Super Malls Pvt. Ltd., Karnal V. DCIT, Karnal

ITA 1695/DEL/2015

• Counselvise Citation: 169520114 RSA 2015
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 19-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 25-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNITA KEJRIWAL
• Keywords: Unexplained expenditure; Search and seizure; Document seized; Revised return; Documents seized
• Section: 143(3); 133A; 153A; 234B; 147; 69; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 1693/DEL/2015 : ASSTT. YEAR : 2007 - 08 ITA NO. 1694 /DEL/2015 : ASSTT. YEAR : 2008 - 09 ITA NO. 169 5 /DEL/2015 : ASSTT. YEAR : 2009 - 10 ITA NO. 1696 /DEL/2015 : ASSTT. YEAR : 2010 - 11 SUPER MALLS PVT. LTD., SECTOR - 12, HUDA, KARNAL VS DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KARNAL (APPELLANT) (RESPONDENT) PAN NO. AA ICS2163F ASSESSEE BY : SH. AMIT GOYAL , CA REVENUE BY : SMT. SUNITA KEJRIWAL , CIT DR DATE OF HEARING : 26 .11 .2015 DATE OF PRONOUNCEMENT : 11 .12 .2015 ORDER PER BENCH : THESE FOUR AP PEAL S BY THE ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDER S EACH DATED 20.01.2015 OF LD. CIT(A) - II I , GURGAON . 2. THE ISSUE INVOLVED IN THESE APPEALS ARE COMMON AND THE APPEALS WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORD ER FOR THE SAKE OF CONVENIENCE AND BREVITY. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 2 3. FIRST WE WILL DEAL WITH THE APPEAL IN ITA NO. 1695/DEL/2015 FOR THE ASSESSMENT YEAR 2009 - 10. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE NOTICE U/S 153C ISSUED BY THE ASSESSING OFFICER IS BAD - IN - LAW, WITHOUT JURISDICTION AND ILLEGAL AND THEREFORE THE NOTICE ALONGWITH THE ASSESSMENT ORDER PASSED ON THE FOUNDATION OF SUCH NOTICE IS LIABLE TO BE QUASHED AND THE COMMISSIONER OF INCOME TAX (APPE ALS) SHOULD HAVE HELD SO. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE NOTICE U/S 153C IS ILLEGAL & WITHOUT JURISDICTION. THE ASSESSING OFFICER HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 153C AND OTHER ALLIED PROVISIONS FOR ISSUANCE OF SUCH NOTICE. ACCORDINGLY THE NOTICE U/S 153C ALONGWITH THE ASSESSMENT ORDER PASSED ON THE FOUNDATION OF SUCH NOTICE IS LIABLE TO BE QUASHED AND THE COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE HELD SO. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER OF COMPLETING THE ASSESSMENT AT INCOME OF RS.4,42,00,592/ - INSTEAD OF LOSS OF RS.1,15,89,312/ - AS RETURNED BY THE ASSESSEE. 4A. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER OF NOT ALLOWING SET - OFF OF LOSS OF RS.2,47,96,658/ - FOR THE YEAR AS CLAIMED BY THE ASSESSEE. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 3 B. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTI ON OF ASSESSING OFFICER OF NOT ALLOWING SET - OFF OF LOSS OF RS. 1,15,89,312/ - FOR THE YEAR AS CLAIMED BY THE ASSESSEE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING ADDITION OF RS.1,54,96,623/ - MADE BY THE ASSESSIN G OFFICER AS ALLEGED UNEXPLAINED EXPENDITURE U/S 69C. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER OF NOT ALLOWING DEDUCTION OF EXPENSES OF RS.1,54,96,623/ - . 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMI NG ADDITION OF RS.4,42,00,592/ - (RS.2,87,03,969/ - & RS.1,54,96,623/ - ) MADE BY THE ASSESSING OFFICER. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSING OFFICER HAS ERRED IN CHARGING INTEREST U/S 234B OF INCOME TAX ACT, 1961. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY OR DELETE ONE OR MORE GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. THE AFORESAID GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO EACH OTHE R. 4 . AT THE FIRST INSTANCE THE LD. COUNSEL FOR THE ASSESSEE ARGUED THE GROUND NOS. 1 & 2 RELATING TO THE LEGAL ISSUE OF JURISDICTION OF THE AO IN ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 4 FRAMING THE ASSESSMENT U/S 153C OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 5 . FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE PREMISES OF SH. VED PRAKASH BHARTI GROUP ON 08/09 . 04 . 2010, THE RESIDENTIAL PREMISES OF SH. VED PRAKASH BHARTI, A DIRECTOR OF THE ASSESSEE COMPANY WERE ALSO COVERED ON 08.04. 2010. A SURVEY U/S 133A OF THE ACT WAS ALSO CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE AT KARNAL AND AT NEW DELHI. DURING THE COURSE OF SURVEY VARIOUS DOCUMENTS WERE FOUND AND IMPOUNDED FROM KARNAL OFFICE. THE AO ISSUED NOTICE U/S 153C OF THE ACT T O THE ASSESSEE . IN RESPONSE THE ASSESSEE FILED THE RETURN OF NCOME ON 15.03.2013 DECLARING A LOSS OF RS. 1,15,89,312. HOWEVER, THE ASSESSMENT WAS COMPLETED U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT AT AN INCOME OF RS.4,42,00,590/ - BY MA KING AN ADDITION OF RS.2,87,03,9 69/ - ON ACCOUNT OF UNACCOUNTED CASH RECEIPTS AND RS.1,54,96,623/ - ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69 OF THE ACT. 6 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND CHALLENGED THE VALIDITY FOR NOTICE U/S 153C OF THE ACT AND SUBMITTED THAT THE FIRST PRE - REQUISITE OF INVOCATION OF PROVISIONS OF SECTION 153C OF THE ACT IS THAT THERE MUST BE SATISFACTION BY THE AO OF THE SEARCHED PERSON , THAT THE DOCUMENTS FOUND AND SEIZED DURIN G THE COURSE OF SEARCH BELONGED TO OTHER PERSON AGAIN ST WHOM NOTICE U/S 153C OF THE A CT IS ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 5 PROPOSED TO BE ISSUED. IT WAS FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 132(4A)(I), THE PRESUMPTION IS THAT THE D OCUMENTS BELONG TO SUCH PERSON FROM WHOSE POSSESSION , THE DOCUMENTS WERE SEIZED. THEREFORE, THE AO OF THE SEARCHED PERSON IS ALSO REQUIRED TO RECORD SATISFACTION THAT DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON AND BELONGED TO OTHER PERSON , B UT IN THE PRESENT CASE, NO SATISFACTION HAD BEEN RECORDED BY THE AO OF THE SEARCHED PERSON REBUT TING THE PRESUMPTION U/S 132(4A)(I) OF THE ACT. THE RELIANCE WAS PLACED ON THE JUDGMENT OF THE HON BLE DELHI HIGH COURT IN THE CASE OF PEPSI FOOD S INDIA PVT. LTD. VS ACIT (2014) 367 ITR 112. IT WAS FURTHER SUBMITTED THAT IN TERMS OF PROVISIONS OF SECTION 153C OF THE ACT, THE SATISFACTION HAS TO BE RECORDED BY THE AO OF THE SEARCHED PERSON , E VEN WHEN THE ASSESSING OFFICER OF SEARCHED PERSON AND THE PERSON OTHER THAN THE SEARCHED PERSON (AGAINST WHOM PROCEEDINGS U/S 153C ARE SUPPOSED TO BE INITIA TED) ARE THE SAM E AND THAT THE REQUIREMENT OF RECORDING THE SATISFACTION CANNOT BE AVOIDED AND SUCH SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER IN HIS CAPACITY AS ASSESSING OFFICER OF SEARCHED PERSON. IT WAS STATED THAT IN ASSESSEE S CASE , THE SO CALLED SATISFACTION NOTE HAD BEEN RECORDED BY THE AO IN HIS CAPACITY AS ASSESSING OFFICER OF THE ASSESSEE (I.E. THE PERSON OTHER THAN THE SEARCHED PERSON) AND NOT IN HIS CAPACITY AS ASSESSING OFFICER OF A SEARCHED PERSON , WHICH IS EVIDENT FROM THE FOLL OWING: ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 6 I. IN THE SATISFACTION NOTE, IT HAS NOWHERE BEEN STATED BY A.O. THAT HE IS RECO RDING SATISFACTION IN HIS CAPACITY AS A.O. OF ANY SEARCHED PERSON. II. THE FACT THAT THE A.O. IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ASSESSEE (A PERSON OTHER THAN SEARCHED PERSON) IS EVIDENT FROM THE TOP OF THE SATISFACTION NOTE WHEREIN IN THE COLUMN OF NAME AND ADDRESS OF THE ASSESSEE IT IS THE ASSESSEE S NAME AND ADDRESS WHICH HAS BEEN MENTIONED. THUS THE ASSESSING OFFICER HAS RECORDED THE SATISFACTIO N AS ASSESSING OFFICER OF THE ASSESSEE , HAS RECORDED THE SATISFACTION AS ASSESSING OFFICER OF THE ASSESSEE AND NOT AS THE ASSESSING OFFICER OF SEARCHED PERSON. III. THE FACT THAT THE A.O. IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ASSESSEE (A PERSON OTHER THAN SEARCHED PERSON) IS EVIDENT FROM THE OPENING PARA OF THE SO CALLED SATISFACTION NOTE IN WHICH IT HAS BEEN STATED THAT: - THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICER U/S 127 OF INCOME TAX ACT, 1961 BY THE WORTHY COMM ISSIONER OF INCOME TAX - III/NEW DELHI VIDE ORDER F.NO. CIT - III/DELHI/CENTRALIZATION/2012 - 13/2455, DATED 15.01.2013. FROM THE ABOVE IT IS APPARENT THAT THE A.O. IS REFERRING TO HIS JURISDICTION AS THAT OF ASSESSEE S CASE AND NOT THAT OF ANY SEARCHED PERSO N . YOUR HONOUR WILL APPRECIATE THAT FOR RECORDING SATISFACTION U/S 153C, THE ASSESSING OFFICER OF SEARCHED PERSON NEED NOT BE THE ASSESSING OFFICER OF PERSON OTHER THAN THE SEARCHED PERSON . BY REFERRING TO HIS JURISDICTION OVER THE ASSESSEE S CASE HE IS ESTABLISHING THAT HE IS RECORDING SATISFACTION IN HIS CAPACITY AS ASSESSING OFFICER OF ASSESSEE (A PERSON OTHER THAN THE SEARCHED PERSON). ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 7 IV. ANOTHER FACT THAT ESTABLISH THAT THE A.O. IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ASSESSEE AND NO T AS A.O. OF SEARCHED PERSON . U/S 153C, THE A.O. OF SEARCHED PERSON IS ONLY REQUIRED TO RECORD SAT ISFACTION THAT DOCUMENTS BELONG TO OTHER PERSON AND THEN TO HANDOVER THOSE DOCUMENTS TO ASSESSING OFFICER OF PERSON OTHER THAN THE SEARCHED PERSON. THE A.O. OF THE SEARCHED PERSON IS NOT EMPOWER TO ISSUE NOTICE U/S 153C OR TO GIVE DIRECTION FOR ISSUE OF NOTICE U/S 153C. THIS AUTHORITY OF ISSUE/GIVING DIRECTION FOR ISSUE OF NOTICE U/S 153C LIES SOLELY WITH THE ASSESSING OFFICER OF THE OTHER PERSON. AS CAN B E SEEN FROM THE LAST PARA OF THE SO CALLED SATISFACTION NOTE THE A.O. HAS MENTIONED THAT _QUOTE___ ACCORDINGLY IT IS DIRECTED TO ISSUE SUCH PERSON (M/S SUPER MALL S PVT. LTD.) NOTICE AND ASSESS AND REASSESS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 153A OF THE ACT.___ UNQUOTE. THE AFORESAID REMARKS PROVES BEYOND DOUBT THAT THE SATISFACTION NOTE HAS BEEN RECORDED BY THE ASSESSING OFFICER IN HIS CAPACITY AS THE A.O. OF THE ASSESSEE (THE OTHER PERSON) AND NOT AS THE A.O. OF SEARCHED PERSON BECAUSE IT IS ONLY THE A.O. OF OTHER PERSON WHO CAN ISSUE/GIVE DIRECTION FOR ISSUE OF NOTICE U/S 153C AS HAS BEEN GIVEN IN THE SATISFACTION NOTE. V. THERE IS YET ANOTHER FACT THAT ESTABLISHES THAT THE SATISFACTION U/S 153C HAS BEEN ISSUED BY THE A.O. IN HIS CAP ACITY AS A.O. OF OTHER PERSON (I.E. THE ASSESSEE) AND NOT AS A.O. OF SEARCHED PERSON. THE SEARCHED PERSON IN THIS CASE AS PER THE SATISFACTION NOTE IS VED PRAKASH BHARTI AND DATE OF SEARCH IS 08/09.04.2010. THE ASSESSING OFFICER WAS HAVING JURISDICTION O VER THE ASSESSEE SINCE AT LEAST FEBRUARY 2011 WHEN NOTICE U/S 153A WAS ISSUED TO VED PRAKASH BHARTI U/S 153A. THUS THE ASSESSING OFFICER IN HIS CAPACITY AS A.O. OF VED PRAKASH BHYARTI WAS HAVING POSSESSION OF ALL DOCUMENTS ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 8 SEIZED DURING SEARCH FROM VED PRA KASH BHARTI SINCE AT LEAST PRIOR TO FEB 2011. THE SATISFACTION NOTE U/S 153C HAS BEEN RECORDED BY A.O. ON 22.02.2013 I.E. AFTER MORE THAN 2 YEARS SINCE THE PERIOD WHEN HE WAS HAVING JURISDICTION OVER VED PRAKASH BHARTI I.E. THE SEARCHED PERSON. THE A.O. IN HIS CAPACITY AS A.O. OF VED PRAKASH BHARTI NEVER RECORDED THE SATISFACTION. THE SATISFACTION WAS RECORDED ON 22.02.2013 IN HIS CAPACITY AS A.O. OF ASSESSEE ONLY AFTER JURISDICTION OVER THE ASSESSEE WAS TRANSFERRED/VESTED IN HIM IN JAN 2013. IN VIEW OF TH E ABOVE IT IS SUBMITTED THAT THE NOTICE U/S 153C ISSUED BY THE A.O. IS WITHOUT JURISDICTION AND IS BAD - IN - LAW. THE SAID NOTICE IS LIABLE TO BE QUASHED AND ACCORDINGLY THE ASSESSMENT ORDER PASSED ON THE FOUNDATION OF THE SUCH NOTICE IS ALSO LIABLE TO BE QUA SHED. 7. THE LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESSEE BUT DID NOT FIND MERIT BY OBSERVING AS UNDER: I HAVE CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. THE ASSESSEE HAS ADVANCED THAT THE ORDER ISSUED UNDER SECTION 153C IS BAD IN LAW AND AG AINST THE PROVISIONS OF THE LAW. HE HAS ALSO STATED THAT NO INCRIMINATING MATERIAL WAS FOUND TO BELONG TO THE ASSESSEE IN THE SEARCH CONDUCTED AND THAT NO SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PARTY. TO FORTIFY HIS CASE, THE ASSESSEE HAS RELI ED UPON THE DECISION IN PEPSICO INDIA HOLDINGS (P) LTD. VS ACIT 270 CTR (DEL) 467. THESE WERE ISSUES NOT TAKEN UP BEFORE THE AO AND IS COMING FOR THE FIRST TIME BEFORE ME. BE THAT AS IT MAY, I FIND THAT THE ASSESSEE HAS ATTACHED A COPY OF THE SATISFACTION NOTE AT PAGE 34 OF THE PAPER BOOK. FOR SAKE OF EASY REFERENCE I AM REPRODUCING THE SAME, FROM WHICH IT IS ABUNDANTLY CLEAR THAT THE LEGAL ISSUE RAISED BY THE ASSESSEE HAS NO SUBSTANCE. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 9 NAME AND ADDRESS OF THE ASSESSE : M/S SUPER MALLS (P) LTD., SECTOR - 12 , HUDA, KARNAL, REGD. OFFICER AT 51 TRANSPORT CENTRE, PUNJABI BAGH, NEW DELHI ASSTT. YEAR : 2005 - 06 TO 2010 - 11 PAN : AAICS2163F STATUS : COMPANY REASONS/SATISFACTION NOTE FOR TAKING UP THE CASE OF M/S SUPER MALLS (P) LTD. SECTOR - 12, HUDA, KARNAL , RE GD. OFFICE AT 51 - TRANSPORT CENTRE, PUNJABI BAGH, NEW DELHI UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICE U/S 127 OF INCOME TAX ACT, 1961 BY THE WORTHY COMMISSIONER OF INCOME TAX - III, NEW DEL HI VIDE ORDER F.NO. CIT - III/DELHI/CENTRALIZATION/2012 - 13/2455 DATED 15.01.2013. BY VIRTUE OF THE AUTHORIZATION OF THE DIRECTOR OF INCOME TAX (INVESTIGATION), CHANDIGARH, A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 08/09.04.2010 A T THE RESIDENTIAL/BUSINESS PREMISES OF SH. TEJWANT SINGH & SH. VED PRAKASH BHARTI GROUP OF CASES, KARNAL, PANIPAT & DELHI AND A SURVEY U/S 133A OF THE I.T. ACT, 1961 WAS ALSO CARRIED OUT AT THE BUSINESS PREMISES OF M/S SUPER MALLS (P) LTD., KARNAL & NEW DE LHI. DURING THE COURSE OF SEARCH ON 08/09.04.2010 AT RESIDENCE OF SH. VED PRAKASH BHARTI WHO IS A DIRECTOR IN THE ASSESSEE COMPANY M/S SUPER MALLS (P) LTD., PEN DRIVES WERE FOUND AND SEIZED AS PER ANNEXURE - 3 FROM VEHICLE NO. HR06N - 0063 PARKED IN FRONT OF THE RESIDENCE OF SH. VED PRAKASH BHARTI. SOME DOCUMENTS AS PER ANNEXURE A - 1 WERE SEIZED AFTER ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 10 TAKING PRINT OUT OF THE ABOVE SAID PEN DRIVES. THESE DOCUMENTS CONTAIN THE DETAILS OF CASH RECEIPT ON SALE OF SHOP/OFFICES AT M/S SUPER MALL, KARNAL ALSO BESIDE O THER CONCERNS. THESE DOCUMENTS ARE REQUIRED FOR ASSESSMENT PROCEEDINGS. DURING THE STATEMENT OF SH. VED PRAKASH BAHRTI AT THE TIME OF SEARCH, HE HAS ALSO STATED THAT THESE DOCUMENTS PERTAIN TO HIM AND M/S SUPER MALL (P) LTD., KARNAL IN WHICH HE IS DIRECTOR . IN VIEW OF THE ABOVE AND AS PER THE PROVISIONS OF SUB - SECTION (1) OF SECTION 153C OF THE ACT, I AM SATISFIED THAT THE DOCUMENT SEIZED FROM THE RESIDENCE OF SH. VED PRAKASH BHARTI BELONGS TO A PERSON I.E. SUPER MALL (P) LTD., OTHER THAN THE PERSON REFERR ED IN SECTION 153A. ACCORDINLGY IT IS DIRECTED TO ISSUE SUCH PERSON (M/S SUPER MALL PVT. LTD.) NOTICE AND ASSESS AND REASSESS INCOME IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF THE ACT. - SD - (VED PRAKASH KALIA) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KARNAL DATED: 22.02.2013 THE SATISFACTION NOTE REPRODUCED ABOVE DOES NOT NEED FURTHER ELUCIDATION. IT IS SELF - SPEAKING. A SURVEY U/S 133A WAS CARRIED OUT ON THE ASSESSEE WHICH WAS CONSEQUENT TO SEARCH CONDUCTED ON THE DIRECTORS OF THE ASSESSEE COMPANY. MOREOVER, INCRIMINATING DOCUMENTS WERE IMPOUNDED/SEIZED AFTER TAKING PRINTOUTS FROM THE PEN DRIVES AND ON CONFRONTING THE SAME; THE DIRECTOR SHRI VED PRAKASH BHARTI SURRENDERED RS. 7 CRORES IN THE HANDS OF THE ASSESSEE COMPANY AND RS. 8 CRORES IN HIS INDIVIDUAL HANDS. THE PRINTOUTS OF THE PEN DRIVE REVEALED TRANSACTIONS RELATING TO SALE OF SHOPS/OFFICE PERTAINING TO M/S SUPER MALLS PVT. LTD., BEARING SR. NO., NAME ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 11 OF THE PURCHASER, SHO P NO. BOOKING AMOUNT IN CASH AND CHEQUE, BROKERAGE ETC. SO THE NATURE OF THE CONTENTS OF THE DOCUMENTS CLEARLY SHOWS THAT IT WAS MORE THAN A MERE REFERENCE OF THE ASSESSEE. IT IS ALSO EVIDENT THAT MATERIALS FOUND DURING SURVEY ARE RELATABLE WITH THE MATERI ALS SEIZED DURING SEARCH, REVEALING ELEMENT OF INCOME , THEREBY SUGGESTING UNDISCLOSED INCOME OF THE OTHER PERSON. FURTHERMORE, THE ASSESSEE ALSO REVISED ITS REGULAR RETURN OF LOSS OF RS.( - )2,47,96,658/ - TO RS.( - )1,15,89,312/ - WHEN IT RESPONDED TO NOTICE ISSUED U/S 153A R.W.S. 153C. IN VIEW OF THE ABOVE, I AM OF THE CONSIDERED OPINION THAT THE ASSESSEE S CONTENTIONS ARE UNFOUNDED, AND THEREFORE FAIL IN GROUNDS OF APPEAL NO. 1 TO 3. 8. NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSION MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT AT THE RESIDENCE OF SH. VED PRAKASH BHARTI GROUP OF CASES ON 08/09 .04. 2010, ON THE BASIS OF THIS SEARC H, PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED AGAINST THE ASSESSEE BY ISSUING THE NOTICE DATED 22.02.2013 U/S 153C OF THE ACT BUT NO SATISFACTION HAD BEEN RECORDED BY THE AO OF THE SEARCHED PERSON AND THAT NO DOCUMENT BELONGING TO THE ASSESSEE WAS FOUN D AND SEIZED DURING THE COURSE OF SEARCH. THEREFORE, THE NOTICE ISSUED U/S 153C OF THE ACT WAS BAD IN LAW AND WITHOUT JURISDICTION BECAUSE THERE HAD BEEN NO HANDING OVER OF THE SEIZED DOCUMENTS AS REQUIRED U/S 153C BEFORE INITIATION OF PROCEEDINGS UNDER TH AT SECTION. IT WAS STATED THAT THE EVEN WHEN THE SEARCHED PERSON AND THE ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 12 PERSON OTHER THAN THE SEARCHED PERSON (AGAINST WHOM PROCEEDINGS U/S 153C OF THE ACT WERE SUPPOSED TO BE INITIATED) ARE THE SAME THE REQUIREMENT OF RECORDING SATISFACTION BY THE ASSESS ING OFFICER OF THE SEARCHED PERSON CANNOT BE AVOIDED AND SUCH SATISFACTION HAS TO BE RECORDED BY THE AO IN HIS CAPACITY AS AO OF SEARCHED PERSON. THEREFORE, IN THE ABSENCE OF SUCH SATISFACTION, THE PROCEEDINGS INITIATED U/S 153C OF THE ACT ARE WITHOUT JURI SDICTION. IT WAS EMPHASIZED THAT THE SO CALLED SATISFACTION NOTE HAS BEEN RECORDED BY THE AO IN HIS CAPACITY AS AO OF THE ASSESSEE (I.E. A PERSON OTHER THAN A SEARCHED PERSON) AND NOT IN HIS CAPACITY AS AO OF SEARCHED PERSON WHICH IS EVIDENT FROM THE FOLLO WING: I. IN THE SATISFACTION NOTE, IT HAS NOWHERE BEEN STATED BY A.O. THAT HE IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ANY SEARCHED PERSON. II. THE FACT THAT THE A.O. IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ASSESSEE (A PERSON OTHER THAN SEARCHED PERSON) IS EVIDENT FROM THE TOP OF THE SATISFACTION NOTE WHEREIN IN THE COLUMN OF NAME AND ADDRESS OF THE ASSESSEE IT IS THE ASSESSEE S NAME AND ADDRESS WHICH HAS BEEN MENTIONED. THUS THE ASSESSING OFFICER HAS RECORDED THE SATISFACTI ON AS ASSESSING OFFICER OF THE ASSESSEE AND NOT AS THE ASSESSING OFFICER OF SEARCHED PERSON. III. THE FACT THAT THE A.O. IS RECORDING SATISFACTION IN HIS CAPACITY AS A.O. OF ASSESSEE (A PERSON OTHER THAN SEARCHED PERSON) IS ALSO EVIDENT FROM THE OPENING PARA OF THE SO CALLED SATISFACTION NOTE IN WHICH IT HAS BEEN STATE THAT: ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 13 THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICE U/S 127 OF INCOME TAX ACT, 1961 BY THE WORTHY COMMISSIONER OF INCOME TAX - III/NEW DELHI VIDE ORDER F. NO. CIT - III/DEL HI/ CENTRALIZATION /2012 - 13/2455, DATED 15.01.2013. 9. ON THE BASIS OF THE ABOVE FACTS , IT WAS STATED THAT IN THIS CASE , SATISFACTION WAS FOR TAKING UP THE CASE AND ISSUE OF NOTICE U/S 153C OF THE ACT BUT THE AO OF THE SEARCHED PERSON IS NOT EMPOWERED TO I SSUE NOTICE U/S 153C OF THE ACT OR TO GIVE A DIRECTION FOR ISSUANCE OF NOTICE U/S 153C OF THE ACT BECAUSE THIS AUTHORITY LIES SOLELY WITH THE AO OF THE OTHER PERSON . IT WAS STATED THAT IN THE LAST PARA OF THE SO CALLED SATISFACTION NOTE , THE AO M ENTIONED THAT ACCORDINGLY IT IS DIRECTED TO ISSUE SUCH PERSON (M/S SUPER MALLS PVT. LTD.) NOTICE AND REASSESS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT . IT WAS CONTENDED THAT THE AFORESAID REMARKS PROVED BEYOND DOUBT THAT THE SATISFACTI ON NOTE HAD BEEN RECORDED BY THE AO IN HIS CAPACITY AS THE AO OF THE ASSESSEE (THE OTHER PERSON) AND NOT AS AO OF SEARCHED PERSON BECAUSE IT IS ONLY THE AO OF OTHER PERSON WHO CAN ISSUE/GIVE DIRECTION FOR ISSUE OF NOTICE U/S 153C OF THE ACT AS HAS BEEN GIV E N IN THE SATISFACTION NOTE. IT WAS POINTED OUT THAT IN THE SATISFACTIO N NOTE, THE AO HAS STATED THAT THESE DOCUMENTS ARE REQU IRED FOR ASSESSMENT PROCEEDINGS WHICH CLEARLY ESTABLISH ES THAT THE SATISFACTION HAS BEEN RECORDED BY THE AO OF THE ASSESSEE AND NOT THE AO OF THE SEARCHED PERSON. IT WAS STATED THAT HAD THE SATISFACTION BEEN RECORDED BY AO IN HIS ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 14 CAPACITY AS AO OF SEARCHED PERSON THEN THERE WOULD HAVE BEEN NO NEED FOR HIM TO MENTION ABOUT THE REQUIREMENTS OF SEIZED DOCUMENTS BECAUSE THOSE WERE ALRE ADY IN HIS POSSESSION. IT WAS POINTED OUT THAT THE SEARCHED PERSON IN THIS CASE AS PER THE SATISFACTION NOTE IS VED PRAKASH BHARTI , AND DATE OF SEARCH IS 08/09.04.2010 AND THE AO WAS HAVING JURISDICTION OVER THE SEARCHED PERSON SINCE AT LEAST FEBRUARY 2011 WHEN NOTICE U/S 153A WAS ISSUED TO SH. VED PRAKASH BHARTI. THUS, THE AO IN HIS CAPACITY AS AO OF SEARCHED PERSON WAS HAVING POSSESSION OF ALL THE DOCUMENTS SEIZED DURING SEARCH SINCE AT LEAST PRIOR TO FEBRUARY 2011 . IT WAS CONTENTED THAT THE SATISFACTION NOTE U/S 153C OF THE ACT HAS BEEN RECORDED BY THE AO ON 22.02.2013 I.E. AFTER MORE THAN 2 YEARS FROM THE PERIOD WHEN HE WAS HAVING JURISDICTION OVER SH. VED PRAKASH BHARTI I.E. SEARCHED PERSON. HOWEVER, THE AO IN HIS CAPACITY AS AO OF VED PRAKASH BHARTI NE VER RECORDED THE SATISFACTION WHICH WAS RECORDED ON 22.02.2013 IN HIS CAPACITY AS AO OF ASSESSEE ONLY AFTER JURISDICTION OVER THE ASSESSEE WAS TRANSFERRED/VESTED IN HIM IN JANUARY 2013. IT WAS STATED THAT THE SATISFACTION NOTE HAD BEEN RECORDED BY THE AO I N HIS CAPACITY AS AO OF THE ASSESSEE (THE OTHER PERSON) STANDS CONCLUSIVELY ESTABLISHED FROM THE ORDER SHEET OF THE AO IN THE ASSESSEE S CASE WHEREIN VIDE ENTRY DATED 22.02.2013 IT HAS BEEN RECORDED AS UNDER: NOTICE U/S 153C ISSUED AFTER RECORDING REASO N. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 15 THUS , THE AO IN HIS CAPACITY AS AO OF THE ASSESSEE RECORDED SATISFACTION NOTE ON 22.02.2013 AND ISSUED THE NOTICE U/S 153C OF THE ACT ON THE SAME DATE. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: SATKAR ROADLINES PVT. LTD. VS DCIT (ITA NO. 6 416 TO 6421 OF 2013) DELHI ITAT DATED 14.08.2015 AQUA GUARD MARKETING (P) LTD. VS ACIT (DELHI ITAT ORDER DATED 27.02.2015 ITA NO. 4944 TO 4948 OF 2013) DCIT VS AAKASH AROGYA MANDIR (P) LTD. (2015) 58 TAXMANN.COM 293 (DELHI - TRIB). PR. CIT VS AAKASH AROGYA M ANDIR PVT. LTD. (DELHI HIGH COURT ORDER DATED 28.07.2015) ACIT VS COMMAND DETECTIVE & SECURITIES (P) LTD. (DELHI ITAT ORDER DATED 09.10.2015) ACIT VS INLAY MARKETING PVT. LTD., ITA NOS. 4200 TO 4202/DEL/2012 ORDER DATED 14.11.2014 DCIT VS EXTRA MARKETING P VT. LTD. (2015) 3 TMI 1012 (ITAT DELHI) PEPSI FOODS (P.) LTD. VS ACIT (2014) 52 TAXMANN.COM 220 (DELHI) PEPSICO INDIA HOLDINGS (P.) LTD. VS ACIT (2014) 50 TAXMANN.COM 299 (DELHI) CIT VS MECHMEN (2015) 7 TMI 538 MP HIGH COURT ORDER DATED 10.07.2015 1 0 . IN HER RIVAL SUBMISSIONS THE LD. CIT DR REITERATED THE OBSERVATIONS MADE BY THE LD. CIT(A) AND FURTHER SUBMITTED THAT THE LD. CIT(A) AT PAGE NOS. 7 & 8 OF THE IMPUGNED ORDER CLEARLY STATED THAT SATISFACTION WAS RECORDED BY THE AO ON 22.02.2013 WHEREIN A REFER ENCE WAS MADE TO THE DOCUMENTS FOUND AND SEIZED AS PER ANNEXURE - III FROM THE VEHICLE NO. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 16 HR06N - 0063 PARKED IN FRONT OF THE RESIDENCE OF SH. VED PRAKASH BHARTI AND SOME DOCUMENTS AS PER ANNEXURE - A - 1 WERE SEIZED AFTER TAKING PRINT OUT FROM THE PEN DRIVE AND THOSE DOCUMENTS CONTAINED THE DETAILS OF CASH RECEIPTS ON ACCOUNT OF SALE/OFFICE BY THE ASSESSEE. SHE FURTHER SUBMITTED THAT THE PRINT OUT OF THE PEN DRIVES REVEALED THE TRANSACTION RELATING TO THE SALE OF SHOPS/OFFICE PERTAINING TO THE ASSESSEE BEARING SR . NO., NAME OF THE PURCHASER, SHOP NO., BOOKING AMOUNT IN CASH AND CHEQUE, BROKERAGE ETC., WHICH CLEARLY SHOWS THAT IT WAS MORE THAN A MERE REFERENCE OF THE ASSESSEE AND IT WAS EVIDENT THAT MATERIALS FOUND DURING THE SURVEY WERE RELATABLE WITH THE MATERIAL S SEIZED DURING SEARCH, REVEALING ELEMENT OF INCOME, THEREBY SUGGESTING UNDISCLOSED INCOME OF THE PERSON OTHER THAN THE SEARCHED PERSON. IT WAS CONTENDED THAT THE RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 WERE NOT FILED U/S 139(1) OF T HE ACT AND FOR THE ASSESSMENT YEARS 2009 - 10 AND 2010 - 11, UNACCOUNTED TRANSACTIONS WERE FOUND IN THE COURSE OF SEARCH/SURVEY. THEREFORE, THE INCOME OR LOSS DECLARED IN THE RETURNS FILED PURPORTEDLY BASED ON THE UNRELIABLE BOOKS COULD NOT BE HELD TO BE IN OR DER AND THE ASSESSEE HAD SURRENDERED ON THE BASIS OF DOCUMENTS WHICH WERE CLEARLY INCRIMINATING. IT WAS ALSO SUBMITTED THAT THE ISSUE RELATING TO THE VALIDITY OF NOTICE U/S 153C OF THE ACT WAS NEVER RAISED BEFORE THE AO AND ALSO A REVISED RETURN WAS FIELD IN RESPONSE TO NOTICES U/S 153A R.W.S. 153C OF THE ACT. THEREFORE, THE LD. CIT(A) WAS FULLY JUSTIFIED IN REJECTING THE CONTENTION OF THE ASSESSEE RELATING TO THE VALIDITY OF NOTICE U/S 153C OF THE ACT. IT ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 17 WAS FURTHER SUBMITTED THAT QUESTIONING THE SAN CTITY OF SATISFACTION NOTE AND FURTHER PROCEEDINGS U/S 153C OF THE ACT IS ARBITRARY WITHOUT ANY BASIS BY SAYING THAT THE AO HAS RECORDED THE SATISFACTION AS AO OF THE ASSESSEE AND NOT AS THE AO OF SEARCHED PERSON PARTICULARLY WHEN THE DIRECTOR OF THE ASSESSEE C OMPANY IS THE SEARCHED PERSON. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: FAKIR MOHD HAJI HASAN VS CIT 247 ITR 290 (GUJ) SURJEET SINGH CHHABRA VS UNION OF INDIA AIR 1997 (SC) 2560 BANARSI DAS VS KANSHI RAM AIR 1963 (SC) 1165 PARAM ANAND BUILDERS (P) LTD. VS ITO (1996) 61 ITD 35 (MUM) SURENDER KUMAR CHARANJIT KUMAR VS CIT (2006) 282 ITR 78 (P&H) KIM PHARMA (P) LTD. (2013) 258 CTR 454 11 . THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOINDER SUBMITTED THAT THE JURISDICTION U/S 153C OF ACT IS AN EXTRA ORDINARY JURISDICTION AND CAN ONLY BE EXERCISED WHEN CONDITION PRECEDENT AS PROVIDED IN SECTION 153C OF THE ACT ARE EXERCISED AND THE RECORDING OF SATISFACTION AND COMPLIANCE OF PROVISION OF SECTION 153C OF THE ACT IS A JURISDICTIONAL FACT AND ONLY ON ITS SATISFACTION DOES THE AO ACQUIRE JURISDICTION TO ISSUE THE NOTICE. THEREFORE, THE LACK OF SATISFACTION OF JURISDICTIONAL FACT CAN NEVER CONFER JURISDICTION AND AN OBJECTION TO IT CAN BE RAISED AT ANY TIME EVEN IN APPEAL PROCEEDINGS. IT WAS FURTHER STATED T HAT NO CONSENT CAN CONFER JURISDICTION UPON A COURT IF THE COURT HAS NO JURISDICTION AND IF THE AO ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 18 CAN HAVE JURISDICTION ONLY WHEN HE COMPLIED WITH THE CONDITIONS LAID DOWN IN THE ACT, THEN NO CONSENT BY THE ASSESSEE OR WAIVER ON HIS PART CAN CONFER UPON T HE AO. IT WAS ALSO STATED THAT A MERE ACQUIESCENCE OR PARTICIPATION IN ASSESSMENT PROCEEDINGS CANNOT CONFER JURISDICTION TO AN ASSESSING OFFICER WHO LACKED JURISDICTION. THE RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: MAVANY BROTHERS VS CIT (2015) 62 TAXMANN.COM 50 (BOM) CIT VS RAMUKH MOTILAL AIR 1955 (BOM) 227 RAZA TEXTILES LTD. VS ITO, RAMPUR (1973) 87 ITR 539 (SC) VALVOLINE CUMMINS LTD. VS DCIT 307 ITR 103 (DEL) SEWLAL DAGA VS CIT 55 ITR 406 (CAL) M/S TANSUKHRAI BODULAL VS ITO 46 ITR 325 (ASSAM) P. V. DOSHI VS CIT 113 ITR 22 (GUJ) SWARAN YASH VS CIT 138 ITR 734 (DEL) INVESTORS INDUSTRIAL CORPORATION LTD. VS CIT 194 ITR 548 (BOM) NATIONAL THERMAL POWER CO. LTD. VS CIT (1998) 97 TAXMAN 358 (SC) CIT VS COCHIN REFINERIES LTD. (1996) 220 ITR 398 (KER) 12 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT A SEARCH WAS CONDUCTED AT THE PREMISES OF VED PRAKASH BHARTI GROUP OF CASES ON 08/09.04.2012 AN D ALSO AT THE RESIDENTIAL PREMISES OF SH. VED PRAKASH BHARTI WHO IS A DI RECTOR OF THE ASSESSEE COMPANY AND IN ASSESSEE S CASE ONLY A SURVEY U/S 133A OF THE ACT WAS CONDUCTED. THE ASSESSEE CHALLENGED THE VALIDITY OF THE ASSESSMENT ON THE BASIS THAT NO SATIS FACTION WAS RECORDED IN THE CASE OF ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 19 THE SEARCHED PERSON AS PER THE PROVISIONS OF SECTION 153 OF THE ACT. THE SAID PROVISIONS READ AS UNDER: 153C.ASSESSMENT OF INCOME OF ANY OTHER PERSON. - (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 ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON O THER 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 AND THAT ASSESSING OFFICER SHALL PROCEED AGA INST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A : PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF TH E SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 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 REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. 13 . THE A FORESAID PROVISION STARTS WITH A NON - OBSTANTE CLAUSE AND IS HAVING AN OVER RIDING EFFECT ON THE PROVISIONS CONTAINED IN SECTIONS 139, 147, 148, 149, 151 & 153 OF THE ACT. ON A PLAI N READING OF THE PROVISIONS CONTAINED IN SECTION 153C OF THE ACT, IT IS EVIDENT THAT THE AO OF THE SEARCHED PERSON MUST BE SATISFIED THAT INTER ALIA ANY DOCUMENT ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 20 SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON AND ONLY THEREAFTER THE AO OF THE SEARCHED PERSON CAN HANDOVER SUCH DOCUMENTS TO THE AO HAVING A JURISDICTION OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON) AND THE AO OF SUCH OTHER PERSON CAN PROCEED FURTHER ONLY AFTER SUCH HANDING OVER OF THE DOCUMENTS/MATERIAL SEIZED AND CAN ISSUE A NOTICE TO THAT PERSON TO ASSESS OR REASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT. IN SUCH TYPE OF CASES , FIRST OF ALL THE AO OF THE SEARCHED PERSON MUST ARRIVE AT A CLEAR SATISFACTION THAT THE DOCUM ENTS SEIZ ED FROM THE SEARCHED PERSON DO NOT BELONG TO HIM BUT TO SOME OT HER PERSON AND ONLY AFTER ARRIVING AT A SATISFACTION THAT THE DOCUMENTS BELONGED TO OTHER PERSON , THOSE DOCUMENTS ARE TO BE HANDED OVER TO THE AO OF A PERSON TO WHOM THE SAID DOCUMENTS BELONGED. ON RECEIPT OF THE MATERIAL/DOCUMENTS, THE AO HAVING JURISDICTION ON THE OTHER PERSON IS EXPECTED TO CONDUCT INQUIRY AND DUE VERIFICATION OF THE RELEVANT FACTS BEFORE ISSUING A NOTICE TO OTHER PERSON UNDER HIS JURISDICTION ON THE BASIS OF HIS OWN INQUIRY. THEREFORE, IT IS CLEAR THAT FIRSTLY SATISFACTION HAS TO BE RECORDED BY THE AO WHO CONDUCTED SEARCH THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. IN THE PRESENT CASE, THE CLAIM OF THE DEPARTMENT IS THAT THE SATISFACTION WAS RECORDED ON 22.02.2013. WE HAVE PERUSED THE COPIES OF THE ORDER SHEET IN THE CASE OF THE ASSESSEE AS WELL ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 21 AS THE SEARCHED PERSON SH. VED PRAKASH BHARTI . I N THE ORDER SHEET ENTRY BELON GING TO SH. VED PRAKASH BHARTI, T HE AO SIMPLY STATED AS UNDER: STATEMENT OF MR. S. K. CHUG RECORDED. AND IN THE CASE OF THE ASSES SEE THE ORDER SHEET ENTRY READ S AS UNDER: NOTICE OF 153C ISSUED AFTER RE CORDING REASONS. 14 . FROM THE PLAIN READING OF THE ABOVE NOTING S , IT IS CRYSTAL CLEAR THAT NO SATISFACTION WAS RECORDED BY THE AO IN THE CASE OF THE SEARCHED PERSON, THE ONLY SATISFACTION WAS RECORDED IN THE CASE OF THE PERSON OTHER THAN THE SEARCHED P ERSON I.E. THE ASSESSEE. THE CONTENTS OF THE REASONS RECORDED BY THE AO IN THE CASE OF THE ASSESSEE WHICH HAS BEEN INCORPORATED BY THE LD. CIT(A) AT PAGE NOS. 7 & 8 OF THE IMPURNGED ORDER ARE AS UNDER: REASONS/SATISFACTION NOTE FOR TAKING UP THE CASE OF M/S SUPER MALLS (P) LTD. SECTOR - 12, HUDA, KARNAL REGD., OFFICER AT 51 - TRANSPORT CENTRE, PUNJABI BAGH, NEW DELHI UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICE U/S 127 OF INCOME TAX ACT, 1961 BY THE WORTHY COMMISSIONER OF INCOME TAX - III, NEW DELHI VIDE ORDER F.NO. CIT - III/DELHI/CENTRALIZATION/2012 - 13/2455 DATED 15.01.2013. BY VIRTUE OF THE AUTHORIZATION OF THE DIRECTOR OF INCOME TAX (INVESTIGATION), CHANDIGARH, A SEARCH & SEIZURE OPERATION U/ S 132(1) OF THE ACT WAS CARRIED OUT ON 08/09.04.2010 AT THE RESIDENTIAL/BUSINESS PREMISES OF SH. TEJWANT SINGH & SH. VED ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 22 PRAKASH BHARTI GROUP OF CASES, KARNAL, PANIPAT & DELHI AND A SURVEY U/S 133A OF THE I.T. ACT, 1961 WAS ALSO CARRIED OUT AT THE BUSINESS PREMISES OF M/S SUPER MALLS (P) LTD., KARNAL & NEW DELHI. DURING THE COURSE OF SEARCH ON 08/09.04.2010 AT RESIDENCE OF SH. VED PRAKASH BHARTI WHO IS A DIRECTOR IN THE ASSESSEE COMPANY M/S SUPER MALLS (P) LTD., PEN DRIVES WERE FOUND AND SEIZED AS PER ANNE XURE - 3 FROM VEHICLE NO. HR06N - 0063 PARKED IN FRONT OF THE RESIDENCE OF SH. VED PRAKASH BHARTI. SOME DOCUMENTS AS PER ANNEXURE A - 1 WERE SEIZED AFTER TAKING PRINT OUT OF THE ABOVE SAID PEN DRIVES. THESE DOCUMENTS CONTAIN THE DETAILS OF CASH RECEIPT ON SALE O F SHOP/OFFICES AT M/S SUPER MALL, KARNAL ALSO BESIDE OTHER CONCERNS. THESE DOCUMENTS ARE REQUIRED FOR ASSESSMENT PROCEEDINGS. DURING THE STATEMENT OF SH. VED PRAKASH BAHRTI AT THE TIME OF SEARCH, HE HAS ALSO STATED THAT THESE DOCUMENTS PERTAIN TO HIM AND M /S SUPER MALL (P) LTD., KARNAL IN WHICH HE IS DIRECTOR. IN VIEW OF THE ABOVE AND AS PER THE PROVISIONS OF SUB - SECTION (1) OF SECTION 153C OF THE ACT, I AM SATISFIED THAT THE DOCUMENT SEIZED FROM THE RESIDENCE OF SH. VED PRAKASH BHARTI BELONGS TO A PERSON I.E. SUPER MALL (P) LTD., OTHER THAN THE PERSON REFERRED IN SECTION 153A. ACCORDINLGY IT IS DIRECTED TO ISSUE SUCH PERSON (M/S SUPER MALL PVT. LTD.) NOTICE AND ASSESS AND REASSESS INCOME IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF THE ACT. - SD - (VED PRAKASH KALIA) ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KARNAL DATED: 22.02.2013 ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 23 15 . IN THE AFORESAID SATISFACTION NOTE, IT HAS NOWHERE BEEN STATED BY THE AO THAT HE IS RECORDING SAT ISFACTION IN HIS CAPACITY AS AO OF ANY SEARCHED PERSON I.E. SH. VED PRAKASH BHARTI. IN THE PRESENT CASE, T HE SATISFACTION HAS BEEN RECORDED BY THE AO OF THE ASSESSEE (I.E. A PERSON OTHER THAN THE SEARCHED PERSON) WHICH IS EVIDENT FROM THE TOP OF THE SATISF ACTION NOTE WHEREIN THE ASSESSEE S NAME AND ADDRESS HAS BEEN MENTIONED. THEREFORE, IT IS CLEAR THAT THE AO OF THE ASSESSEE HAS RECORDED SATISFACTION AS ASSESSING OFFICER OF THE ASSESSEE AND NOT AS THE ASSESSING OFFICER OF THE SEARCHED PERSON. IN THE INSTAN T CASE, THE AO IN ORDER SHEET ENTRY DATED 22.02.2013 HAS MENTIONED THAT NOTICE U/S 153C ISSUED AFTER RECORDING REASONS BUT THE AO OF THE SEARCHED PERSON IS NO T EMPOWERED TO ISSUE THE NOTICE TO THE PERSON OTHER THAN THE SEARCHED PERSON. IN OUR OPINION , EVEN IF THE AO OF THE ASSESSEE AND THE SEARCHED PERSON IS THE SAME, SATISFACTION MUST BE RECORDED BY THE AO OF SEARCHED PERSON. IN THIS REGARD, THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR. CIT VS AAKASH AROGYA MANDIR PVT. LTD. ( COPY OF WHICH IS PLA CED AT PAGE NOS. 1 TO 6 OF THE ASSESSEE S PAPER BOOK ) HELD IN PARA 8 AS UNDER: 8. THE REVENUE HAS NOT PLACED ANY MATERIAL TO DISPUTE THE FACTUAL FINDING OF THE ITAT THAT THE REQUIREMENT OF THE LAW EXPLAINED BY THIS COURT IN PEPSI FOODS REGARDING THE RECO RDING OF SATISFACTION BY THE AO EVEN IN RESPECT OF THE SEARCHED PERSON WAS NOT FULFILLED. CONSEQUENTLY, THE FACT THAT IT WAS THE SAME AO BOTH FOR THE SEARCHED PERSON AND THE ASSESSEE MAKES NO DIFFERENCE TO THE CONSEQUENCE OF NON - COMPLIANCE WITH THE LEGAL R EQUIREMENT REGARDING THE ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 24 RECORDING OF SATISFACTION. THE COURT ALSO AGREES WITH THE ITAT THAT EVEN IF THE AO WERE THE SAME, SATISFACTION WOULD HAVE TO BE RECORDED SEPARATELY QUA THE SEARCHED PERSON AND THE ASSESSEE. 16 . IN THE INSTANT CASE, THE AO OF THE SEARCHED PERSON HAS NOT RECORDED ANY SATISFACTION, THEREFORE, NOTICE U/S 153C OF THE ACT WAS NOT VALID AND CONSEQUENTLY THE ASSESSMENT FRAMED WAS BAD IN LAW. ON A SIMILAR ISSUE THEIR LORDSHIPS OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOODS PVT . LTD. VS ACIT REPORTED AT (2014) 367 ITR 112 HELD AS UNDER: THE ASSESSING OFFICER OF THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED MUST BE SATISFIED THAT, INTER ALIA, ANY DOCUMENT SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE P ERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED. IT IS ONLY THEN THAT THE ASSESSING OFFICER CAN HAND OVER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON (OTHER THAN THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED ). FURTHERMORE, IT IS ONLY AFTER SUCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR REASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE INCOME - TAX ACT, 1961. THEREFORE, BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED, TWO STEPS HAVE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING OFFICER OF THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED MUST ARRIVE AT A CLEAR SATISFACTION THAT A DOCUMENT SEIZED FROM HIM DOES N OT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS AFTER SUCH SATISFACTION IS ARRIVED AT THAT DOCUMENT IS HANDED OVER TO THE ASSESSING OFFICER OF THE PERSON TO WHOM THE DOCUMENT BELONGS . ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 25 SECTION 132(4A)(I) CLEARLY STIPULATES THAT WHEN, INTER ALIA, ANY DOCUMENT IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRESUMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SIMILARLY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHENEVER A DOCUMENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED THE NORMAL PRESUMPTION IS THAT THE DOCUMENT BELONGS TO THAT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT THAT PRESUMPTION AND COME TO A CONCLUSION OR SATISFACTION THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY ELSE. THE RE MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFORE HE ARRIVES AT THE SATISFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE PERSON IN RESPECT OF WHOM THE SEARCH WAS CONDUCTED BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNO T TAKE THE PLACE OF SATISFACTION . IT HAS FURTHER BEEN HELD THAT: I T WAS EVIDENT FROM THE SATISFACTION NOTE THAT APART FROM SAYING THAT THE DOCUMENTS BELONGED TO THE ASSESSEE AND THAT THE ASSESSING OFFICER WAS SATISFIED THAT IT WAS A FIT CASE FOR ISSUA NCE OF A NOTICE UNDER SECTION 153C, THERE WAS NOTHING WHICH WOULD INDICATE HOW THE PRESUMPTIONS WHICH WERE TO BE NORMALLY RAISED HAD BEEN REBUTTED BY THE ASSESSING OFFICER. MERE USE OR MENTION OF THE WORD SATISFACTION OR THE WORDS I AM SATISFIED IN THE ORDER OR THE NOTE WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SATISFACTION AS USED IN SECTION 153C. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASONS OR BASIS FOR THE CONCLUSION THAT THE ASSESSING OFFICER OF THE PERSON IN RESPECT OF WHOM THE SEAR CH WAS CONDUCTED IS SATISFIED THAT THE SEIZED DOCUMENTS BELONGED TO ANOTHER PERSON. ON GOING THROUGH THE CONTENTS OF THE SATISFACTION NOTE, NO SATISFACTION OF THE KIND REQUIRED UNDER SECTION 153C COULD BE DISCERNED. THUS, THE VERY FIRST STEP PRIOR TO THE ISSUANCE OF A NOTICE UNDER SECTION 153C HAD NOT BEEN ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 26 FULFILLED. INASMUCH AS THIS CONDITION PRECEDENT HAD NOT BEEN MET, THE NOTICES UNDER SECTION 153C WERE LIABLE TO BE QUASHED. 17 . IN THE PRESENT CASE, AS WE HAVE ALREADY NOTED IN THE FORMER PART OF THIS ORDER THAT NO SATISFACTION HAS BEEN RECORDED IN THE CASE OF SEARCHED PERSON AND THE SATISFACTION, IF ANY, RECORDED IN THE CASE OF OTHER PERSON WILL NOT CURE THE DEFECT BECAUSE IT IS NECESSARY THAT THE SATISFACTION MUST BE RECORDED BY THE AO OF THE SEARCHE D PERSON AND THEREAFTER THE DOCUMENTS ARE TO BE HANDED OVER TO THE AO OF OTHER PERSON AND THIS POSITION WILL NOT ALTER EVEN IF THE AO FOR THE SEARCHED PERSON AND THE OTHER PERSON I.E. THE ASSESSEE IS THE SAME. IN VIEW OF THE AFORESAID DISCUSSION AND THE RA TIO LAID DOWN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE AFORESAID REFERRED TO CASES, WE ALLOW GROUND NOS. 1 & 2 OF T HE ASSESSEE S APPEAL AND QUASH THE ASSESSMENT FRAMED BY THE AO . A S THE ASSESSMENT ITSELF IS QUASHED, N O FINDINGS HAVE BEEN GIVEN ON OT HER ISSUES RAISED BY THE ASSESSEE ON MERIT. 18. THE FACTS IN ALL OTHER APPEALS I.E. ITA NOS. 1693, 1694 & 1696/DEL/ 2015 FOR THE ASSESSMENT YEARS 2007 - 08, 2008 - 09 & 2010 - 11 RESPECTIVELY ARE IDENTICAL TO THE FACTS INVOLVED IN ITA NO . 1695/DEL/2015 FOR THE A SSESSMENT YEAR 2009 - 10, THEREFORE OUR FINDINGS GIVEN RELATING TO THIS APPEAL IN THE FORMER PART OF THE ORDER SHALL APPLY MUTATIS MUTANDIS FOR THE OTHER APPEALS UNDER CONSIDERATION. ITA NO S. 1693 TO 1696 /DEL /201 5 SUPER MALLS PVT. LTD. 27 1 9 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED . ( ORDER PRON O UNCED IN THE COURT ON 11 /12 /2015 ) SD/ - SD/ - ( KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 11 /12 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR