M/s. IECS Solutions Pvt. Ltd., New Delhi V. DCIT, New Delhi

CO 356/DEL/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0373 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 04-03-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 02-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KAPIL GOAL
• Assessee Lawyers: GUNJAN P RASAD
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Document seized; Principle of natural justice; Application of stay; Assessment record; Documents seized
• Section: 69C; 143(3); 153A; 147; 68; 148; 132; 139

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL IN (DELHI BENCH C NEW DELHI) BEFORE SHRI S.V.MEHROTRA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO. 6404 TO 6409 /DEL/2013 (A.Y. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 ) DCIT VS. IECS SOLUTIONS PVT. LTD. CENTRAL CIRCLE 21 A1/8 2, 2 ND FLOOR, HASTAL ROAD, UTTAM NAGAR NEW DELHI N EW DELHI PAN NO. AAACI8676F C.O. NO. 353 TO 358 /DE L/2014 IN ITA NO. 6404 TO 6409/DEL/2013 (A.Y. 2003-04, 2004-05, 2005-06, 2006-07, 2007 -08, 2008-09) IECS SOLUTIONS PVT. LTD. VS. DCIT A1/82, 2 ND FLOOR, CENTRAL CIRCLE 21 HASTAL ROAD, UTTAM NAGAR NEW DELH NEW DELHI PAN NO. AAACI8676F (APPLICANT) (RES PONDENT) ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 2 REVENUE BY : SH. KAPIL GOAL, ADV. ASSESSEE BY : SH. GUNJAN PRASAD, CIT, DR DATE OF HEARING : 04.03.201 5 DATE OF PRONOUNCEMENT : 13 .03.2015 ORDER PER BENCH : THESE SIX APPEALS BY THE REVENUE AND EQUAL NUMBER OF CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEAL) II, N EW DELHI IN SHORT HERE IN AFTER REFER TO AS THE CIT(A) DATED 4 TH SEPARATE, 2013 AND 5 TH SEPTEMBER, 2013 RESPECTIVELY AND PERTAINING TO THE ASSESSMENT YEARS 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 A ND 2008-09 RESPECTIVELY. ALL THE APPEALS OF THE REVENUE AND CR OSS OBJECTIONS OF THE ASSESSEE RAISES IDENTICAL GROUNDS AND ARISE FRO M THE SIMILAR FACTS AND CIRCUMSTANCES, THEREFORE, ALL WERE TAKEN UP FOR HEARING TOGETHER AND ARE BEING DISPOSED OF BY WAY OF CONSOLIDATED OR DER FOR THE SAKE CONVENIENCE. 2. SINCE THE FACTS AND CIRCUMSTANCES ARE SIMI LAR IN ALL THESE APPEALS AND IDENTICAL GROUNDS HAVE BEEN RAISED. WE TAKE UP ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 3 REVENUES APPEAL PERTAINING TO ASSESSMENT YEAR 2003 -04 IN ITA NO. 6404/DEL/2013 AND CROSS OBJECTION NO. 353/DEL/2014 IN ITA NO. 6404/DEL/2013 ASSESSMENT YEAR 2003-04 AS LEAD CASE FOR THE PURPOSE OF NARRATING FACTS. IN ITA NO. 6404/DEL/20 13, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ER RED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 15 ,01,580/- ON ACCOUNT OF UNEXPLAINED PURCHASE U/S 69C OF THE A CT. 2. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS. 4,62,3 16/- ON ACCOUNT DISALLOWANCE OF EXPENDITURE. 3. (A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALT ER OR AMEND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING T HE COURSE OF THE HEARING OF THE APPEAL. HOWEVER, THE ASSESSEE IN CROSS OBJECTION NO. 353 /DEL/2014 HAS RAISED THE FOLLOWING GROUNDS : 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD. CIT (A) HAS FAILED TO APP RECIATE THAT THE NOTICE ISSUED ULS 153C AND ASSESSMENT ORDE R PASSED BY THE LD. AO U/S. 153C/143(3) IS ILLEGAL, B AD IN LAW, TIME BARRED, WITHOUT JURISDICTION AND WRONG ON FACTS. THE ADDITIONS MADE ARE UNJUST, UNLAWFUL AND ARBITRA RY AND ARE MADE AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD. CIT(A) HAS FAILED TO APP RECIATE THAT THE LD. AO WAS NOT JUSTIFIED TO IGNORE THE SUB MISSIONS OF THE APPELLANT THAT THE ASSESSMENT PROCEEDINGS FO R THE YEAR UNDER APPEAL WAS NOT PENDING ON THE DATE OF TH E RECORDING OF SATISFACTION U/S. 153C AND SINCE THE S AME ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 4 DIDN'T ABATE, THE PROCEEDINGS U/S. 153C OF THE LT. ACT IN THIS CASE ARE BAD IN LAW AND DESERVES TO BE QUASHED . 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD CIT (A) HAS FAILED TO APP RECIATE THAT THE ASSESSMENT FRAMED BY LD. AO IS AGAINST THE STATUTORY PROVISIONS OF THE ACT AND WITHOUT COMPLYI NG THE PROCEDURES PRESCRIBED U/S. 153C OF THE I.T. ACT AND AS SUCH THE ASSESSMENT BEING BAD IN LAW DESERVES TO BE QUASHED. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD CIT (A) HAS FAILED TO APP RECIATE THAT THE LD AO WAS NOT JUSTIFIED TO IGNORE THE SUBM ISSIONS OF THE APPELLANT THAT ASSESSMENT U/S 153C OF THE IN COME TAX ACT BE RESTRICTED TO ASSESSMENT IN RESPECT OF S EIZED DOCUMENTS OF INCRIMINATING NATURE IN THE CASE OF TH E APPELLANT FOR ONLY THEYEAR TO WHICH SAID DOCUMENTS RELATES TO, AND IN ABSENCE OF ANY SUCH INCRIMINATING SEIZED DOCUMENT IN THE CASE OF APPELLANT; ASSESSMENT FRAM ED U/S. 153C OF THE I.T. ACT FOR THE YEAR UNDER CONSID ERATION, IS BAD IN LAW AND DESERVE TO BE QUASHED. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD CIT (A) HAS ERRED IN HOLDI NG THE CONCLUSION THAT THE 'AUDITED BOOKS' NOTWITHSTANDING , THE BOOK RESULTS ARE REQUIRED TO BE REJECTED, SINCE THE NARRATIONS ARE ARTIFICIAL, SHAM AND NOT REFLECTIVE OF THE ACTUAL BUSINESS / COMMERCIAL TRANSACTIONS. HOWEVER, THE LD CIT (A) STILL RELYING ON THESE BOOKS / BOOK RESU LTS FOR GIVING DIRECTIONS TO THE AO FOR THE PURPOSE OF CALC ULATING THE PEAK FROM THE ENTRIES IN THE CASH BOOK OF THE APPELLANT FOR THE RELEVANT YEAR. 6. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, CIT (A) HAS ERRED IN DISREGARDING THE PURCHASES OF RS. 15,01,580/-, THE SALES AND THE EXPENSES OF RS 4,62, 316/- CLAIMED BY THE ASSESSEE COMPANY. 7. A) THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD. CIT (A) HAS ERRED IN WRONGLY DIRECTING THE AO TO WORK OUT THE PEAK FROM THE ENTRIES IN THE CASH BOOK OF THE APPELLANT COMPANY F OR THE RELEVANT YEAR AND MAKE A SINGULAR ADDITION OF THE S AID ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 5 AMOUNT, AS UNEXPLAINED INVESTMENT/EXPENDITURE, IGNO RING THE FACT THAT THE SAME HAS DULY BEEN ENTERED IN THE AUDITED BOOKS OF ACCOUNTS OF THE APPELLANT FOR THE YEAR UND ER CONSIDERATION; B) THAT THE LD CIT (A) DID NOT GIVE SUFFICIENT OP PORTUNITY OF BEING HEARD TO THE APPELLANT COMPANY AND IGNORED TH E CONCEPT OF 'REAL INCOME' AND WRONGLY DIRECTED THE A O TO WORK OUT THE PEAK FROM THE ENTRIES IN THE CASH BOOK OF THE APPELLANT COMPANY FOR THE RELEVANT YEAR, WITHOUT GR ANTING THE CREDIT OF THE PEAK OF FINANCIAL TRANSACTIONS AS PER THE CASH BOOK FOR THE PRECEDING YEARS. 8. THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF TH E CASE AND THE PROVISION OF LAW, THE CIT (A) HAS ERRED IN IGNO RING THE FACT THAT THE AO HAS ERRED BOTH ON FACTS AND IN LAW , IN USING STATEMENT OF VARIOUS PERSONS WITHOUT GIVING A COPY OF THE SAME AND OPPORTUNITY TO CROSS EXAMINE. 9. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VARIOUS OBSERVATIONS AND FINDINGS OF THE LD CIT (A) AND LD AO IN THE IMPUGNED APPELLATE ORDER AND ASSESSMENT O RDER, RESPECTIVELY, IS IRRELEVANT AND VITIATED IN THE LAW . 10. THAT THE CIT (A) HAS ERRED IN IGNORING THE EXP LANATION GIVEN, EVIDENCES AND MATERIAL PLACED AND AVAILABLE ON RECORD. THE SAME HAS NOT BEEN PROPERLY CONSIDERED A ND JUDICIALLY INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIONS/DISALLOWANCES MADE. THE ADDITIONS HAVE BE EN SUSTAINED WITH PRESET MIND OF THE CIT (A) AND HER O RDER IS BASED ON SURMISES, CONJECTURES AND SUSPICION. 11. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE INTEREST CHARGED U/S 234A AND 234 B HAS BEEN WRONGLY AND ILL EGALLY CHARGED AND IN ANY CASE IS HIGHLY EXCESSIVE. 12. THAT THE RESPONDENT CRAVES THE RIGHT TO AMEND, APPEND, DELETE ANY OR ALL GROUNDS OF APPEAL. 3. BRIEFLY STATED FACTS ARE THAT A SEARCH ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (HEREIN AFTER REFER TO AS THE ACT) WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMIS ES OF SHRI ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 6 B.K.DHINGRA, MRS. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD. ON 20.10.2008. DURING THE COURSE OF SEAR CH AT RESIDENTIAL PREMISES F- 6/5, VASANT VIHAR, NEW DELHI, CERTAIN D OCUMENTS ALLEGED TO HAVE BEEN RECOVERED BELONGING TO THE ASSESSEE. A CCORDINGLY, THE ASSESSING OFFICER INITIATED PROCEEDING UNDER SECTIO N 153C OF THE ACT. THE ASSESSING OFFICER FRAMED ASSESSMENT UNDER SECTI ON 153C/143(3) OF THE ACT THEREBY THE ASSESSING OFFICE R MADE ADDITION U/S 68 AND 69C OF THE ACT ON ACCOUNT OF UNEXPLAINED EXPENDITURE AND INVESTMENT AMOUNTING TO RS. 15,01,580/- AND 4,62,31 6 RESPECTIVELY. AGAINST THIS THE ASSESSEE FILED AN APPEAL BEFORE LD . CIT(A) WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE REJECTE D THE GROUNDS RAISED AGAINST THE VALIDITY OF PROCEEDINGS UNDER SE CTION 153C, HOWEVER ON MERIT LD. CIT(A) MODIFIED THE ASSESSMENT ORDER BY DIRECTING THE AO TO WORK OUT THE PEAK FROM THE ENTE RIES IN THE CASH BOOK OF THE ASSESSEE FOR THE RELEVANT YEAR AND MAK E A SINGULAR ADDITION OF THE SAID AMOUNT AS UNEXPLAINED INVESTME NT/EXPENDITURE. THE REVENUE AND ASSESSEE HAVE ASSAILED THIS ORDER B EFORE THIS TRIBUNAL BY WAY OF APPEAL AND CROSS OBJECTION RESPE CTIVELY. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE LD. CIT(A) FAILED TO TAKE NOTE OF THE FACT THAT THE ASSESSING OFFICER OF ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 7 THE SEARCHED PERSONS GROSSLY FAILED TO RECORD HIS S ATISFACTION AS ENVISAGED UNDER SECTION 153C OF THE ACT. HE SUBMITT ED THAT RECORDING OF SATISFACTION BY THE AO OF SEARCHED PAR TY IS SINE QUA NON FOR ASSUMING JURISDICTION FOR MAKING ASSESSMENT UND ER 153C READ WITH SECTION 143(3) OF THE ACT. HE SUBMITTED THAT U NDER THE IDENTICAL FACTS THE ASSESSMENT FRAMED U/S 153C OF THE ACT HAS BEEN QUASHED BY THE CO-ORDINATE BENCHES OF THIS TRIBUNAL FOLLOWI NG THE JUDGMENT OF JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF P EPSI FOODS (P) LTD. VS. ACIT [2014] 50 TAXMAN.COM 220(DELHI). THEREFORE, HE REQUESTED THAT THE MATTER MAY BE DECI DED ON THIS GROUND ALONE. LD. CIT(DR) SUBMITTED THAT HE HAS NO OBJECTION, HOWEVER HE POINTED OUT THAT THE ASSESSEE HAS NOT TA KEN ANY SPECIFIC GROUND IN HIS CROSS OBJECTION AGAINST SATISFACTION NOTE. ADMITTEDLY, THERE IS NO SPECIFIC GROUND AGAINST NON-RECORDING OF SATISFACTION (SATISFACTION NOTE) BY THE ASSESSING OFFICER, HOWEV ER SAME GOES TO THE ISSUE OF JURISDICTION BECAUSE SATISFACTION OF THE AO OF SEARCHED PARTY THAT ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED ON R EQUISITIONED BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A, THEN THE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS O R REQUISITIONED ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 8 SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OF SUCH OTHER PERSON AND THAT THE ASSESSING OFFICER SH ALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH PROVISION OF SECTION 153A OF THE ACT. THEREFO RE, THE SATISFACTION AS ENVISAGE UNDER SECTION 153C OF THE ACT, WOULD C ONFER JURISDICTION UPON THE ASSESSING OFFICER OF THE ASSESSEE TO PROCE ED AGAINST IT U/S 153C OF THE ACT. THEREFORE, WE TAKE UP FOR ADJUDICA TION GROUND NO. 3 OF C.O. THAT READS AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D THE PROVISIONS OF LAW, THE LD. CIT(A) HAS FAILED TO APP RECIATE THAT THE ASSESSMENT FRAMED BY LD. AO IS AGAINST THE STATUTORY PROVISIONS OF THE ACT AND WITHOUT COMPLYI NG THE PROCEDURES PRESCRIBED U/S 153C OF THE I.T.ACT AND A S SUCH THE ASSESSMENT BEING BAD IN LAW DESERVES TO BE QUASHED. WE PROCEED TO DECIDE THIS GROUND FIRST, TO EXAMINE WHETHER IN THE ABSENCE OF SATISFACTION NOTE, BY THE AO OF THE SEARCHED PARTY THE PROCEEDINGS INITIATED U/S 153C AND ASSESSMENT FRAME D THEREUNDER ARE BAD IN LAW AND AS SUCH THE ASSESSMENT SO FRAMED IS UNSUSTAINABLE AND NULLITY IN THE EYES OF LAW. 5. ARGUMENTS OF THE ASSESSEE ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 9 LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE INF ORMATION FURNISHED BY THE REVENUE UNDER THE RIGHT TO INFORMATION ACT, REVEALS THAT THE AO OF THE SEARCHED PARTY HAS NOT RECORDED ANY SATIS FACTION. HE DREW OUR ATTENTION TO PAPER BOOK PAGES NO. 12-15, WHEREI N THE REPLY RECEIVED UNDER THE RIGHT TO INFORMATION ACT ARE INC LOSED. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE IN BRIEF SYNOPSIS INCLOSED IN PAPER BOOK AT PAGE 1 TO 6. HE SUBMITTED THAT THE REVENUE HAS NOT CONTROVERTED THE FACTUM OF INFORMAT ION AND ITS CONTENTS FURNISHED UNDER THE RIGHT TO INFORMATION A CT. THEREFORE, HE CONTENDS THAT THE ADMITTED POSITION IS THAT NO SATI SFACTION IS RECORDED BY THE AO OF THE SEARCHED PARTY HENCE IN THE LIGHT OF RATIO LAID BY THE HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI CO FO OD (P) LTD. (SUPRA) THE ASSESSMENT AS FRAMED U/S 153C READ WIT H SECTION 143(3) DESERVES TO BE QUASHED. 6. ARGUMENTS OF REVENUE : SH. GUNJAN PRASAD LD. CIT(DR), VEHEMENTLY ARGUED TH AT THERE IS NO REQUIREMENT UNDER THE LAW OF RECORDING OF SATISFACT ION BY THE ASSESSING OFFICER OF SEARCHED PERSON. THE SATISFACT ION OF ASSESSING OFFICER OF THE SEARCHED PARTY CAN BE INFERRED BY IM PLICATION I.E. BY THE CONDUCT OF AO. HE FURTHER SUBMITTED THAT THERE IS N O AMBIGUITY IN THE ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 10 PROVISION, THEREFORE, THE LITERAL MEANING SHOULD BE ADOPTED FOR INTERPRETING THE SAME. HE DREW OUR ATTENTION TO SEC TION 148(2) AND 153(C) OF THE ACT TO BUTTRESS HIS CONTENTION THAT H AD SUCH INTENTION OF LEGISLATION WOULD HAVE BEEN THEN AS THE WORD RECOR D AS ENSHRINED IN SECTION 148(2) WOULD HAVE BEEN INCORPORATED IN SECT ION 153(C) AS WELL. HE SUBMITTED THAT THE ENTIRE ASSESSMENT CANN OT BE ANNULLED ON THE BASIS OF TECHNICAL DEFECT. HE SUBMITTED THAT TE CHNICALITIES SHOULD NOT HOLD THE DISPENSATION OF JUSTICE, AND CANNOT BE ALLOWED TO BENEFIT A WRONG DOER. HE FURTHER POINTED OUT THAT THE ASSES SEE IS BLOWING HOT AND COLD AT THE SAME TIME. HE SUBMITTED THAT LD. CI T(A) IN PARA 4.3 OF THE IMPUGNED ORDER HAS CATEGORICALLY RECORDED THAT THE ASSESSEE HAS NO OBJECTION WITH REGARD TO INITIATION OF PROCEEDIN G U/S 153C OF THE ACT. HE SUBMITTED THAT UNDER THESE FACTS THE ISSUE UNDER CONSIDERATION DOES NOT NEED ANY FURTHER EXAMINATION AND DECISION BY THIS TRIBUNAL. IN REJOINDER LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE OBJECTION OF LD. CIT(DR) ARE MISCONCEIVED. HE SUBMITTED THAT THE ISSUE UNDER CONSIDERATION GOES TO VERY ROOT OF JURISDICTION OF THE ASSESSING OFFICER. HE SUBMITTED THAT WITHOUT ADMITTING EVEN I F IT IS PRESUMED THAT THE OBSERVATION OF THE LD. CIT(A) IS CORRECT, THE LAW IS WELL SETTLED ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 11 THAT THE JURISDICTION CANNOT BE CONFERRED BY THE CO NSENT OF THE PARTIES. HE FURTHER SUBMITTED THAT IN VIEW OF THE B INDING PRECEDENTS OF THE JURISDICTIONAL HIGH COURT AND THE CO-ORDINATE B ENCHES OF THIS TRIBUNAL THE ASSESSMENT FRAMED UNDER SECTION 153C O F THE ACT CANNOT BE SUSTAINED. HE SUBMITTED THAT THE ASSESSME NT SO FRAMED IS WITHOUT AUTHORITY OF LAW AND DESERVES TO BE QUASHED . 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERU SED THE MATERIAL AVAILABLE ON RECORD, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND CASE LAWS CITED BY THE RESPECTIVES REPRESENTATI VES OF THE PARTIES. WE FIND THE OPENING PARA OF THE ASSESSMEN T ORDER READS AS UNDER : SEARCH & SEIZURE ACTION U/S 132 OF THE I.T. ACT WAS CARRIED OUT IN THE CASES OF SH. B.K.DHINGRA, SMT. P OONAM DHINGRA & M/S MADHUSUDAN BUILDCON PVT. LTD. ON 20/10/2008 AND DURING THE COURSE OF SEARCH AT THEIR RESIDENTIAL PREMISES AT F-[6/5, VASANT VIHAR, NEW D ELHI CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SE IZED. ON THE BASIS OF DOCUMENTS SO FOUND BELONGING TO THE ASSESSEE COMPANY, PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSESSEE COMPANY U/S 153C READ WITH SECTION 153A OF THE I.T.ACT. THE CASE OF ASSESSEE WAS INITIALLY CENTRALIZED WITH ACIT, CENTRAL CIRCLE-7 U/S 127 OF THE I.T.ACT BY COMMISSIONER OF INCOME TAX, DELHI-IV, NE W DELHI VIDE ORDER F.NO. CIT-IV/CENT./121/2009-10/134 3 DATED 30.07.2010. NOTICE U/S 153C DATED 14.09.2010 WAS ISSUED TO THE ASSESSEE BY THE ACIT, CC-17, NEW DELH I REQUIRING THE ASSESSEE COMPANY TO FILE RETURN OF IN COME WITHIN 15 DAYS OF SERVICE OF THE NOTICE. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 12 7.1 FROM THE ABOVE IT IS EVIDENT THE BASIS O F INITIATING PROCEEDING U/S 153C IS THAT CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE COMPANY WERE FOUND AT THE SEARCHED PREMISES BEARING NO. F 6/5 VASANT VIHAR, NEW DELHI IN THE CASE OF SH. B.K.DHIN GRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD . BELONGING TO THE ASSESSSEE. THE CONTENTION OF LD. COUNSEL IS THAT THE AO OF THE SEARCHED PARTY SHOULD HAVE RECORDED SATISFACTION BU T FROM THE REPLIES FURNISHED UNDER THE RIGHT TO INFORMATION ACT NO SUC H SATISFACTION WAS RECORDED. THE CONTENTS OF REPLY FURNISHED BY REVENU E READS AS UNDER :- 2. FROM THE ASSESSMENT RECORDS OF SH. BHUPESH KU MAR DHINGRA, WHICH IS COVERED UNDER SECTION153A, FOR TH E ASSTT. YEARS FROM 2003-04 TO 2008-09 (BLOCK PERIOD) IT IS NOTICED THAT THERE IS NO SATISFACTION NOTEAVAILABLE/RECOR DED IN RESPECT OF OTHER ENTITIES. 3. IN CASE YOU INTEND TO FILE THE APPEAL, YOU MA Y FILE THE SAME BEFORE THE ADDL. COMMISSIONER OF INCOME TAX, CENT RAL REGNGE-2, 3 RD FLOOR, ARA CENTER, E-2, JHANDEWALAN, NEW DELHI WITHIN 30 DAYS FROM RECEIPT OF THIS LETTER. THE ABOVE REPLIES SUPPORTS THE CONTENTION OF LD. C OUNSEL FOR THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE A O OF THE SEARCHED PARTY. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 13 7.2. BEFORE ADVERTING TO THE RIVAL CONTENTIONS OF THE PARTIES IT WOULD BE APPROPRIATE TO REPRODUCE THE RELEVANT PROVISIONS OF LAW. SECTION 153C 153C. 3 [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON 3A [ AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF T HE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A , IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL IN COME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A ] :] [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 82 [SUB-SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON.] 83 [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNI SHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT T O THE ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 14 PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTIC E UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN M ADE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH AS SESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSE SS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A. ] 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER T HE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES CRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 15 PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHA LL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESS MENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REA SSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB- SECTION PENDING ON THE DATE OF INITIATION OF THE SE ARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN ANNULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, T HEN, NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SECTION ( 1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATIN G TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECO ND PROVISO TO SUB-SECTION (1), SHALL STAND REVIVED WIT H EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNUL MENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHAL L BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SU CH ASSESSMENT YEAR. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 16 LD. CIT(DR) DURING THE COUNSEL OF HEARING ALSO DRE W ATTENTION TO SECTION 148 (2) OF THE ACT, WHICH READ S AS UNDER :- 8. THE REVENUE HAS RAISED FOUR FOLD OBJECTION S AGAINST QUASHING THE ASSESSMENT ORDER. FIRSTLY, IT WAS ARGUED THAT T HERE IS NO REQUIREMENT UNDER THE LAW THAT THE SATISFACTION SHO ULD BE RECORDED. THE SATISFACTION CAN BE INFERRED BY IMPLICATION, H AD THE INTENT OF LEGISLATION BEEN SO, THE WORD RECORD AS ENSHRINED IN SECTION 148(2) WOULD HAVE BEEN INCORPORATED. THEREFORE, THERE IS N O NEED OF SATISFACTION NOTE AND ON THE BASIS OF ABSENCE OF S ATISFACTION NOTE ASSESSMENT CANNOT BE ANNULLED. IN SUPPORT OF THIS SUBMISSION THE RELIANCE IS PLACED ON THE JUDGMENT HONBLE KERALA H IGH COURT RENDERED IN THE CASE OF DR. K.M. MEHBOOB VS. DCIT A NR. (2012) 76 DTR (KER) 90. SECONDLY, IT WAS POINTED OUT THAT LD. CIT(A) IN PARA 4.3 OF THE IMPUGNED ORDER HAS OBSERVED THAT THE ASSESSE E HAS NO OBJECTION IN RESPECT OF INITIATION OF PROCEEDINGS. NOW THE ASSESSE CANNOT BE ALLOWED TO BLOW HOT AND COLD AT THE SAME TIME. THIRDLY, IT WAS CONTENDED THAT THE PROVISION SHOULD BE LITERALL Y CONSTRUED. THERE IS NO SCOPE OF ADDING OF NEW WORD AND OR IMPARTING A NEW MEANING, WHEN THERE IS NO AMBIGUITY, THIS BEING WELL SETTLED PROPOSITION OF LAW. LASTLY, IT WAS CONTENDED THAT TECHNICALITIES SHOULD NOT COME IN THE WAY OF DISPENSATION OF JUSTICE. IT WAS SUBMITTED TH AT NON RECORDING OF ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 17 SATISFACTION IS ONLY A TECHNICAL DEFECT THIS SHOULD NOT BE SOLE GROUND FOR ANNULLING THE ASSESSMENT. IT WAS THEREFORE, CON TENDED THAT THE ASSESSMENT SHOULD NOT BE QUASHED. 9. ON THE OTHER HAND, IT IS CONTENDED BY THE C OUNSEL FOR THE ASSESSSEE IS THAT ISSUE IS NO MORE RES-INTEGRA AND HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE AUTHORITATIVE JUDI CIAL PRONOUNCEMENT BY THE HONBLE HIGH COURT OF DELHI, O THER HIGH COURTS AND THE CO-ORDINATE BENCHES OF THIS TRIBUNAL. THERE FORE, IT IS PRAYED THAT ASSESSMENT ORDER BE QUASHED BEING ILLEGAL AND NULLITY IN THE EYES OF LAW. THE BRIEF SYNOPSIS AS FILED IS REPRODU CED HEREIN BELOW FOR THE SAKE OF CLARITY :- BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL, CBENCH, NEW DELHI IN THE MATTER OF VS. ACI T, CENTRAL CIRCLE -21 INSTRONICS LIMITED RO OM NO. 344, ARA CENTRE, F-345, LADO SARAI, JHAN DEWALAN EXTENSION, NEW DELHI-110030 NEW DE LHI - 110055 PAN : AAACI0163R (APPELLANT) (RESPONDENT) ASSESSMENT YEARS 2003-2004 TO 2008-09 ITA NOS. 6 336/DEL/2014 TO 6341/DEL/2014 (FILED BY ASSESSEE ON 19.11.2014) AND ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 18 DCIT, CENTRAL CIRCLE 21, IN STRONICS LIMITED ARA CENTRE, JHANDEWALAN EXTENSION, F-345, LADO SA RAI, NEW DELHI 110055 NEW DELHI- 110030 ASSESSMENT YEARS 2 005-2006 TO 2008-09 ITA NOS. 6553/DEL-2014 TO 6556/DEL-2014 NDOH (F ILED BY REVENUE ON 29.05.2014) 04.03.2015 SYNOPSIS (COVERED MATTER) ASSESSEE COMPANYS CROSS APPEALS INTER-ALIA ON LEGA LITY AND VALIDITY OF PROCEEDINGS U/S 153C AND REVENUES APPEALS ON ME RITS. MAY IT PLEASE YOUR HONORS. 1. SATISFACTION NOTE AS SUPPLIED TO ASSESSEE COMP ANY DATED 30.09.2010 (PAPER BOOK FOR THE AY. 2003-04 TO AY. 2 008-09, PAGE NO. 11) SATISFACTION NOTE FOR ISSUING NOTICE U/S. 153C OF I.T. ACT, 1961, IN THE CASE OF M/S. INSTRONICS LIMITED, 192C, J&K POCKET, DILSHAD GARDEN, NEW DELHI, PAN : AAACI0163R FOR AY. 2003-04 TO 2008 -09. 30.09.2010: IN THE CASE OF SH. B.K.DHINGRA, SMT. P OONAM DHINGRA AND M/S MAYANK TRADERS PVT. LTD., M/S HORIZON PVT. LTD. SEARCH & SEIZURE TOOK PLACE U/S. 132 ON 20.10.2008. THE UNDE RSIGNED IS THE JURISDICTIONAL AO OF THESE CASES. DURING THE COURSE OF SEARCH AND SEIZURE DOCUMENTS/PAPERS AT PAGES 1 TO 38 OF ANNEXU RE A-87, ANNEXURES A-96, A-97, A-98 AND A-99, ARE FOUND TO B ELONG TO M/S. INSTRONICS LTD., 192C, J&K POCKET, DILSHAD GARDEN, NEW DELHI. I HAVE EXAMINED THE ABOVE MENTIONED DOCUMENTS/PAPERS AND P ROVISION OF SECTION 153C IS INVOKEABLE IN THIS CASE. AS THE UND ER SIGNED IS ALSO THE JURISDICTIONAL AO OF M/S. INSTRONICS LTD., 192C , J & K POCKET, DILSHAD GARDEN, NEW DELHI, THIS SATISFACTION NOTE I S PLACED IN THE FILE BEFORE ISSUEING NOTICE U/S. 153C. SD/- 30.09.2010 ACIT, CENTRAL CIRCLE-17, NEW DELHI REASONS FOR AFORESAID SATISFACTION NOTE IS NOT VALI D TO ASSUME THE JURISDICTION U/S 153C OF THE ACT: TH AT IT IS NO T R E CORDED BY S PE CIF IED AUTHORIT Y THAT IS AO OF RAIDED PART Y DURING ASSESSMENT PROCEEDINGS W HI CH IS FO R TIFI E D FROM : A) RTI REPLIES D A TED 1 0 . 0 6 . 2 013 & 28.06 . 201 3 (PAGES 12 TO 15 OF PAPER BOOK FOR THE AY. 2003-04 TO AY. 2008-09). ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 19 B) ON THE VER Y NEXT DA Y (01.10.2010) NOTICE ULS 153C IS ISSUED; C) TONE AND TENOR OF SATISFACTION NOTE TH A T I S T HER E IS NO R E MOTE INDI C ATION IN THE G I V EN / AFORESAID NOTE THAT S AME I S RECORDED DURING THE COURSE OF ASSESSMENT OF A PARTICULAR SEARCHED PERSON ON THE CONTRAR Y , FROM CURSOR Y LOOK IT IS PALPABLE THAT SAME I S MER E NOTIN G B Y AO O F AS S ESSEE ( OTHER PERSON ) BEFORE IS S UAI OF NOTICE U L S 153C. I T IS S UPPORTED B Y I )FI R S TL Y , OPENIN G LAN G UAGE AND MOST IMPORTANTL Y IT IS RECORDED THAT 'IN THE CASE OF SHE B.K. DHINGRA, SMT. POONAM DHINGRA AND MLS. MAYANK TRADER S PVT. LTD., HORIZON PVT LTD. SEARCH & SEIZURE TOOK PLACE U/S. 132 ON 20.10.2008; ................ SECONDLY, DOCUMENTS/PAPERS AT PAGES 1 TO 39 OF ANNEXURE A-87 , ANNEXURES A-96, A-97, A-98 AND A-99 , ARE FOUND TO BELONG TO M/S. INSTRONICS LTD.,' WHERE MULTIPLE PARTIES ARE M E NTI O NED (3 IN N O . ); II ) ' W HICH S UFFICIENTL Y PR O VES THAT IN S TANT NOTE IS RECORDED B Y AO OF PRESENT AS SE S S E E AND I S NOT TH E REQUI S ITE ' SATI S FACTION ' B Y AN Y AO OF AN Y PARTICULAR RAIDED PART Y DURING SEARCH A S SESS M E N T U/ S 1 5 3 A . NOTICEABL Y AFOR E SAID F EA TURES CLEARL Y ESTABLISH THAT THERE IS NO V ALID S ATI S FACT I ON ON PART OF LD. AO. BEFORE I SS UIN G NOT I CE U LS 153 C OF THE ACT. ON IDENTICAL FACTS, HON ' BLE DELHI BENCHES OF ITAT ON THREE DI F FER E NT OC CA S ION S I N CASES OF INLA Y MARKETING PVT. L TD . (CASE LAW PAPER BOOK PAGES 78 TO 128) , AK A SH ARO GY A MANDIR P V T. LTD . (CASE LAW PAPER BOOK PAGES 129 TO 144) AND TANVIR COLLECTIONS P V T. L T D . (CASE LAW PAPER BOOK PAGES 145 TO 166) H AV E QUA S HED T HE SIMILAR P R OCEEDING S BEIN G NULLIT Y FOR L AC K OF JURI S DI CT ION . IN THESE PR E CEDENTS , C OORDIN A TE BENCH DECI S IONS , HON'BLE JURISDICTIONAL HIGH C O URT AND A PE X COURT DECISIONS ARE DILAT E D AT LEN G TH . SO IT IS RESPECTFULLY PRE Y ED THAT FOR SAKE OF JUSTICE, SAME MA Y PLEASE BE APPLIED IN PRESENT CASE ALSO. IT IS NOT EWO RTH Y H E RE THAT OR D ER OF DELHI [T A T IN DSL PROPERTIES C ASE RE P OR T E D AT 60 SOT 88 W A S A PPLI E D IN A BO VE CA SE S. THIS ORDER IS FOLLOWED IN MANY OTHER DECISIONS B Y HON'BLE ITAT . FURTHER IT IS NOT KNOWN AS TO WHY THE REVENUE HAS NOT DISCLOSED THAT AT HON'BLE HIGH COURT ON 05. 12.2014 REVENUE ' S STAY APPLICATION FOR DSL ITAT DECISION HAS BEEN ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 20 HITHERTO JETTISONED B Y HON'BLE DELHI HIGH COURT, ITA 583/2013 DATED 05.12.2014. RE G ARD I N G S PE C I F IC S ATI S FACTI O N B Y AO OF RAIDED PART Y AND IN ITS A BSENCE C ONSEQUENTIAL NULLIFICATION OF PR O CEEDIN G S , H O N ' BLE DELHI HI G H COURT DECISION DATED 26 . 11 . 2 014 I N CA S E OF M A NJU FINANCE CORPORTION (IT A NO . 339/2002) (CASE LAW PAPER BOOK PAGES 17 TO 24) I S N O T EWO RTH Y . 2.2 THAT INSTANT NOTE IS RECORDED MECHANICALLY AND WITHOUT APPLICATION OF MIND: IT IS V I V ID FROM AFORESAID NOT E TH A T SAME IS R ECORDED W ITHOUT E VE N NARRATING AND D E SCRIBIN G THE NATURE OF DOCUMENTS AND THEIR FINANCIAL IMPLICATIONS AND ONL Y ANNE X URE NUMBE R S A RE LOO S EL Y AND V A G UEL Y M ENTIO N ED W HICH DO NOT M E E T TH E BA S IC CR ITE R I A O F AN Y OBJECTI V E AND R ATI ON A L 'SATISFACTION' . TH A T IS THERE NO C LE A R FINDING IN A FOR ES AID NOTE ON I ) NATURE O F DOCUM E NTS A ND I I) AS TO HO W LD A O ARRI V ED AT THE SA TI S F A CT I O N TH A T SAMEB E L O N GS TO A PPELL A NT H E R E W HI C H IS QU I TE CRUC I AL A ND C RIT IC AL III ) T HE F INAN CI AL IMPLICATION S O F DOCUMENTS ON BL OCK P ERIO D . N O THIN G I S C O MP R EHENSIBLE F R O M THE A F ORE S AID NO T E. HOW CAN WITHOUT ENUMERATION OF BASIC DOCUMENTS MERE MENTIONING OF ANNEXURE NO ' S CAN BE TREATED AS ADEQUATE FOR ARRIVING AT JUST AND V ALID SATISFACTION ULS 153C WHICH REFLECTS MECHANICAL RECORDING OF THE SAME. ON BOTH THE ABOVE COUNTS, THAT IS NON RECORD ING OF SATISFACTION BY SPECIFIED AUTHORITY (BEING AO OF A RAIDED PARTY) AND FOR TOTAL LACK OF CLARITY OF NATURE OF DOCUMENT S SEIZED AND HOW TREATED TO BE BELONGING TO, MAKES THE INSTANT PROCEEDINGS NULL AND VOID AND THE GIVEN NOTE AT PAG E 1 CANNOT BE TREATED AS VALID FOR ASSUMPTION OF JURISD ICTION. JURISDICTIONAL AND OTHER AVAILABLE HON'BLE HIGH COU RT JUDICIAL PRONOUNCEMENTS: ISSUE IS NO LONGER RES INTEGRA NOTICEABLY, THERE ARE AT LEAST FOUR HIGH CO URT DECISIONS (INCLUDING TWO FROM JURISDICTIONAL HIGH COURT REPOR TED AT 367 ITR 673, 367 ITR 112, 270 CTR 467 PEPSI AND PEPSICO ORDERS (CASE LAW PAPER BOOK PAGES 1 TO 16) AND OTHE R TWO FROM ALLAHABAD HIGH COURT (GOPI APARTMENTS 366 ITR 411) AND TELANGANA & ANDHRA PRADESH HIGH COURT IN SHETTY PHARMACEUTICALS (26.11.2014) ITT A 662 OF 2014 AND BATCH) (CASE LAW PAPER BOOK PAGES 31 TO 66) WHERE IN DETAI LED PRINCIPLES ON VALIDITY OF PROCEEDINGS U/S 153C ARE LAID DOWN WHICH SUPPORTS THE VIEW TAKEN IN CASES OF I) INLAY MARKETING PVT. LTD. (SUPRA) II) AKASH AROGYA MANDIR PVT. LTD. (SUPRA) III) ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 21 TANVIR COLLECTIONS PVT. LTD. AND IV) DSL PROPERTIES PVT. LTD. AND OUR PRAYER(SUPRA). IN AFORESAID CONNECTION, IT IS VERY RESP ECTFULLY SUBMITTED THAT IT IS TRITE LAW THAT AFTER VARIOUS HIGH COURT DECISIONS ON THE ISSUE, NO QUESTION OF DEBATE AND PER INCURIAM AND S PECIAL BENCH CAN ARISE AS IT IS HELD IN COORDINATE BENCH D ECISION REPORTED AT 69 TTJ 550 (APPLIED BY PUNE ITAT IN AUR ANGABAD RESORTS REPORTED AT 118 ITD 1/111 TTJ 741) THAT ONC E AN AUTHORITY HIGHER THAN TRIBUNAL HAS EXPRESSED ITS ES TEEMED VIEWS ON AN ISSUE, NORMALLY THE DECISION OF HIGHER JUDICIAL AUTHORITY IS TO BE FOLLOWED, EVEN IF HIGHER JUDICIA L FORUM IS NON JURISDICTIONAL HIGH COURT (HERE T & AP HIGH COURT IN SHETTY CASE AND ALLAHABAD HIGH COURT IN GOPI APARTMENTS). SAME VIEW IS REITERATED IN DECISION OF MUMBAI BENCH OF I TAT REPORTED AT 20 SOT 129. IN CONTEXT OF REVENUE'S ATT EMPT TO DISTINGUISH THE JURISDICTIONAL HIGH COURT DECISIONS (IN CASES OF PEPSI AND PEPSICO SUPRA) ON NON EXISTING AND EXTRAN EOUS GROUNDS, RESPECTFULLY SUBMITTING, IT IS URGED THAT ONCE THE DECISION OF JURISDICTIONAL HIGH COURT EXISTS ON AN ISSUE, IT IS SETTLED POSITION IN LAW AS DECLARED BY THE SUPREME COURT IN THE CASE OF EAST INDIA COMMERCIAL CO. LTD. VS. COLL ECTOR OF CUSTOMS AIR 1962 (SC) 1793 THAT THE LAW DECLARED BY THE HIGH COURT IS BINDING ON ALL AUTHORITIES AND TRIBUN ALS WITHIN THE STATE. LASTLY, WE HUMBLY DRAW YOUR HONORS KIND ATT ENTION TO RECENT CONSTITUTION BENCH ORDER OF HON'BLE SUPREME COURT I N VATIKA CASE REPORTED AT 367 ITR 466 WHEREIN IN NO UNCLEAR WORDS IT IS CATEGORICALLY HELD THAT 'TAX LAWS ARE CLEARLY IN DEROGATION OF PERSONAL RIGHTS AND PROPERTY INTERESTS AND ARE, THE REFORE, SUBJECT TO STRICT CONSTRUCTION, AND ANY AMBIGUITY M UST BE RESOLVED AGAINST IMPOSITION OF THE TAX' THAT IS WHE RE TWO VIEWS ARE THERE ONE WHICH FAVORS THE TAX PAYER MUST BEFOLLOWED. (VIDE SE DECISION IN CASE OF VEGETABLE PRODUCTS 88 ITR 192). 4. FURTHER WHERE THE ISSUE IS COVERED IN FAVOR OF A SSESSEE ON LEGAL JURISDICTIONAL GROUNDS THERE IS NO NEED TO EN TER INTO MERITS AT ALL IS SUPPORTED BY BOMBAY HIGH COURT DEC ISION IN CASE OF M/S. PETROLEUM INDIA INTERNATIONAL, MUMBAI ORDER DATED: 19TH NOVEMBER, 2012 IN INCOME TAX APPEAL NO. 2660 ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 22 OF 2009 WHEREIN IT IS HELD THAT 'ONCE, IT IS HELD T HAT THE REOPENING OF THE ASSESSMENT IS BAD IN LAW, THEN, IN OUR OPINION, THE CIT (A) AS ALSO THE ITAT WERE NOT JUST IFIED IN DEALING WITH THE MERITS OF THE CASE' NOTE ON DELHI HIGH COURT DECISION IN CASE OF SSP AVIATION (346 ITR 177) WHICH IS RELIED HEAVILY BY R EVENUE AT ITAT AND CIT-A. RELEVANT FACTS OF INSTANT CASE/DOCUMENTS: I) OUR FIRST HAND RESPONSE TO LD. AO. IN THE MONTH OF NOVEMBER, 2010 DURING ASSESSMENT PROCEEDINGS (PAGES 22 TO 28 OF PAPER BOOK FOR THE AY. 2003-04 TO AY. 2008 -09) THAT SEIZED DOCUMENT ARE FULLY DISCLOSED AND ACCOUNTED AND NOTHING IS UNDIS CLOSED AS FAR AS SEARCH RELATED DOCUMENTS ARE CONCERNED WHICH REMAIN ED UNCONTROVERTED; II) AT NO STAGE IT IS CONTROVERTED THAT SEIZED DOC UMENTS FOUND DURING SEARCH ARE FULLY DISCLOSED AND ACCOUNTED. PARA 17 OF AFORESAID DECISION AS APPLIES TO PRESENT CASE IN FAVOR OF ASSESSEE: ' THE SECTION MERELY ENABLES THE REVENUE AUTHORITIES TO INVESTIGATE INTO THE CONTENT S OF THE DOCUMENT SEIZED, WHICH BELONGS TO A PERSON OTHER TH AN THE PERSON SEARCHED SO THAT IT CAN BE ASCERTAINED WHETH ER THE TRANSACTION OR THE INCOME EMBEDDED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIATE P ERSON. IT IS AIMED AT ENSURING THAT INCOME DOES NOT ESCAPE ASSES SMENT IN THE HANDS OF ANY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHED UNDER SECTION 132 OF THE ACT. IT IS O NLY A FIRST STEP TO THE ENQUIRY, WHICH IS TO FOLLOW. THE ASSESS ING OFFICER WHO HAS SEARCHED THE SATISFACTION THAT THE DOCUMENT RELATES 'TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHING EXCEPT TO FORWARD THE DOCUMENT TO THE ASSESSING OFF ICER HAVING JURISDICTION OVER THE OTHER PERSON AND THERE AFTER IT IS FOR THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED BY SECTIO N 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLECTED BY T HE DOCUMENT HAS BEEN ACCOUNTED FOR BY SUCH OTHER PERSO N. IF HE IS SO SATISFIED AFTER OBTAINING THE RETURNS FROM SU CH OTHER PERSON FOR THE SIX ASSESSMENT YEARS, THE PROCEEDING S WILL ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 23 HAVE TO BE CLOSED. IF THE RETURNS FILED BY THE OTHE R PERSON FOR THE PERIOD OF SIX YEARS DOES NOT SHOW THAT THE INCO ME REFLECTED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR, A DDITIONS WILL BE ACCORDINGLY MADE AFTER FOLLOWING THE PROCED URE PRESCRIBED BY LAW AND AFTER GIVING ADEQUATE OPPORTU NITY OF BEING HEARD TO SUCH OTHER PERSON. THAT, IN SUM AND SUBSTANCE, IS THE POSITION. ' FURTHER SUPPORTIVE CASE LAWS WHERE AFORESAID DECISI ON OF DELHI HIGH COURT IN SSP AVIATION PARA 17 IS APPLIED: I) IN IDENTICAL FACT SITUATION, IN THE INCOME TAX A PPELLATE TRIBUNAL DELHI BENCH 'B', NEW DELHI IN I.T.A. NOS. 5430 TO 5436IDEL/2013 A.YRS. : 2003-04 TO 2009-10 'DEVI DAYAL PETRO CHEMICALS PVT. LTD., ORDER DATED 10-9-2 014.' (REFER CASE LAW PAPER BOOK PAGES 67 TO 77 ) HAS OBS ERVED THAT 'THEREFORE, THE ASSESSING OFFICER WILL DROP TH E PROCEEDINGS INITIATED UNDER SECTION153 OF THE YEARS TO WHICH THE SEIZED DOCUMENTS DO NOT BELONG. FOR THE YEAR TO WHICH THE SEIZED DOCUMENTS BELONGED, HE WILL VERIFY WHETH ER THE TRANSACTION REFLECTED BY THE SEIZED DOCUMENTS IS DU LY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. IF THE TRANS ACTIONS ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT, AS CONT ENDED BY THE LEARNED COUNSEL, THE ASSESSING OFFICER WILL DRO P THE PROCEEDINGS INITIATED UNDER SECTION 153C' II) BENCH 'A', KOLKATA ,ITAT IN TRISHUL HI-TECH IN DUSTRIES CASE ORDER DATED 24.09.2014, IT(SS)A NOS. 84-86/KOI /2011 (REFER CASE LAW PAPER BOOK PAGES 197 TO 209) HAS HE LD THAT 'TO PUT IT SIMPLY THIS AMENDMENT TO PROVISO TO SECTION 153C(1) BY FINANCE ACT 2014 OF THE ACT DEBARS THE A O FROM MAKING ANY ASSESSMENT DEHORSE ANY INCRIMINATING MAT ERIAL FOUND DURING THE SEARCH ' III) PUNE BENCH ITAT IN BHARATI VIDYAPEETH FOUNDATI ON DULY APPROVED BY BOMBAY HIGH COURT ON 10/06/2014 ITA NO. 959/PN/10 TO 967/PN/10 IN TURN BASED ON PUNE ITAT O RDER REPORTED AT SINGHAD TECHNICAL EDUCATION 140 TTJ 233 ) IV) PUNE BENCH ITAT IN D.Y.PATIL PRATSHTHAN ORDER D ATED 7/9/2012, ITA NO. 1586/PN/2011 TO 1591/PN/2011 SINCE IN THE INSTANT CASE CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE TRUST HAVE BEEN FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF THE TRUSTEES, THEREFORE, ISSUE O F NOTICE U/S. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 24 153C OF THE INCOME TAX ACT BY THE AO IS A VALID NOT ICE IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. (SUPRA). HOWEVER, SINCE ALL TH E ENTRIES FOUND IN THOSE DOCUMENTS HAVE ALREADY BEEN REFLECTE D IN THE BOOKS OF ACCOUNTS AS PER THE CHART FURNISHED BY TH E ASSESSEE WHICH HAVE BEEN REPRODUCED AT PARA 9 OF TH IS ORDER AND WHICH HAVE BEEN ANALYSED ABOVE AND WHICH COULD NOT BE CONTROVERTED BY THE LEARNED DR, THEREFORE, IN IVEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF SSP AVIATION LTD. (SUPRA) FURTHER PROCEEDINGS SHOULD HA VE BEEN CLOSED BY THE AO. OTHERWISE IT WILL CAUSE UNDUE HAR ASSMENT TO THE ASSESSEE. IN OUR OPINION, THE AO IN THE GARB OF PROCEEDINGS U/S 153C CANNOT MAKE ROVING AND FISHING ENQUIRIES AFTER ASSESSEE PROVES THAT ENTRIES RECORD ED IN THE DOCUMENTS SIZED FROM THE SEARCH PARTY WHICH BELONG TO THE ASSESSEE ARE ALREADY REFLECTED IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. (SUPRA) WE H OLD THAT THE NOTICE ISSUED U/S. 153 IS A VALID NOTICE. HOWEVER, SINCE THE ASSESSEE HAS SATISFACTORI LY EXPLAINED THAT ENTRIES FOUND IN THE SEIZED DOCUMENTS ARE REFLECTED IN THE REGULAR BOOKS OF ACCOUNT, FURTHER PROCEEDINGS U/S. 153C WILL HAVE TO BE CLOSED AND NO FURTHER ADDITION CAN BE MA DE BY MAKING ROVING AND FISHING ENQUIRIES SINCE THE ASSES SEE CANNOT BE PUT TO UNDUE HARASSMENT. SINCE THE ASSESS SEE SUCCEDS ON THIS PRELIMINARY ISSUE WE REFRAIN OURSEL VES FROM ADJUDICATING THE OTHER GROUNDS BY THE ASSESSEE AS W ELL AS THE REVENUE ON MERIT. DECISIONS REFERRED : I) JAI STEEL (INDIA) VS. ACIT: 259 CTR (RAJ) 281 II) CIT VS. MURLI AGRO PRODUCTS LTD. I.T.A. NO. 36 OF 2009 (BOM.) HIGH COURT ORDER DT. 29.10.2010 III) CIT VS. CHETAN DASS LACHMAN DASS; 77 DTR (DEL) 25 IV) CIT VS. ANIL KUMAR BHATIA; 352 ITR 493 (DEL) V) SANJAY AGARWAL; ITA NO. 3184/DEL/2013 VI) PACL INDIA LTD., ITA NO. 2637/DEL/2010 VII) KUSUM GUPTA, ITA NO. 3312/DEL/2009 VIII) MGF AUTOMOBILES LTD., ITA NO. 4212/DEL/2011 ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 25 IX) VEE GEE INDUSTRIAL ENTERPRISES, ITA NO. 1/DEL/2 011 X) ASHA KATARIA, ITA NO. 3105-3107/DEL/2011 XI) MERIGOLD MERCHANDISE (P). LTD. ITA NO. 2666/DEL /2013 XII) PRADEEP KUMAR, ITA NO. 4016/DEL/2011 XIII) ACIT VS. MANOJ NARAIN AGARWAL; 99 DTR (DEL) ( TRIB.) 279 XIV) PARIVAR PROPERTIES (P) LTD., ITA NO. 1011/DEL/ 2013 XV) INLAY MARKETING PVT. LTD, ITA NO. 4200/DEL/2012 (IDENTICAL FACT SETTING) (CASE LAW PAPER BOOK PAGES 78 TO 128) XVI) V.K.FISCAL, ITA NO. 5460/DEL/2013 XVII) PARSVNATH DEVELOPERS LTD. VS. DCIT, 5188/DEL/ 2013 XVIII) SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. VS. CIT; 137 ITD 287 (MUMBAI) (S.B.) XIX) DELHI ITAT BENCH, DBENCH NEW DELHI, KURELE P APER MILLS PVT. LTD. 14.11.2014 (CASE LAW PAPER BOOK PAGES 172 TO 186) XX) ITAT, DELHI A BENCH, ANJOO KASHYAP ORDER DATE D 19.12.2014 XXI) ITAT, DELHI F BENCH ORDER, IN THE CASE OF QU ALITRON COMODITIES PVT. LTD. DATED 06.01.2015 (CASE LAW PAP ER BOOK PAGES 187 TO 196) SUBMITTED PLEASE, SD/- AR KAPIL GOEL, ADV. 9.1. THE REVENUE HAS NOT DISPUTED THE FACT THA T IN THE CASE IN HAND, THERE IS NO SATISFACTION NOTE BY THE AO OF TH E SEARCHED PARTY. THE EXPLANATION FOR NOT RECORDING SATISFACTION IS T HAT LAW DOES NOT ENVISAGE THAT THE SATISFACTION SHOULD BE RECORDED. THIS CONTENTION IS AGAINST THE RATIO LAID DOWN BY THE HONBLE DELHI HI GH COURT IN THE CASE OF PEPSI FOODS (P) LTD. VS. ASSISTANT COMMISSI ONER OF INCOME ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 26 TAX [2014] 52 TAXMAN. COM 220 (DELHI) IN PARA 6 OF THE JUDGMENT HAS HELD AS UNDER :- 6. ON A PLAIN READING OF SECTION 153C, IT IS EVIDENT T HAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST B E SATISFIED THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY THEN THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON (OTHER THAN THE SEARCHED PERSON). WP(C) 415/ 2014 & ORS. PAGE 9 OF 15 FURTHERMORE, IT IS ONLY AFTER S UCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTH ER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE- ASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THEREFORE, BEFORE A NOTICE UNDER SECT ION 153C CAN BE ISSUED TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING OFFICER OF THE PERSON WH O IS SEARCHED MUST ARRIVE AT A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS AFTER SUCH SATISFACTION IS ARRIVED AT THAT THE DOCUMENT IS H ANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE SAID DOCUMENT BELONGS. IN THE PRESENT CASES IT HA S BEEN URGED ON BEHALF OF THE PETITIONER THAT THE FIRST ST EP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NE CESSARY TO EXAMINE THE PROVISIONS OF PRESUMPTIONS AS INDICATED ABOVE. SECTION 132(4A)(I) CLEARLY STIPULATES THAT W HEN INTER ALIA ANY DOCUMENT IS FOUND IN THE POSSESSION OR CON TROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRES UMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SI MILARLY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHE NEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEARCH ED THE NORMAL PRESUMPTION IS THAT THE SAID DOCUMENT BE LONGS TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR SATISFACTI ON THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY WP(C) ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 27 415/2014 & ORS. PAGE 10 OF 15 ELSE. THERE MUST BE S OME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICE R BEFORE HE/SHE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE SEARCHED PERSON BUT TO SOMEB ODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE THE PLACE OF SATISFACTION. FURTHER THE HONBLE DELHI HIGH COURT HELD TH AT MERE USE OR MENTION OF THE WORD SATISFACTION OR THE WORDS SATISFIED IN THE ORDER AS THE SAME WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C OF THE SAID AC T. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASON AS BASIS FOR TH E CONCLUSION THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON IS SATISFI ED THAT THE SEIZED DOCUMENTS BELONG TO A PERSON OTHER THAN THE SEARCHE D PERSONS. IT IS PERTINENT TO NOTE HERE THAT THE HONBLE DELH I HIGH COURT IN THE CASE OF PEPSI FOOD (P) LTD. VS. ACIT (SUPRA) HAS HE LD THAT THE SATISFACTION NOTE BY THE AO SEARCHED PARTY IS A CON DITION PRECEDENT FOR ISSUANCE OF NOTICE U/S 153C OF THE ACT. IN THE LIGHT OF JUDGMENT OF THE HONBLE DELHI HIGH COURT, WE CANNOT ACCEPT THE ARGUMENT OF REVENUE THAT NO SATISFACTION IS REQUIRED TO BE RECO RDED OR THE SATISFACTION CAN BE INFERRED BY IMPLICATION I.E. FR OM THE CONDUCT OF ASSESSING OFFICER OF THE SEARCHED PARTY AND IT WOUL D BE SUFFICIENT IF THE AO OF THE SEARCHED PARTY TRANSFERS THE MATERIAL BELONGING TO OTHER ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 28 PERSON TO THE ASSESSING OFFICER OF SUCH PERSON. WE DO NOT AGREE WITH CONTENTION OF LD. CIT(DR) THAT NON RECORDING OF SAT ISFACTION NOTE IS MERELY A TECHNICAL DEFECT. THE SATISFACTION OF THE ASSESSING OFFICER OF THE SEARCHED PARTY GOES TO VERY ROOT OF THE ASSUMPT ION OF JURISDICTION BY THE ASSESSING OFFICER OF OTHER PERSON FOR INITIA TING PROCEEDING U/S 153C OF THE ACT. THEREFORE, WE FIND NO MERIT INTO T HIS CONTENTION OF LD. CIT(DR). MOREOVER, WE CANNOT IGNORE THE MANDATE OF THE STATUTORY PROVISION UNDER THE GARB OF TECHNICAL DEFECT. 10. LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF TANVIR FINANCE & LEASING LTD. VS. DCIT IN CROSS OBJ ECTION NOS. 268 TO 271/DEL/2014 (IN ITA NOS. 14 TO 17/DEL/2014) WHE REIN UNDER THE IDENTICAL FACTS HAS OBSERVED AS UNDER :- WE DULY APPRECIATE THE CONCERN OF THE LD. DR FOR THE EXCHEQUER. BUT WE ARE REMINDED OF THE BASIC PRINCIP LE ENSHRINED IN ARTICLE 265 OF THE CONSTITUTION THAT N O TAX CAN BE COLLECTED WITHOUT AUTHORITY OF LAW. THERE CAN BE NO ASSESSMENT IN THE ABSENCE OF A PROPER JURISDICTION OF THE AUTHORITY. THE QUESTION OF JURISDICTION IS A VERY I MPORTANT ASPECT, WHICH CANNOT BE EQUATED WITH A TECHNICAL IS SUE. SIMILAR CONTENTION RAISED BY THE LD. DR HAS BEEN ELABORATELY DEALT WITH BY THE TRIBUNAL IN THE CASE OF TANVIR COLLECTIONS P. LTD. (SUPRA). WE, THEREFORE, DO NOT APPROVE THIS CONTENTION. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 29 RESPECTFULLY FOLLOWING THE DECISION OF HONBLE CO- ORDINATE BENCH, WE HEREBY REJECT THE CONTENTION LD. CIT(DR) THAT NON R ECORDING OF SATISFACTION IS ONLY A TECHNICAL DEFECT, AND THE AS SESSMENT CANNOT BE ANNULLED ON THIS BASIS. 11. DURING THE COURSE OF HEARING LD. CIT(DR) HAS RELIED UPON THE JUDGMENT OF THE HONBLE KERLA HIGH COURT RENDERED IN THE CASE OF DR. K.M.MAHBOOB VS. DCIT(SUPRA). THIS ARGUMENT OF T HE ASSESSEE HAS BEEN CONSIDERED BY THE HONBLE CO-ORDINATE BENC H RENDERED IN THE CASE OF M/S AKASH AROGYA MINDIR PVT. LTD. VS. D CIT IN CROSS OBJECTION NOS. 77 82/ DEL/ 2013 WHEREIN IT HAS B EEN OBSERVED THAT THERE ARE CONFLICTING VIEWS OF HONBLE DELHI HIGH C ORUT AND HONBLE KERLA HIGH COURT, THE ASSESSEE FALLS INTO THE JURI SDICTION OF HONBLE DELHI HIGH COURT IN VIEW RATIO OF DELHI HIGH COURT JUDGMENT IN CASE OF PEPSI FOODS (P) LTD. (SUPRA), IT WAS HELD THAT REC ORDING OF SATISFACTION BY AO OF SEARCHED PERSONS IS A NECES SARY PRE CONDITION FOR INITIATION OF PROCEEDING U/S 153C WHICH WAS NOT DONE IN THAT CASE. ACCORDINGLY, THE HONBLE CO-ORDINATE BENCH WAS PLEA SED TO QUASH THE ASSESSMENT PROCEEDINGS. IN THE CASE IN HAND ALSO THE ASSESSEE COMPANY IS WI THIN THE TERRITORIAL JURISDICTIONAL OF THE HONBLE DELHI HIGH COURT. THE FACTS ARE IDENTICAL, ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 30 NO CONTRARY VIEW OF THE HONBLE DELHI HIGH COURT OR THE HONBLE SUPREME COURT BROUGHT TO OUR NOTICE BY THE REVENU E. THEREFORE, WE DO NOT SEE ANY REASON TO TAKE ANY CONTRARY VIEW, TH EREFORE, WE ARE OF THE CONSIDERED VIEW THAT IN THE ABSENCE OF A SATISF ACTION RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSONS, THE ASSESSMENT FRAMED U/S 153C OF THE ACT BY THE ASSESSING OFFICER CANNOT BE SUSTAINED, AS SUCH SAME IS BAD IN LAW. 12. IT IS OBSERVED THAT THE REVENUE HAS NOT P LACED ANY MATERIAL ON RECORD IN RESPECT OF EVIDENCE QUA THE PRESENT ASSESSEE COLLECTED DURING THE SEARCH OPERATION. MOREOVER, THE SATISFAC TION AS ENVISAGED UNDER SECTION 153C IS ALSO NOT PLACED ON RECORD. TH EREFORE, WE HAVE NO OPTION BUT TO ACCEPT THE CONTENTION OF LD. COUNS EL FOR THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE A SSESSING OFFICER OF THE SEARCHED PARTY, THIS CONTENTION IS SUPPORTED BY THE REPLY OF REVENUE FURNISHED UNDER RIGHT TO INFORMATION ACT. I T IS EXPECTED THAT THE ASSESSING OFFICER SHOULD BE CAREFUL IN COMPLYIN G WITH THE MANDATE OF LAW TO AVOID LOSS TO EXCHEQUER. ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 31 13. ACCORDINGLY THE GROUND RAISED BY THE ASSESSE E IN CROSS OBJECTION, THAT THE PROCEEDINGS INITIATED UNDER SEC TION 153C IS BAD IN LAW IS ALLOWED. THE ASSESSMENT FRAMED U/S 153C READ WITH SECTION 143(3) PERTAINING TO THE ASSESSMENT YEAR 2003-04 IS QUASHED. SINCE WE HAVE QUASHED THE ASSESSMENT ON THE LEGAL ISSUES. WE ARE NOT ADJUDICATING THE OTHER GROUNDS RAISED IN CROSS OBJE CTION 353/DEL/2014. THE REVENUES APPEAL IN I.T.A. NO. 6404/DEL/2013 PE RTAINING TO THE ASSESSMENT YEAR 2003-04 IS DISMISSED, AS INFRUC TUOUS. IN THE RESULT ASSESSEES CROSS OBJECTION NO. 353/D EL/2014 IS PARTLY ALLOWED AS INDICATED HEREINABOVE. 14. IN RESPECT OF CROSS OBJECTIONS NUMBERS ALSO 3 54 TO 358/DEL/2014 PERTAINING TO THE ASSESSMENT YEARS 2004-05, 2005-06 , 2006-07, 2007-08 AND 2008-09 AND ITA NO. 6405 TO 6409/DEL/20 13 PERTAINING TO ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007 -08 AND 2008- 09. THE FACTS ARE IDENTICAL NO CHANGE INTO FACTS A ND CIRCUMSTANCES IS POINTED OUT. IN ALL THESE YEARS ALSO THERE IS NO SA TISFACTION RECORDED AS ENVISAGED UNDER SECTION 153C OF THE ACT. THEREFO RE, FOLLOWING OUR ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 32 DECISION IN CROSS OBJECTION NO. 353/DEL/2014 PERTAI NING TO ASSESSMENT YEAR 2003-04 WE HEREBY QUASH THE ASSESSM ENT ORDER PERTAINING TO THE ASSESSMENT YEARS 2004-05, 2005-06 , 2006-07, 2007-08 AND 2008-09. ACCORDINGLY, THE CROSS OBJECTIONS NOS. 354 TO 358/D EL/2014 PERTAINING TO ASSESSMENT YEAR 2004-05, 2005-06, 200 6-07, 2007- 08 AND 2008-09 ARE PARTLY ALLOWED IN THE TERMS INDI CATED HEREINABOVE AND REVENUES APPEAL IN ITA NO. 6405 TO 6409 FOR THE ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 200 7-08 AND 2008-09 ARE DISMISSED, AS INFRUCTUOUS. ORDER PRONOUNCED IN OPEN COURT ON FRIDAY 13 TH , MARCH, 2015. SD/- SD/- (S.V.MEHROTRA) (KUL BHARAT) ACCOUNTANT MEMBER JUDICI AL MEMBER DATED 13 TH MARCH, 2015 B.RUKHAIYAR COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. CIT (ITAT), NEW DELHI. BY ORDER AR, ITAT N. DELHI ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 33 SL. NO. DESCRIPTION DATE 1. DATE OF DICTATION BY THE AUTHOR 09.03.2015 2. DRAFT PLACED BEFORE THE DICTATING MEMBER 09.03.2015 3. DRAFT PLACED BEFORE THE SECOND MEMBER 4. DRAFT APPROVED BY THE SECOND MEMBER 5. DATE OF APPROVED ORDER COMES TO THE SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER 13.03.2015 7. DATE OF FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER ITA NO. 6404 TO 6409 /DEL/2013 C.O. NO. 353 TO 358 /DEL/2014 34