TaxTMI 
TaxTMI 
2025 (6) TMI 1379
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.... of various receipts and payments in various schemes of SIPL during the period 02-04-2010 to 26-08-2010. Sh Anil Hiralal Shah, when confronted with the same stated the recordings to relate to transactions conducted in the construction activity carried out of Abhishree group which he stated was handled by his brother Sh. Atul Shah. Sh. Atul Shah when confronted with the excel sheets stated the transaction to pertain to the Abhishree group but was unable to confirm whether these were recorded in the books of accounts of the assessee and whether they were in coded form. The sheet was confronted to Sh. Sanjay Mahendrabhai Sutariya, a director & shareholder of SIPL who did not throw much light on the contents of the sheet and was noted by the AO to have evaded giving answers to the questions asked. The AO of the searched entity thereafter went on to interpret the contents of the sheet and finding that some entries therein were reflected in the books/bank accounts of the assessee/SIPL, he decoded the abbreviations in the sheet as also the figures mentioned therein, after matching it with entries recorded in the books of the assessee/SIPL, and interpreted accordingly the sheet to contain ....
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....rch operations in the form of entries recorded in CCCCC.xls. 2. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred by allowing assessee's appeal by holding that AO was not justified in making addition by relying on dumb documents which did not belong to the appellant where the Hon'ble Supreme Court in the case of Income Tax Officer v. Vikram Sujit Kumar Bhatia, 2023 SCC online SC3, the Ld CIT(A) has clearly held that the amendment to section 1530 is retrospective in nature and that the seized material u/s 153C may either belong or pertain to the assessee. 3. Whether on the facts and the circumstances of the case and in law the Ld CIT(A) has erred by deleting an addition made by the AO in assessment order on account of cash payments towards investments in property with M/s Sarthav Infrastructure Pvt Lt, which was not recorded in the books of accounts of the assessee and which is treated as investment out of books and treated as unexplained investment u/s 69 of the Income Tax Act, 1961." 6. The Ld.Counsel for the assessee was given a copy of the revised grounds and he stated in open court to have no objection to the same. The appeal ....
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.... rules, the assessee apparently is not entitled to raise this ground. 12. We have however noted that the ITAT Delhi Bench in the case of ITO vs. Gurinder Kaur (2007) 288 ITR 207 (Delhi), had an occasion to deal with an identical situation and held that even dehors Rule 27 of the Income Tax Appellate Tribunal Rules, 1963, it is open to the respondent in an appeal before the Tribunal to raise new grounds in defense of the order appealed against,noting that the Tribunal has inherent powers u/s. 254(1) of the Act to entertain the argument of the respondent which amounted to a new ground. In the facts of the said case, the ld. CIT(A) had held the order passed by the Assessing Officer u/s. 147 of the Act to be invalid noting that the reasons recorded by the Assessing Officer for reopening the case of the assessee was based merely on suspicion and did not fulfil the parameter laid down u/s. 147 of the Act to form a belief of escapement of income. Before the ITAT, the Department come up in appeal against the order of the ld. CIT(A), where the assessee raised grounds in defense of the order of the ld. CIT(A), which were not dealt with by the ld. CIT(A). The assessee raised the ground of th....
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....ds obviously calling upon the department to show that reasons for reopening have been recorded, but due to some difficulty or the other, the department has not been able to produce the records. The CIT(A) has not recorded any finding on the question whether the reasons were recorded or not, but having regard to the judgment of the Hon'ble Delhi High Court in Rohtak and Hissar Districts Electric Supply Co. (P.) Ltd, v. CIT, it is possible to hold that he found against the assessee on this point. On this reasoning, it is open to the assessee to raise the question of non-recording of reasons for reopening the assessment before the Tribunal for the first time and seek to support the ultimate decision of the CIT(A). Even the non-disclosure of the reasons can be said to be covered by ground No. 2 taken before the CIT(A) and in the absence of any definite decision by the CIT(A), the same conclusion would follow namely, that it is open to the assessee to invoke Rule 27 even in respect of this point. As regards the approval of the JCIT under Section 151(1), it is fairly admitted on behalf of the assessee that this was not specifically taken either before the Assessing Officer or before ....
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....equired to be brought on record is capable of being disposed of on the facts on record and secondly that an opportunity is given to the other side to meet that point which is allowed to be raised for the first time in the appeal. This was also a case of the respondent. To the same effect are the decisions of the Allahabad, Gauhati, Kerala and Gujarat High Courts cited on behalf of the assessee. Therefore, whether it is the appellant or the respondent before the Tribunal, new points or contentions can be raised provided they did not involve investigation into facts (as contrasted with the record) and that an opportunity is given to the other side to meet the contentions. Applying these principles to the present case, we overrule the preliminary objection of the Ld. Sr. DR and permit the assessee to raise the new points before us as a respondent." 13. Following the said decision, we hold that the grounds raised by the assessee, challenging the validity of jurisdiction assumed u/s. 153C of the Act is maintainable. 14. We shall now proceed to adjudicate the ground raised by the ld. counsel for the assessee. 15. As noted above, the contention of the ld. counsel for the assessee was ....
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....2014 dated 12.3.2014(available in NJRS at 2014-LL-0312-51) has laid down that for the purpose of Section 158BD of the Act, recording of a satisfaction note is a prerequisite and the satisfaction note must be prepared by the AO before he transmits the record to the other AO who has jurisdiction over such other person u/s 158BD. The Hon'ble Court held that "the satisfaction note could be prepared at any of the following stages: (a) at the time of or along with the initiation of proceedings against the searched person under section 158BC of the Act; or (b) in the course of the assessment proceedings under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person." 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supr....
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....ns of section 153C of the Act are substantially similar/pari materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by the CBDT." Thus, the above decision of the Supreme Court would also be applicable insofar as recording of satisfaction as contemplated under section 153C of the Act by the Assessing Officer of the person searched is concerned. In the facts of the present case admittedly, such satisfaction has not been recorded at the time of or along with the initiation of proceedings against the searched person under section 153A of the Act. In the case of HN Safal Group the searched persons approached the Settlement Commission and hence, there was no assessment under section 153A of the Act. However, the proceedings before the Settlement Commission came to be concluded by an order dated 29.7.2016 under section 245D (4) of the Act. Such order came to be received by the Assessing Officer of the searched person on 2.8.2016, whereafter the said Assessing Officer recorded satisfacti....
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....person 16-03-2018 21. Referring to the above facts, he contended that the satisfaction recorded in the present case was almost a year after completion of assessment, which in view of the settled position of law noted above was clearly invalid. 22. Ld. DR, on the other hand, contended that this issue had been raised for the first time by the assessee. He, however, stated that the Act doesn't prescribe any limitation for the recording of satisfaction by the AO of the searched person and even considering the decision of the Hon'ble Apex Court in the case of Calcutta Knitwears (supra) and CBDT Circular referred by the Ld. Counsel for the assessee, the recording of satisfaction was AO of the searched person in the present case was within limits and reasonable time. 23. We have heard the contentions of both the parties carefully. 24. The issue for adjudication is regarding validity of the jurisdiction assumed in the present case by the AO u/s.153C of the Act, which has been questioned / challenged on the ground that the AO of the searched person had not recorded his satisfaction, of material pertaining to the assessee found during search conducted on the SIPL Group, within a reasonab....