TaxTMI 
TaxTMI 
2023 (8) TMI 1188
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....d. AR relied on the decision of Hon'ble Supreme Court in the case of M/s. Super Malls Pvt. Ltd. Vs. PCIT-8 (115 Taxmann.com 105) dated 05-03-2020 which has considered its earlier decision passed in CIT vs. Calcutta Knitwears (43 Taxmann.com 446). The Ld. AR also relied on CBDT Circular No. 24/2015 dated 31-12- 2015 which state that for the purpose of Sec.158BD, the recording of satisfaction is prerequisite and satisfaction note must be prepared by AO before he transmits the record to the other AO who has jurisdiction over such person. The CBDT has also accepted the position that this principle would apply to proceedings u/s 153C also. The Ld. CIT-DR, on the other hand, submitted that AO of searched person as well as the present assessee is same and satisfaction note has been recorded in the case of the assessee which is sufficient compliance of law. The Ld. CIT-DR referred to the observations made by Hon'ble Apex Court in the cited decision of M/s. Super Malls Pvt. Ltd. (supra). Having heard rival submissions and upon perusal of case record, our adjudication for these three years would be as under. The assessee being resident individual is stated to be engaged in business under pro....
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....der: - Consequent to the search conducted in the case of Shri Madanlal Chawla, the Assessing officer, based on the documents found during the course of search, believed that there was an income that escaped assessment in the case of the applicant. Smt. L. Ammini. A satisfaction note to that effect is recorded in the case of the Applicant and assessment proceedings were initiated subsequently. The Assessing officer being same for both the cases, there was no requirement to record a satisfaction note pertaining to the applicant in the file of Shri. Madanlal Chawla, Thus, the undisputed position that emerges is that no satisfaction note has been recorded by AO in case of searched person i.e., Shri Madanlal D. Chawla. The argument of Ld. CIT-DR is that since AO of searched person as well as the AO of the assessee is one and the same person, it is sufficient compliance of law if the satisfaction note is recorded in either of the case. However, we find that the same run contrary to CBDT circular No. 24/2015 which read as under: - CIRCULAR No. 24/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015 The issue of recording of satisfaction for the purposes of....
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....on should record satisfaction before transmitting the record to other person having jurisdiction over such other person u/s 158BD. This requirement would apply even if AO of searched person as well as other person is one and the same. From para-2 as extracted above, it is quite clear that such a satisfaction note could be prepared by AO of searched person at various stages of framing of assessment u/s 158BC. Therefore, in our considered opinion, in the absence of satisfaction note in the case of searched person, the proceedings u/s 153C would be vitiated by law. The recording of satisfaction note in the case of present assessee is not sufficient compliance of law. 5. The case law of Hon'ble Supreme Court in the case of M/s. Super Malls Pvt. Ltd. Vs. PCIT-8 (115 Taxmann.com 105) also supports this view. The adjudication of Hon'ble Court was as under: - 3.2 That in the present case there was no satisfaction note by the Assessing Officer of the searched party. That as per the scheme of section 153C of the Act, the Assessing Officer of searched person, i.e., the Directors in this case has to be firstly "satisfied" that any money, jewellery or other valuable articles, books ....
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....behalf of the Revenue, while opposing the present appeal/s has vehemently submitted that in the facts and circumstances of the case and after considering the satisfaction note recorded by the Assessing Officer, the High Court has rightly observed and held that there is a sufficient compliance of section 153C of the Act. In support he has made the following submissions: 4.1 That in the present case, the Assessing Officer of the assessee and the Assessing Officer of the searched person was the same and therefore if one looks at the satisfaction note, it can be seen that there is a satisfaction note by the Assessing Officer of the searched person also. It is submitted that as the Assessing Officer was the same, there was no question of thereafter transmitting the documents so seized from the searched person to another Assessing Officer as he himself was the Assessing Officer of the searched person as well as the Assessing Officer of the assessee. Therefore, there was a sufficient compliance of the requirements under section 153C of the Act. 4.2 That even as observed and held by the Delhi High Court in the case of Ganpati Fincap Services (P.) Ltd.(supra), in case the ....
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....her 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 the other person and is also required to make a note in the file of a searched person that he has done so. However, as rightly observed and held by the Delhi High Court in the case of Ganpati Fincap Services (P.) Ltd.(supra), the same is for the administrative convenience and the failure by the Assessing Officer of the searched person, after preparing and dispatching the satisfaction note and the documents to the Assessing Officer of the other person, to make a note in the file of a searched person, will not vitiate the entire proceedings under section 153C of the Act against the other person. At the same time, the satisfaction note by the Assessing Officer of the searched person that the documents etc. so seized during the search and seizure from the sea....
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....tates that the documents so seized belonged to the other person - the assessee and not the searched person. Thus, the High Court is justified in observing that the requirement of section 153C has been fulfilled. On facts, we are in complete agreement with the view taken by the High Court on the requirement of section 153C of the Act being fulfilled by the Assessing Officer before initiating the proceedings under section 153C of the Act. 7. In view of the above and for the reasons stated above, all these APPEALS fail and the same deserve to be dismissed and are accordingly dismissed. Now, the learned ITAT shall decide and dispose of the appeals afresh on merits, at the earliest, in accordance with law, as observed by the High Court in the impugned Judgment(s) and Order(s). From the aforesaid decision, it clearly flows that satisfaction note in case of searched person is mandatory requirement before acquiring jurisdiction u/s 153C of the Act. In this note, AO has to reach a conclusion that the documents seized / recovered belonged to the other person. Thereafter, this satisfaction note along with documents may be transmitted to Assessing Officer having jurisdiction over s....