TaxTMI 
TaxTMI 
2025 (4) TMI 1723
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....minated the Hon'ble Third Member to adjudicate the dispute which arose between the view of Hon'ble Accountant Member and Hon'ble Judicial Member. The questions framed by the Hon'ble Members read as follows: "1. Whether, in the facts and circumstances involved in both these cases, the Assessing Officer herein had rightly recorded his twin sec 153C(1)(a) and (b) satisfactions, as the case may be, culminating in his corresponding as many assessments in issue both dated 24.12.2021 or not ? In addition to the above common question, hon'ble Accountant Member also refers the following twin questions separately:- 2. Whether, in the facts and circumstances and in law, the satisfactions recorded by the Assessing Officer of the searched person qualifies the test of sufficiency to set in motion the provision of section 153C of the Act against the assessee being the person other than searched person/party? 3. Whether, in the facts, circumstances and in law, the satisfaction recorded by the Assessing Officer of assessee (being person other than searched person/party) qualifies the test of sufficiency to invoke jurisdiction and assess the income u/s. 153C o....
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....fact that the Assessing Officer while initiating proceedings u/s 153C of the Act in the case of the assessee vide satisfaction note dated 22.03.2021 has noted that the documents mentioned in table above belongs to Shri Prashant Premchand Bafna, a person other than referred to in section 153A of the Act and will have a bearing on the determination of total income of such other person. The above satisfaction recorded by the Assessing Officer is contradictory to the satisfaction recorded by the Assessing Officer of the searched person while recording the satisfaction. 18. A perusal of the amended provisions of section 153C of the Act as amended by the Finance Act, 2015 shows that there are two facets in this provision. The first one is the initiating the provision by the Assessing Authority of the First Party which is subjected to (i) there must be a search seizure operation carried out u/s. 132 of the Act upon a party other than the other party (ii) in such operation there must be some incriminating material such as (a) any money, bullion, jewellery or other valuable article or thing "belong" to and/or. (b) any books of account or documents seized or requisitioned, "pertain ....
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....he Hon'ble Supreme Court in the case of Super Malls P. Ltd. Vs. PCIT (2020) 423 ITR 281 (SC) has observed as under: "5. We have heard the learned counsel for the respective parties at length. 5.1 As observed hereinabove, the short question which is posed for the consideration of this Court is, whether there is a compliance of the provisions of Section 153C of the Act by the Assessing Officer and all the conditions which are required to be fulfilled before initiating the proceedings under Section 153C of the Act have been satisfied or not? 6. This Court had an occasion to consider the scheme of Section 153C of the Act and the conditions precedent to be fulfilled/complied with before issuing notice under Section 153C of the Act in the case of Calcutta Knitwears (supra) as well as by the Delhi High Court in the case of Pepsi Food Pvt. Ltd. (supra). As held, before issuing notice under Section 153C of the Act, the Assessing Officer of the searched person must be "satisfied" that, inter alia, any document seized or requisitioned "belongs to" a person other than the searched person. That thereafter, after recording such satisfaction by the Assessing Officer....
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....ing Officer to note in the satisfaction note that the documents seized from the searched person belonged to the other person. Once the note says so, then the requirement of Section 153C of the Act is fulfilled. 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. 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. (Emphasis supplied by me) 21. However, as mentioned earlier, in the present case a perusal of the satisfaction note in the case of the searched party shows that there is no whispe....
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....rse of assessment proceedings before the Assessing Officer of the searched person, the said Assessing Officer has satisfied that the documents mentioned in the table above belong to Shri Prashant Premchand Bafana, a person other than the person referred to in Section 153A and will have a bearing on the determination of the total income of such other person...." Accordingly he has recorded his satisfaction u/s 153C of the Act. Thus, as mentioned earlier, the satisfaction note recorded by the common Assessing Officer is absolutely contradictory to each other. On one hand he is saying that the incriminating materials in bundles no. 1 to 11 belong to Shri Sachin Nahar and on the other, he is recording his satisfaction that it belongs to the assessee i.e. Prashant Premchand Bafana to initiate proceedings u/s. 153C of the Act. The alleged documents in Bundle No.1 to 11 are details of money lending transactions carried out by Shri Sachin Nahar in various formats. Therefore, these documents cannot anyway belong to the assessee. It is absolutely not in dispute that no documents belonging to the assessee were found. Therefore, the recording of satisfaction of the Assessing Officer that the d....
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....en to the Courts to adopt any other hypothetical construction on the ground that such construction is more consistent with the alleged object and policy of the Act. 20. In applying rule of plain meaning any hardship and inconvenience cannot be the basis to alter the meaning to the language employed by the legislation. This is especially so in fiscal statutes and penal statutes. Nevertheless, if the plain language results in absurdity, the Court is entitled to determine the meaning of the word in the context in which it is used keeping in view the legislative purpose. Not only that, if the plain construction leads to anomaly and absurdity, the court having regard to the hardship and consequences that flow from such a provision can even explain the true intention of the legislation. Having observed general principles applicable to statutory interpretation, it is now time to consider rules of interpretation with respect to taxation. 21. In construing penal statutes and taxation statutes, the Court has to apply strict rule of interpretation. The penal statute which tends to deprive a person of right to life and liberty has to be given strict interpretation or else man....