TaxTMI 
TaxTMI 
2025 (4) TMI 1858
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.... law. 2. The Ld. CIT(A) erred in quashing the assessment made u/s 153C of the Act for the A.Y. 2019-20 though the mandatory conditions as prescribed in section 153C of the Act were duly met and satisfaction duly recorded by the AO to the effect the material seized has a bearing on the determination of the total income of the assessee. 3. The Ld. CIT(A) erred in quashing the assessment made u/s 153C only on hyper technical grounds without adjudicating on merits of the additions made based on seized annexure UPF/RP/EL-50 (page nos. 141 & 142) in A.Y. 2019-2020 by simply placing reliance on the decision of Delhi High Court in the case of Pepsi Foods Pvt. Ltd. & M/s Saksham Commodities., the ratio of which is distinguishable from the facts of the present case. 4. The Ld. CIT(A) erred in admitting the ground filed by the assessee regarding validity of notice issued u/s 153C of the Act without giving reasonable opportunity to the AŬ under Rule 46A of the I.T Rules, 1962. 5. The Ld. CIT(A) erred in quashing the assessment proceedings u/s 153C despite the fact that the addition made is having nexus with seized material for the relevant assessment ye....
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....e provisions of section 153C of the Act for recording CSN for more than one year. In support of her contention, the Ld. DR invited our attention to para nos.22 to 25 of the decision of Hon'ble Delhi High Court in the case of Indian National Congresss Vs. DCIT (2024) 463 ITR 431 (Del) wherein the Hon'ble Court has held that, there is no bar in the statute qua recording of CSN. The only condition which has been specified under the statute is the satisfaction of the Ld. AO that the seized material has an impact on the total income for the relevant assessment year. The Ld. DR also invited our attention to page no.54 of the order of Ld. CIT(A) and submitted that the seized material were having bearing on all the assessment years, hence a CSN has been recorded for all the assessment years by the Ld. AO. Further, with regard to the reliance of Ld. CIT(A) on the decision of Hon'ble Delhi High Court in the case of Saksham Commodities Ltd. Vs. ITO (2024) 464 ITR 1 (Del), the Ld. DR invited our attention to para no.62 of the decision of Hon'ble Delhi High Court and submitted that the Hon'ble Court has not given any adverse findings on the recording of CSN . Hence, the reli....
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....ress Vs. DCIT (supra) is concerned, the Ld. AR invited our attention to para nos.34 & 35 of the order of Hon'ble High Court and submitted that in the said case, the main issue before the Hon'ble High Court was the maintainability of the writ petition and finally the Hon'ble High Court had not accepted the writ petition. Hence, the observation of the Hon'ble High Court on the issue of CSN was not the core issue before the Hon'ble High Court and hence the same cannot be taken as the final verdict of Hon'ble High Court on the issue of CSN. Accordingly, the same cannot be applied in the case of the assessee under consideration. The Ld. AR further submitted that, even if the observation of Hon'ble High Court in the case of Indian National Congress Vs. DCIT (supra) is stated as the final verdict of Hon'ble High Court, the observation of the Hon'ble High Court is contrary to the findings of Hon'ble Karnataka High Court in the case of DCIT Vs. Sunil Kumar Sharma (supra). Hence, where there are two contrary view of Hon'ble High Courts, then, as per the decision of Hon'ble Supreme Court in the case of CIT Vs. Vegetable Products Ltd. (1973) 88 I....
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....ar. Further, as far as the reliance of the Ld. AR on the decision of Hon'ble Supreme Court in the case of DCIT Vs. Vegetable Products Ltd. Ltd (supra), the Ld. DR invited our attention to the decisions of Hon'ble Bombay High Court, in the case of CIT Vs. New Shorrock Spg. & Mfg. Co. Ltd. 212 ITR 355 (Bom), wherein it was held as under : " The plea of the assessee that there being two decisions of two different High Courts, that beneficial to the assessee should be accepted, could not sustained The question of accepting the principle of beneficial interpretation would arise only in a case where two views are reasonably possible in t opinion of the Court deciding the point at issue. In such a case the Court should tilt in favour of the assessee. But where on a plain reading of t statutory provision, the Court is of the opinion that one and the only one interpretation is reasonably possible and that is against the assessee, it cannot give an erroneous interpretation in favour of the assessee by taking resort to the principle of beneficial interpretation. In view of the above the principle of beneficial interpretation has no application in the instant case. Thus, the T....
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....recorded by the Ld. AO. We have gone through the decision of Hon'ble Delhi High Court in the case of Saksham Commodities Ltd. Vs. ITO (supra), wherein at para no.62 of the order, the Hon'ble High Court has held as under : "62. Hypothetically speaking, it may be possible for the material recovered in the course of a search having the potential or the probability of constituting incriminating material for more than one assessment year. However, even if such a situation were assumed to arise, it would be incumbent upon the AO to duly record reasons in support of such a conclusion. The Satisfaction Notes would thus have to evidence a formation of opinion that the material is likely to be incriminating for more than a singular assessment year and thus warranting the drawl of Section 153C proceedings for years in addition to those to which the material may be directly relatable." 8.2 On perusal of above, we found that, Hon'ble Delhi High Court in the case of Saksham Commodities Ltd. Vs. ITO (supra) has held that the satisfaction note would have to evidence a formation of opinion that the material is likely to be incriminating for more than one year. In other words....
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....r of incriminating material and that therefore, the AO's satisfaction is invalid as per the provisions of section 153C of the Act for assuming jurisdiction over the case for issue of notice u/s 153C of the Act. 4. The Ld. CIT(A) ought to have appreciated that there is no incriminating material belonging to the assessee and that therefore the very assessment is invalid. 5. Appellant may, add or alter or amend or modify or substitute or delete and/or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal. 11. Before us the Ld. AR has raised the following additional grounds: (i) whether the CSN recorded by the Ld. AO for more than one year is valid or not and (ii) if the CSN has been recorded for more than one year, whether explicit identification of the seized material and its linkage to the escaped income income for each assessment year is required or not. 11.1 In this context the Ld. AR submitted that the additional ground so raised are admissible in view of judgment rendered by the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The prayer for admissi....
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....ized Prop: Usha Pictures and Financers Raja Rammohan Rai Street, Power Pet, ELURU, West Godavari District. (d) Date of seizure of such material 31.01.2021 (c) Particulars of the relevant panchanama Panchanama dated 31.01.2021 (1) Annexure/S.No./Page Number etc. particulars to be specified; Annexure : UPF/RP/EL-28(pages 1 to 28) UPF/RP/EL-31 (pages 112 to 118)and UPF/RP/EL- 50 (pages 135 to 143) and UPF/RP/EL-65 (pages 88 to 151) 6 Relationship of the person referred to in S.No.2 with the person referred to in S.No.4 Usha Pictures & Financiers has lent loans to Sri.Sudhakar Reddy Nalla, Prop: Sreshth Movies 7 Satisfaction of the Assessing Officer of the person referred to in section 153C As per Annexure 8 Assessment Years involved 2015-16 to 2021-22 Date: 27.06.2022 Place: Hyderabad 8000 (K. SHIVALINGAM) Assistant Commissioner of Income Tax Central Circle-1(3), Hyderabad Document 2 Annexure Nalla Sudhakar Reddy Prop: Sreshth Movies (ACTPN4645D) A search and seizure operation U/s. 132 of the Income Tax Act, 1961 was conducted in M/s. Usha Bala Group of cases on 28.01.2021 covering Sri V V Bala Krishna Rao (HUF), Prop: M/s. Usha Pictures & Financers, Elu....