TaxTMI 
TaxTMI 
2022 (10) TMI 720
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....ly based on enquiries conducted on the entries in the books of account regularly maintained merely by reference to statement recorded u/s. 132(4) which by no stretch of imagination could be held to be any incriminating material. 3. The learned CIT(A) erred in confirming the addition of Rs.36,02,098 made as income from other sources claimed as agricultural income though made based on statements collected behind the back of the assessee and no opportunity to cross examination is allowed. 4 The learned CIT(A) erred in confirming the action of the AO in treating entire cash deposits into bank as unexplained and thereby erred in confirming the action of AO in making addition of Rs.1,08,77,048 without appreciating the submissions that the AO has not considered the withdrawals made which were available for redeposit particularly when the book entries are not being relied. 5. The learned CIT(A) failed to appreciate the fact that the assessee is a listed . company and further that the authorities during the course of search has not found any material suggesting that the directors are involved in day to day activity and are not found benefited in any manner from th....
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....nal may be pleased to admit the additional ground and the same may be adjudicated on merits and pass such other order(s) as the Hon'ble Tribunal deems fit and proper in the interest of justice". 4. The learned AR submitted that the ground raised by the assessee are legal in nature and have not been raised specifically before the learned CIT (A). However, it was submitted that the reasons for raising the additional grounds are duly mentioned in the petition for admission of the additional grounds which read as under: 5. The learned AR further submitted that the assessee although filed for application for admission of the additional evidences which are nothing but the record of the proceedings which have taken place before the Special Judge, Economic Offences (Cross Examination) of the officials of the Revenue namely Shri Vijay Kumar and Rama Subramaniam) working as Assessing Officer at that relevant point of time and also copy of the warrant of the authorization and the application moved by the assessee for seeking the record of satisfaction u/s 153C of the Act. It was submitted that the admission of the additional ground and also the admission of the additional evidences ....
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....r that the deposits were made out of undisclosed income. It is all based on the enquiries they conducted subsequently to demonstrate that the agricultural income is inflated and on the basis of statement given Under coercion. Therefore the assessment that is not based on incriminating material particularly u/s. 753C is invalid. The appellant in this regard invite kind attention to the Circular of the CBDT No 24/2015, dated 31.12.2015 where the CBDT has accepted the decision of the Supreme Court which is to the effect that without recording of satisfaction, no assessment u/s 153C could be made. As submitted earlier, the Assessing Officer issued notice u/s 153C and completed the assessment u/s 153C. The appellant therefore, submit that the assessment that is made u/s 153C is void ab initio". 8. The learned AR submitted that the warrants of authorization are issued in the name of the individuals which is clear from Page 28 of the Paper Book as the same was issued in the name of the two Directors namely Mr. Rajesh Naidu and Mrs. Kalpana Raj Muniratnam. It was also submitted that once letter of authorization was issued under the name of the two persons and there is no satisfaction re....
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....aid satisfaction and upon examination of such other documents relating to such other person, the jurisdictional Assessing Officer may proceed to issue a notice for the purpose of completion of the assessment under Section 158BD of the Act and the other provisions of Chapter XIV-B shall apply. 6.1 It cannot be disputed that the aforesaid requirements are held to be mandatorily complied with. There can be two eventualities. It may so happen that the Assessing Officer of the searched person is different from the Assessing Officer of the other person and in the second eventuality, the Assessing Officer of the searched person and the other person is the same. Where the Assessing Officer of the searched person is different from the Assessing Officer of the other person, there shall be a satisfaction note by the Assessing Officer of the searched person and as observed hereinabove that thereafter the Assessing Officer of the searched person is required to transmit the documents so seized to the Assessing Officer of the other person. The Assessing Officer of the searched person simultaneously while transmitting the documents shall forward his satisfaction note to the Assessing Officer of th....
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....be made in the hands of the assessee u/s 153A of the Act as the search has taken place in the premises of the searched persons on 16.11.2012 and the last date of authorization was 31.3.2013 and the assessment order under consideration was passed on 31.3.2015 u/s 153C of the Act. As per the contention of the learned AR, the order, in any case, u/s 153A was required to be passed within a period of 21 months from the last date of the financial year in which the search has taken place and therefore, the order passed by the Assessing Officer, though passed u/s 153C was highly time barred. 11. The learned AR also submitted that the grounds raised in all the appeals before the Tribunal and are identical and therefore, the appeal for the A.Y 2007-08 may be taken as a lead appeal and the submission made by the assessee before the lower authorities on quantum may kindly be considered with respect to the determination of the issue on merit are concerned and he has not made any submission in support of the grounds raised on merit. 12. The learned DR, on the other hand, vehemently argued the mater and he relied upon the written submission filed by the earlier DR and also the judgment reli....
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....hat, as per sec. 153A, the AO is authorized to proceed against the person where the search is initiated u/s. 132. Accordingly, the person covered u/s. 153A shall be identified on the basis of the person in whose case search is initiated u/s. 132. As per sec. 132, the D1T(Inv.) is empowered to issue warrant of authorization against a person, directing the Authorized Officers to enter and search any building, place, vessel, etc., wherein the books of account, valuables, etc., belonging to such person are kept. As such, conducting search operation in the premises of a person cannot be equated with issuing a warrant against a person. 5.0 For instance, warrant can be issued in the name of a person X (individual) directing to search the residential premises of X i.e., premises 'A' as well as the business premises of B company (Y) wherein X is a director i.e., premises 93', in order to find out books of account, valuables, etc., belonging to X lying in premises 'W. Thus, the provisions of sec. 153A would cover only such person (X) against whom warrant of authorization is issued to conduct search and seizure operation in various places (premises A and B). On the ot....
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....such persons against whom the warrant of authorization is issued should come under the purview of sec. 153A, has been ratified by the Hon'ble Supreme Court in the case of Tapan Kumar Dutta Vs. CIT (2018) 92 taxmann.com 367 (SC). Accordingly in the instant case, the AO has rightly issued notice u/s. 153C. Thus, it is humbly requested that the additional grounds of appeal and corresponding additional evidence filed by the assessee shall not be admitted at this stage. 8.0 Coming to the second contention of the assessee regarding recording of satisfaction note by the AO u/s 153C, it is humbly submitted that the incumbent AO reported that the copy of satisfaction note is not placed in the Miscellaneous Records (MRs) of the assessee company available in the office of the AO i.e., [TO, Ward-2(1), Hyderabad. Also, it is stated by the AO that the case was originally assessed to tax with ITO, Ward-2(2), Hyderabad and consequent to action u/s 132 mounted against the directors of the assessee company and seizure of incriminating material from the business premises of the assessee company, the case was centralized with DCIT, Central Circle-5, Hyderabad (since merged with DCIT, Cent....
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....SC). Also, reliance is placed on the decision of Hon'ble Kerala High Court in CIT Vs. Dr. T.M. Kuriachan [2013132 taxmann.com 165 (Kerala), wherein it is held that where the assessments of both the assessees, one u/s. 158BC and other u/s. 158BD were completed by the same AO, recording of satisfaction by the AO about undisclosed income to be assessed at hands of other assessee u/s. 158BD was not necessary. A similar proposition of law was expounded by the Hon'ble Allahabad High Court in TVS Securities & Finance (P.) Ltd. Vs. CIT [20141 42 taxmann.com 441 (Allahabad). 11.0 Similarly, I am of the humble opinion that, in view of peculiar set of facts and circumstances of the case, there is no requirement of recording of satisfaction by the AO of the assessee company before issuing notice u/s. 153C, since the seized material relating to the assessee company was found and seized from its own business premises, rather than from any third party premises. As such, it is not a case of seizure of books of account, valuables, etc., relating to any other person during the course of search operation conducted in the premises of a third party. Further, the incriminating nature of....
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....ss examination carried out on behalf of the assessee in the Court of the Special Judge, Economic Offences. He had also submitted that efforts were made to obtain copy of the satisfaction by writing letters to the Department, however, the assessee was not able to lay on the record of the assessee to show that there is no recording of satisfaction. 16. We have heard the rival contentions of the parties and perused the material available on record. The Revenue had submitted before us that the provision of sec 153A cannot be invoked in the present case as the warrant of authorization had not been issued against the assessee before us. In view of the above, we find the contention of the ld.AR that the right recourse was to exercise power u/s 153A is not sustainable. The decision of the Hon'ble Supreme Court in the case of Tapan Kumar Datta (Supra) is applicable to the facts of the case. 17. Having held that the proceeding u/s 153A cannot be invoked in the present case, now we have to examine whether the Assessing Officer was correct in invoking the provisions of sec 153C or not. As mentioned herein above, the recording of satisfaction by the Assessing Officer of the searched perso....