TaxTMI 
TaxTMI 
2025 (12) TMI 1889
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....ch/Seizure & Survey action was carried out on 14.03.2018 in the premises of M/s Abhinav Steel & Power Limited group at various premises including Smt. Renu Singh Deo. The case of the assessee was also covered in survey proceedings under Section 133A of Act. In search proceedings at the residential premise of Smt. Renu Singh Deo i.e. 3, Gautampally, Lucknow, Uttar Pradesh, various large volume of incriminating evidence including physical documents as well as digital data related to M/s.Vimlarjun Trust were found and seized/impounded. During the course of assessment proceedings, in case of Smt. Renu Singh Deo and M/s Abinav Steel & Power Limited, the AO of searched person i.e. Smt. Renu Singh Deo, recorded his satisfaction of other then searched person i.e. M/s Vimlarjun Trust. After recording satisfaction by the Ld. AO of the assessee proceedings under Section 153C of the Act were initiated. Notice under Section 153C r.w.s. 153A of the Act dated 31.12.2020 was issued. In response to the notice under Section 153C of the Act, the assessee filed return of income on 04.01.2021 declaring total income at Rs. Nil. Notice under Section 143(2) of the Act dated 16.01.2021 was issued. Notice u....
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....is bad and liable to be quashed in the absence of any valid satisfaction being recorded by the assessing officer of the searched person as well as the assessing officer of the assessee. 7. On the facts and circumstances of the case, the learned CIT(A) has erred in confirming the action of the AO despite the fact that notice issue under section 153C of the Act and completing the assessment on the basis of satisfaction recorded by the assessing officer of the searched person and the assessing officer of the assessee are invalid and non-est as no Document Identification Number (DIN) has been quoted in the body of the said satisfaction notes in violation of the instructions issued by the CBDT Circular No. 19/2019. 8. On the facts and circumstances of the case, leamed CIT (A) has erred, both on facts and in law, in confirming the action of the AO despite the fact that the proceedings initiated against the assessee and the assessment framed under section 153C of the Act are in violation of mandatory provisions of Section 153D of the Act and as such the same is bad in eyes of law. The purported approval u/s 153D of the Act is illegal, bad in law and also without any appl....
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....) CIT v. Girish Chaudhary (163 Taxman 608, Delhi HC): Notings on loose sheets are not substantive evidence; they require independent corroboration. c) CIT v. P. V. Kalyanasundaram (294 ITR 49, SC): Addition cannot be made merely on the basis of a third party's statement/document unless corroborated. C d) Common Cause v. Union of India (394 ITR 220, SC): Documents seized from third parties (e.g., "Sahara Diaries") without further investigation or corroboration cannot be the sole basis for making additions. 5.2 Even assuming the document has some evidentiary value, the following facts emerge: a) The document contains the narration with name "Vimalarjun" written which prima facie establishes that this document is not maintained or written by the Assessee. It pertains to some other entity, not the assessee. b) If the document truly belonged to the assessee, it is implausible that the assessee would record transactions in his own name. c) No enquiry has been made by the Assessing Officer to ascertain the authorship of the document, its purpose, or the identity of the person maintaining such noting. d) Assessing Officer without....
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....at the Assessing Officer classify the seized documents or assets assessment year- wise and establish their nexus with the income of the assessee for that year. Absence of such year-wise linkage renders the satisfaction note vague, cryptic, and non-speaking, thereby invalidating the consequential proceedings. 5.8 It is a well-settled legal principle that the satisfaction note must clearly spell out the link between the seized material and the income of the person. A vague or mechanical reference to documents, without demonstrating how they bear upon the determination of total income of the assessee, renders the assumption of jurisdiction under Section 153C invalid. In the case of [2023] 154 taxmann.com 144 (Bombay), Ashok Commercial Enterprises v. Assistant Commissioner of Income Taxation, the Bombay High Court has held:- "19.... ..... (d) The question of whether any material found during the course of proceedings under section 132 of the Act in the case of Hubtown Limited is incriminating or otherwise has to be tested based only on the satisfaction note recorded by the Assessing Officer/s. The contents of the said satisfaction note are the only item/ma....
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....roval has been given for various assessment years for one assessee, which is not in accordance with provisions of Section 153D of the Act. Hence, the search assessments framed based on this invalid approval under Section 153C of the Act deserves to be quashed. Accordingly, the assessments for assessment years 2018-19 and 2019-20 are quashed on this limited count itself" 6. Learned Departmental Representative submitted that Ld. AO of the searched person and the assessee are same. The satisfaction notes of searched person and the assessee are similar but not identical. The satisfaction notes referred to incriminating material. 7. From examination of record in the light of aforesaid rival contentions, it is crystal clear that the impugned additions were made by the Ld. AO on basis of documents found and seized at third party's premises. No statement of person from whom possession the document was recovered was recorded to establish its nature, author and contents of same. The inquiry did not lead to any adverse material against the assessee. As per ratio of judgment in Common Cause of Nature vs. Union of India (394 ITR 49, SC), it is well settled that documents seized from third....