TaxTMI 
TaxTMI 
2026 (3) TMI 132
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....The petitioners are aggrieved by the notice issued under Section 153C of the Income-tax Act, 1961 (for short "the Act") dated 12.03.2023 (of Special Civil Application No. 19297 of 2023). All the notices issued under Section 153C of the Act emanates from the search undertaken on one Shree Kuberji Group of Surat on 06.02.2020 and seizure action undertaken under Section 132 of the Act. 2.1 During the course of the search, certain incriminating materials/documents were seized relating to the present petitioners. On the basis of such seized materials, the Assessing Officer initiated proceedings against the petitioner under Section 153C of the Act. Notice under Section 143(2) read with Section 142(1) of the Act for the Assessment Year 2020-21 was issued on 03.08.2023 along with a satisfaction note which was received through on-line portal. 2.2 The perusal of the satisfaction note reveals that it pertains to an information / material related to land situated at Block No. 218, Antroli, admeasuring 15.95 vigha. It also mentions that total investment in the land works out to be Rs.39,87,50,000/- i.e. Rs.2.50 crores per vigha. It was recorded that 7% share of Block No. 218, Antroli, Pal....
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....ner does not figure in the documents seized from search person and the satisfaction recorded by the Jurisdictional Assessing Officer of the petitioner does not reconcile in any manner with the incriminating material. It is further submitted that the satisfaction note only refers to block number and further mentions that the information has been derived from the website Any ROR which did not form part of the seized material from the searched person and hence the reliance placed upon the external data which is not seized cannot be relied upon for drawing the conclusion and for assuming the jurisdiction under Section 153C of the Act. 3.3 It is submitted that requirement of Section 153C of the Act, is that if an officer is satisfied that any books of accounts or documents seized or requisitioned, pertains to or any information contained therein relates to a person other than the person referred to in Section 153A, then, the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person. Thus, it is contended that the prerequisite for invoking Section 153C of the Act is that the Assessing Office....
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.... 153C of the Act. 4.2 Further, it is submitted that from the information received in the seized material and upon assessment it was also known that during the search of the residence of the search person Shri Mukesh N Savaliya and his son Shri Arnav M. Savaliya, a pocket diary was found and seized which contained details of cash loan of Rs.147,37,41,799/- taken by Arnav Savaliya and interest paid in cash of Rs. 9,24,76,162/-. Thus, it is submitted that subsequently during the course of assessment proceedings since it was known that there has been cash transactions involving the petitioner, the notices under Section 153C may not be set aside. 4.3 In support of his submissions learned Senior Standing Counsel has placed reliance on the judgement of the Hon'ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3, vs. Abhisar Buildwell (P) Ltd., reported in [2023] 149 taxmann.com 399 (SC), by placing reliance on para 14(iii) he has submitted that it is always open for the Assessing Officer to assume the jurisdiction to assess or reassess the total income taking into consideration the incriminating material unearthed during the search and the other material....
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.... the buyers as well as unaccounted income is received by the sellers which comes to Rs.18,69,00,000/-, which needs to be taxed accordingly. Similarly, for block No. 218B, the amount is derived at Rs. 6,89,23,750/-. 5.4 Unquestionably, on the perusal of the satisfaction note we find that the name of the petitioners are totally absent in the chit which was found and also from the material which was recovered from the search person i.e. Shree Kuberji Group of Surat (Shri Sunny J Patel and Shri Jayantibhai Patel). The Assessing Officer has premised his opinion on the basis of the information available from the government website Any ROR which was not in any manner found or was part of the incriminating documents / papers found from Shree Kuberji Group of Surat. In the case of Sandhya Maulik Patel (supra), on an identical issue, this Court has held thus: "13. Thus, the AO in his satisfaction has positively recorded that he ascertained from the "public domain" that the said land was purchased by the petitioners. The AO presumed that since the seller entered into the MoU for Rs. 39,32,25,000/-, he could not have entered into a sale with the petitioners for Rs.12,00,00,000/- wi....
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....ya and interest paid in case of Rs.9,24,76,162/- which has been derived from a search conducted on searched persons and from a pocket diary seized and recovered from them. This facts of the cash loan of one Arnav Savaliya which has been derived from a pocket diary and seized material, unquestionably neither forms the part of the satisfaction note nor any other satisfaction note in this regard has been formed by the Jurisdictional Assessing Officer. Thus, it appears that this information was never supplied to the Jurisdictional Assessing Officer by the Assessing Officer of the search person. It is also not in dispute that the incriminating material relates to the land and the details of cash loans as mentioned in the affidavit-in-reply emanates from same search against Shree Kuberji Group, Surat. 6. It is vehemently contended by learned Senior Standing Counsels that it is always open for the Jurisdictional Assessing Officer to place reliance on the seized material from the search person during the course of the assessment and there is no need of recording the satisfaction note again as required under Section 153C of the Act. In support of his submissions, as recorded hereinabove ....
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....th involvement in a delinquency or any deliberate act of concealment/ misdeclaration/ diversion of funds/income. The Supreme Court has rendered the decision in the context of the provisions of Section 153A of the Act, which does not stipulate recording of a satisfaction note in the case of the searched person, since the incriminating material which directly involves the searched person is recovered, whereas it is mandatory to note the nature/details of incriminating material found having a link with the "other person/third person" for enabling the Assessing Officer of such other person/third person to assume jurisdiction under Section 153C of the Act, which is not a requirement under Section 153A of the Act. The Supreme Court has clarified that the provisions of Sections 147/148 of the Act can be resorted to if there is any other material available other than the incriminating material, which can suggest that the income has escaped assessment. 56. In the case of an "other person", the substratum of the reassessment/assessment is the material supplied by the Assessing Officer of the "searched person" only. Thus, the upshot of the discussion is that the jurisdictional Assess....
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.... and communicate the same to the jurisdictional Assessing Officer of the "other/third person". B) In the absence of any satisfaction note recorded by the Assessing Officer of the searched person, the jurisdictional Assessing Officer of the other person cannot assume jurisdiction under Section 153C of the Act solely on the basis of material sent to him by the Assessing Officer of the searched person. In other words, the "other person" cannot be subjected to assessment/ reassessment under Section 153C of the Act on the material received by him sans a satisfaction note; hence, such an approach would be illegal, without jurisdiction, and liable to be quashed. C) The jurisdictional Assessing Officer of the "other/searched person" (Section 153C) can invoke the provisions of Sections 147/148 of the Act only on the basis of material available to him from other sources, other than the incriminating material sent to him. In case a satisfaction note is recorded on the incriminating material and transmitted to him/her, then the only recourse available to the jurisdictional Assessing Officer is to proceed under Section 153C of the Act and not under Sections 147/148 of the Act.....