TaxTMI 
TaxTMI 
2023 (4) TMI 358
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....sessment so framed. 2. That the ld. CIT(A) has erred in law in holding that the case of assessee for relevant assessment year was validly proceeded ignoring the fact that the same was without proviso to Section 153A of the I.T.Act, 1961 and also ignoring the vital fact that the AO herself has considered the additional income as assessed u/s 69C of the Act. 3. That the ld. CIT(A) has erred in law and on facts in interpreting the judgement of Hon'ble Income Tax Settlement Commission in the case of Shri Baldeep Goyal (the searched person) as per her own wish and relied only the portion which suited her and ignoring the other parts of judgement which were in favour of the appellant. 4. That the ld. CIT(A) has erred in not deciding the argument of the assesee that how the case of the assesee for extended assessment year can be taken up when no such action had been taken in the case of Shri Baldeep Goyal (the searched person) on the basis of whom proceedings u/s 153C had been taken up in the case of the assessee.'' ITA No. 345/JP/2022 - A.Y. 2010-11 ''1. That the ld. CIT(A) has erred in law and on facts in sustaining the action of the AO in assuming....
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....mission in the case of Shri Baldeep Goyal (the searched person) as per her own wish and relied only the portion which suited her and ignoring the other parts of judgement which were in favour of the appellant. 4. That the ld. CIT(A) has erred in not deciding the argument of the assesee that how the case of the assesee for extended assessment year can be taken up when no such action had been taken in the case of Shri Baldeep Goyal (the searched person) on the basis of whom proceedings u/s 153C had been taken up in the case of the assessee.'' ITA No. 347/JP/2022 - A.Y. 2013-14 ''1. That the ld. CIT(A) has erred in law and on facts in sustaining the action of the AO in holding that the AO has assumed proper jurisdiction to assess the case u/s 153C of the Income Tax, 1961 ignoring the crucial evidence to the fact that the AO had recorded satisfaction for initiating action u/s 153C even prior to transfer of the case with her and hence was invalid.'' 2.1 First of all, we take up the appeal of the assessee in ITA No. 347/JP/2022 for the assessment year 2013-14 being the solitary ground as to the jurisdiction to assess the case of the assessee u/s 153C of the Act, f....
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....ies which pertains to period beyond six years from assessment year relevant to previous year in which search was conducted. The details of these entries are as under: F.Y. Amount (in Rs.) 2008-09 1.08 Crore 2009-10 3.28 Crore 2010-11 2.55 Crore 2012-13 .97 Crore (iv) On this basis, the AO initiated action against the appellant by recording a satisfaction note for opening the case of the appellant u/s 153C and consequently on the basis of the seized material, the AO issued notice under section 153C dt. 16.12.2019 calling upon the appellant to file returns for assessment years in question. Appellant filed his return declaring certain taxable income. The AO completed the assessment u/s 153C r.ws. 143(3), by making various additions to the appellant's income and framed the assessment u/s 153C of the Act. (v) Before me, the Ld. AR of the appellant has contended that the case of the present appellant was transferred to Asstt./Dy. CIT, Central Circle-3, Jaipur vide order dt. 02.09.2019 passed by the Hon'ble Pr. CIT-2, Jaipur. Further it was contended that during the assessment proceedings, satisfaction note as prepared by the AO was ....
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....39;ble Supreme Court quashed the whole proceedings for want of a satisfaction note. Similarly the other decisions relied by the Ld. AR of the appellant are also based on the facts that no such satisfaction note was prepared in the case of the assessee's. However the facts in the instant case of the appellant are distinguishable since a proper satisfaction note has been prepared by the AO before issuing notice u/s 153C in the case of the appellant. (viii) As regards the contention of the appellant that the Board has categorically stated that such satisfaction has to be recorded in the case of person searched as well as the other person whose books of accounts/documents have been found during such search, reference is made to the judgement of the Hon'ble Cochin Tribunal in the case of DCIT v. Damac Holdings (P.) Ltd. (2015) 33 ITR 331/67 SOT 148 (URO)(Cochin)(Trib.) wherein it has been held that where the same Assessing Officer had completed assessment proceeding of appellant-company and its director, recording of satisfaction may not be necessary because there was no necessity for Assessing Officer to handover document to another Assessing Officer. (AY. 2007-08, 200....
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....served hereinabove, he must be conscious and satisfied that the documents seized/recovered from the searched person belonged to the other person. In such a situation, the satisfaction note would be qua the other person. The second requirement of transmitting the documents so seized from the searched person would not be there as he himself will be the Assessing Officer of the searched person and the other person and therefore there is no question of transmitting such seized documents to himself.'' (xi) Further on perusal of satisfaction note in the instant case of the appellant, it emerges that the Assessing Officer was satisfied that the documents contain the details of payment of cash by the appellant against unsecured loans obtained by M/s Aditya Propcon Pvt. Ltd Kolkata based companies. The appellant in one of the directors in the aforesaid company. The AO was also satisfied that the documents were seized from Sh. Baldeep Goyal during the course of search at his residence. Thus, the Assessing Officer was satisfied that the documents so seized belonged to the appellant i.e. other person. In view of the aforesaid judgment of the Hon'ble Supreme Court in the case of M/....
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....erred to the jurisdiction of the AO (ACIT, Central Circle-3, Jaipur) vide order dated 02-09- 2019 by the ld. Pr. CIT, Jaipur-2 which indicates that the AO (ACIT, Central Circle-3, Jaipur) had recorded the satisfaction of the reasons prior to getting authority over the case of the assessee vide order dated 02-09-2019 from the ld. Pr.CIT, Jaipur-2 and hence the satisfaction note dated 01-08-2019 is without authority and notice issued u/s 153C on the basis of unauthorized recording of satisfaction is illegal and proceedings undertaken based on such illegal notice requires to be quashed. During the course of hearing, the ld. AR relied on following case laws. 1. CIT vs Calcutta Knitwears, Ludhiana, 362 ITR 673 (SC) 2.Super Malls Pvt. Ltd. vs PCIT, 423 ITR 281 (SC) 3. Manish Maheshwari vs ACIT, 289 ITR 341 (SC) 4.ACIT vs Rangoli Buildcon (P) Ltd. (ITA 5015/Del/2014) 5. K.M. Sharma vs ITO , 254 ITR 772 (SC) He further submitted that in all the above four cases, the Hon'ble Courts have given verdict about mandatory condition of recording satisfaction prior to initiation of proceedings u/s 153C of the Act. The written submission filed by the a....
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....09.2019 passed by the worthy PCIT - 2, Jaipur (APB 19). Therefore such satisfaction note does not confer any authority on the ld. AO to proceed against the appellant u/s 153C. The ld. CIT (A) has stated in her order at page 8 in para (vi) that the satisfaction note was valid as notice u/s 153C had ben issued after receiving jurisdiction of the appellant. She forgot to appreciate that in online process no notice can be issued by any officer other than jurisdictional AO and hence her argument is not on correct footings. 2. The ld. CIT (A) has stated at page 8 of her order in para (vi) that notice u/s 153C was issued by the ld. AO after transfer of case to her and she had prepared the satisfaction note as she was AO of the searched person as well as the appellant. The ld. CIT (A) has missed a crucial part of this matter that on the date of recording such satisfaction the AO was not AO of both the persons viz. the searched person and the appellant and therefore such satisfaction note can not be relied upon for assuming jurisdiction for assessing the case of other person. The ld. AO had issued notice u/s 153C on 11.09.2019 which was on the basis of above said illegal satisfacti....
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....ther person was with the same AO. Therefore for strict applicability of the above cited case of the Hon`ble SC in the present case dwells upon the crucial issue of jurisdiction of both the person at the time of recording of satisfaction note and hence is not applicable in the instant case. Therefore no proper jurisdiction was assumed by the AO for assessing the case of the appellant and hence the order deserves to be quashed. The ld. CIT (A) at page 8 in para (vi) in last line states that since the case of the person searched i.e. of Shri Baldeep Goyal was with the same AO, on the basis of which notice u/s 153C was issued to the appellant, therefore it appears that the AO prepared the satisfaction note in the case of the appellant for the year under consideration. However CIT (A) is silent on the issue of jurisdictional defect in recording the satisfaction note which was argued right since begining in the case. Therefore her justification of the action of the ld. AO is unlawful. 4. The observations of the ld. CIT (A) in para (iv) at page 8 of her order is that the ld. AO issued notice u/s 153C on 16.12.2019 calling upon the appellant to file return of income This fact is w....
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....ct was completed on 29-02-2016 at total assessed income of Rs.Nil. In this case, the ld. CIT(A) has observed that the assessee belongs to Swaroop Narain Shiv Narain&Kumawat Group of Jaipur on whose premises a search u/s 132 of the Act took placed on 28-09-2017 where various assets/ books of accounts and documents were found and seized as per annexure prepared during the course of search. It is also noted from the assessment order that during the course of search, 13, highly incriminating documents were found from the bedroom of Shri Baldeep Goyal, situated at C-42, Lajpat Marg, C-Scheme, Jaipur which were seized as page Nos. 11-23 of Exhibit-2. Out of these, 13 papers, Page No. 11-17 are handwritten papers while Page No. 18-23 are computer generated papers. These are bit of old papers starting from F.Y. 2007-08 to F.Y. 2012-13. These pages contain details of loans taken by M/s. Aditya Propcon Pvt. Ltd., a company in which the assessee and Shri Baldeep Goyal are directors, from mainly Kolkata companies to repay the loan taken from RIICO by M/s. Aditya Propcon Pvt. Ltd for buying land from Rajastha Housing Board. In the opinion of the AO, these loans taken from Kolkata companies were....