time of hearing of the appeal." ITA No. 4048/D/2017 - AY 2011-12 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition made u/s 68 of the I.T. Act on account of unexplained cash credits of Rs. 25,59,91,700/- on protective basis. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in law and on facts in directing the A.O. to delete the addition of Rs. 12,79,959/- as unexplained expenditure on account of brokerage. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) had erred in law and on facts by relying on the decision in the case of Sh. Kabul Chawla by the jurisdictional High Court which has not been accepted by the department and SLP against the same has been filed before Hon'ble Supreme Court. 4. On t....
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.... notice dated 12.02.2015under section 153C r.w.s 153A of the Act. Incidentally in this case, the Assessing Officer of the searched person and the Assessing Officer of the appellant are the same. 4. The appellant sought copies of the satisfaction noteswhich were recorded before issuance of notice under section 153C of the Act. Copies of satisfaction notes dated 22.12.2014 drawn by Assessing Officerof PIL and by the Assessing Officer of the appellant were supplied to the appellant. The appellant filed detailed objections against the satisfaction recorded by the Assessing Officer which was disposed of by the Assessing Officer. 5. The appellant challenged the satisfaction notes and contended inter-alia that the documents found from the premises of PIL relating to the appellant was those that were duly recorded in the regular books of account of the appellant and were in no manner incriminating in nature. Hence, the appellant contended that since they are not incriminating in nature, no assessment can be made on the basis of these documents because no undisclosed income is discernable out of theseseized documents and the years under consideration are completed assessments. In this....
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....incriminating material and following the ratio of Kabul Chawla the additions cannot be made. ii. The statement recorded under search on the basis of which additions were made is not a documents as per the decision of Hon'ble Jurisdictional High Court in the case of Raj Pal Bhatia. 11. Before us the ld. counsel in his written submission has submitted that it is a settled legal position that prior to 01.06.2015 where documents found with the person searched may contain information about "other person", but documents do not belong to him, proceedings u/s 153C will not be valid. Only w.e.f 01-06-2015, if the documents/ books seized from the premises of person searched, pertain to, or any information contained therein, relates to such "other person", proceedings u/s 153C against such "other person" will be valid. In the case of the assessee the search was conducted on M/s Prakash Industries Ltd. on 30.10.2012 which is before 01.06.2015. Since the search took place before 01.06.2015, the notice u/s 153C can be issued only if the documents seized from the premises of M/s Prakash Industries Ltd. are found to be belonging to the assessee company. For initiating valid proceedings....
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.... opinion, though tentative, however, cannot be a product of imagination or speculation. It cannot be spacious or mercurial. It should not be a mere pretence and should be made in good faith rather than suspicion. Reliability, credibility or for that matter what weight has to be attached to the material, depends upon the subjective satisfaction of the Assessing Officer, but definitely it is subject to scrutiny whether the satisfaction has a rational nexus or a relevant bearing to the formation of satisfaction and is not extraneous or irrelevant. The satisfaction must reflect rational connection with or relevant bearing between the material available and undisclosed income of the third person. The rational connection postulates and requires satisfaction of the Assessing Officer that a third person has 'undisclosed income' on the basis of evidence or material before him. The material itself should not be vague, indefinite, distinct or remote. If there is no rational or intangible nexus between the material and the satisfaction that a third person has 'undisclosed income', the conclusion would not deserve acceptance. Then the satisfaction is vitiated. It is to this limi....
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....on note is sufficient to comply with the law, recording of satisfaction that the seized documents do not belong to the searched person but belong to the other person is a mandatory pre-condition. "Hon'ble Supreme Court in the case of Super Malls Pvt. Ltd. Vs. PCIT (423 ITR 281) has held that: In case, where the Assessing Officer of the searched person and the other person is the same, there can be one satisfaction note prepared by the Assessing Officer, as he himself is the Assessing Officer of the searched person and also the Assessing Officer of the other person. However, as observed hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. 2. The assessee also relies upon the decision of Hon'ble High Court of Delhi in the case of Pepsi Foods Pvt. Ltd. Vs. ACIT (52 taxmann.com 220) which is also discussed and approved by the Hon'ble Supreme Court in the case of Super Malls(supra) wherein it has been held that: 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 satisfi....
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....son other than the searched person. 3. The Ld. AO did not mention how the seized documents do not belong to the person searched but belong to the assessee. 4. The Ld. AO in the satisfaction note through a chart presented the description of the seized document. Kindly refer page no. 21C-21D of the paper book. 5. The assessee explanation with respect to the seized documents are tabulated in the following chart: Annexure No. Page no. Assessee's explanation Whether the document can be said to be belonging to the assessee Whether pertains to the assessment year in question Whether the seized documents are incriminating or suggest any escapement of income A 2 47 1. This is the trial balance of the assessee company for the period 01.04.2012 to 08.10.2012. 2. Documents already recorded in the books of the assessee. However the copy of trial balance cannot be said to be incriminating. 3. It pertains to the A.Y. 2013-14 and does not pertain to the assessment year in question and has no co-relation with the addition made by the Ld. AO and cannot be said to be incriminating material. NO Copy of trial balance cannot be said to be....
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....of Delhi - Sunny InfraprojectsLtd: seized material must have some nexus or relevance to the additions sought to be made A 8 10-12 1. Trial balance and accounting policies for the period 01.04.2011 to 10.02.2012. NO NO Documents pertain to A.Y. 2012-13 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The transactions in the seized documents have already been recorded in the books of the assessee company. The Ld. AO failed to link these seized documents with the additions. High Court of Delhi - Sunny Infraprojects Ltd: seized material must have some nexus or relevance to the additions sought to be made A 12 28, 58-64, 81-88 1. Certified copy of board resolution, statement of holding and pledge master report YES NO A.Y. 2012-13 Supreme Court - Singhad Technical Education Society Documents must relate to the A.Y. whose assessments are sought to be reopened. NO The transactions in the documents have been duly recorded in the books of the assessee. These documents are not incriminating in nature. Even otherwise the Ld. AO did not take any ....
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....ourt of Delhi in the case of Nikki Drugs and Chemicals Pvt. Ltd -(64 taxmann.com 309) It is apparent from the above that the first step for initiation of proceedings under Section 153C of the Act is for the assessing officer of the searched person to be satisfied that the assets or documents seized do not belong to the searched person but to the assessee sought to be assessed under Section 153C of the Act. Once the assessing officer of the searched person is so satisfied, he is required to transfer the assets or documents, which he believes belongs to the assessee, to the assessing officer having jurisdiction over that assessee. The assessing officer of the assessee on receipt of such asset or document seized would have jurisdiction to commence proceedings under Section 153C of the Act. The assessing officer has, thereafter, to apply his mind as to whether the assets and documents received have a bearing on the determination of the total income of the Assessee and if he is so satisfied that the same have a bearing on the determination of the income of the assessee, he has to issue notice and assess or reassess the income of the assessee in accordance with the provisions of....
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....ized. The other documents are copies of Form-32 of the Assessee, copies of the return of income of the Assessee, copy of its director's report, copy of certificate of incorporation and memorandum of association. These were documents furnished by the Assessee to DEPL and found in the possession of DEPL. Here, again, it cannot be presumed that such documents having being found in the possession of the DEPL did not belong to DEPL but to the Assessee. Here again, while the documents may 'pertain to' the Assessee, but in the context explained above, they cannot be presumed to be documents that 'belonged to' the searched person. Consequently, even with regard to these documents, the jurisdictional requirement under Section 153 C (1) of the Act, of the AO of the searched person having to be satisfied that the said documents do not belong to searched person but to the Assessee, has not been fulfilled." III. Seized document must pertain to the assessment year for which the Ld. AO had initiated the proceedings under section 153C of the Act. 1. Your Honours, Hon'ble Supreme Court in the case of CIT Vs. Singhad Technical Education Society (84 taxm....
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....that: In the present case, the two seized documents referred to in the Satisfaction Note in the case of each Assessee are the trial balance and balance sheet for a period of five months in 2010. In the first place, they do not relate to the AYs for which the assessments were reopened in the case of both assessees. Secondly, they cannot be said to be incriminating. Even for the AY to which they related, i.e. AY 2011-12, the AO finalised the assessment at the returned income qua each Assessee without making any additions on the basis of those documents. Consequently even the second essential requirement for assumption of jurisdiction under Section 153 C of the Act was not met in the case of the two Assessees. 7. It has been held that in various other decisions of Hon'ble jurisdictional High Court and other High Court that the seized material must relate to the assessment year in question. a. Hon'ble High Court of Delhi in the case of RRJ Securities (380 ITR 612) wherein a record slip of cheque book was seized which formed part of the cheque book containing entries relating to A.Y. 2009-10 has held that: Insofar as the documents referred to as pages....
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..... Hon'ble Delhi High Court in the case of ARN Infrastructure India Ltd. (81 taxmann.com 260) has held that: As regards the other document seized, and mentioned in the Satisfaction Note viz., the extract of the ledger account maintained by the Petitioner concerning the payments of commission made by it to RGEPL, even if it is held to 'belong' to the Petitioner, it could hardly be said to be an 'incriminating' document. This was a document relevant only for the AY 2010-11. It could not have been used for re-opening the assessments of the earlier years i.e. AYs 2007-08 to AY 2009-10, 2011-12 and 2012-13. This position again stands settled by the decision in RRJ Securities Ltd (supra). The fact that the Revenue's SLP against the said decision is pending in the Supreme Court does not make a difference sine the operation of the said decision has not been stayed. c. Hon'ble High Court of Delhi in the case of Refam Management Services Pvt. Ltd. (80 taxmann.com 281) has held that: It is apparent from the above that the only document seized during the search in question was a cheque book pertaining to the Assessee which reflected issue of cheque....
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....R 612) that "As expressly indicated under Section 153C of the Act the assessment or reassessment of income of a person other than a searched person would proceed in accordance with the provisions of Section 153A of the Act. The concluded assessments cannot be interfered with under Section 153A of the Act unless the incriminating material belonging to the Assessee has been seized." Merely because a valuable article or document belonging to an Assessee is seized from the possession of a person searched under Section 132 of the Act, does not mean that the concluded assessments of the Assessee are necessarily to be re-opened under Section 153C of the Act. In our view, the concluded assessments cannot be interfered with mechanically and solely for the reason that a document belonging to the Assessee, which has no bearing on the assessments of the Assessee for the years preceding the search, was seized from the possession of the searched persons. As indicated above, in the present case, the documents seized had no relevance or bearing on the income of the Assessee for the relevant assessment years and could not possibly reflect any undisclosed income. This being the und....
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.... 12. Therefore the assessment year in question can only be interfered if any incriminating material is found belonging to the assessee during the course of search on the person searched. 13. Hon'ble High Court of Delhi in the case of Kabul Chawla 61 taxmann.com 412 has also explained the meaning of incriminating material Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 14. In the present case documents seized by the department relating to the assessment year in question are the Income tax returns, Audited balance sheets and ROC data of the assessee company. All these statutory documents are public documents and available in public domain and are already available with the department. None of such document seized from the premises of Prakash industries is of nature which is already not available with the income tax department. ....
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....CIT (2016) 390 ITR 496 (Del.) and CIT-VII v. RRJ Securities Limited (2016) 380 ITR 612 that the seized material must have some nexus or relevance to the additions sought to be made and must be relevant for the belief formed regarding income having escaped assessment. As far as the present cases are concerned, the documents and material seized are only the balance sheet, audit reports etc., which did not reflect any income that was not already disclosed when the assessments were finalised initially under Section 143(3) of the Act. This by itself is sufficient to delete the additions sustained by the CIT (A). Consequently, the ITAT was not in error in ordering such deletion. b. Hon'ble High Court of Delhi in the case of SSP Aviation Ltd. (20 taxmann.com 214) has held that: The decision in SSP Aviation Ltd. (supra) cannot be understood to mean that the AO has the jurisdiction to make a re-assement in every case, where seized assets or documents are handed over to the AO. The question whether the documents/assets seized could possibly reflect any undisclosed income has to be considered by the AO after examining the seized assets/documents handed over to him. ....
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....r for the said assessment year 2010-11 was picked up for scrutiny and finalised by an assessment order under section 143(3). The payments of commission to RGEPL as reflected in the ledger account was already disclosed in the Petitioner's accounts which were examined while finalising the regular assessment. Therefore, the ledger account could not have led the Assessing Officer to be satisfied that any income had escaped assessment for the assessment year 2010-11. [Para 18] f. Hon'ble High Court of Delhi in the case of Rajeev Behl (99 taxmann.com 425) has held that: the Assessing Officer virtually reappreciated the materials and documents that were part of the record filed by the assessee. A plain reading of the assessment order would show that no attempt was made by the Assessing Officer to connect the fresh material and how it pointed out to any concealed income or led to any concealed income. The entire reliance upon the existing documents that were disclosed only reinforced that Kabul Chawla (supra) and its reasoning was appropriately applied. For these reasons, the court is of the opinion that the Income-tax Appellate Tribunal's reasons are sound on the....
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....made in cases of search and seizure. Such an assessment was popularly known as 'block assessment' because the Chapter provided for a single assessment to be made in respect of a period of a block of ten assessment years prior to the assessment year in which the search was made. In addition to these ten assessment years, the broken period up to the date on which the search was conducted was also included in what was known as 'block period'. Though a single assessment order was to be passed, the undisclosed income was to be assessed in the different assessment years to which it related. But all this had to be made in a single assessment order. The block assessment so made was independent of and in addition to the normal assessment proceedings as clarified by the Explanation below Section 158BA(2). After the introduction of the group of Sections namely, 153A to 153C, the single block assessment concept was given a go-by. Under the new Section 153A, in a case where a search is initiated under Section 132 or requisition of books of account, documents or assets is made under Section 132A after 31.5.2003, the Assessing Officer is obliged to issue notices calling upon the s....
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.... respect of all or any of those six assessment years, either under Section 143(1)(a) or Section 143(3) of the Act. If such an order is already in existence, having obviously been passed prior to the initiation of the search/requisition, the Assessing Officer is empowered to reopen those proceedings and reassess the total income, taking note of the undisclosed income, if any, unearthed during the search. For this purpose, the fetters imposed upon the Assessing Officer by the strict procedure to assume jurisdiction to reopen the assessment under Sections 147 and 148, have been removed by the non obstante clause with which sub section (1) of Section 153A opens. The time-limit within which the notice under Section 148 can be issued, as provided in Section 149 has also been made inapplicable by the non obstante clause. Section 151 which requires sanction to be obtained by the Assessing Officer by issue of notice to reopen the assessment under Section 148 has also been excluded in a case covered by Section 153A. The time-limit prescribed for completion of an assessment or reassessment by Section 153 has also been done away with in a case covered by Section 153A. With all the stops having....
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....OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED, BUT IN CASES WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REAS....
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....s conducted or requisition was made. Total income is assessed or reassessed n the order under Section 153A of the Act and the Section applies notwithstanding Sections 139, 147, 148, 149, 151 and 153 of the Act." Further Hon'ble Delhi High Court has clarified the decision of Chetan Dass, LaxmanDass decided earlier by observing in para 3 that "Learned counsel for the appellant assessee has relied on the decision of this Court in CIT Vs. Chetan Dasslaxmandass, (2012) 254 CTR (Del) 392. The said decision notices insertion of Section 153A by Finance Act, 2003, its purpose and object, had the earlier proceedings for block assessment under Chapter XIVB, the difficulties and the legal issues which had arisen on the difference between regular assessment and block assessment. It is in this context that in the case of Chetan DassLaxmanDass (supra), the Division Bench, [to which one of us (Sanjiv Khanna, J) was a party], has observed that Section 153A(1)(b) provides for assessment or re-assessment of the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which the search took place. It was emphasized that there is no conditi....
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....sessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the assessee. The assessing officer, while exercising the power under section 153A of the Act, would make assessment and compute the total income of the assessee including the undisclosed income, notwithstanding the assessee had filed the return before the date of search which stood processed under section 143(1)(a) of the Act. In the light of the aforesaid, the reasons given by the Tribunal that no material was found during the search cannot be sustained since we have held that the Assessing Officer has the power to reassess the returns of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to the material that was available at the time of the original assessment. We find that the Tribunal dismissed the appeal while relying upon the decision of a Coordinate Bench of the Tribunal in the case of Anil Kumar Bhatia Vs. ACIT (2010) 1 ITR (Trib.) 484 (Delhi). We find that the said decision of the Coordinate Bench of the Tribunal was set aside by the Delhi High Court in Commissioner of Income Tax Vs. Anil Kuma....
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....ssioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the said material can be furnished to the assessing authority and that assessing authority shall take note of the sad income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of said proceedings." Recently same view is also expressed by Hon'ble Delhi Bench in the case of Apoorva Extrusion Pvt. Ltd., ITA No. 3308/Del/2010 for the A.Y. 2002-03, vide order dated 09.10.2014. The relevant portion is mentioned as below:- "5. In order to answer whether the quashing of the initiation of assessment for the year under consideration on the given count is valid or not, we need to consider the mandate of the relevant part of subsection (1) of section 153C, which reads as under:- " Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or valuable article or thing or books of account or documents seized or requisitione....
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....requisition is made:" 7. On circumspection of the clause (a) of the above provision, it is amply clear that the AO shall issue notice to such person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years as referred to in clause (b) and, the latter clause, provides that the Assessing Officer shall 'assesss or reassess the total income of six assessment year immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made.' When we read section 153C in conjunction with section 153A of the Act, the position which follows is that if the books of account or document etc., belonging to the other person are found during the course of the person searched, then the assessment or re-assessment of such other person is required to be made of 'six assessment years immediately preceding assessment years relevant to previous year' in which such search is conducted or requisition is made. Section 153C is a jurisdictional provision, which on the fulfillment of the stipulated conditions, enables the making of assessment or reassessment of such other person in accord....
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....e person searched cannot per se be related to a particular assessment year. If we test the contention of the Ld. AR on the touchstone of 'money or jewellery' etc., belonging to the assessee found from the person searched, then it will be very difficult at the stage of initiation of assessment or reassessment of the other person to relate it to a particular year, there by jeopardizing the whole scheme of assessment pursuant to search or requisition. To a specific query it was candidly accepted by the Ld. AR that in items of section 153A, the initiation of assessment or reassessment foe all the six assessment years in the case of person searched is not dependent on the findings of any incriminating material. It is beyond our comprehension that when such a course of action is permissible u/s 153A in the case of person searched, then how can there be any bar on the initiating or making of assessment or reassessment for some of the years of other person, more so, when section 153C(1) has been expressly made to accord with the provisions of section 153A. We, therefore, jettison the contention urged on behalf of the assessee as sans merit. 9. In order to support the impugned orde....
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.... such assessment year in the manner provided in section 153A.' the expression ' such assessment year' used in subsection (2) of section 153C refers to ' the assessment year relevant to the previous year in which search is conducted u/s 132 or requisition is made u/s 132A.' Thus, it is amply clear that whereas sub-section (2) of section 153C deals with the assessment for the assessment year relevant to the previous year in which search is conducted, sub-section (1) of section 153C read with section 153A refers to 'six assessment years immediately preceding assessment year relevant to the previous year in which such search is conducted or requisition is made.' As we are presently concerned with one of the six assessment years immediately preceding the assessment year relevant to the previous year in which such search was conducted, it is the mandate of sub-section (1) of section 153C read with section 153A which shall apply. 12. Reverting to the facts of the instant case, it is noticed that the documents found from the persons searched, placed at pages 26- 36 of the Departmental paper book, do belong to the assessee. As such, there can be no question of lack of jurisdiction ....
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....er section 153A. Smt Dayawanti Gupta Vs CIT (Delhi HC) where Honb'le court after considering the decision of Kabul Chawla has held that statement recorded under section 132(4) during search proceedings in absence of any other material would in itself constitute incriminating material giving leeway to AO to make additions in search assessment." 16. We have heard the rival submissions and also perused the relevant finding given in the impugned orders as well as the material referred to before us. Before the ld. CIT(A) the assessee has challenged the validity of satisfaction and proceedings u/s.153C wherein the ld. CIT(A) had decided the issue in favour of the holding that satisfaction note recorded was not valid and the document found does not lead to any escapement of income and did not pertain to Assessment Year in question. The relevant observations are as under: "In view of the above submission, it is also submitted by the appellant that decision of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT vs. Kabul Chawla [2015] 61 Taxmann.com 412 (Del), is squarely applicable to the facts of the appellant. From the above, following facts emerged: ....
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....not be made if no incriminating documents exist and no undisclosed income found during the course of search. 18. We have carefully perused the satisfaction note, written submissions of the appellant and also the contentions of the Ld. CIT (DR). A chart was furnished by the appellant, which is reproduced above in this order,wherein every seized document was described as to its nature and it was emphasized that all the documents are either statutory records filed with the tax authorities, ROC or are audited accounts and books of the appellant. 19. We have perused the chart from which it clearly comes out that the documents belong to the appellant. However, they do not indicate any undisclosed income that has escaped assessment in the impugned assessment years. The appellant had also submitted a chart demonstrating that the assessment years in appeal are completed assessment years which has been reproduced in the submissions of the appellant. We would like to reproduce the relevant portion of section 153C of the Act. 153C [(1)] [Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Offi....
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.... (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such assessment year in the manner provided in section 153A.] 20. The tests that the documents belong to the appellant are duly verified. Section 153C of the Act also states that once the assessment is sought to be opened based on the documents belonging to the appellant, further assessment shall be made in accordance with the provisions of section 153A of the Act. There is a further requirement which states that the Assessing Officer must record a satisfaction note that documents mu....
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....ad scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to assessment year 2004-05 or thereafter. After taking note of the material and discussing it, it was specifically recorded that the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, the respondent, argued that notice in respect of assessment years 2000- 01 and 2001-02 was even time barred.[Para 18]" 22. From the perusal of the satisfaction note, it cannot be held that it is reflective of any undisclosed income or in the nature of incriminating belonging to the assessee the reason being none of the documents either pertained to the impugned assessment years or are already party of regular books of account. 23. This is fairly clear from the assessee's explanation with regard to each and every document incorporated in the tabulated form in the following paragraphs. Most of the documents did not pertain to impugned assessment years or does not specify any assessment year or have already recorded in the books of account or a pa....