DCIT, New Delhi V. M/s. G.S. Finance and Investment Pvt. Ltd., New Delhi

ITA 5982/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86951 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANURADHA MISHRA
• Keywords: Unexplained cash credit; Search and seizure; Question of law; Assessment record; Documents seized
• Section: 69C; 153A; 68; 132

Judgement Text

IN TH E INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI GEORGE GEORGE K. , JUDICIAL MEMBER AND SHRI T.S. KAPOOR , ACCOUNTANT MEMBER ITA NO S . 5980 TO 5985 /DEL/201 3 ASSESSMENT YEARS 200 3 - 0 4 TO 2008 - 09 D CIT, CENTRAL C IRCLE - 21 VS. M/S G .S. FINANCE AND INVESTMENT PVT. LTD ROOM NO.344, E - 2, ARA CENTRE, 602, D/8, ROSE APARTMENT, WARD NO.3 JHANDEWALAN EXT. MEHRAULI, NEW DELHI NEW DELHI (PAN AA CCG 7939 F ) C.O. NO S . 178 TO 183 / DEL /201 4 (IN ITA NO S . 5980 TO 5985/DEL / 201 4) A.YS. 2003 - 04 TO 2008 - 09 M/S G.S. FINANCE AND INVESTMENT PVT. LTD DCIT, CENTRAL CIRCLE - 21 602, D/8, ROSE APARTMENT, WARD NO.3 ROOM NO.344, E - 2, ARA CENTRE, MEHRAULI, VS. JHANDEWALAN EXT. NEW DELHI. NEW DELHI. ( APPELLANT) (RESPONDENT) A PPELLANT BY : SMT. ANURADHA MISHRA, CIT RESPONDENT BY: SH . KAPIL GOEL, ADVOCATE ORDER PER BENCH : 1. THESE APPEAL S , AT THE INSTANCE OF THE REVENUE AND THE CROSS OBJECTIONS FILED BY THE ASSESSE E , ARISE OUT OF SIX SEPARATE ORDERS OF CIT (A) , ALL PASSE D IN THE MONTH OF AUGUST, 2013. THE RELEVANT ASSESSMENT YEAR S ARE 200 3 - 0 4 TO 2008 - 09 . ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 2 2. IN REVENUE S APPEALS, IDENTICAL GROUNDS ARE RAISED EXCEPT FOR VARIATION IN FIGURES. TWO EFFECTIVE GROUNDS RAISED IN REVENUE S APPEALS RELATE TO: I) WHETHER THE CIT (A ) WA S JUSTIFIED IN DELETING THE DISALLOWANCE S OF EXPENDITURE MADE BY THE AO ; & . II) WHETHER THE CIT (A) WA S JUSTIFIED IN DELETING THE ADDITION S MADE ON ACCOUNT OF UNEXPLAINED PURCHASE S U/S 69C OF THE ACT. 2.1 IN THE AY 2007 - 08, APART FROM THE ABOVE GROUND S, THE REVENUE ALSO CHALLENGES THE CIT(A) S ORDER I N DELETING THE ADDITION OF RS. 4 0 ,00, 0 0/ - ADDED BY THE AO ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 3. IN THE ASSESSEE S CROSS OBJECTION S , SEVERAL GROUNDS ARE RAISED. ALL THE GROUNDS RELATE T O THE ISSUE OF CHALLENG ING THE INITIATION OF PROCEEDING S U/S 153C OF THE ACT. 4. AT THE VERY OUTSET, THE L D. COUNSEL FOR THE ASSESSE E , REFERRING TO THE GROUNDS RAISED IN THE CO S , SUBMITTED THAT ASSESSMENT S MADE U/S 153C OF THE ACT WERE INVALID, SINCE SATIS FACTION WAS NOT RECORDED BY THE AO IN THE FILES OF THE SEARCHED PERSON PRIOR TO INITIATION OF PROCEEDING S U/S 153C OF THE ACT . T HE SAID ISSUE , IT WAS SUBMITTED , IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE COORDINATE BENCH ES OF TH IS TRIBUNAL W HICH , IN TURN , HAD PLACED RELIANCE ON THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S . PEPSICO INDIA HOLDING PVT. LTD V . ACIT REPORTED IN 367 ITR (673 )/122 (DEL) . 5. THE L D. DR PRESENT WAS DULY HEARD. THE L D. DR HAS GIVEN A BRIEF NOTE WITH REFERENCE TO THE ISSUE RAISED BY THE L D. AR. THE RELEVANT PORTION OF THE NOTE OF THE LD . DR READS AS FOLLOW S : - ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 3 1. ASSESSEE HAS RELIED UPON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF M/S . PEPSICO INDIA HOLDING PVT. LTD. IN CIVIL AP PEAL NO. 28 OF 2015. IN THIS REGARD, IT IS HUMBLY SUBMITTED THAT THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF M/S . PEPSICO INDIA HOLDING PVT. LTD. WAS GIVEN ON A WRIT PETITION WHERE: - A. QUESTION OF LAW WAS NOT FRAMED. B. THE JUDGMENT IS IN PERSONEM AND NOT IN REM. C. THEREFORE IT HAS NO PRECEDENTIAL VALUE QUA THE PERSONS WHO WERE NOT PARTY BEFORE THE HIGH COURT. 2 ON THE OTHER HAND , REVENUE WOULD LIKE TO RELY ON THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF M/S CALCUTTA KNITWEAR IN CIVIL APPEAL NO. 3958 OF 2014 WHICH HAS BINDING AND PRECEDENTIAL VALUE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL S ON RECORD. THE SEARCH AND SEIZURE OPERATION S U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASES OF SRI B.K.DHINGRA, POONAM DHINGRA AND M/S. MADHUSUDAN BUILDCON (P) LIMITED ON 20.10.2008. THE AO RECORDED SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF THE ACT TO THE ASSESSEE ON 5.7.2010 AND THE NOTICE U/S 153C OF THE ACT WAS ISSUED TO THE ASSESSE E ON 8.7.2010. IN RESP ONSE, THE ASSESSEE FILED RETURNS OF INCOME ON 6.9.2010 FOR ALL THE SIX ASSESSMENT YEARS UNDER DISPUTE. THE SATISFACTION NOTE FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT AGAINST THE ASSESSEE IS PLACED AT PAGE 1 OF THE PAPER BOOK FILED. THE SATISFACT ION NOTE RECORDED BY THE AO READS AS FOLLOWS: ON 05.07.2010: DOCUMENTS AT PAGES 1 TO 60 OF ANNEXURE A 32 SEIZED BY THE PARTY R - 2 FROM THE PREMISES AT F - 6/5, VASANT VIHAR, NEW DELHI, DURING THE COURSE OF SEARCH CONDUCTED U/S 132 OF THE IT ACT, 1961, ON 20.10.2008 IN THE CASE OF SH. B.K.DHINGRA, SMT. POONAM DHINGRA, M/S. MADHUSUDAN BUILDCON PVT. LTD HAVE BEEN FOUND TO BELONG TO M/S. G.S.FINANCE & INVESTMENT PVT. LTD 113,, IST FLOOR, VASANT VIHAR, NEW DELHI, WHICH WAS (HAS) NOT BEEN COVERED U/S 132 OF THE IT ACT, 1961. ACCORDINGLY, IN TERMS OF PROVISIONS OF SECTION 153C OF THE ACT, NOTICES U/S 153C ARE HEREBY ISSUED FOR THE AY 2003 - 04 TO 2008 - 09 IN THE CASE OF M/S. G.S. FINANCE & INVESTMENT PVT. LTD. THE CASE WAS CENTRALIZED IN THE CENTRAL CIRCLE - 17, NEW DELHI VIDE ORDERS 14/DEC/09 OF CIT - V, NEW DELHI. SD/ - DCIT, CENTRAL CIRCLE 17, NEW DELHI. ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 4 7. ON THE BASIS OF RTI APPLICATION OF THE ASSESSEE , A LETTER WAS ISSUED BY THE AO [F.NO.D CIT/CC - 17/RTI/2013 - 14/122 DATED 10.6.2013] STATING THAT NO SATISFACTION IS RECORDED IN THE FILE OF THE SEARCHED PERSON FOR INITIATION OF PROCEEDINGS U/S 153C OF THE ACT IN THE CASE OF THE ASSESS E E. THE LETTER OF THE AO READS AS FOLLOWS: SUB: APPLICATIO N FOR SEEKING INFORMATION UNDER RTI ACT, 2005 REG PLEASE REFER TO YOUR APPLICATION ON THE ABOVE MENTIONED SUBJECT. 2. FROM THE ASSESSMENT RECORDS OF SH. BHUPESH KUMAR DHINGRA WHICH IS COVERED UNDER SECTION 153A, FOR THE ASST. YEARS FROM 2003 - 04 TO 2008 - 09 (BLOCK PERIOD), IT IS NOTICED THAT THERE IS NO SATISFACTION NOTE AVAILABLE/RECORDED IN RESPECT OF OTHER ENTITIES. SIMILAR LETTER ADDRESSED TO THE OTHER SEARCHED PERSONS, NAMELY, SMT. POONAM DHINGRA AND M/S. MADHUSUDAN BUILDCON PVT. LTD ARE ALSO PLACED ON RECORD AT PAGES 4 AND 5 OF THE PB FILED BY THE ASSESSE E . 8. THE CONTENTION OF THE LD. COUNSEL OF THE ASSESSEE WAS THAT IT IS APPARENT FROM THE ASSESSMENT REC O RDS OF THE SEARCHED ENTITIES THAT THE REQUIRED SATISFACTION NOTE U NDER SECTION 153C OF THE ACT WAS NOT RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSONS/ENTITIES . 9. T HIS ISSUE RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IS NO LONGER RES INTEGRA . THE CO - ORDINATE BENCHES OF THIS TRIBUNAL HAVE CONSIDERED AN IDENTICA L ISSUE TO THAT OF THE PRESENT MATTER UNDER DISPUTE IN THEIR ORDERS. THE DETAILS OF THE ORDERS OF THE EARLIER BENCHES OF THIS TRIBUNAL ARE AS UNDER: (I) TANVIR COLLECTIONS PVT. LTD V. ACIT [ITA NO.2421/DEL/2014 DATED: 16.1.2015 ] ; ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 5 (II) DCIT V. M/S. AAKAS H AROGYA MINDIR P. LTD [ITA NOS. 5437 TO 5442/DEL/2013 DATED: 28.11.2014]; & (III) ACIT V. INLAY MARKETING PVT. LTD [ITA NOS.4200 TO 4202/DEL/2012 & 4197 TO 4199/DEL/2012 DATED: 14.11.2014] 10. IN THE CASE OF TANVIR COLLECTIONS PVT. LTD (SU PRA), THE CO - ORDINATE BENCH OF THIS TRIBUNAL REPELLED THE CONTENTIONS OF THE REVENUE THAT NO SATISFACTION NOTE NEED TO BE RECORDED WHEN THE AO OF THE SEARCHED PERSON AND THE OTHER PERSON AGAINST WHOM PROCE E DINGS U/S 153C OF THE ACT ARE SAME. THE BENC H HAD ALSO REJECTED THE CONTENTION OF THE REVENUE THAT THE TRIBUNAL ORDERS IN THE CASES OF (I) ACIT V. INLAY MARKETING PVT. LTD., AND (II) M/S. AAKASH AROGYA MAINDIR P LTD (SUPRA) SHOULD BE HELD TO BE PER INCURIUM [REFER: PA RA 24 ON PAGE 18 OF THE ORDER ] . THE RELEVANT FINDINGS OF THE EARLIER BENCH OF THIS TRIBUNAL IN THE CASE OF TANVIR COLLECTIONS PVT. LTD V. ACIT (SUPRA) READ AS FOLLOWS: PARA 13 . IT CAN BE SEEN FROM THE ASSESSMENT ORDER THAT NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE BY THE ACIT, C ENTRAL CIRCLE - 17 ON 08.09.2010, BEING THE SAME DATE ON WHICH THE ABOVE SATISFACTION WAS RECORDED. IT IS APPARENT THAT IT WAS : SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF THE I.T. ACT, 1961 IN THE CASE OF M/S TANVEER COLLECTION PVT. LTD. IT IS FUR THER NOTICEABLE FROM THE ABOVE THAT : THIS SATISFACTION NOTE IS RECORDED AND IS PLACED IN THE FILE BEFORE ISSUING NOTICE U/S 153C. THE CONTENTS OF THE ABOVE SATISFACTION NOTE LEAVE NOTHING TO DOUBT THAT IT WAS RECORDED BY THE AO OF THE ASSESSEE BEFORE TAKING UP THE ASSESSMENT U/S 153C OF THE ACT PURSUANT TO THE SEARCH CONDUCTED ON SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD. PAGES 5 - 7 OF THE PAPER BOOK ARE THE COPIES OF THE REPLY FURNISHED BY THE DY. COMMISSIONER OF INC OME - TAX, CENTRAL CIRCLE - 17, NEW DELHI TO SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD., UNDER THE PROVISIONS OF RTI ACT, 2005. THE RELEVANT PART OF THE REPLY DATED 10.6.2013 GIVEN TO SH. B.K. DHINGRA, IS AS UNDER: - ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 6 2. FROM THE ASSESSMENT RECORDS OF SH. BHUPESH KUMAR DHINGRA, WHICH IS COVERED UNDER SECTION 153A, FOR THE ASST. YEARS FROM 2003 - 04 TO 2008 - 09 (BLOCK PERIOD) IT IS NOTICED THAT THERE IS NO SATISFACTION NOTE AVAILABLE/RECORDED IN RESPECT OF OTHER ENTITIES. PARA 14 . SIMILAR REPLIES HAVE BEEN GIVEN TO SMT. POONAM DHINGRA AND M/S ADHUSUDAN BUILDCON PVT. LTD. ON A CONSIDERATION OF THE ABOVE REPLIES GIVEN BY THE DEPARTMENT TO THE PERSONS SEARCHED, IT IS MANIFEST THAT THERE IS NO SATISFACTION NOTE AVAILABLE/RECORDED IN RESPECT OF OTHER ENTITIES . ON A CONJOINT READING OF THE SATISFACTION NOTE AND REPLIES GIVEN BY THE DEPARTMENT TO THE PERSONS SEARCHED UNDER THE RTI ACT, IT CLEARLY EMERGES THAT NO SATISFACTION WAS RECORDED BY THE AO IN THE CASES OF THE PERSONS SEARCHE D U/S 132(1) OF THE ACT (I.E. SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD.) THAT SOME BOOKS OF ACCOUNT OR DOCUMENTS ETC. BELONGING TO THE ASSESSEE WERE FOUND WHICH WERE HANDED OVER TO THE AO OF THE OTHER PERSON (I.E. THE A SSESSEE). THE SATISFACTION NOTE AS REPRODUCED ABOVE HAS BEEN PREPARED BY THE AO OF THE ASSESSEE. PARA 15. THE LD. DR VEHEMENTLY ACCENTUATED ON THE POINT THAT SINCE THE AO OF THE PERSONS SEARCHED AND THE ASSESSEE IS SAME, IT DOES NOT MAKE ANY DIFFERENC E WHETHER THE SATISFACTION IS RECORDED IN THE CASE OF THE PERSONS SEARCHED OR OTHER PERSON. SHE EMPHASIZED ON THE FACTUM OF RECORDING SATISFACTION BY THE AO, WHICH CONDITION IN HER OPINION STOOD SATISFIED, BY VIRTUE OF IT HAVING BEEN RECORDED BY THE COMMON AO. PARA 16. IN OUR CONSIDERED OPINION, THIS CONTENTION ADVANCED ON BEHALF OF THE REVENUE IS DEVOID OF MERIT. WE FAIL TO COMPREHEND AS TO HOW THE REQUIREMENT OF RECORDING SATISFACTION BY THE AO OF THE PERSON SEARCHED PROVIDED BY THE STATUTE CAN BE SUB STITUTED WITH ANYTHING ELSE. THERE IS AN UNDERLYING RATIONALE IN PROVIDING FOR RECORDING OF SUCH SATISFACTION BY THE AO OF THE PERSON SEARCHED. AS THE MONEY, BULLION, JEWELLERY, BOOKS OF ACCOUNT OR DOCUMENTS ETC. ALWAYS COME TO THE POSSESSION OF THE AO OF THE PERSON SEARCHED WHO HAS TO FRAME ASSESSMENT, IT IS ONLY HE WHO CAN FIND OUT THAT WHICH OF SUCH DOCUMENTS ETC. DO NOT BELONG TO THE PERSON SEARCHED AND ARE RELEVANT FOR THE ASSESSMENT OF THE OTHER PERSON. IT IS NOT AS IF ALL THE BOOKS OF ACCOUNT AND DO CUMENTS ETC. FOUND DURING THE COURSE OF A SEARCH ARE EVALUATED BY A SEPARATE AUTHORITY TO FIGURE OUT THAT WHICH OF THESE DOCUMENTS BELONG TO THE PERSON SEARCHED AND TO THE OTHERS AND THUS HANDED OVER TO THE CONCERNED AOS OF THE PERSON SEARCHED AND OTHERS F OR MAKING ASSESSMENT. AS IT IS ONLY THE AO OF THE PERSON SEARCHED WHO CAN REACH A CONCLUSION THAT SOME OF THE DOCUMENTS ETC. DO NOT ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 7 BELONG TO THE PERSON SEARCHED BUT TO SOME OTHER PERSON, THE LEGISLATURE HAS PROVIDED FOR RECORDING OF SUCH SATISFACTION BY T HE AO OF THE PERSON SEARCHED. IT IS NOT PERMISSIBLE UNDER THE LAW TO REQUIRE THE AO OF THE OTHER PERSON TO RECORD SUCH SATISFACTION BY THE AO. PARA 17. AS REGARDS THE OTHER ARGUMENT OF THE LD. DR THAT SINCE THE AO OF BOTH THE PERSONS SEARCHED AND THE ASSESSEE IS THE SAME PERSON, HENCE THE REQUIREMENT OF RECORDING SATISFACTION BY THE AO OF THE PERSONS SEARCHED SHOULD BE DEEMED TO HAVE BEEN FULFILLED WITH THE RECORDING OF SATISFACTION BY THE AO OF THE ASSESSEE. WE ARE AGAIN UNABLE TO APPRECIATE THIS CO NTENTION THAT THE COMMONNESS OF THE AO WOULD MAKE NO DIFFERENCE IN SO FAR AS THE RECORDING OF SATISFACTION IN THE CASE OF THE PERSONS SEARCHED IS CONCERNED. WHAT IS RELEVANT FOR THIS PURPOSE IS NOT THE IDENTITY OF THE PERSON ASSESSING BUT HIS POSITION AND THE CAPACITY. WHEN THE LAW REQUIRES THE AO OF THE PERSON SEARCHED TO RECORD THE NECESSARY SATISFACTION, IT IS THE AO HAVING JURISDICTION OVER THE PERSON SEARCHED WHO IS OBLIGED TO RECORD SUCH SATISFACTION IN THE CAPACITY OF THAT AO AND THAT TOO IN THE CASE OF THE PERSON SEARCHED. THE MERE FACT THAT THE AO OF THE PERSON SEARCHED AND THE ASSESSEE IS THE SAME PERSON, DOES NOT, IN ANY MANNER, OBLITERATE THE REQUIREMENT OF LAW NECESSITATING THE RECORDING OF SATISFACTION IN THE CASE OF THE PERSON SEARCHED THAT MO NEY, BULLION, JEWELLERY, ETC., FOUND FROM THE PERSON SEARCHED BELONGS TO THE OTHER PERSON. WHAT IS CRUCIAL TO NOTE IS CAPACITY OF THE AO AND NOT HIS IDENTITY. IN VIEW OF THE FACT THAT WHEN THE STATUTORY STIPULATION IS FOR RECORDING THE SATISFACTION BY T HE AO OF THE PERSON SEARCHED, THEN, IT CANNOT BE SUBSTITUTED WITH THE SATISFACTION OF THE AO OF THE OTHER PERSON. THIS CONTENTION ALSO FAILS. PARA 18. AT THIS STAGE, IT IS RELEVANT TO NOTE THAT THE LEGISLATURE HAS SUBSTITUTED THE LATTER PART OF SECTION 1 53C(1) BY THE FINANCE (NO.2) ACT, 2014 W.E.F. 1.10.2014. THE HITHERTO PART OF SUB - SECTION (1) : AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON REFERRED TO IN SUB - SECTION (1) OF SECTION 153A. HAS BEEN SUBSTITUTED AS UNDER : - AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SE CTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB - SECTION (1) OF SECTION. ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 8 PARA 19. THE ABOVE SUBSTITUTION HAS THE EFFECT OF NOW MAKING IT MANDATORY FOR THE AO OF THE OTHER PERSON ALSO TO RECORD SATISFACTION THAT THE BOOKS OF ACCOUNT OR DOCUMENTS, ETC., HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON BEFORE EMBARKING UPON THE EXERCISE OF HIS ASSESSMENT OR REASSESSMENT. THEREFORE, NOW UNDER THE LAW, W.E.F. 1.10.2014 IT HAS BECOME OBLIGATORY NOT ONLY FOR THE AO OF THE PERSON SEARCHED TO RECORD SATISFACTION BEFORE HANDING OVER BOOKS OF ACCOUNT OR DOCUMENTS, ETC., TO THE AO OF THE OTHER PERSON , BUT, SUCH AO OF THE OTHER PERSON IS ALSO REQUIRED TO RECORD SATISFACTION THAT THE BOOKS OF ACCOUNT OR DOCUMENTS, ETC. HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INC OME OF SUCH OTHER PERSON. IN THE PRE - SUBSTITUTION ERA OF THE RELEVANT PART OF SUB - SECTION (1) OF SECTION 153C COVERING THE PERIOD UNDER CONSIDERATION, THE JURISDICTIONAL CONDITION REMAINS THAT THE SATISFACTION IS REQUIRED TO BE RECORDED BY AND IN THE CASE OF THE PERSON SEARCHED SO AS TO ENABLE THE AO OF THE OTHER PERSON TO START WITH THE PROCEEDINGS FOR MAKING ASSESSMENT OR REASSESSMENT. PARA 20. THE LD. DR CONTENDED THAT RECORDING OF SATISFACTION BY THE AO OF THE ASSESSEE AT THE MOST CAN BE TREATED A S A TECHNICAL MISTAKE AND HENCE SHOULD NOT ECLIPSE THE ASSESSMENT. RELYING ON CERTAIN JUDGMENTS, THE LD. DR SUBMITTED THAT THE TECHNICALITIES CANNOT BE ALLOWED TO PREVAIL IN THE COURSE OF INDULGENCE OF JUSTICE. PARA 21. WE AGREE IN PRINCIPLE THAT TECH NICALITIES CANNOT COME IN THE WAY OF DISPENSATION OF JUSTICE. HOWEVER, IT IS IMPORTANT TO NOTE THAT THE LACK OF JURISDICTION BY THE AO CANNOT BE PUT UNDER THE CARPET IN THE GUISE OF A TECHNICAL DEFECT. IT GOES WITHOUT SAYING THAT NO ASSESSMENT OR OTHER P ROCEEDINGS CAN BE LAWFULLY TAKEN UP AND COMPLETED UNLESS THE CONCERNED AUTHORITY HAS JURISDICTION TO DO SO. LACK OF JURISDICTION GOES TO THE VERY ROOT OF THE MATTER AND CUTS THE TREE OF ASSESSMENT IF THE FOUNDATION OF JURISDICTION IS MISSING. PARA 22. THE LD. AR HAS BROUGHT TO OUR NOTICE TWO ORDERS PASSED BY THE DELHI BENCHES OF THE TRIBUNAL, NAMELY, ACIT VS. INLAY MARKETING PVT. LTD. (ITA NO.4200/DEL/2012), ETC. AND DCIT VS. AAKASH AROGYA MANDIR PVT. LTD. (ITA NO.5437/DEL/2013), ETC., IN WHICH THE NOT ICES AND THE CONSEQUENTIAL ASSESSMENTS U/S 153C, UNDER IDENTICAL CIRCUMSTANCES, HAVE BEEN QUASHED. THE LD. DR CONTENDED THAT THE ABOVE REFERRED TWO TRIBUNAL ORDERS ARE PER INCURIUM AND SHOULD NOT BE FOLLOWED. THE MAIN REASON FOR DECLARING THE TRIBUNAL ORD ERS AS PER INCURIUM WAS THE NON - CONSIDERATION OF THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN JUDGMENT IN THE CASE OF SSP AVIATION LTD. VS. DCIT (2012) 252 CTR (DEL) 291. ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 9 PARA 23. LET US EXAMINE THE CASE OF SSP AVIATION LTD. (SUPRA) FOR EVAL UATING THE CONTENTION THAT THE INSTANT ASSESSMENT BE DECLARED AS PER LAW. THE HON BLE HIGH COURT IN THAT CASE HAS HELD THAT THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON SHOULD BE SATISFIED THAT THE VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING THE SEARCH BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON AND THERE IS NO REQUIREMENT IN SECTION 153C(1) THAT THE ASSESSING OFFICER SHOULD ALSO BE SATISFIED THAT SUCH VALUABLE ARTICLES OR BOOKS OF ACCOUNT OR DOCUMENTS BELONGI NG TO THE OTHER PERSON MUST CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISCLOSED INCOME. WE FIND THAT THERE IS NO SUCH CONTROVERSY BEFORE US AS WAS THERE BEFORE THE HON BLE HIGH COURT. IT IS NOT THE CASE OF THE ASSESSEE BEFORE US IN THIS GROUND THAT THE DOCUM ENTS ETC. FOUND FROM THE PERSONS SEARCHED DID NOT POSITIVELY INDICATE THE EXISTENCE OF SOME INCOME IN THE HANDS OF THE ASSESSEE. THE ARGUMENT IS SIMPLY CONFINED TO NON - RECORDING OF SATISFACTION BY THE AO OF THE PERSONS SEARCHED. INSTEAD OF SUPPORTING THE D EPARTMENT S CASE, WE FIND THAT THIS JUDGMENT STRENGTHENS THE ASSESASEE S CASE BY MAKING IT CLEAR IN NO UNCERTAIN TERMS THAT THE AO OF THE PERSON SEARCHED IS OBLIGED TO RECORD THE SATISFACTION. THE RELEVANT OBSERVATIONS OF THE HON BLE HIGH COURT CONTAINED I N PARA 15 MERIT REPRODUCTION AS UNDER: - IT NEEDS TO BE APPRECIATED THAT THE SATISFACTION THAT IS REQUIRED TO BE REACHED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON IS THAT THE VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SE IZED DURING THE SEARCH BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON. THERE IS NO REQUIREMENT IN SECTION 153C(1) THAT THE ASSESSING OFFICER SHOULD ALSO BE SATISFIED THAT SUCH VALUABLE ARTICLES OR BOOKS OF ACCOUNT OR DOCUMENTS BELONGING TO THE OTHER PER SON MUST BE SHOWN TO SHOW TO CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISCLOSED INCOME. PARA 24. IT IS PRETTY CLEAR FROM THE ABOVE EXTRACTION THAT THE SATISFACTION AS REFERRED TO IT IN THIS CASE IS THAT OF THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON. AS SUCH, WE ARE OF THE CONSIDERED OPINION THAT THIS JUDGMENT DOES NOT SUPPORT THE REVENUE S CASE. RESULTANTLY, THE CHARACTERIZATION OF THE ABOVE TRIBUNAL ORDERS AS PER INCURIUM BY THE LD. DR, IS ABSOLUTELY WITHOUT ANY LEGALLY SUSTAINAB LE BASIS. PARA 25. EVEN OTHERWISE, THE JUDICIAL DISCIPLINE REQUIRES A SUBSEQUENT BENCH TO THE FOLLOW AN EARLIER ORDER OF A CO - ORDINATE BENCH ON THE POINT. IT IS ONLY IF THE SUBSEQUENT BENCH FEELS ITSELF UNABLE TO CONCUR WITH THE VIEW TAKEN EARLIER TH AT IT IS REQUIRED TO REFER THE CASE FOR CONSIDERATION ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 10 BY A SPECIAL BENCH. IN OUR CONSIDERED OPINION, THESE TWO ORDERS OF THE CO - ORDINATE BENCHES ARE PERFECTLY IN ACCORDANCE WITH LAW. PARA 26. COMING BACK TO FACTS OF THE INSTANT CASE, IT IS PALPABLE THAT THE AO OF SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD., DID NOT RECORD ANY SATISFACTION THAT SOME MONEY, BULLION, JEWELLERY OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS FOUND FROM THESE PERSONS BELONGED TO THE ASSESSEE. THE ABS ENCE OF SUCH SATISFACTION, IN OUR CONSIDERED OPINION, FAILED TO CONFER ANY VALID AND LAWFUL JURISDICTION ON THE AO OF THE ASSESSEE TO PROCEED WITH THE MATTER OF THE ASSESSMENT U/S 153C OF THE ACT. WE, ERGO, SET ASIDE THE INITIATION AND THE ENSUING ASSESSME NT ON THE ASSESSEE AS VOID AB INITIO. PARA 27. THE RELIANCE OF THE LD. DR ON SOME DECISIONS ON OTHER LEGAL ISSUES OR MERITS IS OF NO CONSEQUENCE IN VIEW OF THE LACK OF JURISDICTION OF THE AO TO PROCEED WITH THE ASSESSMENTS U/S 153C OF THE ACT. IN VIE W OF OUR DECISION ON THE FIRST LEGAL ISSUE, THERE IS NO NEED TO ESPOUSE THE OTHER GROUNDS TAKEN BY THE ASSESSEE DEALING WITH OTHER LEGAL ISSUES OR MERITS. 11. IN THE C ASE OF M/S. AAKASH AROGYA MINDIR P. LTD V. DCIT (SUPRA), THE EARLIER BENCH OF THIS TRIBU NAL HAD FOLLOWED THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOODS P. LTD V. ACIT (SIC) PEPSICO INDIA HOLDING PVT. LTD V. ACIT [SOURCE: PARA 6 ON PAGE 6 OF THE ORDER DT.28.11.2014]. 12 . IN THE LIGHT OF THE JUDGMENT OF THE HO N BLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI CO INDIA HOLDING PVT . LTD V. ACIT (SUPRA) AND ALSO THE FINDINGS OF THE EARLIER BENCHES OF THIS TRIBUNAL (SUPRA), WE HOLD THAT SINCE THERE WAS NO SATISFACTION NOTE BY THE AO OF SEARCHED PERSON PRIOR TO I NITIATION OF PROCEEDINGS U/S 153C OF THE ACT, THE ASSESSMENTS CONCLUDED ON THE ASSESS E E U/S 153C OF THE ACT R.W.S 153A OF THE ACT LACK JURISDICTION AND THE SAME ARE HEREBY QUASHED. ITA NOS. 5980 TO 5985/DEL/2013 C.O. NOS. 178 TO 183/DEL/2014 11 13 . IN SUBSTANCE, THE GROUND NO.1 OF THE ASSESSEE S C.OS IS ALLOWED. SIN CE THE C.O OF THE ASSESSEE IS PARTLY ALLOWED, THE GROUNDS RAISED BY THE REVENUE IN ITS APPEALS WITH REFERENCE TO THE MERITS OF THE CASE ARE NOT ADJUDICATED. 1 4 . IN THE RESULT: (I) THE ASSESSEE S C.OS FOR THE ASSESSMENT YEARS 2003 - 04 TO 2008 - 09 ARE PARTLY ALLOWED AS INDICATED ABOVE; & (II) THE REVENUE S APPEALS ARE NOT ADJUDICATED AND HENCE DISMISSED AS INFRUCTUOUS, SINCE THE ASSESSMENT ORDERS PASSED U/S 153C R.W.S. 153A OF THE ACT FOR THE ASSESSMENT YEARS 2003 - 04 TO 2008 - 09 WERE QUASHED. TH E DECISION WAS PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY , 201 5 . SD/ - SD/ - ( T.S. KAPOOR ) (GEORGE GEORGE K.) A CCOUNTANT MEMBER J UDICIAL MEMBER DATED: 25 TH FEBRUARY , 201 5 . AKS/ - COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST . REGISTRAR, ITAT, NEW DELHI