Mohinder Singh Bajwa, Jalandhar V. The Assistant Commissioner of Income Tax, Jalandhar

ITA 218/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0499 (ITAT-AMRITSAR)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAWANI SHANKER
• Assessee Lawyers: J S BHASIN
• Keywords: Document seized; Block assessment; Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.218(ASR)/2016 ASSESSMENT YEAR:2010-11 PAN: AGAPB9331K SH. MOHINDER SINGH BAJWA VS. ASSTT. COMMR. OF INCOM E TAX, 31, LATIFPURA, MODEL TOWN, CIRCLE-1, JALANDHAR. JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. J.S. BHASIN, ADVOCATE RESPONDENT BY: SH. BHAWANI SHANKER, DR DATE OF HEARING: 29/06/2016 DATE OF PRONOUNCEMENT: 15/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2010-11, AGAINST THE ACTION OF THE LD. CIT(A) IN UPHOLDING THE ASSUMPTION OF JURISDICTION BY THE AO UNDER SECTION 153C OF THE I .T. ACT, WITHOUT RECORDING OF MANDATORY SATISFACTION IN THE CASE O F THE PERSON SEARCHED. THE FOLLOWING GROUNDS HAVE BEEN RAISED: 1. THAT THE LD. CIT(A) GROSSLY MISDIRECTED HIMSELF IN LAW AND IN FACTS OF THE CASE, IN SUMMARILY UPHOLDING TH E ASSUMPTION OF JURISDICTION BY THE AO U/S 153C, WHEN NO SATISFACTION, AS ENVISAGED UNDER THE SAID SECTION, WAS RECORDED IN THE CASE OF PERSON SEARCHED. 2. THAT THE LD. CIT(A), OUGHT TO HAVE APPRECIATED T HAT PHOTOCOPY OF AGREEMENT, SEIZED FROM THIRD PARTY, WH EN DENIED BY ONE AND ALL CONCERNED, AND DID NOT EXCLUS IVELY ITA NO.218(ASR)2016 A.Y. 2010-11 2 BELONG TO THE APPELLANT, IT COULD NOT BE RELIED UPO N TO ROPE IN THE APPELLANT U/S 153C. 3. THAT THE LD. CIT(A) ERRED IN UPHOLDING THE IMPUG NED ORDER, WHEN STATUTORY NOTICE U/S 143(2) HAD NOT BEE N ISSUED, AFTER THE FILING OF RETURN AGAINST NOTICE U/S 153C . 4. THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDI NG THE ADDITION OF RS.4,15,17,188/- MADE FOR THE ALLEGED UNDISCLOSED INVESTMENT IN PLOT, ON WHOLLY ERRONEOUS AND INSUFFICIENT GROUNDS. BY ANY RECKONING, THE SEIZED AGREEMENT, BEING A PHOTOCOPY WITH ORIGINAL NOT BRO UGHT ON RECORD, DENIED BY PARTIES CONCERNED, HAD NO EVIDENT IARY VALUE, TO CONFIRM THE IMPUGNED ADDITION. 5. THAT THE LD. CIT(A) MISCONSTRUED THE FINDINGS OF HIS PREDECESSOR, GIVEN IN THE CASES OTHER PERSONS HAVIN G IDENTICAL DISPUTE, TO TAKE A VIEW AGAINST THE ASSES SEE. 6. THAT THE INTEREST U/S 234A WAS NOT CHARGEABLE WH EN THE DELAY IN FILING OF RETURN WAS NOT ATTRIBUTABLE TO ASSESSEE. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH WAS INITIATED AGAINST M/S. PUNJAB IRON & STEEL COMPANY LTD., (IN SHORT, PISCO) GROUP ON 03.08.2011. A PHOTOCOPY OF AN AGREEMENT TO SELL DATED 10.05.2007 WAS SEIZED FROM ONE SHRI VINAY KUMAR SHA RMA, AN ERSTWHILE ACCOUNTANT OF THE SAID COMPANY. THIS DOCUMENT WAS A LLEGED TO BE PERTAINING TO THE ASSESSEE, WARRANTING ACTION U/S 1 53C OF THE ACT. THE ASSESSEE WAS SERVED WITH A NOTICE U/S 153C, DATED 1 2.08.2013, FOR COMPLIANCE WITHIN 15 DAYS OF ITS RECEIPT. BEFORE T HE ASSESSEE COULD FILE HIS RETURN, HE WAS ISSUED SEVERAL NOTICES BY THE AO , SEEKING VARIOUS DETAILS. THE ASSESSEE RESPONDED VIDE LETTER DATED 1 7.10.2013 REQUESTING THE AO TO SUPPLY THE SEIZED DOCUMENTS BELONGING TO HIM, THE SATISFACTION RECORDED U/S 153C, IF ANY, AND STATEMENTS MADE U/S 132(4) IN THE ITA NO.218(ASR)2016 A.Y. 2010-11 3 SEARCH PROCEEDINGS, OR SUBSEQUENTLY, BY THE PERSON S FROM WHOM THE SAID DOCUMENTS WERE SEIZED AND THE INFERENCE DRAWN ON SUCH DOCUMENTS IN THEIR RESPECTIVE CASES. AFTER SEVERAL REMINDERS , ON 03.01.2014, THE ASSESSEE WAS SERVED WITH SATISFACTION NOTE DATED 12.08.2013, RECORDED IN HIS OWN CASE, ALONGWITH A PHOTOCOPY OF THE IMPUG NED AGREEMENT TO SELL DATED 10.05.2007, TITLED AS THE MOST VITAL DO CUMENT. 3. BEFORE THE LD. CIT(A), THE ASSESSEE FILED WRITTE N SUBMISSIONS AND TOOK UP THE ISSUE OF ASSUMPTION OF JURISDICTION U/S 153C, WHEN NO SATISFACTION WAS RECORDED BY THE AO IN THE CASE OF PERSON SEARCHED. HOWEVER, THE LD. CIT(A), WITHOUT CONSIDERING THE CO NTENTIONS OF THE ASSESSEE SO RAISED, DISMISSED THE GROUNDS OF APPEAL NO. 1 & 2 BEFORE HIM. THE OBSERVATIONS OF THE LD. CIT(A) IN PARA 4 OF THE ORDER ARE AS FOLLOWS: 4. GROUND OF APPEAL NOS. 1 & 2 PERTAIN TO ASSUMPTI ON OF JURISDICTION U/S 153C BY THE AO. THE AO HAS MENTION ED THAT DURING THE SEARCH U/S 132 OF THE ACT ON 08.03.2011 IN THE CASE OF PUNJAB IRON & STEEL COMPANY (PISCO) GROUP OF CASES, A DOCU MENT RELATING TO ASSESSEE WAS FOUND AND SEIZED FROM THE RESIDENCE OF THE ACCOUNTANT OF PISCO, THEREFORE, NOTICE U/S 153C WAS ISSUED. AS THE BASIS OF ASSUMPTION OF JURISDICTION IS DULY STATED BY THE AO IN FIRST TWO PARA OF THE ASSESSMENT ORDER, THESE GROUNDS OF APPEAL ARE DISMISSED. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT ISSUE RELATING TO ASSUMPTION OF JURISDICTION IN THIS CASE BY ISSUE OF NOTICE U/S 153C IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE ITAT, AMRITSAR BENCH, IN THE CASE OF RIPANDEEP THAKHAR V S. ACIT, CC-1, ITA NO.218(ASR)2016 A.Y. 2010-11 4 JALANDHAR, IN ITA NO. 665(ASR)/2014)/2014 & CO. NO .02(ASR)/2015 DATED 13.06.2016, FOR THE A.Y. 2009-10. 4. THE LD. DR, ON THE OTHER HAND, RELIED ON THE IMP UGNED ORDER. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PER USED THE MATERIAL AVAILABLE ON RECORD. WE ARE IN AGREEMENT WITH THE S UBMISSION OF THE ASSESSEE THAT THE ISSUE IN DISPUTE STANDS ALREADY DECIDED BY THIS BENCH OF THE TRIBUNAL, IN THE CASE OF RIPANDEEP THAKHAR VS. ACIT, CC-1, JALANDHAR, IN ITA NO. 665(ASR)/2014)/2014 & CO. NO .02(ASR)/2015 DATED 13.06.2016, FOR THE A.Y. 2009-10, WHERE THE A PPEAL OF THE DEPARTMENT HAS BEEN DISMISSED AND THE C.O. OF THE A SSESSEE ON THE ISSUE HAS BEEN ALLOWED. WE CONSIDER IT APPROPRIATE TO REPRODUCE THE RELEVANT PORTION OF THE TRIBUNAL ORDER DATED 13.06. 2016 FOR READY REFERENCE: 2. THE CROSS OBJECTION FILED BY THE ASSESSEE INVOL VES LEGAL ISSUE AND AS SUCH, IT IS BEING TAKEN UP FOR DECISIO N FIRST. AS PER THIS CROSS OBJECTION, ABSENCE OF SATISFACTION OF THE AO IN THE CASE OF THE PERSON SEARCHED IS NOT A CURABLE DEFECT WHEN CONSI DERING THE PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT, 1 961 AND THE LD. CIT(A)S ORDER HOLDING OTHERWISE HAS BEEN CHALLENG ED BY THE ASSESSEE. 3. THE FACTS ARE THAT A SEARCH WAS CARRIED OUT IN T HE CASE OF M/S. PUNJAB IRON & STEEL COMPANY LTD. AND ALSO IN THE CA SE OF ONE OF ITS DIRECTORS SH. RAMESH INDER SINGH, WHO IS THE FATHER OF THE ASSESSEE . IT IS AN UNDISPUTED POSITION THAT THERE WAS NO SE ARCH WARRANT IN THE CASE OF THIS ASSESSEE AND THE ASSESSMENT HAS AL SO BEEN FRAMED U/S 153C. 4. THE ASSESSEE TOOK THE FOLLOWING GROUND BEFORE TH E LD. CIT(A): THAT THE ORDER UNDER SECTION 153C READ WITH SECTIO N 143(3) IS BAD IN LAW. ITA NO.218(ASR)2016 A.Y. 2010-11 5 5. THE LD. CIT(A) DECIDED THE ISSUE HOLDING AS FOLL OWS: I HAVE CONSIDERED THE FACTS OF THE CASE, THE BASIS OF JURISDICTION ASSUMED BY THE ASSESSING OFFICER UNDER SECTION 153C AND ARGUMENTS OF THE AR DURING ASSESSMENT PROCEEDINGS AS WELL AS APPELLATE PROCEED INGS ON THE ISSUE. THE COMMENTS OF THE ASSESSING OFFICER DURING REMAND PROCEEDINGS HAVE ALSO BEEN CONSIDERED . THE PROVISIONS OF SECTION 153C WHICH GOVERN 'ASSESS MENT OF INCOME OF ANY OTHER PERSON' READ AS UNDER:- 'NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFI ED 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 QFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSE SS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A.' 7. THE PERUSAL OF THE ABOVE DETAILED PROVISION SHOW S THAT THE SATISFACTION HAS TO BE ARRIVED AT BY THE ASSESSING OFFICER OF THE PERSON SEARCHED FROM WHOM RELEVANT VALUABLES OR INCRIMINATING DOCUMENTS ARE S EIZED AND THEREAFTER SUCH DOCUMENTS OR ASSETS ARE TO BE HANDED OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON AND THE SAID ASSESSING OFFICER SHOULD PROCEED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. IT IS SEEN THAT THE ASSESSING OFFICER OF SEARCHED PERSON AS WE LL AS THE ASSESSING OFFICER OF THE APPELLANT ARE THE SAME . SATISFACTION RECORDED BY THE ASSESSING OFFICER OF T HE APPELLANT AMOUNTS TO RECORDING OF SATISFACTION BY T HE ASSESSING OFFICER OF THE SEARCH PERSON FROM WHOM IMPUGNED DOCUMENTS HAD BEEN SEIZED. 8. THE AR OF THE APPELLANT HAS RELIED UPON THE JUDGMENT OF HON'BLE ITAT BENCH AT DELHI IN THE CASE OF DSL PROPERTIES (P.) LTD. VS. DCIT [2013] 60 SOT 88 (DELHI- TRIB.)(URO) WHEREIN THE FOLLOWING OBSERVATIONS HAVE BEEN MADE:- ITA NO.218(ASR)2016 A.Y. 2010-11 6 'THE ASSESSING OFFICER OF THE PERSON SEARCHED AND S UCH OTHER PERSON MAY BE THE SAME, BUT THESE ARE TWO DIFFERENT ASSESSEE AND, THEREFORE, THE ASSESSING OF FICER HAS TO CARRY OUT THE DUAL EXERCISE, FIRST AS THE AS SESSING OFFICER OF THE PERSON SEARCHED, IN WHICH HE HAS TO RECORD THE SATISFACTION DURING THE COURSE OF ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED. AFTER RECORDING SUCH SATISFACTION NOTE IN THE FILE OF THE PERSON SEARCHE D, THE SAME IS TO BE PLACED IN THE FILE OF SUCH OTHER PERS ON. THEN IN HIS CAPACITY AS THE ASSESSING OFFICER OF SUCH OT HER PERSON, HE SHOULD TAKE COGNIZANCE OF SUCH SATISFACT ION NOTE AND THEREAFTER ISSUE NOTICE UNDER SECTION 158B C. IN THE INSTANT CASE THIS EXERCISE OF RECORDING THE SAT ISFACTION DURING THE ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED HAS NOT BEEN CARRIED OUT. ON THE OTHER HAN D, THE ASSESSING OFFICER RECORDED THE SATISFACTION IN THE CASE OF SUCH OTHER PERSON WHICH DOES NOT SATISFY TH E CONDITION OF ASSUMING JURISDICTION UNDER SECTION 15 3C. THEREFORE, THE ABOVE SATISFACTION NOTE CAN NOT BE S AID TO BE A VALID SATISFACTION NOTE WITHIN THE MEANING OF SECTION 153C. [PARA 15]' 9. THE APPARENT PROCEDURAL FLAW COULD BE REGULARIZED BY APPLICATION OF PROVISION OF SECTION 292B OF THE INCOME TAX ACT, 1961 WHICH READS AS UNDER: NO RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDINGS, FURNISHED OR MADE OR ISSUED OR TAKEN OR PURPORTED TO HAVE BEEN FURNISHED OR MADE OR ISSU ED OR TAKEN IN PURSUANCE OF ANY OF THE PROVISIONS OF THIS ACT SHALL BE INVALID OR SHALL BE DEEMED TO BE INVALID M ERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN SUC H RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OT HER PROCEEDING IF SUCH RETURN OF INCOME, ASSESSMENT, NO TICE, SUMMONS OR OTHER PROCEEDINGS IS IN SUBSTANCE AND EF FECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND P URPOSE OF THIS ACT.' IN VIEW OF THE ABOVE DETAILED ANALYSIS OF PROVISION S OF THE STATUTE, I DO NOT AGREE WITH THE CONTENTION OF THE APPELLANT THAT THE PROCEDURAL FLAW POINTED OUT BY H IM AMOUNTS ANNULMENT OF THE IMPUGNED ASSESSMENT ORDER. THIS GROUND OF APPEAL IS THEREFORE DISMISSED ITA NO.218(ASR)2016 A.Y. 2010-11 7 6. THUS, THE LD. CIT(A) HELD THAT SINCE THE ASSESSI NG OFFICER OF SEARCHED PERSON AS WELL AS THE ASSESSING OFFICER OF THE ASSESSEE (THE OTHER PERSON) ARE THE SAME, THE SAT ISFACTION RECORDED BY THE ASSESSING OFFICER IN THE CASE OF TH E ASSESSEE AMOUNTS TO RECORDING OF SATISFACTION BY THE ASSESSI NG OFFICER OF THE SEARCHED PERSON FROM WHOM, DOCUMENTS HAD BEEN S EIZED; AND THAT THE APPARENT PROCEDURAL FLAW COULD BE REGULARIZED BY APPLICATION OF PROVISIONS OF SECTION 292B OF THE INCOME TAX ACT. 7. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING CASE LAWS: I) MANISH MAHESHWARI VS. ACIT, 289 ITR 341 (SC) II) DHAPUBAI JAIN VS. ACIT, (ITAT INDORE) IT(SS)A.NO.78/IND/2008, AY 2003-04, DATED 31.05.201 1. III) TANVIR COLLECTIONS VS. ACIT, ( ITAT DEL) 153 ITD 486 IV) DCIT VS. L.K. INDIA, (ITAT AHMEDABAD) 43 CCH 263 V) VINOD KUMAR CHAURASIYA VS. ACIT, ( ITAT LUCK) 42 CCH 30 VI) DSL PROPERTIES VS. DCIT, ( ITAT DEL.) 60 SOT 88 VII) CIT MECHMEN, (MP ) 380 ITR 591 VIII) PR. CIT VS. NIKKI DRUGS, 236 TAXMAN 305 (DEL.) IX) CENTRAL VS. GOPI APPARTMENT, (ALL.) 46 TAXMAN.COM , 280 X) CIT VS. SHETTYS PHARMACEUTICALS (AP) 90 CCH 517 XI) DCIT VS. LALITKUMAR N PATEL (GUJ.) 222 TAXMAN 8. THE LD. DR, ON THE OTHER HAND, RELIED ON THE IMP UGNED ORDER. NO DECISION CONTRARY TO THE ABOVE CASE LAWS WAS CIT ED. 9. IN MANISH MAHESHWARI VS. ACIT (SUPRA), IT HAS BEEN HELD THAT WHERE THE PREMISES OF A DIRECTOR OF A COMPANY AND HIS WIFE WERE SEARCHED UNDER SECTION 132 OF THE INCOME-TAX A C, 1961, AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY, THE ASSESSING OFFICER HAD TO (I) RECORD HIS SATISFACTIO N THAT ANY UNDISCLOSED INCOME BELONGED TO THE COMPANY, AND (II ) HAND OVER THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AND ASSETS SEI ZED TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE COMP ANY. 10. THEN, THE HONBLE SUPREME COURT IN THE CASE OF M/S. CALCUTTA KNITWEARS IN CIVIL APPEAL NO.3958 OF 2014, VIDE JU DGMENT DATED 12.03.2014, HELD THAT FOR THE PURPOSES OF SECTION 1 58BD, RECORDING OF A SATISFACTION NOTE IS A PRE-REQUISITE AND THE S ATISFACTION NOTE MUST BE PREPARED BY THE AO BEFORE HE TRANSMITS THE RECORD TO THE OTHER AO, WHO HAS JURISDICTION OVER THE PERSON OTHE R THAN THE PERSON SEARCHED UNDER SECTION 158BD OF THE ACT. ITA NO.218(ASR)2016 A.Y. 2010-11 8 11. THE LD. CIT(A) FURTHER OBSERVED THAT THE SEARC H IN THIS CASE WAS CARRIED OUT IN THE CASE OF M/S PUNJAB IRON & ST EEL COMPANY LTD. AND ALSO IN THE CASE OF ONE OF ITS DIRECTORS S H. RAMESH INDER SINGH, WHO IS THE FATHER OF THE ASSESSEE. IT IS AN UNDISPUTED POSITION THAT THERE WAS NO SEARCH WARRANT IN THE CASE OF THI S ASSESSEE. THE ASSESSING OFFICER WAS THUS REQUIRED TO RECORD SATIS FACTION IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF M ANISH MAHERSHWARI VS. ACIT, REPORTED AT 289 ITR 341 (SC) IN THE CASE OF THE PERSON SEARCHED THAT CERTAIN DOCUMENTS HAVING I MPLICATION ON COMPUTATION OF INCOME BELONG TO A PERSON OTHER THAN THE ONE SEARCHED AND ONLY THEREAFTER, THE PROCEEDINGS COULD COMMENCE IN THE CASE OF SUCH OTHER PERSON. IN THE PRESENT CASE, THE SATISFACTION HAS ONLY BEEN RECORDED IN THE CASE OF THE ASSESSEE HIMSELF, I.E., THE PERSON NOT SEARCHED OR, THE OTHER PERSON. THE REQ UIREMENT, AS MANDATED BY THE SUPREME COURT IN THE CASE OF MANIS H MAHESHWARI (SUPRA), HAS THUS NOT BEEN COMPLIED WITH AND THE PR OCEEDINGS IN THE CASE OF THIS ASSESSEE ARE BAD IN LAW AND ORDER U/S 153C READ WITH 143(3) SHOULD BE QUASHED ON THIS SCORE ITSELF. 12. FURTHER THE HONBLE SUPREME COURT, VIDE JUDGME NT DATED 12.03.2014, IN CIVIL APPEAL NO. 3958 OF 2014, IN TH E CASE OF M/S. CALCUTTA KNITWEARS, HAS MANDATED THE RECORDING OF SATISFACTION AND PREPARATION OF SATISFACTION NOTE BY THE AO OF THE P ERSON SEARCHED, NOTWITHSTANDING THE FACT THAT THE AO OF THE PERSON SEARCHED IS THE SAME AS THAT OF THE OTHER PERSON. 13. ALL THE OTHER DECISIONS CITED BY THE ASSESSEE A RE TO THE SAME EFFECT. 14. EVEN THE CBDT, KEEPING THE VARIOUS DECISIONS O F JUDICIAL AUTHORITIES, ISSUED CIRCULAR NO. 24 OF 2015, ACCEP TING THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT-III VS. CALCU TTA KNITWEARS AND THOSE OF VARIOUS HIGH COURTS. IT WAS STATED THAT TH E VIEW OF THE COURTS THAT THE PROVISIONS OF SECTION 153C ARE SUBS TANTIALLY SIMILAR/PARI-MATERIA TO THE PROVISIONS OF SECTION 1 58BD OF THE ACT HAD BEEN ACCEPTED. IT WAS CONCEDED THAT SATISFACTIO N HAS TO BE RECORDED EVEN IF THE A.O OF PERSON SEARCHED AND THE OTHER PERSON IS THE SAME. THE CIRCULAR CLARIFIES THAT IT WOULD BE APPLICABLE TO PENDING LITIGATION ALSO. 15. THIS CBDT CIRCULAR HAS BEEN CONSIDERED IN SHIE LD HOME PVT. LTD., BY THE ITAT DELHI, VIDE ORDER DATED 24.2.201 6 (COPY AT APB 237 TO 239) AND HARDEVI KESHWANI, BY THE ITAT CH ANDIGARH BENCH, VIDE ORDER DATED 5.4.2016 (APB 240 TO 243). 16. THE SAID CBDT CIRCULAR HAS BEEN FILED BEFORE US ALSO. IT READS AS FOLLOWS: ITA NO.218(ASR)2016 A.Y. 2010-11 9 CBDT CIRCULAR NO.24/2015 F.NO.279/MISC./140/2015/ITJ GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI, 31 ST DECEMBER, 2015 SUBJECT: RECORDING OF SATISFACTION NOTE UNDER SECTI ON 158BD 153C OF THE ACT - REG.- THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURP OSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HONBLE SUPREME COURT IN THE CASE OF M/S CALCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO.3958 OF 2014 DATED 12.3.2014(AVAILABLE IN NJRS AT 2014-LL-0312-5 1) HAS LAID DOWN THAT FOR THE PURPOSE OF SECTION 158BD OF THE A CT, RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFA CTION NOTE MUST BE PREPARED BY THE AO BEFORE HE TRANSMITS THE RECORD T O THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S 158 BD.J THE HONBLE COURT HELD THAT THE SATISFACTION NOTE COUL D BE PREPARED AT ANY OF THE FOLLOWING STAGES: (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UND ER SECTION 158BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS AR E COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERS ON. 3. SEVERAL HIGH COURTS HAVE HELD THAT THE PR OVISIONS OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMIIAR/PARI-MATE RIA TO THE PROVISIONS OF SECTION 158BD OF THE ACT AND THEREFOR E, THE ABOVE GUIDELINES OF THE HONBLE SC, APPLY TO PROCEEDINGS U/S 153C OF THE IT ACT, FOR THE PURPOSES OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. THIS VIEW HAS BEEN ACCEPTED BY CBD T. 4. THE GUIDELINES OF THE HONBLE SUPREME COUR T AS REFERRED TO IN PARA 2 ABOVE, WITH REGARD TO RECORDING OF SATISFACT ION NOTE, MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIAN CE. IT IS FURTHER CLARIFIED THAT EVEN IF THE AO OF THE SEARCHED PERSO N AND THE OTHER PERSON IS ONE AND THE SAME, THEN ALSO HE IS REQUIR ED TO RECORD HIS SATISFACTION AS HAS BEEN HELD BY THE COURTS. ITA NO.218(ASR)2016 A.Y. 2010-11 10 5. IN VIEW OF THE ABOVE, FILING OF APPEALS ON THE I SSUE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DECIDED IN THE LIGHT OF THE ABOVE JUDGMENT. ACCORDINGLY, THE BOARD HEREBY DIRECTS THA T PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE UNDER SECTION 158BD/153C SHOULD BE WITHDRAWN /NOT PRESSED IF IT D OES NOT MEET THE GUIDELINES LAID DOWN BY THE APEX COURT. 17. THUS, AS PER PARA 4 OF THE AFORESAID CBDT CIRCU LAR, EVEN IF THE AO OF THE SEARCHED PERSON AND THAT OF THE OTHER PE RSON IS ONE AND THE SAME, IT IS MANDATORY FOR HIM TO RECORD HIS SAT ISFACTION. HENCE, THE LD. CIT(A)S OBSERVATION IN THIS REGARD IS UNS USTAINABLE. FURTHER, IN VIEW OF THE AFOREMENTIONED SETTLED LEGAL POSITI ON, THE DEFECT IN QUESTION BEING A JURISDICTIONAL ONE, IT CANNOT GET CURED BY THE PROVISIONS OF SECTION 292B OF THE ACT. 18. ACCORDINGLY, THE ORDER DATED 24.03.2014 PASSED UNDER SECTION 153C IS QUASHED. THE C.O. FILED BY THE ASSESSEE IS ACCEPTED. 6. THEREFORE, FOLLOWING OUR OWN ORDER IN THE CASE O F RIPANDEEP THAKHAR VS. ACIT, CC-1, JALANDHAR, IN ITA NO. 665( ASR)/2014)/2014 & CO. NO.02(ASR)/2015 DATED 13.06.2016, FOR THE A.Y. 2009-10, WE QUASH THE ORDER PASSED U/S 153C OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/07/ 2016. SD/- SD-/ (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 15/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:MOHINBDER SINGH BAJWA, JALANDHAR. 2. THE ACIT, CC-1, JALANDHAR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY