DCIT, New Delhi V. M/s. Shivaansh Advertising & Publicatins Pvt. Ltd., New Delhi

ITA 5992/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97051 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 06-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA KOTRU
• Assessee Lawyers: B K DHINGRA
• Keywords: Reopening of assessment; Search and seizure; Document seized; Principle of natural justice; Question of law; Assessment record; Documents seized
• Section: 69C; 153A; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NOS.5992 TO 5997/DEL/2013 (ASSESSMENT YEARS : 2003-04 TO 2008-09) ACIT, CENTRAL CIRCLE-21, VS SHIVAANSH ADVERTI SING & PUBLICATIONS PVT.LTD., NEW DELHI. RZ, F-7, VIJAY ENCLAVE, DWARKA PURI, NEW DELHI (PAN : AAKCS9764N) CO. NOS.335 TO 340/DEL./2014 ITA NOS.5992 TO 5997/DEL/2013 (ASSESSMENT YEARS : 2003-04 TO 2008-09) M/S. SHIVAANSH ADVERTISING & PUBLICATIONS, VS. ACI T, CENTRAL CIRCLE 21, (P) LTD, NEW DELHI. (NOW KNOWN AS BERT MARKETING PVT. LTD.), RZF-7, VIJAY ENCLAVE,DWARKA PURI, NEW DELHI 110 001. (PAN : AAKCS9764N) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI B. K.DHINGRA, ADVOCATE REVENUE BY : SHRI ANUPAMA KOTRU, CIT DR DATE OF HEARING : 04.08.2015 DATE OF PRONOUNCEMENT : 14.08.2015 O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THESE SIX APPEALS BY THE REVENUE AND SIX CROSS OBJE CTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS OF THE COM MISSIONER OF INCOME-TAX (APPEALS)-II, NEW DELHI FOR THE ASSESSMENT YEARS 20 03-04 TO 2008-09. ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 2 2. THE FACTS AND CIRCUMSTANCE IN ALL THE ASSESSMENT YEARS ARE SIMILAR EXCEPT THE DIFFERENCE IN THE ADDITIONS, THEREFORE, FOR THE SAKE OF BREVITY, WE TAKE THE FACTS FROM THE PROCEEDINGS OF THE ASSESSME NT YEAR 2003-04. BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZURE ACTIO N U/S 132 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER THE ACT) WAS CARRIED O UT IN THE CASES OF SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDA N BUILDCON PVT. LTD ON 20.10.2008 AND DURING THE COURSE OF SEARCH A T THEIR RESIDENTIAL PREMISES AT F-6/5, VASANT VIHAR, NEW DELHI, CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE, WHO IS AN INDIVIDUAL AND PROPRIETO R OF A CONCERN WERE SEIZED. ON THE BASIS OF DOCUMENTS SO FOUND BELONGI NG TO THE ASSESSEE, PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSES SEE U/S 153C READ WITH SECTION 153A OF THE ACT. THE CASE OF THE ASSESSEE WAS INITIALLY CENTRALIZED WITH ACIT, CENTRAL CIRCLE 17 U/S 127 OF THE ACT BY CIT, DELHI-III, NEW DELHI VIDE ORDER F.NO.CIT-III/CENTRALISATION/2009-1 0/2414 DATED 21.10.2009. NOTICE U/S 153C DATED 08.07.2010 WAS I SSUED TO THE ASSESSEE BY THE ACIT, CC 17, NEW DELHI REQUIRING THE ASSESSE E TO FILE RETURN OF INCOME WITHIN 15 DAYS OF SERVICE OF THE NOTICE. ME AN WHILE THE CASE WAS TRANSFERRED TO CENTRAL CIRCLE 21 BY AN ORDER U/S 12 7 OF THE ACT ISSUED VIDE F.NO.CIT (C)-II/CENT/2010-11/1029 DATED 19/10/2010. IN RESPONSE TO THE NOTICE U/S 153C, THE ASSESSEE FILED A RETURN FO R ASSESSMENT YEAR 2003-04 ON 06.09.2010 DECLARING NIL INCOME. A COPY OF TH E PANCHNAMA, REASONS FOR ISSUING NOTICE U/S 153C AND JURISDICTION ORDER DATED 19.10.2010 U/S 127 ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 3 OF THE ACT WERE DISPATCHED TO THE ASSESSEE ON 03.11 .2010 AS SOUGHT BY THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE TOOK PART IN THE PROCEEDINGS. THE AO FOUND THAT THE ASSESSEE COMPANY BELONGED TO THE THAPAR GROUP OF CASES AND ONE OF THE MAIN ALLEGATIO NS AGAINST THE GROUP WAS THAT SEVERAL CONCERNS HAD BEEN FLOATED BY THE G ROUP WITH DUMMY DIRECTORS AND SHAREHOLDERS. HE OBSERVED THAT THESE CONCERNS WERE BASICALLY CAPITAL FORMATION CONCERNS WHICH HAD BUIL D UP HUGE RESERVES AND SURPLUSES OVER THE YEARS AND THESE RESERVES AND SUR PLUSES WERE DECLARED INVESTED IN STOCKS OF TEXTILES. HE FURTHER FOUND T HAT AS AND WHEN CASH WAS REQUIRED, THE STOCKS WERE SOLD AND THE MONEY WAS UT ILIZED FOR OTHER PURPOSES AS PER REQUIRED. AGAINST THIS BACKGROUND, THE AO ANALYSED THE FACTS OF THE CASE. THE AO OPENED THE ASSESSMENT UND ER THE PROVISIONS OF SECTION 153C FOR THE ASSESSMENT YEAR 2003-04. THE AO NOTICED THAT THE COMPANY WAS INCORPORATED ON 25.10.1997 AND HAD BEEN FILLING ITS RETURNS WITH INCOME TAX REGULARLY. THE AO FURTHER FOUND THA T THE ASSESSEE HAD DECLARED A CLOSING STOCK OF RS.8,94,32,924/- AS ON 31.03.2002, WHICH FORMED THE OPENING STOCK FOR THE PREVIOUS YEAR UNDE R CONSIDERATION. DURING THE RELEVANT ASSESSMENT YEAR, THE AO FOUND T HAT THE ASSESSEE HAD PURCHASED TEXTILE GOODS OF RS.21,15,780/- AND HAD M ADE SALES OF RS.26,54,875/-. THE AO DIRECTED THE ASSESSEE TO PRO VE ITS TRADING ACTIVITIES AND TO PRODUCE SALE TAX RECORDS. THE ASSESSEE HAD C LAIMED THAT SINCE IT DEALT WITH TAX FREE GOODS ONLY THERE WAS NO NECESSI TY FOR IT TO FILE SALES TAX ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 4 RETURNS. THUS, THE AO FOUND THAT EXCEPT THE DECLARA TION OF THE ASSESSEE, THERE WAS NO INDEPENDENT PROOF OF SALE/PURCHASE OF THE GOODS EXCEPT THE BANK TRANSACTIONS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ASKED THE ASSESSEE TO GIVE BREAK UP OF CASH OR CHEQ UE PURCHASES. IN RESPONSE THERETO, THE ASSESSEE FILED A REPLY IN WHI CH ASSESSEE HAD DECLARED ITS ENTIRE PURCHASE AS CASH/CHEQUE PURCHASES OF RS. 21,15,780/- AND IT WAS ALSO STATED THAT IT DID NOT MAINTAIN ANY BANK ACCOU NT DURING THE YEAR AND THE ASSESSEE DEALT WITH TAX FREE GOODS ONLY THERE W AS NO NECESSITY FOR IT TO FILE SALES TAX RETURN. DURING THE COURSE OF INQUI RIES, THE AO FOUND THAT THE DIRECTOR/SHAREHOLDER WAS NOT A MAN OF MEANS AND THE PREMISES WERE NOT COMMERCIAL PREMISES. IT WAS ALSO REPORTED BY THE IN VESTIGATION WING THAT NO EVIDENCE OF STOCK WAS FOUND FROM ANY OTHER PREMI SES OF THE THAPAR HOMES GROUP. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSEE CLAIMED THAT THE ASSESSEE HAD A GODOWN AT KHASRA NO . 34/7, VILLAGE DERA MANDI, TEHSIL MEHRAULI, NEW DELHI. BUT, THE AO OBSE RVED THAT THE CLAIM WAS NON-VERIFIABLE DUE TO LAPSE OF SO MANY YEARS. T HE AO ALSO FOUND THAT MOST OF THE CONCERNS OF THAPAR GROUP HAD SOUGHT TO DECLARE THIS PREMISES AS THEIR GODOWN BUT NO SUCH CLAIM WAS MADE DURING S EARCH PROCEEDINGS. THE AO OBSERVED THAT IN THE CASE OF PRESENT ASSESSE E, ALL THE PURCHASES & SALES WERE IN CASH. THE ITEMS PURCHASED & SOLD WERE TEXTILE & FABRICS. THE NAME AND STYLE OF THE TEXTILES & FABRICS WERE DENIM , FABRICS K-III SUPER FINE (N), FABRIC (PS), FABRIC (PS) EMBROIDERY, FABR IC (PS) EXCEL, FABRICS, ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 5 KASHMIRI FABRICS-I, KASHMIRI FABRICS-I (D), ETC. F ROM THESE ITEMS, THE AO OBSERVED THAT THE ASSESSEE WAS NOT DEALING IN BRAND ED ITEMS AND THERE WAS NO NAME OF ANY COMPANY IN THESE PRODUCTS. HE FURTH ER OBSERVED THAT THE PURCHASES & SALES WERE WITHIN M/S THAPAR HOMES GROU P OF CASES. HE FOUND THAT IN INVENTORIES OF FABRIC & TEXTILE GOODS SHOWN IN THE BALANCE SHEET, THE CLOSING STOCK OF LAST YEAR STOOD AT RS.8 ,94,32,924/- AND THIS YEAR THE FIGURE WAS RS.8,93,30,132/- WHICH WAS ALMOST TH E SAME. THEREFORE, HE OBSERVED THAT THE PURCHASES & SALES WERE ONLY OUT O F CURRENT YEAR TRANSACTIONS WHICH WERE HELD UNVERIFIABLE AND BOGUS . THE AO FURTHER OBSERVED THAT IT WAS HIGHLY IMPROBABLE THAT WITH A HUGE STOCK INVENTORY OF GOODS WHICH CHANGE IN FASHION AND TASTE, THE ASSESS EE HAD TO MAKE SALES FROM FRESH PURCHASES ONLY. THE AO OBSERVED THAT THE PREPONDERANCE OF PROBABILITY SUGGESTED THAT THE STOCKS WERE NOT GENU INE BUT SINCE THESE WERE DECLARED PRIOR TO 01.04.2002, NO ACTION WAS BEING T AKEN FOR NOW. IN VIEW OF THE ABOVE, THE AO OBSERVED THAT ALL CASH PURCHAS ES WERE HELD UNVERIFIABLE AND HENCE A SUM OF RS.21,15,780/- WAS DISALLOWED U/S 69C. SIMILARLY, THE AO OBSERVED THAT THE EXPENSES CLAIME D BY THE ASSESSEE COMPANY IN P&L ACCOUNT WERE ALSO UNVERIFIABLE AS SU CH 100% OF THE EXPENSES I.E. RS.4,43,240/- WERE DISALLOWED. AGGRI EVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A) WHO WAS PLEASED TO PARTLY ALLOW THE APPEAL OF THE ASSESSEE. ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 6 3. THE REVENUE AND THE ASSESSEE, BEING AGGRIEVED BY THE ORDER OF THE LD. CIT (A), ARE IN APPEAL AND CROSS OBJECTION RESPECTI VELY BEFORE US. 4. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN AS SESSMENT YEAR 2003-04 ARE AS FOLLOW :- 1. THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,43,24 0/- ON ACCOUNT DISALLOWANCE OF 100% EXPENDITURE. 2. THE COMMISSIONER OF INCOME TAX (APPEAL), ERRED I N LAW AND ON FACTS IN DELETING THE ADDITION OF RS.21,15,7 80/- ON ACCOUNT OF UNEXPLAINED PURCHASE U/S 69C OF THE ACT. 3.(A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. (B) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE ON DURING THE COURS E OF THE HEARING OF THE APPEAL. THE ASSESSEE IN THE CROSS OBJECTION FOR ASSESSMENT YEAR 2003-04 HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD. CIT (A) HAS FAILED TO APP RECIATE THAT THE NOTICE ISSUED U/S 153C AND ASSESSMENT ORDER PAS SED BY THE LD. AO U/S. 153C/143(3) IS ILLEGAL, BAD IN LAW, TIM E BARRED, WITHOUT JURISDICTION AND WRONG ON FACTS. THE ADDITI ONS MADE ARE UNJUST, UNLAWFUL AND ARBITRARY AND ARE MADE AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD. CIT (A) HAS FAILED TO AP PRECIATE THAT THE LD. AO WAS NOT JUSTIFIED TO IGNORE THE SUBMISSI ONS OF THE APPELLANT THAT THE ASSESSMENT PROCEEDINGS FOR THE Y EAR UNDER APPEAL WAS NOT PENDING ON THE DATE OF THE RECORDING OF SATISFACTION U/S. 153C AND SINCE THE SAME DIDN'T AB ATE, THE ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 7 PROCEEDINGS U/S. 153C OF THE LT. ACT IN THIS CASE A RE BAD IN LAW AND DESERVES TO BE QUASHED. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD CIT (A) HAS FAILED TO APP RECIATE THAT THE ASSESSMENT FRAMED BY LD. AO IS AGAINST THE STAT UTORY PROVISIONS OF THE ACT AND WITHOUT COMPLYING THE PRO CEDURES PRESCRIBED U/S. 153C OF THE LT. ACT AND AS SUCH THE ASSESSMENT BEING BAD IN LAW DESERVES TO BE QUASHED. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISIONS OF LAW, THE LD CIT (A) HAS FAILED TO APP RECIATE THAT THE LD AO WAS NOT JUSTIFIED TO IGNORE THE SUBMISSIO NS OF THE APPELLANT THAT ASSESSMENT U/S 153C OF THE INCOME TA X ACT BE RESTRICTED TO ASSESSMENT IN RESPECT OF SEIZED DOCUM ENTS OF INCRIMINATING NATURE IN THE CASE OF THE APPELLANT F OR ONLY THE YEAR TO WHICH SAID DOCUMENTS RELATES TO, AND IN ABS ENCE OF ANY SUCH INCRIMINATING SEIZED DOCUMENT IN THE CASE OF A PPELLANT, ASSESSMENT FRAMED U/S. 153C OF THE I.T. ACT FOR THE YEAR UNDER CONSIDERATION, IS BAD IN LAW AND DESERVE TO BE QUAS HED. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD CIT (A) HAS ERRED IN HOLDI NG THE CONCLUSION THAT THE 'AUDITED BOOKS' NOTWITHSTANDING , THE BOOK RESULTS ARE REQUIRED TO BE REJECTED, SINCE THE NARR ATIONS ARE ARTIFICIAL, SHAM AND NOT REFLECTIVE OF THE ACTUAL B USINESS / COMMERCIAL TRANSACTIONS. HOWEVER, THE LD CIT (A) ST ILL RELYING ON THESE BOOKS /BOOK RESULTS FOR GIVING DIRECTIONS TO THE AO FOR THE PURPOSE OF CALCULATING THE PEAK FROM THE ENTRIE S IN THE CASH BOOK OF THE APPELLANT FOR THE RELEVANT YEAR. 6. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF T HE CASE, CIT (A) HAS ERRED IN DISREGARDING THE PURCHASES OF RS.21,15,780/-, THE SALES AND THE EXPENSES OF RS.4, 43,240/- CLAIMED BY THE ASSESSEE COMPANY. 7.A) THAT ON THE FACTS AND ON THE CIRCUMSTANCES OF THE CASE AND THE PROVISION OF LAW, THE LD. CIT (A) HAS ERRED IN WRONGLY DIRECTING THE AO TO WORK OUT THE PEAK FROM THE ENTR IES IN THE CASH BOOK OF THE APPELLANT COMPANY FOR THE RELEVANT YEAR AND MAKE A SINGULAR ADDITION OF THE SAID AMOUNT, AS UNE XPLAINED INVESTMENT/EXPENDITURE, IGNORING THE FACT THAT THE SAME HAS DULY ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 8 BEEN ENTERED IN THE AUDITED BOOKS OF ACCOUNTS OF T HE APPELLANT FOR THE YEAR UNDER CONSIDERATION. B) THAT THE LD CIT (A) DID NOT GIVE SUFFICIENT OPPO RTUNITY OF BEING HEARD TO THE APPELLANT COMPANY AND IGNORED THE CONCEPT OF 'REAL INCOME' AND WRONGLY DIRECTED THE A O TO WORK OUT THE PEAK FROM THE ENTRIES IN THE CASH BOOK OF T HE APPELLANT COMPANY FOR THE RELEVANT YEAR, WITHOUT GRANTING THE CREDIT OF THE PEAK OF FINANCIAL TRANSACTIONS AS PER THE CASH BOOK FOR THE PRECEDING YEARS. 8. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE VARIOUS OBSERVATIONS AND FINDINGS OF THE LD CIT (A) AND LD AO IN THE IMPUGNED APPELLATE ORDER AND ASSESSMENT ORDE R, RESPECTIVELY, IS IRRELEVANT AND VITIATED IN THE LAW . 9. THAT THE CIT (A) HAS ERRED IN IGNORING THE EXPLA NATION GIVEN, EVIDENCES AND MATERIAL PLACED AND AVAILABLE ON RECORD. THE SAME HAS NOT BEEN PROPERLY CONSIDERED AND JUDIC IALLY INTERPRETED AND THE SAME DO NOT JUSTIFY THE ADDITIONS/DISALLOWANCES MADE. THE ADDITIONS HAVE BE EN SUSTAINED WITH PRESET MIND OF THE CIT (A) AND HER O RDER IS BASED ON SURMISES, CONJECTURES AND SUSPICION. 10. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE INTEREST CHARGED U/S 234A AND 234 B HAS BEEN WRONGL Y AND ILLEGALLY CHARGED AND IN ANY CASE IS HIGHLY EXCESSI VE. 11. THAT THE RESPONDENT CRAVES THE RIGHT TO AMEND, APPEND, DELETE ANY OR ALL GROUNDS OF APPEAL. 5. AT THE OUTSET OF THE HEARING, THE LD. AR FOR THE ASSESSEE ASSAILED BEFORE US FROM THE GROUNDS OF CROSS OBJECTION THAT SATISFACTION OF THE AO OF THE SEARCHED PERSON AS ENVISAGED UNDER SECTION 153C OF THE ACT HAS NOT BEEN RECORDED, BEFORE INITIATING THE PROCEEDINGS AG AINST THE ASSESSEE U/S 153C OF THE ACT, WHICH VITIATED THE ENTIRE IMPUGNED ASSESSMENTS, SO WE DEEM IT FIT TO DEAL WITH THE SAID GROUND FIRST BECA USE IT GOES TO THE ROOT OF ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 9 THE MATTER I.E., BY RAISING THIS GROUND THE ASSESSE E HAS QUESTIONED THE VERY ASSUMPTION OF JURISDICTION OF AO TO INITIATE PROCEE DINGS UNDER SECTION 153C OF THE ACT. 6. LD. AR FOR THE ASSESSEE SUBMITTED THAT IN THE PR ESENT CASE, THERE IS NO SATISFACTION RECORDED BY THE AO OF THE RAIDED PA RTY, AS ADMITTED IN RTI REPLIES PLACED AT PAGES 3 TO 5 OF THE PAPER BOOK AN D AVAILABLE NOTE, AT PAGES 1 & 2 OF THE PAPER BOOK, IS ONE RECORDED BY THE AO OF THE PRESENT ASSESSEE/OTHER PERSON. HE SUBMITTED THAT THE SAME IS HELD TO BE INVALID ON SAME FACTS IN THE FOLLOWING CASES :- (I) DELHI ITAT, H BENCH ORDER IN THE CASE OF TANV EER COLLECTIONS 168 TTJ 145; (II) DELHI ITAT, C BENCH ORDER IN THE CASE OF IEC S SOLUTIONS PVT. LTD. (ORDER DATED 13.03.2015); (III) DELHI ITAT, C BENCH ORDER IN THE CASE OF GR OVER GARMENTS (P) LTD. (ORDER DATED 29.04.2015); (IV) DELHI ITAT, B BENCH ORDER IN THE CASE OF DSL PROPERTIES 60 SOT 88. LD. AR SUBMITTED THAT IT IS NOW HELD BY HONBLE TEL ANGANA & ANDHRA PRADESH HIGH COURT IN SHETTY PHARMACEUTICALS CASE T HAT TWO SEPARATE NOTES ARE MUST U/S 153C I.E. ONE/FIRST BY RAIDED PARTY AO AND OTHER/SECOND BY NON-RAIDED PARTY AO EVEN IF BOTH ARE SAME, THIS REC ORDING OF SATISFACTION IS A SINE-QUA NON FOR ASSUMPTION OF JURISDICTION U/S 1 53C. HE SUBMITTED THAT RATIO OF THE AFORESAID JUDGMENT WAS ALSO RELIED UPO N BY DELHI ITAT, H BENCH IN THE CASE OF VINITA CHAURASIA ORDER DATED 2 9.05.2015 AND ALSO IN ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 10 ITAT MUMBAI, BENCH D IN THE CASE OF DEVEN MEHTA ( ORDER DATED 24.04.2015). 7. ON THE OTHER HAND, LD. DR RELIED ON THE ORDERS O F THE AO AND CIT (A) AND WAS OF THE OPINION THAT SATISFACTION HAS BE EN RECORDED BY THE AO BEFORE PROCEEDINGS AGAINST THE ASSESSEE U/S 153C OF THE ACT, AND TOOK OUR ATTENTION TO PAGE 2 OF THE PB WHERE SATISFACTION OF THE AO TO PROCEED AGAINST THE ASSESSEE DATED 05.07.2010 IS THERE, SO THERE IS NO ILLEGALITY AS POINTED OUT BY THE LD. AR. THEREFORE, ACCORDING TO LD DR, THE GROUND RAISED IN THIS BEHALF IS NOT VALID AND NEEDS TO BE REJECTED. 8. WE HAVE HEARD THE RIVAL SUBMISSION AND CAREFULLY GONE THROUGH THE RECORDS AND THE CASE LAWS CITED BEFORE US. THE MAIN ISSUE THAT WAS RAISED BY THE ASSESSEE IS THAT ASSUMPTION OF JURISDICTION BY THE AO BEFORE ISSUING NOTICE U/S 153C OF THE ACT IS NOT IN ACCORDANCE TO LAW AND SO THE IMPUGNED ASSESSMENT U/S 153C READ WITH 153A/143(3) OF THE A CT IS VOID-AB-INITIO AND SHOULD BE QUASHED BEING QUARUM-NON-JUDICE. A P ERUSAL OF THE ASSESSMENT ORDER OF THE ASSESSEE REVEALS THAT A SEA RCH WAS CARRIED OUT U/S 132 OF THE ACT ON SHRI B.K. DHINGRA, SMT. POONAM DH INGRA AND M/S. MADHUSUDAN BUILDCON PVT. LTD., AND IN SUCH SEARCH P ROCEEDINGS, CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WAS FOUND WHICH LED TO THE MAKING OF ASSESSMENT U/S 153C READ WITH SECTION 153A OF THE A CT. IN ORDER TO APPRECIATE THE CONTENTION MADE BY THE LD. AR ON THE QUESTION OF RECORDING ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 11 OF PROPER SATISFACTION, IT WOULD BE APPOSITE TO NOT E DOWN THE PRESCRIPTION OF THE RELEVANT PARTS OF SECTION 153(1) AT THE MATERIA L TIME, 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 SECT ION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BEL ONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O 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 OTH ER PERSON AND THAT ASSESSING OFFICER SHALL 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. 9. FROM THE ABOVE PROVISION, IT IS CLEAR THAT WHERE THE AO OF THE PERSON SEARCHED IS SATISFIED THAT ANY MONEY, BULLION, JEWE LLERY, BOOKS OF ACCOUNTS OR OTHER DOCUMENTS ETC., BELONG TO A PERSON OTHER T HAN THE PERSON SEARCHED, THEN, SUCH DOCUMENTS OR ASSETS, ETC., SHALL BE HAND ED OVER TO THE AO OF THE OTHER PERSON AND THE LATER AO SHALL PROCEED AGAINST SUCH OTHER PERSON TO ASSESS OR REASSESS HIS INCOME. A BARE PERUSAL OF THE PROVISION INDICATES THAT BEFORE HANDING OVER SUCH DOCUMENTS ETC. TO THE AO OF THE OTHER PERSON , A SATISFACTION HAS TO BE RECORDED BY THE AO OF THE PERSON SEARCHED THAT MONEY, BULLION OR JEWELLERY, ETC., FO UND FROM THE PERSON SEARCHED BELONG TO THE OTHER PERSON . ONLY WHEN SUCH SATISFACTION IS RECORDED BY THE AO OF THE PERSON SEARCHED AND SUCH DOCUMENTS OR ASSETS SEIZED, ETC., ARE HANDED OVER TO THE AO OF THE OTHER PERSON , THAT THE LATER ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 12 AO ACQUIRES JURISDICTION TO MAKE ASSESSMENT OR REAS SESSMENT OF THE OTHER PERSON. IT IS, THEREFORE, CLEAR THAT THE AO OF THE OTHER PERSON CAN ACQUIRE JURISDICTION TO ASSESS OR REASSESS INCOME OF THE OTHER PERSON ONLY WHEN THE AO OF THE PERSON SEARCHED RECORDS SATISFACTION IN HIS CASE (SEARCHED PERSON) BEFORE HANDING OVER MONEY, BULLION, JEWELLE RY, ETC. TO HIM. SO, WHAT EMERGES IS THAT THE RECORDING OF SATISFACTION BY THE AO OF THE PERSON SEARCHED IS A CONDITION PRECEDENT FOR THE AO OF THE OTHER PERSON TO ACQUIRE JURISDICTION. UNLESS SUCH JURISDICTIONAL FA CT IS SATISFIED, THERE CAN BE NO QUESTION OF MAKING ASSESSMENT OR REASSESSMENT OF THE OTHER PERSON. 10. IN THE CASE OF ANIL KUMAR & ORS. VS. UOI & ORS. REPORTED IN 155 TAXMAN 659 (SC), THE HONBLE APEX COURT OBSERVED TH AT A JURISDICTIONAL FACT IS A FACT WHICH MUST EXIST BEFORE A COURT, A TRIBU NAL OR AN AUTHORITY ASSUMES JURISDICTION OVER A PARTICULAR MATTER. A J URISDICTIONAL FACT IS ONE ON EXISTENCE OR NON-EXISTENCE OF WHICH DEPENDS JURI SDICTION OF A COURT, A TRIBUNAL OR AN AUTHORITY. . IT IS THE FACT UPON WHI CH AN ADMINISTRATIVE AGENCY'S POWER TO ACT DEPENDS. IF THE JURISDICTIONA L FACT DOES NOT EXIST, THE COURT, AUTHORITY OR OFFICER CANNOT ACT. IF A COURT OR AUTHORITY WRONGLY ASSUMES THE EXISTENCE OF SUCH FACT, THE ORDER CAN B E QUESTIONED BY A WRIT OF CERTIORARI. THE UNDERLYING PRINCIPLE IS THAT BY ERR ONEOUSLY ASSUMING EXISTENCE OF SUCH JURISDICTIONAL FACT, NO AUTHORITY CAN CONFER UPON ITSELF JURISDICTION WHICH IT OTHERWISE DOES NOT POSSESS. THE EXISTENCE OF ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 13 'JURISDICTIONAL FACT' IS SINE QUA NON FOR THE EXERC ISE OF POWER BY A COURT OF LIMITED JURISDICTION . 11. AS NOTED EARLIER SECTION 153C PROVIDES FOR TAKI NG RECOURSE TO ASSESSMENT IN RESPECT OF ANY OTHER PERSON, THE COND ITIONS PRECEDENT WHEREFORE ARE : (I) SATISFACTION MUST BE RECORDED B Y THE AO THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THA N THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER S. 132; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONE D HAD BEEN HANDED OVER TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSO N; AND (III) THE AO HAS PROCEEDED UNDER S. 153C AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISIONS OF S. 153C, T HUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF SAID SECTION ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PERSON WHOSE PREMISES HAD BEE N SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED U NDER S. 132A. THAT THE RECORDING OF SATISFACTION BY THE AO HAVING JURISDIC TION OVER THE PERSON SEARCHED IS AN ESSENTIAL AND PREREQUISITE CONDITION FOR BESTOWING JURISDICTION TO THE AO OF THE OTHER PERSON. 12. LET US EXAMINE THE FACTS OF THE INSTANT CASE MO RE ELABORATELY. IT IS SEEN THAT SOME SATISFACTION WAS RECORDED, A COPY OF WHICH IS AVAILABLE ON PAGE 2 OF THE PAPER BOOK, AS UNDER :- ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 14 SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF T HE I.T. ACT, 1961 IN THE CASE OF M/S. SHIVAANSH ADVERTISING & PUBLICATIONS PVT. LTD., RZ F-7, VIJAY ENCLAVE, DWAR KA PURI, NEW DELHI PAN NO. AAKCS9764N FOR A.Y. 2003-04 TO 2008-09. 05.07.2010 DOCUMENTS AT PAGES 1 TO 37 OF ANNEXURE OF A-34 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 I.T. ACT, 1961 ON 20/10/2008 IN THE CASE OF SH. B.K.DHINGRA, SMT.POONAM DHINGRA, M/S MADHUSUDAN BUILDCON P LTD. HAVE BEEN FOUND TO BELONG TO M/S. SHIVAANSH ADVERTISING & PUBLICATIONS PVT. LTD., RZ F-7, VIJAY ENCLAVE, DWARKA PURI, NEW DELHI WHICH HAS NOT BEEN COVERED U/S132 OF THE I.T. ACT, 1961. ACCORDINGLY, IN TERMS OF PROVISIONS OF SECTION 153C OF THE ACT, NOTICES U/S 153C ARE HEREBY ISSUED FOR THE A.Y. 2003-04 TO 2008-09 IN THE CASE OF M/S. SHIVAANSH ADVERTISING & PUBLICATIONS PVT. LTD. THE CASE WAS CENTRALIZED IN THE CENTRAL CIRCLE -17, NEW DELHI VIDE ORDERS DATED 29/OCT/2009 OF CIT-III, NEW DELHI. SD/- DCIT, CENTRAL CIRCLE 17, NEW DELHI IT CAN BE SEEN FROM THE ASSESSMENT ORDER THAT NOTIC E U/S 153C WAS ISSUED TO THE ASSESSEE BY THE ACIT, CENTRAL CIRCLE-17 ON 08.0 7.2010 AND SATISFACTION WAS RECORDED ON 05.07.2010. IT IS APPA RENT THAT IT WAS: SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF TH E I.T. ACT, 1961 IN THE CASE OF M/S. SHIVAANSH ADVERTISING & PUBLICATIONS P VT. LTD., RZ F-7, VIJAY ENCLAVE, DWARKA PURI, NEW DELHI. THE CONTENTS OF THE ABOVE SATISFACTION NOTE LEAVE NOTHING TO DOUBT THAT IT WA S RECORDED BY THE AO OF ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 15 THE ASSESSEE BEFORE TAKING UP THE ASSESSMENT U/S 15 3C OF THE ACT PURSUANT TO THE SEARCH CONDUCTED ON SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT LTD. PAGES 3-5 OF THE P APER BOOK ARE THE COPIES OF THE REPLY DATED 10.06.2013 FURNISHED BY T HE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-17, NEW DELHI TO SHRI B.K. DHINGRA, SMT. POONAM DHINGRA AND M/S MADHUSUDAN BUILDCON (P) LTD, UNDER THE PROVISIONS OF RTI ACT, 2005. THE RELEVANT PART OF THE REPLY DATED 10.06.2013 GIVEN TO SH. B.K. DHINGRA, IS AS UNDER:- 2. FROM THE ASSESSMENT RECORDS OF SH. BHUPESH KUMA R DHINGRA, WHICH IS COVERED UNDER SECTION 153A, FOR T HE 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 REPLIES HAVE BEEN GIVEN TO SMT. POONAM DHIN GRA AND M/S MADHUSUDAN BUILDCON PVT. LTD. ON A CONSIDERATION O F 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 REPLI ES GIVEN BY THE DEPARTMENT TO THE PERSONS SEARCHED UNDER THE RTI AC T, IT CLEARLY EMERGES THAT NO SATISFACTION WAS RECORDED BY THE AO IN THE CASES OF THE PERSONS SEARCHED U/S 132(1) OF THE ACT (I.E. SHRI B.K. DHIN GRA, 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 ASSESSEE). THE ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 16 SATISFACTION NOTE AS REPRODUCED ABOVE HAS BEEN PREP ARED BY THE AO OF THE ASSESSEE. 13. THE LD. DR WAS OF THE OPINION THAT SINCE THE A O OF THE PERSONS SEARCHED AND THE ASSESSEE IS SAME, IT DOES NOT MAKE ANY DIFFERENCE WHETHER THE SATISFACTION IS RECORDED IN THE CASE OF THE PER SONS SEARCHED OR OTHER PERSON. HE EMPHASIZED ON THE FACTUM OF RECORDING SA TISFACTION BY THE AO, WHICH CONDITION IN HIS OPINION STOOD SATISFIED, BY VIRTUE OF IT HAVING BEEN RECORDED BY THE COMMON AO. 14. THIS PARTICULAR ARGUMENT OF THE REVENUE WAS ANS WERED BY THE COORDINATE BENCH IN THE CASE OF M/S. TANVIR COLLECT IONS PVT. LTD. VS. ACIT, CENTRAL CIRCLE 21, NEW DELHI IN ITA NO.2421/D EL/2014 ORDER DATED 16.01.2015 AS UNDER :- 16. IN OUR CONSIDERED OPINION, THIS CONTENTION ADV ANCED ON BEHALF OF THE REVENUE IS DEVOID OF MERIT. WE FAI L TO COMPREHEND AS TO HOW THE REQUIREMENT OF RECORDING SATISFACTION BY THE AO OF THE PERSON SEARCHED PROVI DED BY THE STATUTE CAN BE SUBSTITUTED WITH ANYTHING ELSE. THERE IS AN UNDERLYING RATIONALE IN PROVIDING FOR RECORDING OF SUCH SATISFACTION BY THE AO OF THE PERSON SEARCHED. AS T HE MONEY, BULLION, JEWELLERY, BOOKS OF ACCOUNT OR DOC UMENTS 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 N OT 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 DOCUMENTS ETC. FOUND DURING THE COUR SE OF A SEARCH ARE EVALUATED BY A SEPARATE AUTHORITY TO FIG URE 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 FOR MAKING ASSESSMENT. AS IT IS ONLY THE AO OF THE PERS ON ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 17 SEARCHED WHO CAN REACH A CONCLUSION THAT SOME OF TH E DOCUMENTS ETC. DO NOT BELONG TO THE PERSON SEARCHED BUT TO SOME OTHER PERSON, THE LEGISLATURE HAS PROVIDED FOR RECORDING OF SUCH SATISFACTION BY THE AO OF THE PER SON SEARCHED. IT IS NOT PERMISSIBLE UNDER THE LAW TO RE QUIRE THE AO OF THE OTHER PERSON TO RECORD SUCH SATISFACTION BY THE AO. 17. AS REGARDS THE OTHER ARGUMENT OF THE LD. DR THA T SINCE THE AO OF BOTH THE PERSONS SEARCHED AND THE A SSESSEE IS THE SAME PERSON, HENCE THE REQUIREMENT OF RECORD ING SATISFACTION BY THE AO OF THE PERSONS SEARCHED SHOU LD BE DEEMED TO HAVE BEEN FULFILLED WITH THE RECORDING OF SATISFACTION BY THE AO OF THE ASSESSEE. WE ARE AGA IN UNABLE TO APPRECIATE THIS CONTENTION THAT THE COMMO NNESS OF THE AO WOULD MAKE NO DIFFERENCE IN SO FAR AS THE RECORDING OF SATISFACTION IN THE CASE OF THE PERSON S SEARCHED IS CONCERNED. WHAT IS RELEVANT FOR THIS PURPOSE IS NOT THE IDENTITY OF THE PERSON ASSESSING BUT HIS POSITION A ND THE CAPACITY. WHEN THE LAW REQUIRES THE AO OF THE PERSO N SEARCHED TO RECORD THE NECESSARY SATISFACTION, IT I S 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 ME RE FACT THAT THE AO OF THE PERSON SEARCHED AND THE ASSESSEE IS THE SAME PERSON, DOES NOT, IN ANY MANNER, OBLITERATE TH E REQUIREMENT OF LAW NECESSITATING THE RECORDING OF SATISFACTION IN THE CASE OF THE PERSON SEARCHED THA T MONEY, BULLION, JEWELLERY, ETC., FOUND FROM THE PERSON SEA RCHED 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 RECORDIN G THE SATISFACTION BY THE AO OF THE PERSON SEARCHED, THEN , IT CANNOT BE SUBSTITUTED WITH THE SATISFACTION OF THE AO OF THE OTHER PERSON. THIS CONTENTION ALSO FAILS. 18. AT THIS STAGE, IT IS RELEVANT TO NOTE THAT THE LEGISLATURE HAS SUBSTITUTED THE LATTER PART OF SECTION 153C(1) BY THE FINANCE (NO.2) ACT, 2014 W.E.F. 1.10.2014. THE HIT HERTO PART OF SUB-SECTION (1) : AND THAT ASSESSING OFFIC ER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NO TICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PER SON ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 18 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 SECTION 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 O F THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SU B- SECTION (1) OF SECTION. 19. THE ABOVE SUBSTITUTION HAS THE EFFECT OF NOW MA KING 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 IN COME OF SUCH OTHER PERSON BEFORE EMBARKING UPON THE EXERC ISE OF HIS ASSESSMENT OR REASSESSMENT. THEREFORE, NOW UND ER THE LAW, W.E.F. 1.10.2014 IT HAS BECOME OBLIGATORY NOT ONLY FOR THE AO OF THE PERSON SEARCHED TO RECORD SATISFACTIO N BEFORE HANDING OVER BOOKS OF ACCOUNT OR DOCUMENTS, ETC., T O THE AO OF THE OTHER PERSON, BUT, SUCH AO OF THE OTHE R PERSON IS ALSO REQUIRED TO RECORD SATISFACTION THA T THE BOOKS OF ACCOUNT OR DOCUMENTS, ETC. HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PER SON. IN THE PRE-SUBSTITUTION ERA OF THE RELEVANT PART OF SU B-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 T HE CASE OF THE PERSON SEARCHED SO AS TO ENABLE THE AO OF THE OTHER PERSON TO START WITH THE PROCEEDINGS FOR MAKING AS SESSMENT OR REASSESSMENT. 20. THE LD. DR CONTENDED THAT RECORDING OF SATISFAC TION BY THE AO OF THE ASSESSEE AT THE MOST CAN BE TREATE D AS A TECHNICAL MISTAKE AND HENCE SHOULD NOT ECLIPSE THE ASSESSMENT. RELYING ON CERTAIN JUDGMENTS, THE LD. D R SUBMITTED THAT THE TECHNICALITIES CANNOT BE ALLOWED TO PREVAIL IN THE COURSE OF INDULGENCE OF JUSTICE. ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 19 21. WE AGREE IN PRINCIPLE THAT TECHNICALITIES CANNO T 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 TE CHNICAL DEFECT. IT GOES WITHOUT SAYING THAT NO ASSESSMENT OR OTHER PROCEEDINGS 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 AN D CUTS THE TREE OF ASSESSMENT IF THE FOUNDATION OF JURISDICTIO N IS MISSING. 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 NOTICES AND THE CONSEQUENTIAL ASSESSMENTS U/S 153C, UNDER IDENTICAL CIRCUMSTANCES, HAVE BEEN QUASHED. THE LD. DR CONTEN DED THAT THE ABOVE REFERRED TWO TRIBUNAL ORDERS ARE PER INCURIUM AND SHOULD NOT BE FOLLOWED. THE MAIN REASON FOR DECLARING THE TRIBUNAL ORDERS AS PER INCURIUM WAS THE NON- CONSIDERATION OF THE JUDGMENT OF THE HONBLE JURISD ICTIONAL HIGH COURT IN JUDGMENT IN THE CASE OF SSP AVIATION LTD. VS. DCIT (2012) 252 CTR (DEL) 291 . 23. LET US EXAMINE THE CASE OF SSP AVIATION LTD. (SUPRA) FOR EVALUATING THE CONTENTION THAT THE INSTANT ASSE SSMENT BE DECLARED AS PER LAW. THE HONBLE HIGH COURT IN THAT CASE HAS HELD THAT THE ASSESSING OFFICER HAVING JURISDIC TION OVER THE SEARCHED PERSON SHOULD BE SATISFIED THAT THE VA LUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DUR ING THE SEARCH BELONG TO A PERSON OTHER THAN THE SEARCHED P ERSON AND THERE IS NO REQUIREMENT IN SECTION 153C(1) THAT THE ASSESSING OFFICER SHOULD ALSO BE SATISFIED THAT SUC H VALUABLE ARTICLES OR BOOKS OF ACCOUNT OR DOCUMENTS BELONGING TO THE OTHER PERSON MUST CONCLUSIVELY REF LECT OR DISCLOSE ANY UNDISCLOSED INCOME. WE FIND THAT THER E IS NO SUCH CONTROVERSY BEFORE US AS WAS THERE BEFORE THE HONBLE HIGH COURT. IT IS NOT THE CASE OF THE ASSESSEE BEFO RE US IN THIS GROUND THAT THE DOCUMENTS ETC. FOUND FROM THE PERSONS SEARCHED DID NOT POSITIVELY INDICATE THE EXISTENCE OF SOME INCOME IN THE HANDS OF THE ASSESSEE. THE ARGUMENT I S SIMPLY CONFINED TO NON-RECORDING OF SATISFACTION BY THE AO ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 20 OF THE PERSONS SEARCHED. INSTEAD OF SUPPORTING THE DEPARTMENTS CASE, WE FIND THAT THIS JUDGMENT STREN GTHENS THE ASSESASEES CASE BY MAKING IT CLEAR IN NO UNCER TAIN TERMS THAT THE AO OF THE PERSON SEARCHED IS OBLIGED TO RECORD THE SATISFACTION. THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT CONTAINED IN 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 SEIZED 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 PERSON MUST BE SHOWN TO SHOW TO CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISCLOSED INCOME. 24. IT IS PRETTY CLEAR FROM THE ABOVE EXTRACTION TH AT THE SATISFACTION AS REFERRED TO IT IN THIS CASE IS THAT OF THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEAR CHED PERSON. AS SUCH, WE ARE OF THE CONSIDERED OPINION T HAT THIS JUDGMENT DOES NOT SUPPORT THE REVENUES CASE. RESUL TANTLY, THE CHARACTERIZATION OF THE ABOVE TRIBUNAL ORDERS A S PER INCURIUM BY THE LD. DR, IS ABSOLUTELY WITHOUT ANY LEGALLY SUSTAINABLE BASIS. 25. EVEN OTHERWISE, THE JUDICIAL DISCIPLINE REQUIRE S A SUBSEQUENT BENCH TO THE FOLLOW AN EARLIER ORDER OF A CO- ORDINATE BENCH ON THE POINT. IT IS ONLY IF THE SUBS EQUENT BENCH FEELS ITSELF UNABLE TO CONCUR WITH THE VIEW T AKEN EARLIER THAT IT IS REQUIRED TO REFER THE CASE FOR C ONSIDERATION BY A SPECIAL BENCH. IN OUR CONSIDERED OPINION, THES E TWO ORDERS OF THE CO-ORDINATE BENCHES ARE PERFECTLY IN ACCORDANCE WITH LAW. 26. COMING BACK TO FACTS OF THE INSTANT CASE, IT IS PALPABLE THAT THE AO OF SHRI B.K. DHINGRA, SMT. PO ONAM DHINGRA AND M/S MADHUSUDAN BUILDCON PVT. LTD., DID NOT RECORD ANY SATISFACTION THAT SOME MONEY, BULLION, J EWELLERY ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 21 OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS FOUND FROM THESE PERSONS BELONGED TO THE ASSESSEE. THE ABSENCE OF SU CH SATISFACTION, IN OUR CONSIDERED OPINION, FAILED TO CONFER ANY VALID AND LAWFUL JURISDICTION ON THE AO OF THE ASSE SSEE TO PROCEED WITH THE MATTER OF THE ASSESSMENT U/S 153C OF THE ACT. WE, ERGO, SET ASIDE THE INITIATION AND THE ENS UING ASSESSMENT ON THE ASSESSEE AS VOID AB INITIO . 27. THE RELIANCE OF THE LD. DR ON SOME DECISIONS ON OTHER LEGAL ISSUES OR MERITS IS OF NO CONSEQUENCE I N VIEW OF THE LACK OF JURISDICTION OF THE AO TO PROCEED WITH THE ASSESSMENTS U/S 153C OF THE ACT. IN VIEW OF OUR DE CISION ON THE FIRST LEGAL ISSUE, THERE IS NO NEED TO ESPOU SE THE OTHER GROUNDS TAKEN BY THE ASSESSEE DEALING WITH OTHER LE GAL ISSUES OR MERITS. 28. IN THE RESULT, THE APPEAL IS ALLOWED. 15. IN THE LIGHT OF THE SAID RATIO-DECIDENDI OF THE AFORESAID ORDER OF THE TRIBUNAL, THE LD COUNSEL FOR ASSESSEE, SUBMITTED TH AT THE FIRST STEP ITSELF HAS NOT BEEN FULFILLED. SO ACCORDING TO THE LD COUNSEL, THE ISSUANCE OF NOTICE U/S 153C IS ILLEGAL. 16. WE ALSO TAKE NOTE OF THE RECENT JUDGEMENT OF TH E HONBLE JURISDICTIONAL HIGH COURT IN A SIMILAR CASE IN PEPS ICO INDIA HOLIDAY (P) LTD VS. ACIT (2014) 50 TAXMANN. COM 299 (DELHI), AFTER CONSIDERING THE DECISIONS CITED BY THE REVENUE HELD IN PARA 5 AS FO LLOWS:- 5. WHILE COMING TO THE AFORESAID CONCLUSIONS THE C OURT HAD ALSO EXAMINED THE DECISIONS WHICH HAD BEEN CITED ON BEHALF OF THE REVENUE AND WHICH ARE, ONCE AGAIN, BEING REITER ATED BY THE LEARNED COUNSEL FOR THE REVENUE BEFORE US. THOSE DE CISIONS ARE KAMLESHBHAI DHARAMSHIBHAI PATEL V. CIT [2013] 214 T AXMAN 558/31 TAXMANN.COM 50 (GUJ.); CIT V. CLASSIC ENTERP RISES [2013] 358 ITR 465/219 TAXMAN 237/35 TAXMANN.COM 24 4 (ALL.) AND A DECISION OF A DIVISION BENCH OF THIS C OURT IN SSP ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 22 AVIATION LTD. V. DY. CIT [2012] 346 ITR 177/207 TAX MAN 260/20 TAXMANN.COM 214. THIS COURT HAD INDICATED IN ITS JUDGEMENT IN PEPSI FOODS (P.) LTD. (SUPRA) THAT THE CASE OF KAMLESHBHAI DHARAMSHIBHAI PATEL (SUPRA) WAS DISTING UISHABLE ON FACTS. THOSE OBSERVATIONS WOULD APPLY TO THE PRE SENT WRIT PETITIONS ALSO. AS REGARDS THE DECISION OF THE ALLA HABAD HIGH COURT IN CLASSIC ENTERPRISES (SUPRA), THIS COURT HA D INDICATED THAT IT COULD NOT AGREE WITH THE CONCLUSIONS AND OB SERVATIONS OF THE ALLAHABAD HIGH COURT INASMUCH AS THE DECISION O F THE ALLAHABAD HIGH COURT WAS PREMISED ON A CONSIDERATIO N OF THE PROVISIONS OF SECTION 158BD OF THE SAID ACT WHICH A RE ENTIRELY DIFFERENT FROM THE PROVISIONS OF SECTION 153C OF TH E SAID ACT. FURTHERMORE, WITH REGARD TO THE DECISION IN SSP AVI ATION LTD. (SUPRA), THIS COURT HAD NOTED THAT THE SAID DECISIO N DOES NOT MILITATE AGAINST THE VIEW TAKEN IN PEPSI FOODS (P.) LTD. (SUPRA). 6. THE LEARNED COUNSEL FOR THE REVENUE HAS CITED AN ADDITIONAL DECISION BEFORE US TODAY AND THAT IS THE CASE OF SARVESH KUMAR AGARWAL V. UNION OF INDIA [2013] 353 ITR 26/216 TAXMAN 109 (MAG.)/35 TAXMANN.COM 85 (ALL). T HIS DECISION ALSO, IN OUR VIEW, DOES NOT ADVANCE THE CA SE OF THE REVENUE. THIS WOULD BE EVIDENT FROM THE OBSERVATION S OF THE ALLAHABAD HIGH COURT IN PARAGRAPHS 19 TO 21 OF THE SAID DECISION, WHICH READ AS UNDER: '19. IN MANISH MAHESHWARIS CASE (SUPRA) THE SUPREM E COURT OBSERVED THAT TAXING STATUTE MUST BE CONSTRUC TED STRICTLY. THE COURT, HOWEVER, SHALL NOT INTERPRET S TATUTORY PROVISIONS IN SUCH A MANNER, WHICH WOULD CREATE AN ADDITIONAL PHYSICAL BURDEN ON A PERSON. IN CASE OF ANY DOUBT OR DISPUTE, CONSTRUCTION IS TO BE MADE IN FAV OUR OF THE TAX PAYER AND AGAINST THE REVENUE. 20. IN THE PRESENT CASE WE DO NOT FIND ANYTHING WRO NG IN THE SATISFACTION NOTE AND THE FORWARDING OF THE ENTIRE MATTER BY THE INCOME TAX OFFICER, WARD-ILL (2), AHMEDABAD TO THE ASSESSING OFFICER OF THE PETITIONE R AT BAREILLY. ALL THE REQUIREMENTS OF SECTION 153(C) WE RE COMPLIED WITH BY THE INCOME TAX OFFICER, WARD-ILL ( 2), AHMEDABAD. A SEARCH UNDER SECTION 132A WAS CARRIED OUT AND BULLION WAS SEIZED. THE CASE WAS SELECTED F OR COMPULSORY SCRUTINY FOR SIX ASSESSMENT YEARS. THE ASSESSEE ESTABLISHED THAT THE SEIZED SILVER BELONGS TO M/S ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 23 SARVESH JEWELLERS, BAREILLY - THE PETITIONER. THE OWNERSHIP AND CONSIGNMENT OF THE PETITIONER WAS ALS O CONFIRMED BY THE ASSESSING OFFICER OF THE PETITIONE R AT BAREILLY. THE INCOME TAX OFFICER, WARD-ILL (2), AHMEDABAD DID NOT COMMIT ANY ERROR IN LAW, IN RECORDING THE SATISFACTION NOTE REQUESTING THE PETI TIONERS ASSESSING OFFICER TO PROCEED UNDER SECTION 153(C) O F THE LT. ACT. 21. AFTER THE ASSESSMENT OF THE PERSON IN RESPECT O F WHOM SEARCH ACTION WAS CARRIED OUT IS COMPLETED, TH E OFFICER UNDER SECTION 153C, WHERE HE FIND THAT SEIZ ED ARTICLES BELONG TO SOME OTHER PERSON, HAS TO FORWAR D A SATISFACTION NOTE TO THE ASSESSING OFFICER ON SUCH PERSON. THE SATISFACTION IN SUCH CASE IS IN RESPECT OF THE MATERIAL AND DISCLOSURES OF THE PERSON WITH WHICH THE ARTICL ES OR ASSETS ARE FOUND AND NOT IN RESPECT OF THE PERSON W HO WHOM THEY BELONG.'(UNDERLINING ADDED) 7. THE ABOVE EXTRACT MAKES IT CLEAR THAT A TAXING S TATUTE MUST BE CONSTRUED STRICTLY AND IN THE CASE OF A DOU BT OR DISPUTE THE CONSTRUCTION IN FAVOUR OF THE ASSESSEE HAS TO B E ADOPTED. APART FROM THIS, THE MATERIAL OBSERVATION OF THE AL LAHABAD HIGH COURT IN THE CASE OF SAVESH KUMAR AGARWAL (SUPRA) I S TO BE FOUND IN PARAGRAPH 20 PAGE 13 OF 16 THEREOF WHERE I T HAS BEEN OBSERVED THAT THE ASSESSEE ESTABLISHED THAT THE SEI ZED SILVER BELONGS TO M/S. SARVESH JEWELLERS, BAREILLY - THE P ETITIONER. IN OTHER WORDS, THE PERSON FROM WHOM THE BULLION WAS S EIZED WAS ABLE TO ESTABLISH THAT IT DID NOT BELONG TO HIM BUT TO SARVESH JEWELLERS. IT IS IN THAT CONTEXT THAT THE PROVISION S OF SECTION 153C OF THE ACT WERE INVOKED INASMUCH AS THE ASSESS ING OFFICER WOULD THEN BE CONSIDERED AS HAVING BEEN SAT ISFIED THAT THE BULLION WHICH WAS SEIZED FROM THE SEARCHED PERS ON DID NOT BELONG TO THE SEARCHED PERSON BUT TO SOME OTHER PER SON (IN THAT CASE M/S. SARVESH JEWELLERS, BAREILLY). 8. FROM THE FOREGOING DISCUSSION IT IS EVIDENT THAT IN ORDER THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON C OMES TO THE SATISFACTION THAT DOCUMENTS OR MATERIALS FOUND DURI NG THE SEARCH BELONG TO A PERSON OTHER THAN THE SEARCHED PERSON, IT IS NECESSARY THAT HE ARRIVES AT THE SATISFACTION THAT THE SAID DOCUMENTS OR MATERIALS DO NOT BELONG TO THE SEARCHE D PERSON. WE MAY POINT OUT THAT IN THE COURSE OF THE ARGUMENT S WE HAD ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 24 ASKED THE LEARNED COUNSEL FOR THE REVENUE AS TO WHE THER THE DOCUMENTS IN QUESTION HAD BEEN DISCLAIMED BY THE JA IPURIA GROUP. THE LEARNED COUNSEL FOR THE REVENUE, ON INST RUCTIONS, STATES THAT THIS WAS NOT THE CASE. IN OTHER WORDS, IT FOLLOWS THAT THE JAIPURIA GROUP DID NOT SAY THAT THE DOCUMENTS D ID NOT BELONG TO THEM. 17. THE HONBLE DELHI HIGH COURT FURTHER HELD AS UN DER:- 13. HAVING SET OUT THE POSITION IN LAW IN THE DECI SION OF THIS COURT IN THE CASE OF PEPSI FOODS PVT. LTD. (SUPRA), IT MUST BE SEEN AS TO WHETHER THE ASSESSING OFFICER OF THE SEA RCHED PERSON (THE JAIPURIA GROUP) COULD BE SAID TO HAVE ARRIVED AT A SATISFACTION THAT THE DOCUMENTS MENTIONED ABOVE BEL ONGED TO THE PETITIONERS. 14. FIRST OF ALL WE MAY POINT OUT, ONCE AGAIN, THAT IT IS NOBODY'S CASE THAT THE JAIPURIA GROUP HAD DISCLAIME D THESE DOCUMENTS AS BELONGING TO THEM. UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE THE VERY EXPRESSION USED IN S ECTION 153C OF THE SAID ACT IS THAT 'WHERE THE ASSESSING OFFICE R IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABL E ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR RE QUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A .... ' IN VIEW OF THIS PHRASE, IT I S NECESSARY THAT BEFORE THE PROVISIONS OF SECTION 153C OF THE SAID A CT CAN BE INVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERS ON MUST BE SATISFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED TO IN SECTIO N 153A (I.E., THE SEARCHED PERSON). IN THE SATISFACTION NOTE, WHI CH IS THE SUBJECT MATTER OF THESE WRIT PETITIONS, THERE IS NO THING THEREIN TO INDICATE THAT THE SEIZED DOCUMENTS DO NOT BELONG TO THE JAIPURIA GROUP. THIS IS EVEN APART FROM THE FACT THAT, AS WE HAVE NOTED ABOVE, THERE IS NO DISCLAIMER ON THE PART OF THE JA IPURIA GROUP INSOFAR AS THESE DOCUMENTS ARE CONCERNED. 15. SECONDLY, WE MAY ALSO OBSERVE THAT THE FINDING OF PHOTOCOPIES IN THE POSSESSION OF A SEARCHED PERSON DOES NOT NECESSARILY MEAN AND IMPLY THAT THEY 'BELONG' TO TH E PERSON WHO HOLDS THE ORIGINALS. POSSESSION OF DOCUMENTS AN D POSSESSION OF PHOTOCOPIES OF DOCUMENTS ARE TWO SEPA RATE ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 25 THINGS. WHILE THE JAIPURIA GROUP MAY BE THE OWNER O F THE PHOTOCOPIES OF THE DOCUMENTS IT IS QUITE POSSIBLE T HAT THE ORIGINALS MAY BE OWNED BY SOME OTHER PERSON. UNLESS IT IS ESTABLISHED THAT THE DOCUMENTS IN QUESTION, WHETHER THEY BE PHOTOCOPIES OR ORIGINALS, DO NOT BELONG TO THE SEAR CHED PERSON, THE QUESTION OF INVOKING SECTION 153C OF THE SAID A CT DOES NOT ARISE. 16. THIRDLY, WE WOULD ALSO LIKE TO MAKE IT CLEAR TH AT THE ASSESSING OFFICERS SHOULD NOT CONFUSE THE EXPRESSIO N 'BELONGS TO' WITH THE EXPRESSIONS 'RELATES TO' OR 'REFERS TO '. A REGISTERED SALE DEED, FOR EXAMPLE, 'BELONGS TO' THE PURCHASER OF THE PROPERTY ALTHOUGH IT OBVIOUSLY 'RELATES TO' OR 'REF ERS TO' THE VENDOR. IN THIS EXAMPLE IF THE PURCHASERS PREMISES ARE SEARCHED AND THE REGISTERED SALE DEED IS SEIZED, IT CANNOT B E SAID THAT IT 'BELONGS TO' THE VENDOR JUST BECAUSE HIS NAME IS ME NTIONED IN THE DOCUMENT. IN THE CONVERSE CASE IF THE VENDORS PREMISES ARE SEARCHED AND A COPY OF THE SALE DEED IS SEIZED, IT CANNOT BE SAID THAT THE SAID COPY 'BELONGS TO' THE PURCHASER JUST BECAUSE IT REFERS TO HIM AND HE (THE PURCHASER) HOLDS THE ORIG INAL SALE DEED. IN THIS LIGHT, IT IS OBVIOUS THAT NONE OF THE THREE SETS OF DOCUMENTS - COPIES OF PREFERENCE SHARES, UNSIGNED L EAVES OF CHEQUE BOOKS AND THE COPY OF THE SUPPLY AND LOAN AG REEMENT - CAN BE SAID TO 'BELONG TO' THE PETITIONER. 17. IN VIEW OF THE FOREGOING DISCUSSION, WE DO NOT FIND THAT THE INGREDIENTS OF SECTION 153C OF THE SAID ACT HAV E BEEN SATISFIED IN THIS CASE. CONSEQUENTLY THE NOTICES DA TED 02.08.2013 ISSUED UNDER SECTION 153C OF THE SAID AC T ARE QUASHED. ACCORDINGLY ALL PROCEEDINGS PURSUANT THERE TO STAND QUASHED. 18. THE WRIT PETITIONS ARE ALLOWED AS ABOVE. THERE SHALL BE NO ORDERS AS TO COSTS. 18. THE LD AR TOOK OUR ATTENTION TO THE ORDER OF TH E CO-ORDINATE BENCH IN DCIT VS. AAKASH AROGYA MINDIR P.LTD. (ITA NOS. 5 437 TO 5442/DEL/ 2013) (PB PAGES 49 TO 64) WHEREIN ON SIMILAR FACTS OF THE SEARCHED PERSON I.E.B. K DHINGRA, SMT. POONAM DHINGRA, AND M/S MADH USUDAN BUILDCON ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 26 PVT. LTD., WERE SEARCHED BUT NO SATISFACTION WAS R ECORDED LIKE IN THIS CASE WHERE IT WAS HELD AS UNDER: 11. THE ASSESSEE FALLS INTO THE JURISDICTION OF HONBLE DELHI HIGH COURT IN VIEW OF THE CASE LAW OF PEPSI F OODS (P) LTD, THEREFORE, WE HELD THAT RECORDING OF SATISFACT ION BY AO OF SEARCHED PERSONS IS A NECESSARY PRE CONDITION FOR I NITIATION OF PROCEEDINGS U/S 153C WHICH HAS NOT BEEN DONE IN THE PRESENT APPEALS. THEREFORE, WE QUASH THE ASSESSMENT PROCEED INGS BEING ILLEGAL. THEREAFTER, WE FIND THAT THE DEPARTMENT WENT IN APP EAL BEFORE THE HONBLE HIGH COURT OF DELHI IN THE AFORESAID CASE ( P. R. C OMMISSIONER OF INCOME TAX, CENTRAL-II) VS. AAKASH AROGYA MANDIR PVT. LTD. ) (PAGE 65) WHEREIN THE HONBLE HIGH COURT, WHILE DISMISSING THE APPEAL OF THE REVENUE, HELD AS UNDER :- 8. THE REVENUE HAS NOT PLACED ANY MATERIAL TO DISP UTE THE FACTUAL FINDING OF THE ITAT THAT THE REQUIREMENT OF THE LAW EXPLAINED BY THIS COURT IN PEPSI FOODS REGARDING THE RECORDING OF SAT ISFACTION BY THE AO EVEN IN RESPECT OF THE SEARCHED PERSON WAS NOT FULF ILLED. 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-COMPL IANCE WITH THE LEGAL REQUIREMENT REGARDING THE RECORDING OF SATISFACTION . THE COURT ALSO AGREES WITH THE ITAT THAT EVEN IF THE AO WERE THE SAME, SA TISFACTION WOULD HAVE TO BE RECORDED SEPARATELY QUA THE SEARCHED PERSON A ND THE ASSESSEE. 9. NO SUBSTANTIAL QUESTION OF LAW ARISES FOR DETERM INATION. THE APPEAL ARE DISMISSED. 19. IN THE LIGHT OF THE CASE LAWS CITED ABOVE AND O N A READING OF SECTION 153A AND 153C THE EXERCISE THAT IS REQUIRED TO BE D ONE BY THE AO HAS BEEN SPELT OUT BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DSL PROPERTIES PVT. LTD. VS. DCIT 33 TAXMAN.COM 420 VID E PARA 15 HAS HELD ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 27 THAT IF THE ASSESSING OFFICER IS ASSESSING THE PERS ON SEARCHED AS WELL AS OTHER PERSON WHOSE ASSETS, BOOKS OF ACCOUNT OR DOCU MENTS WERE FOUND AT THE TIME OF SEARCH, THEN ALSO, FIRST WHILE MAKING T HE ASSESSMENT IN THE CASE OF THE PERSON SEARCHED, HE HAS TO RECORD THE SATISF ACTION THAT THE MONEY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS BELONGED TO THE PERSON OTHER THAN THE PER SON SEARCHED. THEN THE COPY OF THIS SATISFACTION NOTE IS TO BE PLACED IN T HE FILE OF SUCH OTHER PERSON AND THE RELEVANT DOCUMENT SHOULD ALSO BE TRANSFERRE D FROM THE FILE OF THE PERSON SEARCHED TO THE FILE OF SUCH OTHER PERSON. T HEREAFTER, IN THE CAPACITY OF THE ASSESSING OFFICER OF SUCH OTHER PERSON, HE H AS TO ISSUE THE NOTICE U/S 153A READ WITH SECTION 153C. THE ASSESSING OFFICER OF THE SEARCHED PERSON AND SUCH OTHER PERSON MAY BE THE SAME BUT TH ESE ARE TWO DIFFERENT ASSESSEES AND THEREFORE THE ASSESSING OFFICER HAS T O CARRY OUT THE DUAL EXERCISE FIRST AS THE ASSESSING OFFICER OF THE PERS ON SEARCHED IN WHICH HE HAS TO RECORD THE SATISFACTION, DURING THE COURSE O F ASSESSMENT ORDER PROCEEDINGS OF THE PERSON SEARCHED. WE CONCUR WITH THE SAID VIEW OF THE COORDINATE BENCH AND WOULD LIKE TO ADD THAT THIS SA TISFACTION MUST BE AN OBJECTIVE SATISFACTION BASED ON AN ENQUIRY BY THE A O TO ESTABLISH THAT THE DOCUMENTS REFERRED TO IN SECTION 153C WHICH IS FOUN D DURING THE SEARCH U/S. 132, WHICH ARE SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE PERSON SEARCHED; AND THERE SHOULD BE A CLEAR FI NDING TO THAT EFFECT BASED ON WHICH ONLY SATISFACTION AS ENVISAGED U/S. 153C C AN BE INFERRED. SUCH A ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 28 FINDING BY THE AO IS REQUIRED FOR ATTAINING THE SAI D SATISFACTION AND THEN IT SHOULD BE RECORDED IN THE FILE OF THE ASSESSEE WHIC H IS A SINE-QUA-NON TO TRIGGER THE JURISDICTION FOR THE AO TO PROCEED AGAI NST SUCH OTHER PERSON. IN THIS CASE THIS EXERCISE OF RECORDING THE SATISFACTI ON DURING THE ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED HAS NOT BEEN CAR RIED OUT AND THE SATISFACTION DOES NOT SATISFY THE REQUIREMENT OF SE CTION 153C. WE COULD NOT FIND ANY MENTION OF ANY SEIZED MATERIALS LIKE V ALUABLE ARTICLES OR THINGS OR ANY BOOKS OF ACCOUNT OR DOCUMENTS HAVE BEEN REFE RRED EVEN IN THE IMPUGNED ASSESSMENT ORDERS. THE AO LACKS JURISDICTI ON TO INITIATE PROCEEDINGS U/S. 153C AGAINST THE ASSESSEE AND THER EFORE, THE ISSUANCE OF NOTICE ITSELF IS NULL AND VOID AND THEREFORE QUASHE D. CONSEQUENTLY, THE IMPUGNED ASSESSMENT ORDER PASSED U/S. 153C IS ALSO A NULLITY. 20. SINCE WE HAVE QUASHED THE NOTICE U/S 153C OF TH E ACT ITSELF, THE OTHER GROUNDS ARE NOT ADJUDICATED BEING ACADEMIC. 21. AS THE FACTS AND CIRCUMSTANCES IN THE CASE OF T HE ASSESSEE IN OTHER FIVE ASSESSMENT YEARS I.E. 2004-05 TO 2008-09 ARE S IMILAR TO ASSESSMENT YEAR 2003-04, WE ORDER THAT THE IMPUGNED ASSESSMENT ORDERS PASSED U/S 153C IN ASSESSMENT YEARS 2004-05 TO 2008-09 ARE ALS O A NULLITY. 22. BEFORE WE PART WITH THIS ORDER, WE WERE WONDERI NG WHETHER DURING SEARCH, REVENUE AUTHORITIES CAN RESORT TO CARTE-BLANCHE SEIZURE OF ANYTHING AND EVERYTHING FROM THE PREMISES OF THE RAIDED PART Y WITHOUT THE SAID DOCUMENTS HAVING ANY BEARING IN ASSESSMENT OF INCOM E AS PER LAW. IT ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 29 SHOULD BE REMEMBERED THAT ANY EXERCISE OF POWER UND ER SECTION 153C HAS CATASTROPHIC EFFECT ON THE PARTY AGAINST WHOM PROCE EDINGS ARE REOPENED FOR SCRUTINY FOR SIX ASSESSMENT YEARS. SO THE RAIDING PARTY HAS TO APPLY ITS MIND AT LEAST TO PRIMA FACIE SATISFY THEMSELVES THA T THE DOCUMENTS SEIZED HAVE A NEXUS WITH INCOME. ANY ARBITRARY EXERCISE O F POWER WHICH IS UNBRIDLED IS A SWORN ENEMY OF THE ARTICLE 14 OF THE CONSTITUTION AND SUCH EXERCISE OF POWER WOULD OFFEND THE RIGHT TO PRIVACY AND RULE OF LAW WHICH IS A BASIC FEATURE OF THE CONSTITUTION. THEREFORE, THE OFFICERS CONDUCTING THE SEARCH WHILE SEIZING THE DOCUMENTS HAS TO EXERC ISE THE SAID POWERS WITH EXTREME CARE AND CAUTION; AND SEIZURE MUST BE USED WITH CIRCUMSPECTION. THE HONBLE APEX COURT AND THE HON BLE DELHI HIGH COURT IN N.K. TEXTILE MILLS VS CIT, (1966) 61 ITR 5 8, HAS FROWNED UPON THE PRACTICE OF INDISCRIMINATE SEIZURE PAVING WAY F OR REOPENING OF ASSESSMENTS WHICH FINALLY WILL FALL IN CASE IT IS N OT INCRIMINATING AND WILL BE AN EXERCISE OF FUTILITY. 23. IN THE RESULT, ALL THE APPEALS PREFERRED BY THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF AUGUST, 2015. SD/- SD/- (R.S. SYAL) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 14 TH DAY OF AUGUST, 2015/TS ITA NOS.5992 TO 5997/DEL/2013 CO. NOS.335 TO 340/DEL./2014 30 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-II, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.