Smt. Hardevi Keshwani, Agra V. Dy. C.I.T., Central Circle, Agra

ITA 204/AGR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2012 (ITAT-AGRA)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-07-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 10-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Gift; Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 132; 15

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NOS.203 & 204/AG/2013 ASSESSMENT YEARS:2002-03 & 2003-04 SMT. HARDEVI KESHWANI, VS. THE DCIT 92- SURYA NAGAR, CENTRAL CIRCLE AGRA AGRA PAN NO. AHRPK7817K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. PANKAJ GARGH RESPONDENT BY : SH. RAJARSHI DWIVEDY DATE OF HEARING : 02/02/2016 DATE OF PRONOUNCEMENT : 05/04/2016 ORDER PER ANNAPURNA MEHROTRA A.M. BOTH THE APPEALS FILED BY THE ASSESSEE ARE AGAINST SEPARATE ORDERS OF LD. CIT(A)-I AGRA DT. 15/02/2013 FOR THE ASSESSMENT YE AR 2002-03 & 2003-04. 2. IN BOTH THE APPEALS THE ASSESSEE HAS CHALLENGED THE INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT, AS NO PA PER, DOCUMENTS OR ANY ADVERSE MATERIAL RELATING TO THE IMPUGNED ASSESSMEN T YEAR WERE FOUND DURING SEARCH . THE ASSESSEE HAS ALSO ON MERITS CHALLENGED THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 77,433/- MADE ON ACC OUNT OF DETERMINATION OF ANNUAL LETTING VALUE UNDER SECTION 23(4) OF THE ACT IN BOTH THE ASSESSMENT YEARS AND ALSO THE ADDITION OF RS. 1,00,000/- AND RS. 4,9 8,551/- MADE UNDER SECTION 69A OF THE ACT ON ACCOUNT OF UNEXPLAINED GIFT RECEI VED BY THE ASSESSEE IN ASSESSMENT YEAR 2002-03 AND 2003-04 RESPECTIVELY. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON THE SHANKER GUTKA GROUP ON 31/0 1/2008. THEREAFTER PROCEEDINGS UNDER SECTION 153C READ WITH SECTION 15 3A WERE INITIATED IN THE CASE OF THE ASSESSEE ON 02/07/2009 AND ASSESSMENT C OMPLETED UNDER SECTION 153A READ WITH SECTION 143(3) AFTER MAKING ADDITION ON ACCOUNT OF INCOME FROM HOUSE PROPERTY AMOUNTING TO RS. 77,433/- AND INCOME UNDER SECTION 69A OF RS. 2 1,00,000/-TO THE RETURNED INCOME OF THE ASSESSEE OF RS. 1,75,900/- IN ASSESSMENT YEAR 2002-03 AND ADDITION OF RS. 77,433/- ON ACCOU NT OF INCOME FROM HOUSE PROPERTY AND RS. 4,98,551/- U/S 69A OF THE ACT TO T HE RETURNED INCOME OF THE ASSESSEE OF RS. 4,14,241/- FOR THE ASSESSMENT YEAR 2003-04. THE ASSESSEE CHALLENGED THE INITIATION AND VALIDITY OF PROCEEDIN GS UNDER SECTION 153C AND THE ADDITION ON MERIT BEFORE THE LD. CIT(A). DETAIL ED SUBMISSIONS WERE FILED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS IN WHICH THE ASSESSEE EXPLAINED THAT NO ACTION UNDER SECTION 132 HAD BEEN TAKEN IN THE C ASE OF THE ASSESSEE. THE ASSESSEE STATED THAT HER MAIN SOURCE OF INCOME WAS INCOME FROM OTHER SOURCES AND THE SEARCH WAS CONDUCTED AT THE RESIDENCE 92-SU RYA,NAGAR AGRA AND THE PANCHNAMA WAS ISSUED IN THE NAME OF HER HUSBAND, FA THER-IN-LAW AND BROTHERS OF HER HUSBAND. NO ADVERSE OR INCRIMINATING MATERIA L RELATING TO HER WAS FOUND AS A RESULT OF SEARCH, WHICH COULD BE MADE THE BASI S FOR THE ASSESSING OFFICER TO HAVE SATISFACTION THAT ANY INCOME RELATING TO THE A SSESSEE HAD BEEN UNEARTHED DURING SEARCH. THE ASSESSEE FURTHER PLEADED THAT NO SATISFACTION HAD BEEN RECORDED FOR INITIATING PROCEEDING UNDER SECTION 15 3C WHICH IS PRE-REQUISITE FOR THE SAME. THE LD. CIT(A) HOWEVER REJECTED THE CONTENTIONS OF THE ASSESSEE AND HELD THAT CASH OF RS. 4,00,000/- WAS FOUND DURING SEARCH OF S HANKER GUTKA GROUP AND SEIZED AND THE SAME WAS OWNED UP BY THE ASSESSEE AN D ALSO DECLARED AS HER UNDISCLOSED INCOME IN THE RETURN FILED FOR AY 2008- 09 RELATING TO THE SEARCH YEAR. LD. CIT(A) ALSO HELD THAT THE ASSESSEE HAD OWNED UP JEWELLERY OF RS. 52,00,000/- OUT OF JEWELLERY FOUND AND SEIZED DURING THE SEARCH AND DECLARED THE SAME IN HER RETURN OF INCOME FOR AY 2008-09. THE LD. CIT(A) FURTHER HELD THAT THE ASSESSING OFFICER WHO ASSESSED THE PERSONS SEARCHED AND FOUND THE CASH AND JEWELLERY BELONGING TO THE ASSESSEE WAS THE SAME ASSESSING OF FICER WHO ASSESSED THE ASSESSEE ALSO AND THEREFORE THE SATISFACTION CANNOT BE QUESTIONED IN THIS CASE. LD. CIT(A) THEREFORE HELD THAT THE AO BEING SATISFI ED WAS LEGALLY BOUND TO PROCEED AGAINST THE ASSESSEE AND ISSUE NOTICE TO AS SESSEE OR REASSESS HER INCOME IN ACCORDANCE WITH THE PROVISION OF SECTION 153A. THUS THE LD. CIT(A) HELD THAT THE NOTICE ISSUED TO THE ASSESSEE UNDER S ECTION 153C WAS LEGALLY CORRECT. LD. CIT(A) FURTHER HELD THAT IN THE CASE OF THE ASSESSEE FOR THE AY UNDER CONSIDERATION NO ASSESSMENT ORDER EITHER UNDER SECT ION 143(3) OR 147 HAD BEEN PASSED AND ONLY INTIMATION UNDER SECTION 143(1)(A) WAS SENT, WHICH BY NO STRETCH OF IMAGINATION CAN BE HELD TO BE AN ASSESSM ENT ORDER AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. RAJES H JAVERI STOCK BROKERS PVT. 3 LTD. (2007) 161 TAXMAN 316 (SC) AND THEREFORE THE I SSUE OF REGULAR ASSESSMENT FOR THE IMPUGNED YEAR HAD NOT REACHED FINALITY. THEREFO RE THE LD. CIT(A) HELD THAT THE ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME OF THE ASSESSEE FOR THE IMPUGNED AY COULD BE DONE AS PER THE FIRST PROVISO TO SECTION 153A(1)DEALING WITH ALL MATTERS INCLUDING THOSE ISSUES ALSO WHICH RELATE TO REGULAR ASSESSMENT AND MATERIAL, EVIDENCES ETC. FOUND DURING SEARCH RE LATING TO UNDISCLOSED INCOME OF THE ASSESSEE BECAUSE AS PER NEW SCHEME OF SEARCH ASSESSMENT U/S 153A, ONLY ONE ASSESSMENT OR REASSESSMENT OF SUCH A SSESSMENT YEARS CAN BE DONE AFTER SEARCH. LD. CIT(A) HELD THAT THE AO WAS THEREFORE JUSTIFIED IN COMPLETING THE ASSESSMENT UNDER SECTION 153A(1) AND IN DEALING WITH THE MATTER RELATING TO HOUSE PROPERTY INCOME FOUND CRED ITED IN THE BANK ACCOUNT OF THE ASSESSEE. FURTHER LD. CIT(A) UPHELD THE ADDI TION MADE BY THE AO ON ACCOUNT OF INCOME FROM HOUSE PROPERTY AND ADDITION MADE UNDER SECTION 69A. 4. AGGRIEVED BY THE SAME THE ASSESSEE FILED THE PRE SENT APPEAL BEFORE US. 5. GROUND NO. 1 RAISED BY THE ASSESSEE IS AGAINST T HE VALIDITY OF PROCEEDINGS UNDER SECTION 153C. LD. AR REITERATED THE SUBMISSIO NS MADE BEFORE THE LD. CIT(A) BELOW AND SUBMITTED THAT NO SEARCH HAD BEEN CONDUCTED IN THE CASE OF THE ASSESSEE UNDER SECTION 132 OF THE ACT AND THERE FORE THE PROCEEDINGS HAVE BEEN CONDUCTED UNDER SECTION 153C OF THE ACT. LD. A R SUBMITTED THAT SINCE NO INCRIMINATING MATERIAL RELATING TO THE ASSESSEE HAD BEEN FOUND DURING THE COURSE OF SEARCH ON OTHER PERSONS, RELATING TO THE IMPUGNED YEAR, WHICH IS EVIDENT FROM THE FACT THAT THE ADDITION HAD BEEN MA DE ON ACCOUNT OF INCOME FROM HOUSE PROPERTY BY SUBSTITUTING THE ANNUAL LETT ING VALUE AND ON ACCOUNT OF SOME UNEXPLAINED INVESTMENT UNDER SECTION 69A AND F URTHER THAT SINCE NO SATISFACTION HAD BEEN RECORDED BEFORE INITIATING TH E PROCEEDINGS UNDER SECTION 153C OF THE ACT, THE PROCEEDINGS UNDER SECTION 153C WERE ILLEGAL AND BAD IN LAW. FURTHER THE LD. AR DREW OUR ATTENTION TO THE O RDER PASSED BY HONBLE ITAT , AGRA IN THE CASE OF THE ASSESSEE IN SUCCEEDING FOUR YEARS I.E; 2004-05 TO 2007-08 WHEREIN IT WAS HELD THAT THE CONDITIONS OF SECTION 153C HAD NOT BEEN SATISFIED AND FOR THIS REASON THE ORDERS HAD BEEN SET ASIDE A ND THE PROCEEDINGS UNDER SECTION 153C HAD BEEN QUASHED VIDE ORDER DT. 31/05/ 2013. DURING THE COURSE OF HEARING BEFORE US, THE LD. DR WAS ASKED TO FILE SAT ISFACTION NOTE OF THE AO. FURTHER TIME WAS EXTENDED FOR COMPLYING WITH THE AB OVE ORDER. HOWEVER NO SATISFACTION NOTE UNDER SECTION 153C WAS PRODUCED B EFORE US. FURTHER THE LD. DR SUBMITTED THAT NO FINAL SATISFACTION NOTE HAD BEEN RECORDED IN THIS CASE UNDER SECTION 153C OF THE INCOME TAX ACT FOR INITIATING P ROCEEDINGS AGAINST THE 4 ASSESSEE UNDER SECTION 153C OF THE ACT. THE LD. DR HOWEVER RELIED UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. ADMITTEDLY THE PROCEEDINGS IN THE PRESENT C ASE HAVE BEEN CONDUCTED UNDER SECTION 153C OF THE ACT. IT HAS ALSO BEEN ADM ITTED BEFORE US THAT THERE WAS NO SATISFACTION RECORDED BY THE AO BEFORE INITI ATING PROCEEDINGS UNDER SECTION 153C OF THE ACT. THE LD. DR CONTENDED THAT THE AO OF THE SEARCHED PERSON WAS NOT REQUIRED TO RECORD ANY SATISFACTION SINCE THE SEARCHED PERSON AND THE ASSESSEE WERE ASSESSED BY THE SAME OFFICER. WE FIND NO MERIT IN THE CONTENTION OF THE REVENUE. THE RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON IS A SINE QUA NON FOR COMMENCING ANY PROCEEDING UNDER SECTION 153C OF THE ACT. A BARE PE RUSAL OF THE PROVISIONS OF SECTION 153C REVEALS THAT PROCEEDINGS THEREUNDER BE GIN WITH THE AO OF THE SEARCHED PERSON BEING SATISFIED THAT ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING SEIZED OR REQUISITIONED D URING SEARCH BELONGS TO A THIRD PERSON. THEREAFTER THE AO OF THE SEARCHED PERSON HA NDS OVER THE RELEVANT MATERIAL TO THE AO OF THE THIRD PERSON, WHO IN TURN PROCEEDS TO ASSESS SUCH PERSON IF HE IS SATISFIED THAT THESE MATERIALS HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH PERSON FOR THE YEARS OR YEARS MENTIONED IN SECTION 153A. THE SATISFACTION OF THE AO OF THE SEARCHED PERSON I S SIGNIFICANT SINCE IT HAS SEVER CONSEQUENCES ON THE THIRD PERSON. THEREFORE COURTS HAVE HELD THAT SATISFACTION SHOULD BE RECORDED BY THE AO IN WRITING. IT IS THU S NOT ONLY THAT THE AO OF THE SEARCHED PERSONS SHOULD BE SATISFIED BUT THE SATISF ACTION SHOULD BE RECORDED IN WRITING SO AS TO MAINTAIN THE OBJECTIVITY AND SUCH JURISDICTIONAL FACT IS AMENABLE TO BE EXAMINED BY THE HIGHER AUTHORITY IN APPROPRIA TE PROCEEDING IF AGITATED. RECORDING OF SATISFACTION REGARDING SEIZED MATERIAL GOES TO THE ROOT OF THE MATTER TO ASSUME JURISDICTION TO MAKE ASSESSMENT OF OTHER PERSONS U/S 153C. THEREFORE FOR ASSUMING SUCH JURISDICTION THE RECORD ING OF SATISFACTION IN WRITING IS IMPORTANT AND WARRANTED EVEN WHEN THE AO IS COMMON. THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS . GOPI APARTMENTS (2014) 365 ITR 411(ALL) HAS EXTENSIVELY DEALT WITH THIS ISSUE, AN D HAS HELD THAT INITIATION OF 5 PROCEEDINGS AGAINST A THIRD PERSON U/S 153C IS DEPE NDENT UPON A SATISFACTION BEING RECORDED IN WRITING BY THE AO OF THE SEARCHED PERSON, EVEN IF THE AO OF BOTH ARE THE SAME. THE HONBLE HIGH COURT HELD AT PARA 25-30 & 33-36 O F ITS ORDER AS FOLLOWS : 25. A BARE PERUSAL OF THE PROVISION CONTAINED IN S ECTION 153C OF THE INCOME- TAX ACT LEAVES NO DOUBT THAT, AS IS PROVIDED UNDER SECTION 158BD, WHERE THE ASSESSING OFFICER, WHILE PROCEEDING UNDER SECTION 1 53A AGAINST A PERSON WHO HAS BEEN SUBJECTED TO SEARCH AND SEIZURE UNDER SECTION 132(1) OR HAS BEEN PROCEEDED UNDER SECTION 132A, 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 OTHER T HAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENT S OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER 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 THE PROVISIONS OF SECTION 153A. 26. THUS, THERE ARE TWO STAGES: (1) THE FIRST STAGE COMPRISES A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OR PROCEEDING UNDER SECTION 132A AGAINST A PERSON, WHO MAY BE REFERRED ADDITION THE SEARCHED PERSON. BASED ON SUCH SEARC H AND SEIZURE, ASSESSMENT PROCEEDINGS ARE INITIATED AGAINST THE SEARCHED PER SON UNDER SECTION 153A. AT THE TIME OF INITIATION OF SUCH PROCEEDINGS AGAINST THE SEARCHED PERSON OR DURING THE ASSESSMENT PROCEEDINGS AGAINST HIM OR EVEN AFTE R THE COMPLETION OF THE ASSESSMENT PROCEEDINGS AGAINST HIM, THE ASSESSING O FFICER OF SUCH A SEARCHED PERSON, MAY , IF HE IS SATISFIED, THAT ANY MONEY, DOCUMENT, ETC., BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON, THEN SUCH MO NEY, DOCUMENTS, ETC., ARE TO BE HANDED OVER TO THE ASSESSING OFFICER HAVING J URISDICTION OVER SUCH OTHER PERSON. (2) THE SECOND STAGE COMMENCES FROM THE RECORDING O F SUCH SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON FOLL OWED BY HANDING OVER OF ALL THE REQUISITE DOCUMENTS, ETC., TO THE ASSESSING OFF ICER OF SUCH OTHER PERSON, THEREAFTER FOLLOWED BY ISSUANCE OF THE NOTICE OF TH E PROCEEDINGS UNDER SECTION 153C READ WITH SECTION 153A AGAINST SUCH OTHER PER SON. 27. THE INITIATION OF PROCEEDINGS AGAINST SUCH OTH ER PERSON ARE DEPENDENT UPON A SATISFACTION BEING RECORDED. SUCH SATISFACTI ON MAY BE DURING THE SEARCH OR AT THE TIME OF INITIATION OF ASSESSMENT PROCEEDI NGS AGAINST THE SEARCHED PERSON, OR EVEN DURING THE ASSESSMENT PROCEEDINGS AGAINST HIM OR EVEN AFTER COMPLETION OF THE SAME BUT BEFORE ISSUANCE OF NOTIC E TO THE SUCH OTHER PERSON UNDER SECTION 153C. 28. EVEN IN A CASE, WHERE THE ASSESSING OFFICER OF BOTH THE PERSONS IS THE SAME AND ASSUMING THAT NO HANDING OVER OF DOCUMENTS IS REQUIRED, THE RECORDING OF SATISFACTION IS A MUST, AS, THAT IS THE FOUNDATION, UPON WHICH THE SUBSEQUENT PROCEEDINGS AGAINST THE OTHER PERSON ARE INITIATED. THE HANDING OVER OF DOCUMENTS, ETC., IN SUCH A CASE MAY OR MAY NOT BE OF MUCH RELEVANCE BUT THE RECORDING OF SATISFACTION IS STILL REQUIRED AND IN FACT IT IS MANDATORY. 29. IN THIS REGARD, THE RATIO OF THE JUDGMENT OF TH E SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEARS (SUPRA), AS NOTED ABO VE, CLEARLY APPLIES TO THE PROCEEDINGS UNDER SECTION 153C ALSO. 30. THE SATISFACTION HAS TO BE IN WRITING AND CAN BE GATHERED FROM THE ASSESSMENT ORDER PASSED IN RESPECT OF THE SEARCHED PERSON, IF IT IS SO MENTIONED/ RECORDED OR FROM ANY OTHER ORDER, NOTE O R RECORD MAINTAINED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON. THE WOR D SATISFACTION REFERS TO THE STATE OF MIND OF THE ASSESSING OFFICER OF THE PERSO N SEARCHED, WHICH GETS REFLECTED IN A TANGIBLE SHAPE /FORM, WHEN IT IS RED UCED INTO WRITING. IT IS THE CONCLUSION DRAWN OR THE FINDING RECORDED ON THE FOU NDATION OF THE MATERIAL 6 AVAILABLE. IN THIS REGARD, REFERENCE MAY BE MADE TO THE PRONOUNCEMENTS IN THE CASE OF CIT V. RADHEY SHYAM BANSAL [2011] 337 ITR 2 17 (DELHI) AND THE DIVISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF CIT VS. CLASSIC ENTERPRISES [2013] 358 ITR 465 (ALL). 33. IN THE INSTANT CASE, A CATEGORICAL FINDING HAS BEEN RECORDED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) AND THE INCOME- TAX APPELLATE TRIBUNAL THAT THERE IS NO MATERIAL SHOWING THE RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON PRIOR TO ISSUANCE OF NOTICE UNDER SECTION 153C TO THE RESPONDENT-ASSESSEE, I.E. THE OTHER PERSON. I T WAS THE ADMITTED CASE OF THE REVENUE BEFORE THE COMMISSIONER OF INCOME-TAX (APPE ALS) AND THE INCOME-TAX APPELLATE TRIBUNAL THAT THROUGH THE ASSESSING OFFIC ER ( OF THE OTHER PERSON) IN THE ASSESSMENT ORDER HAD STATED THAT THE SATISFACTION F OR ISSUING NOTICE UNDER SECTION 153C WAS RECORDED, HOWEVER, ON EXAMINATION, RECORDI NG OF SUCH SATISFACTION ALLEGED TO BE RECORDED BY THE ASSESSING OFFICER WAS NOT AVAILABLE. 34. IN VIEW OF THE LEGAL POSITION, AS ALREADY DISCU SSED ABOVE AND THE ADMITTED FACTUAL POSITION AS AFORESAID, WE ARE UNAB LE TO ACCEPT THE CONTENTIONS OF SRI AGRAWAL. 35. WE ARE ALSO OF THE VIEW THAT THE PLEA, WHICH IS BEING RAISED IN THIS APPEAL, WAS NOT RAISED IN THE GROUNDS OF APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL, HOWEVER, EVEN OTHERWISE SUCH PLEA DOES NO T HAVE ANY MERIT. 36. THE CONTENTION OF SRI AGRAWAL THAT SECTION 153C IS ONLY PROCEDURAL IN NATURE, THEREFORE, THE NON-RECORDING OF PRIOR SATIS FACTION DOES NOT VITIATE THE ASSESSMENT ORDER, AS, SUCH SATISFACTION, HAS BEEN R ECORDED IN THE ASSESSMENT ORDER PASSED SUBSEQUENTLY WITH REGARD TO THE OTHER PERSON, IS ALSO NOT ACCEPTABLE FOR THE REASON THAT THE SUPREME COURT IN THE CASE OF CALCUTTA KNITWEARS (SUPRA) HAS ALREADY CONSIDERED THIS ASPEC T OF THE MATTER IN THE CONTEXT OF SECTION 158BD, AND AFTER TAKING NOTE OF THE FACT THAT THE SAID PROVISION IS A MACHINERY PROVISION HAS INTERPRETED THE SAME. IN TH E LIGHT OF THE INTERPRETATION GIVEN BY IT AND IN VIEW OF THE RATIO LAID DOWN THER EIN, THE CONTENTION OF SRI AGRAWAL DOES NOT HOLD GROUND. A CLEAR AND PLAIN REA DING OF SECTION 153C LEAVES NO DOUBT THAT RECORDING OF SATISFACTION BY THE ASSE SSING OFFICER OF THE PERSON SEARCHED IS MANDATORY AND IT HAS TO PRECEDE THE INI TIATION OF PROCEEDINGS AGAINST THE OTHER PERSON (NOT SEARCHED). MOREOVER WE FIND THAT ON IDENTICAL SET OF FACTS THE HONBLE ITAT AGRA BENCH IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 TO ASSESSMENT YEAR 2007- 08 HAD QUASHED THE PROCEEDING UNDER SECTION 153C BY HOLDING AT PARA 6.1 OF ITS ORDER AS FOLLOWS : 6.1 CONSIDERING THE FACTS OF THE CASE, IT IS CLEAR THAT NO SEARCH WAS CONDUCTED AGAINST THE ASSESSEE U/S 132 OF THE IT AC T, THEREFORE, PROCEEDINGS U/S 153C HAVE BEEN INITIATED. THE AO DID NOT MAKE ANY A DDITION AGAINST THE ASSESSEE ON THE BASIS OF ANY ADVERSE MATERIAL. THE AO PASSED THE ASSESSMENT ORDER U/S. 153C OF THE IT ACT MAKING ADDITION OF RS . 77,433/- ON ACCOUNT OF DETERMINATION OF ANNUAL LETTING VALUE U/S 23(4) OF THE IT ACT OF THE PROPERTY AT 7% OF INVESTMENTS. THE DETERMINATION OF ANNUAL LETTING VALUE IS ONLY ON NOTIONAL BASIS AND FOR THAT, NO INCRIMINATING MATERIAL WAS FOUND A GAINST THE ASSESSEE. NO MATERIAL IS PRODUCED BEFORE US TO PROVE THAT THE AO IN THE CASE OF PERSON SEARCHED WAS SATISFIED THAT ANY MONEY, BULLION, JEW ELLERY OR OTHER VALUABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION BELONGS TO OR BELONGING TO A PERSON OTHER THAN THE PERSON R EFERRED TO IN SECTION 153A . NO MATERIAL IS PRODUCED BEFORE US TO SHOW IF ANY SATIS FACTION WAS RECORDED BY THE AO IN THAT CASE THAT THE SEIZED MATERIAL BELONGS TO ANY PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE U/S 132 OF THE IT ACT. THE LD. DR WAS DIRECTED TO FILE COPY OF THE SATISFACTION NOTE RECORDED BY THE AO FOR INITIATING THE PROCEEDINGS U/S. 153C OF THE IT ACT. HOWEVER, T HE LD. DR DID NOT PRODUCE ANY 7 SATISFACTION NOTE U/S. 153C OR ANY MATERIAL BEFORE US TO SHOW IF ANY SUCH SATISFACTION AS REQUIRED U/S. 153C WAS RECORDED BY THE AO IN THE CASE OF PERSON SEARCHED. NO MATERIAL IS PRODUCED IN REFERENCE TO T HE ABOVE REQUIREMENT. NO MATERIAL IS ALSO PRODUCED BEFORE US TO SHOW THAT TH E BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED HAD BEEN HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON. IN THE ABSENCE OF ANY MATER IAL PRODUCED BEFORE US, WE FIND THE CONTENTION OF THE LD. COUNSEL FOR THE ASSE SSEE WAS JUSTIFIED THAT IN THIS CASE THE AO HAS NOT RECORDED ANY SATISFACTION THAT ANY S EIZED DOCUMENTS OR MATERIAL BELONGS TO ANY PERSON OTHER THAN THE PERSON SEARCHE D. THEREFORE, NECESSARY INGREDIENTS OF SECTION 153C HAVE NOT BEEN COMPLIED WITH IN THIS CASE BEFORE INVOKING THE JURISDICTION U/S. 153C OF THE IT ACT. WE MAY ALSO ADD HERE THAT THE AO HAS NOT REFERRED TO ANY SEIZED DOCUMENTS OR MATE RIAL IN THE ASSESSMENT ORDERS ON THE BASIS OF WHICH NOTIONAL ANNUAL LETTIN G VALUE WAS DETERMINED. THEREFORE, CONDITIONS OF SECTION 153C AS NOTED ABOV E ARE NOT SATISFIED IN THIS CASE. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT OF OUR ORDER IN THE CASE OF M/S. GLOBAL ESTATES (SUPRA), WE DO NOT FIND ANY JUSTIFIC ATION TO SUSTAIN THE PROCEEDINGS U/S.153C INITIATED BY THE AUTHORITIES BELOW AGAINST THE ASSESSEE. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND Q UASH THE PROCEEDINGS U/S 153C OF THE IT ACT. THEREFORE, ALL THE ADDITIONS MADE IN THE ASSESSMENT ORDERS U/S 153C WOULD STAND DELETED. IT IS PERTINENT POINT OUT THAT EVEN THE CBDT VIDE I TS CIRCULAR NO. 24/2015 DT. 31/12/2015 HAS ACCEPTED THIS POSITION REGARDING REC ORDING OF SATISFACTION NOTE BY THE AO OF THE SEARCHED PERSON BEING A PREREQUISI TE FOR THE PURPOSE OF SECTION 153C, EVEN IN CASES WHERE THE AO OF THE SEA RCHED PERSON AND THE OTHER PERSON ARE THE SAME THE CBDT HAS FURTHER DIRECTED A PPEALS TO BE DECIDED ACCORDINGLY AND FURTHER DIRECTED PENDING LITIGATION ON THIS SCORE OF RECORDING OF SATISFACTION NOTE U/S 153C/158BD TO BE WITHDRAWN / NOT PRESSED. THE CBDT CIRCULAR NO. 24/2015 DT. 31/12/2015 IS REPRODUCED H EREUNDER: 8 7. IN VIEW OF THE ABOVE WE HOLD THAT IN THE ABSENCE OF THE RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON BEFOR E INITIATING PROCEEDINGS AGAINST THIRD PERSON U/S 153C, THE CONDITION OF SEC TION 153C HAS NOT BEEN SATISFIED IN THE PRESENT CASE AND THERE IS NO JURIS DICTION TO SUSTAIN THE PROCEEDING UNDER SECTION 153C INITIATED BY THE AUTHORITIES BEL OW AGAINST THE ASSESSEE. THE ORDER PASSED UNDER SECTION 153C IS THEREFORE SET AS IDE AND THE PROCEEDINGS UNDER SECTION 153 C ARE DIRECTED TO BE QUASHED. THE REFORE ALL THE ADDITIONS MADE IN THE ASSESSMENT ORDER ALSO STANDS DELETED. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 05/04/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR