Sh.Pawan Mangla, Chandigarh V. DCIT, Chandigarh

ITA 445/CHANDI/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9918 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Question of law; Assessment record; Block assessment
• Section: 153A; 234B; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.445/CHD/2015 ASSESSMENT YEAR:2008-09 SH. PAWAN MANGLA VS. DCIT H.NO. 348 SECTOR 35-A CENTRAL CIRCLE II CHANDIGARH CHANDIGARH PAN NO. ABNM8003B (APPELLANT) (RESPONDENT) APPELLANT BY : SH. T.N. SINGLA RESPONDENT BY : SH. SUSHIL KUMAR DATE OF HEARING : 28/04/2016 DATE OF PRONOUNCEMENT : 14/06/2016 ORDER PER ANNAPURNA GUPTA A.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF PRINCIPAL CIT (OSD), GURGAON, DATED 12.03.2015. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE ORDER OF LEARNED COMMISSIONER OF INCOME TA X(APPEALS) IS BAD AND AGAINST THE FACTS & LAW. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN ALLOWING THE IMPUGNED ASSESSMENT ORDERS U/S 153C AG AINST THE APPELLANT WHEREAS THE PROVISIONS OF SECTION 153C ARE NOT APPL ICABLE OVER THE TRANSACTION ON THE BASIS OF WHICH PROCEEDINGS WERE INITIATED AG AINST THE APPELLANT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE ADDITIONS IN THE HANDS OF SH. PAWAN MANGLA (INDIVIDUAL) WHEN THE WHOLE TRANSACTION (EXCLUDING THE ALLEGED RECEIPT OF RS.25,15,173/-) WAS CARRIED OUT BY PAWAN MANGLA & SONS (HUF). 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN SUSTAINING THE ADDITION OF RS.25,15,173/- WHEN THE PROPERTY IN QUESTION WAS OWNED AND SOLD BY PAWAN MANGLA & SONS (HUF) AND NOT BY SH . PAWAN MANGLA (INDIVIDUAL). 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN SUSTAINING THE ADDITION WITHOUT ANY DOCUMENTARY EVI DENCE AGAINST THE ASSESSEE ON RECORD. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN ALLOWING THE CHARGING OF INTEREST U/S 234A, 234B AN D 234C OF THE INCOME TAX ACT. 2 7. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTE R OR WITHDRAWN ANY GROUND OF APPEAL BEFORE FINAL HEARING. 3. DURING THE COURSE OF HEARING, LD. COUNSEL FOR TH E ASSESSEE VIDE PETITION DATED 04.01.2016 PRAYED FOR ADMISSION FOR ADDITIONA L GROUND, WHICH READS AS UNDER:- YOUR HONOUR IS REQUESTED TO ACCEPT THE FOLLOWING AD DITIONAL GROUND OF APPEAL IN THE ABOVE STATED APPEAL:- 'THAT THE LEARNED PRINCIPAL CIT (OSD) HAS WRONGLY U PHELD VALIDITY OF NOTICE ISSUED U/S 153C OF THE INCOME TAX ACT, 1961 TO THE APPELLA NT, WITHOUT APPRECIATING THE FACT THAT NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER OF SEARCHED PERSON REGARDING ANY DOCUMENT BELONGING TO THE APPE LLANT THAN THE PERSON SEARCHED.' THIS ISSUE WAS RAISED BEFORE THE LEARNED ASSESSING OFFICER AND THE LEARNED PRINCIPAL CIT (OSD) AND THE SAME IS DISCUSSED BY BO TH THE OFFICERS IN THEIR ORDERS. THE HON'BLE BENCH IS REQUESTED TO ACCEPT THE AFORES AID ADDITIONAL GROUNDS OF APPEAL, WHICH IS BASED ON LEGAL ISSUE TO BE ADJUDIC ATED BY THE HON'BLE BENCH IN THIS APPEAL FOR THE SAKE OF JUSTICE. FURTHER NO NEW FACTS ARE PLACED BEFORE THE HON'BLE BENCH THROUGH THIS GROUNDS OF APPEAL. WE MAY LIKE TO RELY ON THE JUDGMENT OF HON'BLE SUPR EME COURT IN THE CASE OF NTPC VS. CIT, 229 ITR 0383 AND THE ORDER OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MANOJ AHUJA VS. IAC 150 ITR 696. YOUR HONOUR IS HUMBLY REQUESTED TO ADMIT THIS ADDIT IONAL GROUND OF APPEAL, BASED ON LAW POINT, WHICH COULD NOT BE TAKEN BEFORE THE CIT (A) DUE TO MISTAKE OF THE COUNSEL. 4. AT THE TIME OF HEARING LD. COUNSEL OF THE ASSESS EE SUBMITTED THAT THE ADDITIONAL GROUND IS PURELY LEGAL GROUND WHICH GOES TO THE ROOT OF THE MATTER AND DOES NOT REQUIRE FRESH FACTS TO BE INVESTIGATED AND THEREFORE, IT SHOULD BE ADMITTED. ON THE OTHER HAND, LD CIT DR OPPOSED THE PRAYER SO MADE AND SUBMITTED THAT IT IS AN AFTERTHOUGHT AND IT SHOULD NOT BE ADMITTED. 5. HAVING HEARD THE RIVAL SUBMISSIONS RELATING TO T HE ADMISSION OF ADDL. GROUND, WE FIND THAT THE ADDITIONAL GROUND IS IN RE LATION TO THE JURISDICTIONAL ISSUE IN AS MUCH AS IT MENTIONS THAT NO SATISFACTION WAS RECORDED BY THE A.O. OF THE SEARCHED PERSON AND THEREFORE, THE VERY ISSUE OF NO TICE U/S 153C WAS BAD. THE ADDITIONAL GROUND IS PURELY LEGAL GROUND AND GOES T O THE ROOT OF THE MATTER AND THEREFORE, SUCH LEGAL ISSUE RAISED IN THE ADDITIONA L GROUND IS ADMITTED. IT GOES WITHOUT SAYING THAT THE HONBLE SUPREME COURT IN TH E CASE OF NATIONAL THERMAL POWER CO. LTD. VS. COMMISSIONER OF INCOME TAX (1998 ) 229 ITR 0383 HAVE HELD 3 THAT PURE LEGAL QUESTION OF LAW WHICH DOES NOT REQU IRE FRESH FACTS TO BE INVESTIGATED SHOULD BE ADMITTED AS ADDITIONAL GROUN D. THEREFORE, ADDL. GROUND IS ADMITTED. ADVERTING TO THE MERIT OF THE ADDITIONAL GROUND, LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO SATISFACTION HAS BEEN RECORDED BY THE A.O. OF THE SEARCHED PERSON IN THE FILE OF THE SEARCHED PERSON AND ALL T HAT HAS BEEN RECORDED IS IN THE FILE OF THE APPELLANT VIDE THE ORDER SHEET ENTRY DA TED 17.08.2012 WHICH READS AS UNDER:- REASONS RECORDED FOR ISSUING NOTICE U/S 153C A SEARCH WAS CONDUCTED ON 17.11.2010 AT THE RESIDEN TIAL PREMISES OF DR. NARESH MITTAL AT H. NO. 212, SECTOR-6, PANCHKULA. DURING T HE COURSE OF SEARCH, DOCUMENTS MARKED AS A1, A2 AND A3 WERE FOUND AND SEIZED. PAGES 21-25,127-136 OF DOCUMENT A1, PAGES 1-14,65-6 9, 95-96, 150, 178-251,253 OF DOCUMENT A2 AND PAGES 31-32 OF DOCUMENT A3 CONTAIN THE DETAILS OF TRANSACTIONS IN IMMOVABLE PROPERTY MADE BY SH. PAWA N MANGLA WHICH NEED TO BE VERIFIED. IN ORDER TO PROTECT THE INTEREST OF REVENUE I AM SA TISFIED THAT THE CASE OF PAWAN MANGLA NEEDS TO BE ASSESSED AND THEREFORE NOTICE U/ S 153C OF THE IT ACT, 1961 IS BEING ISSUED. 6. LD. COUNSEL FOR THE ASSESSEE ASSAILED THE ASSUMP TION OF JURISDICTION U/S 153C ON THE ABOVE MENTIONED GROUND AND SUPPORTED HI S ARGUMENT WITH THE DECISION OF DELHI HIGH COURT IN THE CASE RRJ SECURI TIES LTD. ITA NO. 164/2015, DATED 30.10.2015 AND ANOTHER DECISION DCIT CENTRAL CIRCLE21, NEW DELHI VS. SATKAR ROAD LINES P. LTD. AND CO. NO. 341-346/DEL./ 2015, DATED 14.08.2015. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE, EVEN IF THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THIRD PERSON IS ONE AND THE SAM E OFFICER YET RECORDING OF MANDATORY SATISFACTION HAS TO BE MADE BY THE A.O. I N THE CAPACITY OF THE A.O. OF THE SEARCHED PERSON AND THAT TOO IN THE ASSESSME NT RECORD OF THE SEARCHED PERSON. ACCORDING TO LD. COUNSEL FOR THE ASSESSEE, SINCE THIS JURISDICTIONAL REQUIREMENT WAS NOT MET, THE ASSUMPTION OF JURISDIC TION U/S 153C WAS LACKING. 4 7. ON THE OTHER HAND LD. CIT DR SUBMITTED THAT ACCO RDING TO THE COMMUNICATION DATED 27.04.2016 RECEIVED FROM ACIT V S. CENTRAL CIRCLE-II, CHD., REASON HAS BEEN RECORDED VIDE ORDER SHEET DATED 17. 08.2012 AND NO OTHER REASON WAS FOUND TO HAVE BEEN RECORDED U/S 153C IN THE ASSESSMENT RECORDS AVAILABLE WITH THAT OFFICE. ACCORDING TO LD. CIT DR , SATISFACTION HAS BEEN RECORDED VIDE ORDER SHEET ENTRY DATED 17.08.2012 AN D THAT IS THE SUFFICIENT COMPLIANCE OF REQUIREMENT OF SECTION 153C. LD. CIT DR FILED NOTE DATED 25.3.2016 & 27.04.2016 IN WHICH IT WAS SUBMITTED TH AT A.O. OF THE SEARCHED PERSON (DR. NARESH MITTAL) AND IN THE CASE OF THE A SSESSEE IS THE SAME AND THEREFORE, SATISFACTION RECORDED BY THAT VERY A.O. VIDE ORDER SHEET ENTRY DATED 17.08.2012 IS IN TERMS OF THE REQUIREMENT OF LAW. A CCORDING TO LD. CIT DR, HONBLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITW EARS (2014) 362 ITR 673 , NOWHERE STATED THAT THE A.O. OF THE SEARCHED PERSON MUST RECORD SATISFACTION IN THE CASE RECORDS OF THE SEARCHED PERSON ONLY AND NO WHERE ELSE. DECISION OF KOLKATTA BENCH IN THE KPC MEDICAL COLLEGE & HOSPITA L VS. DCIT 59 TAXMANN.COM 393 WAS RELIED EXTENSIVELY. LD. CIT DR IN THE END S UBMITTED THAT THE ADDL. GROUND MAY BE DISMISSED ON MERIT ALSO. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS PASSED BY THE AUTHORITIES BELOW AND HAVE TAKEN OURSELVES TO T HE MATERIAL PLACED BEFORE US. UNDISPUTEDLY A.O. OF THE SEARCHED PERSON AND TH E A.O. OF THE APPELLANT ASSESSEE IS ONE AND THE SAME A.O. THERE IS NO DISPU TE ON THIS FACT ALSO THAT A.O. OF THE ASSESSEE RECORDED REASON U/S 153C ON 17.08 .2012 ON THE ORDER SHEET OF THE CASE RECORDS OF THE APPELLANT ASSESSEE. IT IS A LSO UNDISPUTED FACT THAT NO SATISFACTION FOR ASSUMING JURISDICTION U/S 153C WAS RECORDED IN THE CASE RECORDS OF THE PERSON SEARCHED I.E. DR. NARESH MITTAL. IN T HE SETTING OF THE ABOVE UNDISPUTED FACTS, WE HAVE TO EXAMINE AS TO WHETHER ASSUMPTION OF JURISDICTION U/S 153C WAS IN ACCORDANCE WITH LAW. 5 SECTION 153C PROVIDES THAT IF BOOKS OF ACCOUNTS, DO CUMENTS ETC. BELONGING TO THE THIRD PERSON ARE FOUND DURING THE COURSE OF SEA RCH, THE A.O. SHALL HAND OVER SUCH DOCUMENTS, BOOKS OF ACCOUNTS ETC. TO THE A.O. OF SUCH THIRD PERSON AND THEREAFTER THE A.O. OF SUCH THIRD PERSON SHALL PROC EED TO ASSESS OR REASSESS THE TOTAL OF INCOME OF THIRD PERSON IN TERMS THE PROVIS ION U/S 153A. THE VERY FACT THAT A THIRD PERSON WHO HAS NOT BEEN SEARCHED IS ALSO SO UGHT TO BE PROCEEDED U/S 153A UPON THE BOOKS OF ACCOUNT OR DOCUMENTS ETC. BE LONGING TO HIM, FOUND DURING SEARCH SPEAKS THE SERIOUS CONSEQUENCES OF SE CTION 153C QUA THIRD PERSON. THEREFORE THE PROVISION OF SECTION 153C HAV E TO BE CONSTRUED STRICTLY AND IN CASE IT IS FOUND THAT JURISDICTIONAL CONDITIONS ARE NOT SATISFIED, THE VERY ASSUMPTION OF JURISDICTION BY THE A.O. UNDER THAT S ECTION IS LIABLE TO BE SET ASIDE. THIS PROPOSITION OF LAW HAS FOUND APPROVAL FROM THE HIGHEST COURT OF THE LAND THOUGH IN THE BACK DROP OF SECTION 158BD IN THE CAS ES OF MANISH MAHESHWARI VS. ACIT 289 ITR 341(SC), CIT VS. CALCUTTA KNITWEARS (2 014) 362 ITR 673. IT HAS ALSO BEEN HELD IN THE CASE OF RAJHANS BUILDERS VS. CIT 2 26 TAXMAN 415(GUJARAT) THAT PROVISION OF SECTION 158BD AND THOSE OF SECTION 153 C ARE IN PARI--MATERIA. 8. IN THE PRESENT CASE A.O. OF THE SEARCHED PERSON DID NOT RECORD ANY SATISFACTION THAT ANY OF THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH BELONGED TO THE THIRD PERSON I.E. THE APPELLANT ASS ESSEE AS CAN BE SEEN FROM THE PLAIN READING OF THE REASON RECORDED. MOREOVER, SUCH SATISFACTION HAS NOT BEEN RECORDED IN THE CASE RECORDS OF THE SEARCHED P ERSON BY THE A.O. OF THE SEARCHED PERSON IN THAT CAPACITY. A.O. OF THE SEARC HED PERSON AND A.O. OF THE APPELLANT ASSESSEE I.E. THE THIRD PERSON EVEN IF IS ONE AND THE SAME PERSON BUT IT HAS BEEN HELD IN VARIOUS JURIDICAL DECISIONS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE THAT A.O. OF THE SEARCHED PERSON IS REQUIR ED IN LAW TO RECORD SATISFACTION IN THE CASE RECORDS OF THE SEARCHED PE RSON AS AN A.O. OF THE SEARCHED PERSON. IT IS NOT OUT OF PLACE TO MENTION THAT THE RECORDING OF SATISFACTION BY THE A.O. EVEN IF ASSESSING OFFICER IS ONE AND THE SAME PERSON IS 6 NO LONGER RES-INTEGRA IN AS MUCH AS HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GOPI APARTMENTS 365 ITR 411(ALL) AND HONBL E MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. MECHMEN 380 ITR 591(MP ) HAVE SIMILARLY HELD. THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. GOPI APARTMENTS (SUPRA) HELD AS FOLLOWS: 25. A BARE PERUSAL OF THE PROVISION CONTAINED IN SE CTION 153C OF THE I.T. ACT LEAVES NO DOUBT THAT, AS IS PROVIDED UNDER SECTION 158BD, WHERE THE ASSESSING OFFICER, WHILE PROCEEDING UNDER SECTION 153A AGAINS T 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, BU LLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SE IZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDI CTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINSTEAC H SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESSOR REASSESS INCO ME OF SUCH OTHER PERSON IN ACCORDANCE WITH THEPROVISIONS OF SECTION 153A. 26. THUS, THERE ARE TWO STAGES: (1) THE FIRST STAGE COMPRISES OF A SEARCH AND SEIZU RE OPERATION UNDER SECTION 132 OR PROCEEDING UNDER SECTION 132A AGAINST A PERSON, WHO MAY BE REFERRED AS 'THE SEARCHED PERSON'. BASED ON SUCH SEARCH AND SEIZURE, ASSESSMENT PROCEEDINGS ARE INITIATED AGAINST THE 'SEARCHED PERSON' UNDER SECTI ON 153A. AT THE TIME OF INITIATION OF SUCH PROCEEDINGS AGAINST THE 'SEARCHE D PERSON' OR DURING THE ASSESSMENT PROCEEDINGS AGAINST HIM OR EVEN AFTER TH E COMPLETION OF THE ASSESSMENT PROCEEDINGS AGAINST HIM, THE ASSESSING O FFICER OF SUCH A 'SEARCHED PERSON', MAY, IF HE IS SATISFIED, THAT ANY MONEY, D OCUMENT 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 JURI SDICTION OVER 'SUCH OTHER PERSON'. (2) THE SECOND STAGE COMMENCES FROM THE RECORDING O F SUCH SATISFACTION BY THE ASSESSING OFFICER OF THE 'SEARCHED PERSON' FOLLOWED BY HANDING OVER OF ALL THE REQUISITE DOCUMENTS ETC. TO THE ASSESSING OFFICER O F SUCH 'OTHER PERSON', THEREAFTER FOLLOWED BY ISSUANCE OF THE NOTICE OF THE PROCEEDIN GS UNDER SECTION 153C READ WITH SECTION 153A AGAINST SUCH 'OTHER PERSON'. 27. THE INITIATION OF PROCEEDINGS AGAINST SUCH OTH ER PERSON AREDEPENDANT 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 OFNOTIC 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' A RE INITIATED. THE HANDING OVER OF DOCUMENTS ETC. IN SUCH A CASE MAY OR MAY NO T 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 COMMISSIONER OF INCOME TAX-III VS. M/S CALCUTTA KNITWEARS, LUDHIANA (SUPRA), AS NOTED ABOVE, 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/ 7 RECORDED OR FROM ANY OTHER ORDER, NOTE OR RECORD MA INTAINED BY THE ASSESSING OFFICER OF THE 'SEARCHED PERSON'. THE WORD 'SATISFA CTION' REFERS TO THE STATE OF MIND OF THE ASSESSING OFFICER OF THE PERSON SEARCHED, WH ICH GETS REFLECTED IN A TANGIBLE SHAPE/ FORM, WHEN IT IS REDUCED INTO WRITING. IT IS THE CONCLUSION DRAWN OR THE FINDING RECORDED ON THE FOUNDATION OF THE MATERIAL AVAILABLE. IN THIS REGARD, REFERENCE MAY BE MADE TO THE PRONOUNCEMENTS IN THE CASE OF C.I.T. VS. RADHEY SHYAM BANSAL, (2011) 337 ITR 217 (DELHI) AND THE DI VISION BENCH JUDGMENT OF THIS COURT IN THE CASE OF C.I.T. VS. CLASSIC ENTERPRISES REPORTED IN (2013) 358 ITR 465 (ALLAHABAD). 31. IN THE CASE OF MANISH MAHESHWARI VS. ASSISTANT COMMISSIONER OFINCOME TAX AND ANOTHER, (2007) 289 ITR 341 (SC), THEIR LOR DSHIPS HAD THE OCCASION TO CONSIDER THE PROVISIONS OF SECTIONS 158BC AND 158BD AND HELD THAT THE CONDITIONS PRECEDENT FOR TAKING RECOURSE TO A BLOCK ASSESSMENT INTERMS OF SECTON 158BC AND 158BD (I) WERE AS UNDER: (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD BEE N HANDED OVER TO THE ASSESSING OFFICER HAVINGJURISDICTION OVER SUCH OTHE R PERSON; AND (III) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST S UCH OTHER PERSON. 11. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVI SIONS OFSECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS, OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THEPERSON WHOSE P REMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS ANDOTHER ASSETS HAD BEEN REQUISI TIONED UNDER SECTION 132A OF THE ACT. 32. THE RATIO OF THE JUDGMENT IN MANISH MAHESHWARI S CASE ALSO APPLIES TO THE PROVISIONS OF SECTION 153C AND TO THE FACTS OF THIS CASE. THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE O F CIT VS. MECHMEN (SUPRA) LIKEWISE HELD AS FOLLOWS: 18. THE CONCOMITANT OF THIS CONCLUSION, IS THAT, T HE LEGAL POSITION AS APPLICABLE TO SECTION 158BD REGARDING SATISFACTION IN THE FIRST INSTANCE OF THE FIRST ASSESSING OFFICER FORWARDING THE ITEMS TO THE ASSES SING OFFICER HAVING JURISDICTION; AND IN THE SECOND INSTANCE OF THE ASSESSING OFFICER HAVING JURISDICTION WHILST SENDING NOTICE TO SUCH OTHER PERSON (OTHER THAN THE PERSON REFERRED TO IN SECTION 153A), MUST APPLY PROPRIO VIGORE. THE FACT THAT INC IDENTALLY THE ASSESSING OFFICER IS COMMON AT BOTH THE STAGES WOULD NOT EXTRICATE HIM F ROM RECORDING SATISFACTION AT THE RESPECTIVE STAGES. IN THAT, THE ASSESSING OF FICER IS SATISFIED THAT THE ITEMS REFERRED TO IN SECTION 153C BELONGS OR BELONG TO A PERSON (OTHER THAN THE PERSON REFERRED TO IN SECTION 153A), BEING A SINE QUA NON. HE CANNOT ASSUME JURISDICTION TO TRANSMIT THOSE ITEMS TO ANOTHER FILE WHICH INCID ENTALLY IS PENDING BEFORE HIM CONCERNING OTHER PERSON (PERSON OTHER THAN THE PERS ON REFERRED TO IN SECTION 153A). THE QUESTION AS TO WHETHER THAT MAY INFLUENC E THE OPINION OF THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, ALSO CANNOT BE THE BASIS TO TAKE ANY OTHER VIEW. AS A MATTER OF FACT, THE OTHER ASSESSING OFFICER TO WHOM THE ITEMS ARE HANDED OVER, BEFORE ISSUING NOTICE MUST H IMSELF BE SATISFIED AFTER DUE VERIFICATION OF THE ITEMS RECEIVED AND THE DISCLOSU RES MADE BY THE OTHER PERSON IN THE RETURNS FOR THE RELEVANT PERIOD ALREADY FILED B Y THE OTHER PERSON IN THE RETURNS FOR THE RELEVANT PERIOD ALREADY FILED BY THE OTHER PERSON BEFORE HIM. FOR THE SAME REASON, WE MUST REJECT THE ARGUMENT OF THE DEPARTME NT THAT THE DISCRETION OF THE ASSESSING OFFICER HAVING JURISDICTION WILL BE IMPAI RED IN ANY MANNER, IF HE WERE TO HOLD A DIFFERENT VIEW. SIMILARLY, AS THERE IS NO PR OVISION EITHER EXPRESS OR IMPLIED (IN THE ACT) TO DISPENSE WITH THE REQUIREMENT OF SATISF ACTION, IF THE ASSESSING OFFICER HAPPENS TO BE THE SAME, AS IN THIS CASE, THE ARGUME NT OF THE DEPARTMENT MUST BE NEGATIVED. 19. AFTER RECEIPT OF THE MATERIALS, THE ASSESSING O FFICER HAVING JURISDICTION IS EXPECTED TO CONDUCT ENQUIRY AND DUE VERIFICATION OF THE RELEVANT FACTS; BEFORE FORMING HIS PRIMA FACIE SATISFACTION. THE ASSESSING OFFICER HAVING JURISDICTION WILL BE WELL WITHIN HIS RIGHTS TO FORM AN INDEPENDENT VIEW BEFORE ISSUING NOTICE TO THE OTHER PERSON (PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A) UNDER HIS 8 JURISDICTION ON THE BASIS OF HIS OWN ENQUIRY. IN OU R OPINION, THE VIEW FORMED BY THE ASSESSING OFFICER AFTER HIS OWN ENQUIRY DOES NOT EN TAIL IN SEATING IN APPEAL OVER THE SATISFACTION OF THE FIRST ASSESSING OFFICER, WH O HAD HANDED OVER THE ITEMS TO HIM. 20. AS A RESULT, WE HOLD THAT THERE IS NO INFIRMITY IN THE VIEW TAKEN BY THE TRIBUNAL ON THE QUESTIONS UNDER CONSIDERATION. THE VIEW TAKEN BY US IS REINFORCED FROM THE DECISIONS OF OTHER HIGH COURTS IN THE CASE S OF CIT V. GOPI APARTMENT (SUPRA), PEPSI FOODS P.LTD. (SUPRA), PEPSICO INDIA HOLDINGS P. LTD.(SUPRA) AND, LASTLY, CIT V. SMT. MADHU KESHWANI (SUPRA). THE OBS ERVATIONS OF THE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. (SUPRA) HAVE BEEN EXPLAINED IN THE SUBSEQUENT CASE OF PEPSICO INDIA HOLDINGS P. LTD. ( SUPRA). 21. WE CONCLUDE THAT THE CONDITION PRECEDENT FOR RE SORTING TO ACTION UNDER SECTION 158BD DELINEATED BY THE SUPREME COURT IN TH E CASE OF MANISH MAHESHWARI (SUPRA) AND IN THE RECENT CASE OF CIT V. CALCUTTA KNITWEARS (SUPRA), WOULD APPLY ON ALL FOURS MANDATING SATISFACTION OF THE ASSESSING OFFICER(S) DEALING WITH THE CASE AT THE REPRESENTATIVE STAGES REFERRED TO IN SECTION 153C. 9. IN VIEW OF THE ABOVE WE HOLD THAT IN THE ABSENCE OF A VALID RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON I.E; DR. NARESH MITTAL THAT CERTAIN DOCUMENTS FOUND DURING THE COURSE OF SEARCH BEYOND TO THE ASSESSEE, THE ASSUMPTION OF JURISDICTION U/S 153 C IN THE CASE OF THE ASSESSEE WAS INVALID. 10. WE ARE NOT PERSUADED BY THE ARGUMENT OF LD. CIT DR FOR THE SIMPLE REASON THAT THE POSITION OF LAW AS EXPLAINED IN THE ABOVE MENTIONED JUDICIAL DECISIONS HAS INTERPRETED SECTION 153C IN THE MANNE R AS INTERPRETED BY THE LD. COUNSEL FOR THE ASSESSEE. RELIANCE OF THE DECISION OF KOLKATA BENCH BY LD. CIT DR IN THE CASE OF KPC MEDICAL COLLEGE & HOSPITAL, S UPRA, DOES NOT HELP THE CAUSE OF REVENUE IN AS MUCH AS THERE ARE DECISIONS OF HIGH COURT OF DELHI, ALLAHABAD, AND MADHYA PRADESH AS REFERRED ABOVE. MO REOVER, EVEN FROM THE PLAIN READING OF THE REASON RECORDED ON 17.8.2012, THERE IS NOTHING TO SUGGEST THAT ANY DOCUMENT ETC. FOUND IN SEARCH BELONGED TO THE APPELLANT. ALL THAT IS MENTIONED IS THAT THE PAGE NO. 21-25, 127-136 OF DO CUMENT NO. A1 ETC I.E. DOCUMENTS FOUND IN SEARCH CONTAIN DETAILS OF TRANSA CTIONS IN IMMOVABLE PROPERTY MADE BY THE ASSESSEE. THIS IS NOT THE CASE OF AO OF THE ASSESSEE IN THE REASON RECORDED THAT DOCUMENTS FOUND DURING SEARCH BELONGED TO THE ASSESSEE. DOCUMENTS BELONGING TO A PERSON AND TR ANSACTIONS CONTAINED IN SOME DOCUMENTS MADE BY A PERSON ARE TWO DIFFERENT THINGS. SECTION 153C CAN BE INVOKED ONLY IF THE FINDING IS THERE THAT DOCUME NTS ETC. FOUND DURING SEARCH BELONGED TO THE THIRD PERSON WHICH IS NOT THE CASE MADE OUT BY AO IN THE 9 PRESENT CASE. THEREFORE, AFTER CONSIDERING THE TOTA LITY OF FACTS AND CIRCUMSTANCES AND THE POSITION OF LAW AS EXPLAINED ABOVE, WE HOLD THAT THE JURISDICTION ASSUMED U/S 153C WAS LACKING IN THE IN STANT CASE AND THEREFORE THE NOTICE ISSUED U/S 153C IS HELD NOT IN ACCORDANCE WI TH LAW AND THE ASSESSMENT MADE IS QUASHED. SINCE WE HAVE HELD THAT ASSUMPTION OF JURISDICTION U/S 153C ITSELF IS BAD, WE DO NOT PROPOSE TO DISPOSE THE OTH ER GROUNDS OF APPEAL. IN THE RESULT, APPEAL IS ALLOWED IN ABOVE TERMS. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED :14/06/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR