DCIT, New Delhi V. M/s. Instronics Ltd., New Delhi

ITA 6553/DEL/2014

• Counselvise Citation: 655320114 RSA 2014
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 03-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: GUNJAN P RASAD
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Application of stay; Assessment record; Documents seized
• Section: 143(3); 153A; 147; 148; 132; 10; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH , NEW DELHI) BEFORE SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NOS. 6336, 6337, 6338, 6339, 6340 & 6341/DEL /2014 ASSESSMENT YEARS : 2003-04 TO 2008-09 M/S. INSTRONICS LTD. VS. ACIT, CC-21, U M HOUSE, PLOT NO.35P, NEW DELHI SECTOR 44, GURGAON GIR / PAN:AAACI0163R I.T.A. NOS. 6553, 6554, 6555 & 6556/DEL/2014 (ASSESSMENT YEAR 2005-06 TO 2008-09) DCIT, CC-16, VS. M/S. INSTRONICS LTD., NEW DELHI 48/53, AT 430 MIRZA WALI GALI, LADO SARAI, NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KAPIL GOEL, ADV. RESPONDENT BY : SHRI GUNJAN PRASAD, CIT DR DATE OF HEARING : 04.03.2015 DATE OF PRONOUNCEMENT :_____________ ORDER PER BENCH: THIS IS BUNCH OF 06 APPEALS FILED BY ASSESSEE AGAI NST SEPARATE ORDERS OF LD. CIT(A)-II, NEW DELHI DATED 05.09.2014, 08.09 .2014, 09.09.2014, 10.09.2014 AND 11.09.2014 PERTAINING TO ASSESSMENT YEARS 2003-04, 2004- 05, 2005-06, 2006-07 AND 2007-08. OUT OF 10 APPEAL S, 4 APPEALS ARE CROSS APPEALS FILED BY REVENUE IN ASSESSMENT YEARS 2005-0 6, 2006-07, 2007-08 & 2008-09. THE SIMILAR AND IDENTICAL GROUNDS HAVE BEEN RAISED IN ALL THESE APPEALS. THEREFORE, ALL THESE APPEALS WERE TAKEN U P FOR HEARING TOGETHER AND ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 2 ARE BEING DISPOSED OF BY WAY OF A CONSOLIDATED ORDE R FOR THE SAKE OF CONVENIENCE. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSMENT FRAMED BY THE A.O. U/S 153C READ WITH SE CTION 143(3) OF THE I. T. ACT, 1961, IS A NULLITY IN THE EYES OF LAW FOR W ANT OF SATISFACTION RECORDED BY THE A.O. OF THE SEARCHED PARTY. HE SUBMITTED TH AT FROM THE INFORMATION SOUGHT UNDER RIGHT TO INFORMATION ACT, IT IS EVIDEN T THAT THE A.O. OF SEARCHED PERSON HAS NOT RECORDED SATISFACTION. HE SUBMITTED THAT THE SATISFACTION NOTE BY THE A.O. OF SEARCHED PERSON IS A CONDITION PRECE DENT FOR INITIATING PROCEEDINGS U/S 153C OF THE ACT AGAINST THE PERSON OTHER THAN THE SEARCHED PERSON. HE SUBMITTED THAT THE ISSUE IS NO MORE RES INTEGRA AS THE ISSUE HAS ALREADY BEEN DECIDED BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PEPSI FOODS VS CIT (2014) 52 TAXMAN.COM 220 (DEL.) AND FOLLOWED BY VARIOUS COORDINATE BENCHES OF THIS TRIBUNAL. THERE FORE, HE SUBMITTED THAT ALL THESE APPEALS BE DECIDED AGAINST THE REVENUE ON THI S GROUND ALONE. 3. SINCE THE GROUNDS ARE IDENTICAL IN ALL THESE APP EALS, OF ASSESSEE, WE TAKE I.T.A. NO. 6336/DEL/2014 FOR ASSESSMENT YEAR 2 003-04 AS A LEAD CASE. SINCE THE ASSESSEE HAS RAISED THE QUESTION RELATED TO JURISDICTION OF A.O., THEREFORE, WE PROCEED TO DECIDE THE GROUND NO.3 RAI SED IN THIS APPEAL WHICH READS AS UNDER: 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. A.O. IS AGAINST THE STATUT ORY PROVISIONS OF THE ACT AND WITHOUT COMPLYING THE PROCEDURES PRESCR IBED U/S 153C OF THE I. T. ACT, 1961 AND AS SUCH, THE ASSESSMENT BEI NG BAD IN LAW DESERVES TO BE QUASHED. 4. THE REPRESENTATIVES OF RESPECTIVE PARTIES HAVE A DOPTED THE ARGUMENTS AS ADDRESSED IN A SEPARATE BATCH OF APPEALS FIXED F OR HEARING ON THE SAME DAY ARISING OUT OF THE SAME SEARCH OPERATION. IN CROSS OBJECTION NOS. 353 TO ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 3 358/DEL/2014 AND I.T.A. NOS. 6404 TO 6409/DEL/2013 IN THE CASE OF IECS PVT. LTD., WE HAVE DECIDED THE ISSUE AS UNDER: 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PER USED THE MATERIAL AVAILABLE ON RECORD, GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND CASE LAWS CITED BY THE RESPECTIVE REPRESENTATIV ES OF THE PARTIES. WE FIND THE OPENING PARA OF THE ASSESSMENT ORDER R EADS AS UNDER : SEARCH & SEIZURE ACTION U/S 132 OF THE I.T. ACT WAS CARRIED OUT IN THE CASES OF SH. B.K.DHINGRA, SMT. POONAM DH INGRA & M/S MADHUSUDAN BUILDCON PVT. LTD. ON 20/10/2008 AND DURING THE COURSE OF SEARCH AT THEIR RESIDENTIAL PREMISES AT F-[6/5, VASANT VIHAR, NEW DELHI CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. ON THE BASIS OF DOCUMENTS SO FOUND BELONGING TO THE ASSESSEE COMPANY, PROCEEDINGS WERE INITIATED IN THE CASE OF THE ASSESSEE COMPANY U/S 153C READ WITH SECTION 153A OF THE I.T.ACT. THE CASE OF ASSESSEE WAS INITI ALLY CENTRALIZED WITH ACIT, CENTRAL CIRCLE-7 U/S 127 OF THE I.T.ACT BY COMMISSIONER OF INCOME TAX, DELHI-IV, NEW DELHI VID E ORDER F.NO. CIT-IV/CENT./121/2009-10/1343 DATED 30.07.201 0. NOTICE U/S 153C DATED 14.09.2010 WAS ISSUED TO THE ASSESSE E BY THE ACIT, CC-17, NEW DELHI REQUIRING THE ASSESSEE COMPA NY TO FILE RETURN OF INCOME WITHIN 15 DAYS OF SERVICE OF THE N OTICE. 7.1 FROM THE ABOVE IT IS EVIDENT THE BASIS O F INITIATING PROCEEDING U/S 153C IS THAT CERTAIN DOCUMENTS BELONGING TO THE ASS ESSEE COMPANY WERE FOUND AT THE SEARCHED PREMISES BEARING NO. F 6/5 VA SANT VIHAR, NEW DELHI IN THE CASE OF SH. B.K.DHINGRA, SMT. POONAM DHINGRA AN D M/S MADHUSUDAN BUILDCON PVT. LTD. BELONGING TO THE ASSESSSEE. THE CONTENTION OF LD. COUNSEL IS THAT THE AO OF THE SEARCHED PARTY SHOULD HAVE RECORDED SATISFACTION BUT FROM THE REPLIES FURNISHED UNDER T HE RIGHT TO INFORMATION ACT NO SUCH SATISFACTION WAS RECORDED. THE CONTENTS OF REPLY FURNISHED BY REVENUE READS AS UNDER :- 2. FROM THE ASSESSMENT RECORDS OF SH. BHUPESH KU MAR DHINGRA, WHICH IS COVERED UNDER SECTION153A, FOR THE ASSTT. YEARS FROM 2003-04 TO 2008-09 (BLOCK PERIOD) IT IS NOTICED THA T THERE IS NO SATISFACTION NOTEAVAILABLE/RECORDED IN RESPECT OF OTHER ENTITIES. 3. IN CASE YOU INTEND TO FILE THE APPEAL, YOU MA Y FILE THE SAME BEFORE THE ADDL. COMMISSIONER OF INCOME TAX, CENTRAL REG NGE-2, 3 RD FLOOR, ARA CENTER, E-2, JHANDEWALAN, NEW DELHI WITH IN 30 DAYS FROM RECEIPT OF THIS LETTER. ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 4 THE ABOVE REPLIES SUPPORTS THE CONTENTION OF LD. C OUNSEL FOR THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PARTY. 7.2. BEFORE ADVERTING TO THE RIVAL CONTENTIONS OF THE PARTIES IT WOULD BE APPROPRIATE TO REPRODUCE THE RELEVANT PROVISIONS OF LAW. SECTION 153C 153C. 3 [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 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 BELONG S 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 JURISDICTION OVER SUCH OTHER PERSON 3A [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSO N AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTH ER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A , IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR D OCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON TH E DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PER SON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SU B-SECTION (1) OF SECTION 153A ] :] [PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE RE FERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 82 [SUB- SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUM ENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HA VING JURISDICTION OVER SUCH OTHER PERSON.] 83 [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREV IOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 5 (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UNDER S UB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN M ADE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFF ICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOM E OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVID ED IN SECTION 153A. ] 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION.- (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTI ON 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETU RN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SU CH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHA LL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FAL LING WITHIN SUCH SIX ASSESSMENT YEARS: ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 6 PROVIDED FURTHER THAT ASSESSMENT OR REA SSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PE NDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITH STANDING ANYTHING CONTAINED IN SUB-SECTION (1) OR SECTION 15 3, THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SE CTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RE CEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFE CT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SEC TION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL B E CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. LD. CIT(DR) DURING THE COUNSEL OF HEARING ALSO DRE W ATTENTION TO SECTION 148 (2) OF THE ACT, WHICH READS AS UNDER :- 8. THE REVENUE HAS RAISED FOUR FOLD OBJECTION S AGAINST QUASHING THE ASSESSMENT ORDER. FIRSTLY, IT WAS ARGUED THAT THERE IS NO REQUIREMENT UNDER THE LAW THAT THE SATISFACTION SHOULD BE RECORDED. T HE SATISFACTION CAN BE INFERRED BY IMPLICATION, HAD THE INTENT OF LEGISLA TION BEEN SO, THE WORD RECORD AS ENSHRINED IN SECTION 148(2) WOULD HAVE BE EN INCORPORATED. THEREFORE, THERE IS NO NEED OF SATISFACTION NOTE AN D ON THE BASIS OF ABSENCE OF SATISFACTION NOTE ASSESSMENT CANNOT BE ANNULLED. I N SUPPORT OF THIS SUBMISSION THE RELIANCE IS PLACED ON THE JUDGMENT H ONBLE KERALA HIGH COURT RENDERED IN THE CASE OF DR. K.M. MEHBOOB VS. DCIT ANR. (2012) 76 DTR (KER) 90. SECONDLY, IT WAS POINTED OUT THAT LD. CIT(A) IN PARA 4.3 OF THE IMPUGNED ORDER HAS OBSERVED THAT THE ASSESSEE H AS NO OBJECTION IN ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 7 RESPECT OF INITIATION OF PROCEEDINGS. NOW THE ASSES SEE CANNOT BE ALLOWED TO BLOW HOT AND COLD AT THE SAME TIME. THIRDLY, IT WAS CONTENDED THAT THE PROVISION SHOULD BE LITERALLY CONSTRUED. THERE IS NO SCOPE OF ADDING OF NEW WORD AND OR IMPARTING A NEW MEANING, WHEN THERE IS NO AMBIGUITY, THIS BEING WELL SETTLED PROPOSITION OF LAW. LASTLY, IT W AS CONTENDED THAT TECHNICALITIES SHOULD NOT COME IN THE WAY OF DISPEN SATION OF JUSTICE. IT WAS SUBMITTED THAT NON RECORDING OF SATISFACTION IS ONL Y A TECHNICAL DEFECT THIS SHOULD NOT BE SOLE GROUND FOR ANNULLING THE ASSESSM ENT. IT WAS THEREFORE, CONTENDED THAT THE ASSESSMENT SHOULD NOT BE QUASHED . 9. ON THE OTHER HAND, IT IS CONTENDED BY THE A SSESSSEE IS THAT ISSUE IS NO MORE RES-INTEGRA AND HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE AUTHORITATIVE JUDICIAL PRONOUNCEMENT BY THE HONBLE HIGH COURT OF DELHI, OTHER HIGH COURTS AND THE CO-ORDINATE BENCHES OF TH IS TRIBUNAL. THEREFORE, IT IS PRAYED THAT ASSESSMENT ORDER BE QUASHED BEING IL LEGAL AND NULLITY IN THE EYES OF LAW. THE BRIEF SYNOPSIS AS FILED IS REPRODU CED HEREIN BELOW FOR THE SAKE OF CLARITY :- BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL, CBENCH, NEW DELHI IN THE MATTER OF VS. ACI T, CENTRAL CIRCLE -21 INSTRONICS LIMITED RO OM NO. 344, ARA CENTRE, F-345, LADO SARAI, JHAN DEWALAN EXTENSION, NEW DELHI-110030 NEW DE LHI - 110055 PAN : AAACI0163R (APPELLANT) (RESPONDENT) ASSESSMENT YEARS 2003-2004 TO 2008-09 ITA NOS. 6 336/DEL/2014 TO 6341/DEL/2014 (FILED BY ASSESSEE ON 19.11.2014) AND DCIT, CENTRAL CIRCLE 21, IN STRONICS LIMITED ARA CENTRE, JHANDEWALAN EXTENSION, F-345, LADO SA RAI, NEW DELHI 110055 NEW DELHI- 110030 ASSESSMENT YEARS 2 005-2006 TO 2008-09 ITA NOS. 6553/DEL-2014 TO 6556/DEL-2014 NDOH (F ILED BY REVENUE ON 29.05.2014) 04.03.2015 SYNOPSIS (COVERED MATTER) ASSESSEE COMPANYS CROSS APPEALS INTER-ALIA ON LEGA LITY AND VALIDITY OF PROCEEDINGS U/S 153C AND REVENUES APPEALS ON MERIT S. MAY IT PLEASE YOUR HONORS. 1. SATISFACTION NOTE AS SUPPLIED TO ASSESSEE COMP ANY DATED 30.09.2010 (PAPER BOOK FOR THE AY. 2003-04 TO AY. 2008-09, PAG E NO. 11) ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 8 SATISFACTION NOTE FOR ISSUING NOTICE U/S. 153C OF I.T. ACT, 1961, IN THE CASE OF M/S. INSTRONICS LIMITED, 192C, J&K POCKET, DILSH AD GARDEN, NEW DELHI, PAN : AAACI0163R FOR AY. 2003-04 TO 2008-09. 30.09.2010: IN THE CASE OF SH. B.K.DHINGRA, SMT. P OONAM DHINGRA AND M/S MAYANK TRADERS PVT. LTD., M/S HORIZON PVT. LTD. SEA RCH & SEIZURE TOOK PLACE U/S. 132 ON 20.10.2008. THE UNDERSIGNED IS TH E JURISDICTIONAL AO OF THESE CASES. DURING THE COURSE OF SEARCH AND SEIZUR E DOCUMENTS/PAPERS AT PAGES 1 TO 38 OF ANNEXURE A-87, ANNEXURES A-96, A-9 7, A-98 AND A-99, ARE FOUND TO BELONG TO M/S. INSTRONICS LTD., 192C, J&K POCKET, DILSHAD GARDEN, NEW DELHI. I HAVE EXAMINED THE ABOVE MENTIONED DOCU MENTS/PAPERS AND PROVISION OF SECTION 153C IS INVOKEABLE IN THIS CAS E. AS THE UNDER SIGNED IS ALSO THE JURISDICTIONAL AO OF M/S. INSTRONICS LTD., 192C, J & K POCKET, DILSHAD GARDEN, NEW DELHI, THIS SATISFACTION NOTE I S PLACED IN THE FILE BEFORE ISSUING NOTICE U/S. 153C. SD/- 30.09.2010 ACIT, CENTRAL CIRCLE-17, NEW DELHI REASONS FOR AFORESAID SATISFACTION NOTE IS NOT VALI D TO ASSUME THE JURISDICTION U/S 153C OF THE ACT: TH AT IT IS NO T R E CORDED BY S PE CIF IED AUTHORIT Y THAT IS AO OF RAIDED PART Y DURING ASSESSMENT PROCEEDINGS W HI CH IS FO R TIFI E D FROM : A) RTI REPLIES D A TED 1 0 . 0 6 . 2 013 & 28.06 . 201 3 (PAGES 12 TO 15 OF PAPER BOOK FOR THE AY. 2003-04 TO AY. 2008-09). B) ON THE VER Y NEXT DA Y (01.10.2010) NOTICE U/S 153C IS ISSUED; C) TONE AND TENOR OF SATISFACTION NOTE TH A T I S T HER E IS NO R E MOTE INDI C ATION IN THE G I V EN / AFORESAID NOTE THAT S AME I S RECORDED DURING THE COURSE OF ASSESSMENT OF A PARTICULAR SEARCHED PERSON ON THE CONTRAR Y , FROM CURSOR Y LOOK IT IS PALPABLE THAT SAME I S MER E NOTIN G B Y AO O F AS S ESSEE ( OTHER PERSON ) BEFORE IS S UANCE OF NOTICE U / S 153C. I T IS S UPPORTED B Y I )FI R S TL Y , OPENIN G LAN G UAGE AND MOST IMPORTANTL Y IT IS RECORDED THAT 'IN THE CASE OF SHE B.K. DHINGRA, SMT. POONAM DHINGRA AND MLS. MAYANK TRADERS PVT. LTD., HORIZON PVT LTD. SEARCH & SEIZURE TOOK PLACE U/S. 132 ON 20.10.2008; ................ SECONDLY, DOCUMENTS/PAPERS AT PAGES 1 TO 39 OF ANNEXURE A-87 , ANNEXURES A-96, A-97, A-98 AND A-99 , ARE FOUND TO BELONG TO M/S. ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 9 INSTRONICS LTD.,' WHERE MULTIPLE PARTIES ARE M E NTI O NED (3 IN N O . ); II ) ' W HICH S UFFICIENTL Y PR O VES THAT IN S TANT NOTE IS RECORDED B Y AO OF PRESENT AS SE S S E E AND I S NOT TH E REQUI S ITE ' SATI S FACTION ' B Y AN Y AO OF AN Y PARTICULAR RAIDED PART Y DURING SEARCH A S SESS M E N T U/ S 1 5 3 A . NOTICEABL Y AFOR E SAID F EA TURES CLEARL Y ESTABLISH THAT THERE IS NO V ALID S ATI S FACT I ON ON PART OF LD. AO. BEFORE I SS UIN G NOT I CE U LS 153 C OF THE ACT. ON IDENTICAL FACTS, HON ' BLE DELHI BENCHES OF ITAT ON THREE DI F FER E NT OC CA S ION S I N CASES OF INLA Y MARKETING PVT. L TD . (CASE LAW PAPER BOOK PAGES 78 TO 128) , AK A SH ARO GY A MANDIR P V T. LTD . (CASE LAW PAPER BOOK PAGES 129 TO 144) AND TANVIR C OLLECTIONS P V T. L T D . (CASE LAW PAPER BOOK PAGES 145 TO 166) H AV E QUA S HED T HE SIMILAR P R OCEEDING S BEIN G NULLIT Y FOR L AC K OF JURI S DI CT ION . IN THESE PR E CEDENTS , C OORDIN A TE BENCH DECI S IONS , HON'BLE JURISDICTIONAL HIGH C O URT AND A PE X COURT DECISIONS ARE DILAT E D AT LEN G TH . SO IT IS RESPECTFULLY PRE Y ED THAT FOR SAKE OF JUSTICE, SAME MA Y PLEASE BE APPLIED IN PRESENT CASE ALSO. IT IS NOT EWO RTH Y H E RE THAT OR D ER OF DELHI [T A T IN DSL PROPERTIES C ASE RE P OR T E D AT 60 SOT 88 W A S A PPLI E D IN A BO VE CA SE S. THIS ORDER IS FOLLOWED IN MANY OTHER DECISIONS BY HON'BLE ITAT . FURTHER IT IS NOT KNOWN AS TO WHY THE REVENUE HAS NOT DISCLOSED T HAT AT HON'BLE HIGH COURT ON 05.12.2014 REVENUE ' S STAY APPLICATION FOR DSL ITAT DECISION HAS BEEN HITHERTO JETTISONED B Y HON'BLE DELHI HIGH COURT, ITA 583/2013 DATED 05.12.2014. RE G ARD I N G S PE C I F IC S ATI S FACTI O N B Y AO OF RAIDED PART Y AND IN ITS A BSENCE C ONSEQUENTIAL NULLIFICATION OF PR O CEEDIN G S , H O N ' BLE DELHI HI G H COURT DECISION DATED 26 . 11 . 2 014 I N CA S E OF M A NJU FINANCE CORPORATION (IT A NO . 339/2002) (CASE LAW PAPER BOOK PAGES 17 TO 24) I S N O T EWO RTH Y . 2.2 THAT INSTANT NOTE IS RECORDED MECHANICALLY AND WITHOUT APPLICATION OF MIND: IT IS V I V ID FROM AFORESAID NOT E TH A T SAME IS R ECORDED W ITHOUT E VE N NARRATING AND D E SCRIBIN G THE NATURE OF DOCUMENTS AND THEIR FINANCIAL IMPLICATIONS AND ONL Y ANNE X URE NUMBE R S A RE LOO S EL Y AND V A G UEL Y M ENTIO N ED W HICH DO NOT M E E T TH E BA S IC CR ITE R I A O F AN Y OBJECTI V E AND R ATI ON A L 'SATISFACTION' . TH A T IS THERE NO C LE A R FINDING IN A FOR ES AID NOTE ON I ) NATURE O F DOCUM E NTS A ND I I) AS TO HO W LD A O ARRI V ED AT THE SA TI S F A CT I O N TH A T SAME B E L O N GS TO A PPELL A NT H E R E W HI C H IS QU I TE CRUC I AL A ND C RIT IC AL III ) T HE F INAN CI AL IMPLICATION S O F DOCUMENTS ON BL OCK P ERIO D . N O THIN G I S C O MP R EHENSIBLE F R O M THE A F ORE S AID NO T E. ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 10 HOW CAN WITHOUT ENUMERATION OF BASIC DOCUMENTS MERE MENTIONING OF ANNEXURE NO ' S CAN BE TREATED AS ADEQUATE FOR ARRIVING AT JUST A ND V ALID SATISFACTION U/S 153C WHICH REFLECTS MECHANICAL RECORDING OF THE SAME. ON BOTH THE ABOVE COUNTS, THAT IS NON RECORD ING OF SATISFACTION BY SPECIFIED AUTHORITY (BEING AO OF A RAIDED PARTY) AN D FOR TOTAL LACK OF CLARITY OF NATURE OF DOCUMENTS SEIZED AND HOW TR EATED TO BE BELONGING TO, MAKES THE INSTANT PROCEEDINGS NULL AN D VOID AND THE GIVEN NOTE AT PAGE 1 CANNOT BE TREATED AS VALID FOR ASSUMPTION OF JURISDICTION. JURISDICTIONAL AND OTHER AVAILABLE HON'BLE HIGH COU RT JUDICIAL PRONOUNCEMENTS: ISSUE IS NO LONGER RES INTEGRA NOTICEABLY, THERE ARE AT LEAST FOUR HIGH CO URT DECISIONS (INCLUDING TWO FROM JURISDICTIONAL HIGH COURT REPORTED AT 367 ITR 673, 367 ITR 112, 270 CTR 467 PEPSI AND PEPSICO ORDERS (CASE LAW PAPER BOOK PAGES 1 TO 16) AND OTHER TWO FROM ALLAHABAD HI GH COURT (GOPI APARTMENTS 366 ITR 411) AND TELANGANA & ANDHR A PRADESH HIGH COURT IN SHETTY PHARMACEUTICALS (26.11.2014) ITT A 662 OF 2014 AND BATCH) (CASE LAW PAPER BOOK PAGES 31 TO 66 ) WHERE IN DETAILED PRINCIPLES ON VALIDITY OF PROCEEDINGS U/S 153C ARE LAID DOWN WHICH SUPPORTS THE VIEW TAKEN IN CASES OF I) I NLAY MARKETING PVT. LTD. (SUPRA) II) AKASH AROGYA MANDIR PVT. LTD. (SUPRA) III) TANVIR COLLECTIONS PVT. LTD. AND IV) DSL PROPERTIES PVT. LTD. AND OUR PRAYER(SUPRA). IN AFORESAID CONNECTION, IT IS VERY RESP ECTFULLY SUBMITTED THAT IT IS TRITE LAW THAT AFTER VARIOUS HIGH COURT DECISIONS O N THE ISSUE, NO QUESTION OF DEBATE AND PER INCURIAM AND SPECIAL BEN CH CAN ARISE AS IT IS HELD IN COORDINATE BENCH DECISION REPORTED AT 69 TTJ 550 (APPLIED BY PUNE ITAT IN AURANGABAD RESORTS REPORTE D AT 118 ITD 1/111 TTJ 741) THAT ONCE AN AUTHORITY HIGHER THAN T RIBUNAL HAS EXPRESSED ITS ESTEEMED VIEWS ON AN ISSUE, NORMALLY THE DECISION OF HIGHER JUDICIAL AUTHORITY IS TO BE FOLLOWED, EVEN I F HIGHER JUDICIAL FORUM IS NON JURISDICTIONAL HIGH COURT (HERE T & A P HIGH COURT IN SHETTY CASE AND ALLAHABAD HIGH COURT IN GOPI APARTM ENTS). SAME VIEW IS REITERATED IN DECISION OF MUMBAI BENCH OF I TAT REPORTED AT 20 SOT 129. IN CONTEXT OF REVENUE'S ATTEMPT TO DIST INGUISH THE JURISDICTIONAL HIGH COURT DECISIONS (IN CASES OF PE PSI AND PEPSICO SUPRA) ON NON EXISTING AND EXTRANEOUS GROUNDS, RESP ECTFULLY SUBMITTING, IT IS URGED THAT ONCE THE DECISION OF J URISDICTIONAL HIGH COURT EXISTS ON AN ISSUE, IT IS SETTLED POSITION IN LAW AS DECLARED BY THE SUPREME COURT IN THE CASE OF EAST INDIA COMMERC IAL CO. LTD. ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 11 VS. COLLECTOR OF CUSTOMS AIR 1962 (SC) 1793 THAT TH E LAW DECLARED BY THE HIGH COURT IS BINDING ON ALL AUTHORITIES AND TRIBUNALS WITHIN THE STATE. LASTLY, WE HUMBLY DRAW YOUR HONORS KIND ATT ENTION TO RECENT CONSTITUTION BENCH ORDER OF HON'BLE SUPREME COURT I N VATIKA CASE REPORTED AT 367 ITR 466 WHEREIN IN NO UNCLEAR WORDS IT IS CATEGORICALLY HELD THAT 'TAX LAWS ARE CLEARLY IN DE ROGATION OF PERSONAL RIGHTS AND PROPERTY INTERESTS AND ARE, THE REFORE, SUBJECT TO STRICT CONSTRUCTION, AND ANY AMBIGUITY MUST BE RESO LVED AGAINST IMPOSITION OF THE TAX' THAT IS WHERE TWO VIEWS ARE THERE ONE WHICH FAVORS THE TAX PAYER MUST BE FOLLOWED. (VIDE SE DEC ISION IN CASE OF VEGETABLE PRODUCTS 88 ITR 192). 4. FURTHER WHERE THE ISSUE IS COVERED IN FAVOR OF A SSESSEE ON LEGAL JURISDICTIONAL GROUNDS THERE IS NO NEED TO ENTER IN TO MERITS AT ALL IS SUPPORTED BY BOMBAY HIGH COURT DECISION IN CASE OF M/S. PETROLEUM INDIA INTERNATIONAL, MUMBAI ORDER DATED: 19TH NOVEMBER, 2012 IN INCOME TAX APPEAL NO. 2660 OF 200 9 WHEREIN IT IS HELD THAT 'ONCE, IT IS HELD THAT THE REOPENING O F THE ASSESSMENT IS BAD IN LAW, THEN, IN OUR OPINION, THE CIT (A) AS AL SO THE ITAT WERE NOT JUSTIFIED IN DEALING WITH THE MERITS OF THE CAS E' NOTE ON DELHI HIGH COURT DECISION IN CASE OF SSP AVIATION (346 ITR 177) WHICH IS RELIED HEAVILY BY REVENUE AT ITAT AND CIT- A. RELEVANT FACTS OF INSTANT CASE/DOCUMENTS: I) OUR FIRST HAND RESPONSE TO LD. AO. IN THE MONTH OF NOVEMBER, 2010 DURING ASSESSMENT PROCEEDINGS (PAGES 22 TO 28 OF PA PER BOOK FOR THE AY. 2003-04 TO AY. 2008-09) THAT SEIZED DOCUMEN T ARE FULLY DISCLOSED AND ACCOUNTED AND NOTHING IS UNDIS CLOSED AS FAR AS SEARCH RELATED DOCUMENTS ARE CONCERNED WHICH REMAINED UNCO NTROVERTED; II) AT NO STAGE IT IS CONTROVERTED THAT SEIZED DOC UMENTS FOUND DURING SEARCH ARE FULLY DISCLOSED AND ACCOUNTED. PARA 17 OF AFORESAID DECISION AS APPLIES TO PRESENT CASE IN FAVOR OF ASSESSEE: ' THE SECTION MERELY ENABLES THE REVENUE AUTHO RITIES TO INVESTIGATE INTO THE CONTENTS OF THE DOCUMENT SE IZED, WHICH BELONGS TO A PERSON OTHER THAN THE PERSON SEARCHED SO THAT IT CAN BE ASCERTAINED WHETHER THE TRANSACTION OR THE INCOME E MBEDDED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIATE PERSON. IT IS AIMED AT ENSURING THAT INCOME DOES NO T ESCAPE ASSESSMENT IN THE HANDS OF ANY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHED UNDER SECTION 132 OF THE ACT. IT IS ONLY A FIRST STEP ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 12 TO THE ENQUIRY, WHICH IS TO FOLLOW. THE ASSESSING O FFICER WHO HAS SEARCHED THE SATISFACTION THAT THE DOCUMENT RELATES 'TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHING EXCEP T TO FORWARD THE DOCUMENT TO THE ASSESSING OFFICER HAVING JURISD ICTION OVER THE OTHER PERSON AND THEREAFTER IT IS FOR THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON TO FOLLOW THE PR OCEDURE PRESCRIBED BY SECTION 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLECTED BY THE DOCUMENT HAS BEEN ACCOUNTED FOR BY SUCH OTHER PERSON. IF HE IS SO SATISFIED AFTER OBTAINING THE R ETURNS FROM SUCH OTHER PERSON FOR THE SIX ASSESSMENT YEARS, THE PROC EEDINGS WILL HAVE TO BE CLOSED. IF THE RETURNS FILED BY THE OTHER PER SON FOR THE PERIOD OF SIX YEARS DOES NOT SHOW THAT THE INCOME REFLECTED I N THE DOCUMENT HAS BEEN ACCOUNTED FOR, ADDITIONS WILL BE ACCORDING LY MADE AFTER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO SUCH OTHER P ERSON. THAT, IN SUM AND SUBSTANCE, IS THE POSITION. ' FURTHER SUPPORTIVE CASE LAWS WHERE AFORESAID DECISI ON OF DELHI HIGH COURT IN SSP AVIATION PARA 17 IS APPLIED: I) IN IDENTICAL FACT SITUATION, IN THE INCOME TAX A PPELLATE TRIBUNAL DELHI BENCH 'B', NEW DELHI IN I.T.A. NOS. 5430 TO 5436IDEL/2013 A.YRS. : 2003-04 TO 2009-10 'DEVI DAYAL PETRO CHEMICALS PVT. LTD., ORDER DATED 10-9-2014.' (REFER CASE LAW PAPER BOOK PAGES 67 TO 77 ) HAS OBSERVED THAT 'THER EFORE, THE ASSESSING OFFICER WILL DROP THE PROCEEDINGS INITIAT ED UNDER SECTION153 OF THE YEARS TO WHICH THE SEIZED DOCUMEN TS DO NOT BELONG. FOR THE YEAR TO WHICH THE SEIZED DOCUMENTS BELONGED, HE WILL VERIFY WHETHER THE TRANSACTION REFLECTED BY TH E SEIZED DOCUMENTS IS DULY ACCOUNTED FOR IN THE BOOKS OF ACC OUNT. IF THE TRANSACTIONS ARE DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT, AS CONTENDED BY THE LEARNED COUNSEL, THE ASSESSING OFF ICER WILL DROP THE PROCEEDINGS INITIATED UNDER SECTION 153C' II) BENCH 'A', KOLKATA ,ITAT IN TRISHUL HI-TECH IN DUSTRIES CASE ORDER DATED 24.09.2014, IT(SS)A NOS. 84-86/KOI/2011 (REFER CASE LAW PAPER BOOK PAGES 197 TO 209) HAS HELD THAT 'TO PUT IT SIMPLY THIS AMENDMENT TO PROVISO TO SECTION 153C(1) BY FIN ANCE ACT 2014 OF THE ACT DEBARS THE AO FROM MAKING ANY ASSESSMENT DEHORSE ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ' III) PUNE BENCH ITAT IN BHARATI VIDYAPEETH FOUNDATI ON DULY APPROVED BY BOMBAY HIGH COURT ON 10/06/2014 ITA NO. 959/PN/1 0 TO 967/PN/10 IN TURN BASED ON PUNE ITAT ORDER REPORTED AT SINGHAD TECHNICAL EDUCATION 140 TTJ 233) ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 13 IV) PUNE BENCH ITAT IN D.Y.PATIL PRATSHTHAN ORDER D ATED 7/9/2012, ITA NO. 1586/PN/2011 TO 1591/PN/2011 SINCE IN THE INSTANT CASE CERTAIN DOCUMENTS BELONGING TO THE ASSESSEE TRUST HAVE BEEN FOUND DURING THE COURSE OF SEARCH IN THE PREMISES OF THE TRUSTEES, THEREFORE, ISSUE OF NOTIC E U/S. 153C OF THE INCOME TAX ACT BY THE AO IS A VALID NOTICE IN VIEW OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIA TION LTD. (SUPRA). HOWEVER, SINCE ALL THE ENTRIES FOUND IN TH OSE DOCUMENTS HAVE ALREADY BEEN REFLECTED IN THE BOOKS OF ACCOUNT S AS PER THE CHART FURNISHED BY THE ASSESSEE WHICH HAVE BEEN REP RODUCED AT PARA 9 OF THIS ORDER AND WHICH HAVE BEEN ANALYSED A BOVE AND WHICH COULD NOT BE CONTROVERTED BY THE LEARNED DR, THEREFORE, IN IVEW OF THE DECISION OF THE HONBLE DELHI HIGH COUR T IN THE CASE OF SSP AVIATION LTD. (SUPRA) FURTHER PROCEEDINGS SHOUL D HAVE BEEN CLOSED BY THE AO. OTHERWISE IT WILL CAUSE UNDUE HAR ASSMENT TO THE ASSESSEE. IN OUR OPINION, THE AO IN THE GARB OF PRO CEEDINGS U/S 153C CANNOT MAKE ROVING AND FISHING ENQUIRIES AFTER ASSESSEE PROVES THAT ENTRIES RECORDED IN THE DOCUMENTS SIZED FROM THE SEARCH PARTY WHICH BELONG TO THE ASSESSEE ARE ALREADY REFL ECTED IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED. IN THIS VIEW O F THE MATTER AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. (SUPRA) WE HOLD TH AT THE NOTICE ISSUED U/S. 153 IS A VALID NOTICE. HOWEVER, SINCE THE ASSESSEE HAS SATISFACTORI LY EXPLAINED THAT ENTRIES FOUND IN THE SEIZED DOCUMENTS ARE REFLECTED IN THE REGULAR BOOKS OF ACCOUNT, FURTHER PROCEEDINGS U/S. 153C WILL HAVE TO BE CLOSED AND NO FURTHER ADDITION CAN BE MADE BY MAKING ROVING AN D FISHING ENQUIRIES SINCE THE ASSESSEE CANNOT BE PUT TO UNDUE HARASSMENT. SINCE THE ASSESSSEE SUCCEDS ON THIS PRELIMINARY ISS UE WE REFRAIN OURSELVES FROM ADJUDICATING THE OTHER GROUNDS BY TH E ASSESSEE AS WELL AS THE REVENUE ON MERIT. DECISIONS REFERRED : I) JAI STEEL (INDIA) VS. ACIT: 259 CTR (RAJ) 281 II) CIT VS. MURLI AGRO PRODUCTS LTD. I.T.A. NO. 36 OF 2 009 (BOM.) HIGH COURT ORDER DT. 29.10.2010 III) CIT VS. CHETAN DASS LACHMAN DASS; 77 DTR (DEL) 25 IV) CIT VS. ANIL KUMAR BHATIA; 352 ITR 493 (DEL) V) SANJAY AGARWAL; ITA NO. 3184/DEL/2013 VI) PACL INDIA LTD., ITA NO. 2637/DEL/2010 VII) KUSUM GUPTA, ITA NO. 3312/DEL/2009 VIII) MGF AUTOMOBILES LTD., ITA NO. 4212/DEL/2011 ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 14 IX) VEE GEE INDUSTRIAL ENTERPRISES, ITA NO. 1/DEL/2011 X) ASHA KATARIA, ITA NO. 3105-3107/DEL/2011 XI) MERIGOLD MERCHANDISE (P). LTD. ITA NO. 2666/DEL/201 3 XII) PRADEEP KUMAR, ITA NO. 4016/DEL/2011 XIII) ACIT VS. MANOJ NARAIN AGARWAL; 99 DTR (DEL) (TRIB.) 279 XIV) PARIVAR PROPERTIES (P) LTD., ITA NO. 1011/DEL/2013 XV) INLAY MARKETING PVT. LTD, ITA NO. 4200/DEL/2012 (ID ENTICAL FACT SETTING) (CASE LAW PAPER BOOK PAGES 78 TO 128) XVI) V.K.FISCAL, ITA NO. 5460/DEL/2013 XVII) PARSVNATH DEVELOPERS LTD. VS. DCIT, 5188/DEL/2013 XVIII) SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. VS. CIT; 137 ITD 287 (MUMBAI) (S.B.) XIX) DELHI ITAT BENCH, DBENCH NEW DELHI, KURELE PAPER MILLS PVT. LTD. 14.11.2014 (CASE LAW PAPER BOOK PAGES 172 TO 1 86) XX) ITAT, DELHI A BENCH, ANJOO KASHYAP ORDER DATED 19 .12.2014 XXI) ITAT, DELHI F BENCH ORDER, IN THE CASE OF QUALITR ON COMODITIES PVT. LTD. DATED 06.01.2015 (CASE LAW PAPER BOOK PAG ES 187 TO 196) SUBMITTED PLEASE, SD/- AR KAPIL GOEL, ADV. 9.1. THE REVENUE HAS NOT DISPUTED THE FACT THA T IN THE CASE IN HAND, THERE IS NO SATISFACTION NOTE BY THE AO OF THE SEARCHED P ARTY. THE EXPLANATION FOR NOT RECORDING SATISFACTION IS THAT LAW DOES NOT ENV ISAGE THAT THE SATISFACTION SHOULD BE RECORDED. THIS CONTENTION IS AGAINST THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF PEPSI FOODS (P) LTD. VS. ASSISTANT COMMISSIONER OF INCOME TAX [2014] 52 TAXMAN. COM 22 0 (DELHI) IN PARA 6 OF THE JUDGMENT HAS HELD AS UNDER :- 6. ON A PLAIN READING OF SECTION 153C, IT IS EVIDE NT THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE S ATISFIED THAT INTER ALIA ANY DOCUMENT SEIZED OR REQUISITIONED BE LONGS TO A PERSON OTHER THAN THE SEARCHED PERSON. IT IS ONLY T HEN THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON CAN HANDOV ER SUCH DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTI ON OVER SUCH OTHER PERSON (OTHER THAN THE SEARCHED PERSON). WP(C ) 415/2014 & ORS. PAGE 9 OF 15 FURTHERMORE, IT IS ONLY AFTER S UCH HANDING OVER THAT THE ASSESSING OFFICER OF SUCH OTHER PERSO N CAN ISSUE A NOTICE TO THAT PERSON AND ASSESS OR RE-ASSESS HIS I NCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THE REFORE, ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 15 BEFORE A NOTICE UNDER SECTION 153C CAN BE ISSUED TW O STEPS HAVE TO BE TAKEN. THE FIRST STEP IS THAT THE ASSESSING O FFICER OF THE PERSON WHO IS SEARCHED MUST ARRIVE AT A CLEAR SATIS FACTION THAT A DOCUMENT SEIZED FROM HIM DOES NOT BELONG TO HIM BUT TO SOME OTHER PERSON. THE SECOND STEP IS AFTER SUCH SATIS FACTION IS ARRIVED AT THAT THE DOCUMENT IS HANDED OVER TO TH E ASSESSING OFFICER OF THE PERSON TO WHOM THE SAID DOCUMENT BE LONGS. IN THE PRESENT CASES IT HAS BEEN URGED ON BEHALF OF TH E PETITIONER THAT THE FIRST STEP ITSELF HAS NOT BEEN FULFILLED. FOR THIS PURPOSE IT WOULD BE NECESSARY TO EXAMINE THE PROVISIONS OF PRE SUMPTIONS AS INDICATED ABOVE. SECTION 132(4A)(I) CLEARLY STIPULA TES THAT WHEN INTER ALIA ANY DOCUMENT IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE OF A SEARCH IT MAY BE PRES UMED THAT SUCH DOCUMENT BELONGS TO SUCH PERSON. IT IS SIMILAR LY PROVIDED IN SECTION 292C(1)(I). IN OTHER WORDS, WHENEVER A DOCU MENT IS FOUND FROM A PERSON WHO IS BEING SEARCHED THE NORMA L PRESUMPTION IS THAT THE SAID DOCUMENT BELONGS TO TH AT PERSON. IT IS FOR THE ASSESSING OFFICER TO REBUT THAT PRESUMPT ION AND COME TO A CONCLUSION OR SATISFACTION THAT THE DOCUMENT IN FACT BELONGS TO SOMEBODY WP(C) 415/2014 & ORS. PAGE 10 O F 15 ELSE. THERE MUST BE SOME COGENT MATERIAL AVAILABLE WITH THE ASSESSING OFFICER BEFORE HE/SHE ARRIVES AT THE SATI SFACTION THAT THE SEIZED DOCUMENT DOES NOT BELONG TO THE SEARCHED PER SON BUT TO SOMEBODY ELSE. SURMISE AND CONJECTURE CANNOT TAKE T HE PLACE OF SATISFACTION. FURTHER THE HONBLE DELHI HIGH COURT HELD TH AT MERE USE OR MENTION OF THE WORD SATISFACTION OR THE WORDS SATISFIED IN THE ORDER AS THE SAME WOULD NOT MEET THE REQUIREMENT OF THE CONCEPT OF SA TISFACTION AS USED IN SECTION 153C OF THE SAID ACT. THE SATISFACTION NOTE ITSELF MUST DISPLAY THE REASON AS BASIS FOR THE CONCLUSION THAT THE ASSESSI NG OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT THE SEIZED DOCUMENTS BELON G TO A PERSON OTHER THAN THE SEARCHED PERSONS. IT IS PERTINENT TO NOTE HERE THAT THE HONBLE DELH I HIGH COURT IN THE CASE OF PEPSI FOOD (P) LTD. VS. ACIT (SUPRA) HAS HELD THAT THE SATISFACTION NOTE BY THE AO SEARCHED PARTY IS A CONDITION PRECEDENT FOR ISSUANCE OF NOTICE U/S 153C OF THE ACT. IN THE LIGHT OF JUDGMENT OF THE HO NBLE DELHI HIGH COURT, WE CANNOT ACCEPT THE ARGUMENT OF REVENUE THAT NO SA TISFACTION IS REQUIRED TO BE RECORDED OR THE SATISFACTION CAN BE INFERRED BY IMPLICATION I.E. FROM THE CONDUCT OF ASSESSING OFFICER OF THE SEARCHED PARTY AND IT WOULD BE SUFFICIENT IF THE AO OF THE SEARCHED PARTY TRANSFERS THE MATER IAL BELONGING TO OTHER ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 16 PERSON TO THE ASSESSING OFFICER OF SUCH PERSON. WE DO NOT AGREE WITH CONTENTION OF LD. CIT(DR) THAT NON RECORDING OF SAT ISFACTION NOTE IS MERELY A TECHNICAL DEFECT. THE SATISFACTION OF THE ASSESSI NG OFFICER OF THE SEARCHED PARTY GOES TO VERY ROOT OF THE ASSUMPTION OF JURISD ICTION BY THE ASSESSING OFFICER OF OTHER PERSON FOR INITIATING PROCEEDING U /S 153C OF THE ACT. THEREFORE, WE FIND NO MERIT INTO THIS CONTENTION OF LD. CIT(DR). MOREOVER, WE CANNOT IGNORE THE MANDATE OF THE STATUTORY PROVI SION UNDER THE GARB OF TECHNICAL DEFECT. 10. LD. COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISION OF THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF TANVIR FINANCE & LEASING LTD. VS. DCIT IN CROSS OBJECTION NOS. 268 TO 271/DEL/2014 (IN ITA NOS. 14 TO 17/DEL/2014) WHEREI N UNDER THE IDENTICAL FACTS HAS OBSERVED AS UNDER :- WE DULY APPRECIATE THE CONCERN OF THE LD. DR FOR THE EXCHEQUER. BUT WE ARE REMINDED OF THE BASIC PRINCIP LE ENSHRINED IN ARTICLE 265 OF THE CONSTITUTION THAT NO TAX CAN BE COLLECTED WITHOUT AUTHORITY OF LAW. THERE CAN BE NO ASSESSMEN T IN THE ABSENCE OF A PROPER JURISDICTION OF THE AUTHORITY. THE QUESTION OF JURISDICTION IS A VERY IMPORTANT ASPECT, WHICH CANN OT BE EQUATED WITH A TECHNICAL ISSUE. SIMILAR CONTENTION RAISED B Y THE LD. DR HAS BEEN ELABORATELY DEALT WITH BY THE TRIBUNAL IN THE CASE OF TANVIR COLLECTIONS P. LTD. (SUPRA). WE, THEREFORE, DO NOT APPROVE THIS CONTENTION. RESPECTFULLY FOLLOWING THE DECISION OF HONBLE CO- ORDINATE BENCH, WE HEREBY REJECT THE CONTENTION LD. CIT(DR) THAT NON R ECORDING OF SATISFACTION IS ONLY A TECHNICAL DEFECT, AND THE ASSESSMENT CANN OT BE ANNULLED ON THIS BASIS. 11. DURING THE COURSE OF HEARING LD. CIT(DR) HAS RELIED UPON THE JUDGMENT OF THE HONBLE KERLA HIGH COURT RENDERED IN THE CASE OF DR. K.M.MAHBOOB VS. DCIT(SUPRA). THIS ARGUMENT OF THE A SSESSEE HAS BEEN CONSIDERED BY THE HONBLE CO-ORDINATE BENCH RENDER ED IN THE CASE OF M/S AKASH AROGYA MINDIR PVT. LTD. VS. DCIT IN CROSS OBJ ECTION NOS. 77 82/ DEL/ 2013 WHEREIN IT HAS BEEN OBSERVED THAT THERE ARE CONFLICTING VIEWS OF HONBLE DELHI HIGH CORUT AND HONBLE KERLA HIGH COU RT, THE ASSESSEE FALLS INTO THE JURISDICTION OF HONBLE DELHI HIGH COURT I N VIEW RATIO OF DELHI HIGH COURT JUDGMENT IN CASE OF PEPSI FOODS (P) LTD. (SU PRA), IT WAS HELD THAT RECORDING OF SATISFACTION BY AO OF SEARCHED PERSON S IS A NECESSARY PRE CONDITION FOR INITIATION OF PROCEEDING U/S 153C WHI CH WAS NOT DONE IN THAT CASE. ACCORDINGLY, THE HONBLE CO-ORDINATE BENCH WA S PLEASED TO QUASH THE ASSESSMENT PROCEEDINGS. IN THE CASE IN HAND ALSO THE ASSESSEE COMPANY IS ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 17 WITHIN THE TERRITORIAL JURISDICTIONAL OF THE HONBL E DELHI HIGH COURT. THE FACTS ARE IDENTICAL, NO CONTRARY VIEW OF THE HONBL E DELHI HIGH COURT OR THE HONBLE SUPREME COURT BROUGHT TO OUR NOTICE BY TH E REVENUE. THEREFORE, WE DO NOT SEE ANY REASON TO TAKE ANY CONTRARY VIEW, THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT IN THE ABSENCE OF A SATISFACTI ON RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSONS, THE ASSE SSMENT FRAMED U/S 153C OF THE ACT BY THE ASSESSING OFFICER CANNOT BE SUSTA INED, AS SUCH SAME IS BAD IN LAW. 12. IT IS OBSERVED THAT THE REVENUE HAS NOT P LACED ANY MATERIAL ON RECORD IN RESPECT OF EVIDENCE QUA THE PRESENT ASSESSEE COL LECTED DURING THE SEARCH OPERATION. MOREOVER, THE SATISFACTION AS ENVISAGED UNDER SECTION 153C IS ALSO NOT PLACED ON RECORD. THEREFORE, WE HAVE NO OP TION BUT TO ACCEPT THE CONTENTION OF LD. COUNSEL FOR THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PARTY, THI S CONTENTION IS SUPPORTED BY THE REPLY OF REVENUE FURNISHED UNDER RIGHT TO IN FORMATION ACT. IT IS EXPECTED THAT THE ASSESSING OFFICER SHOULD BE CAREF UL IN COMPLYING WITH THE MANDATE OF LAW TO AVOID LOSS TO EXCHEQUER. 13. ACCORDINGLY THE GROUND RAISED BY THE ASSESSE E IN CROSS OBJECTION, THAT THE PROCEEDINGS INITIATED UNDER SECTION 153C IS BAD IN LAW IS ALLOWED. THE ASSESSMENT FRAMED U/S 153C READ WITH SECTION 143(3 ) PERTAINING TO THE ASSESSMENT YEAR 2003-04 IS QUASHED. SINCE WE HAVE Q UASHED THE ASSESSMENT ON THE LEGAL ISSUES. WE ARE NOT ADJUDICA TING THE OTHER GROUNDS RAISED IN CROSS OBJECTION 353/DEL/2014. THE REVENUE S APPEAL IN I.T.A. NO. 6404/DEL/2013 PERTAINING TO THE ASSESSMENT YEAR 200 3-04 IS DISMISSED, AS INFRUCTUOUS. IN THE RESULT ASSESSEES CROSS OBJECTI ON NO. 353/DEL/2014 IS PARTLY ALLOWED AS INDICATED HEREINABOVE. 14. IN RESPECT OF CROSS OBJECTIONS NUMBERS ALSO 3 54 TO 358/DEL/2014 PERTAINING TO THE ASSESSMENT YEARS 2004-05, 2005-06 , 2006-07, 2007-08 AND 2008-09 AND ITA NO. 6405 TO 6409/DEL/2013 PERTA INING TO ASSESSMENT YEARS 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-0 9. THE FACTS ARE IDENTICAL NO CHANGE INTO FACTS AND CIRCUMSTANCES I S POINTED OUT. IN ALL THESE YEARS ALSO THERE IS NO SATISFACTION RECORDED AS ENV ISAGED UNDER SECTION 153C OF THE ACT. THEREFORE, FOLLOWING OUR DECISION IN CR OSS OBJECTION NO. 353/DEL/2014 PERTAINING TO ASSESSMENT YEAR 2003-04 WE HEREBY QUASH THE ASSESSMENT ORDER PERTAINING TO THE ASSESSMENT YEAR S 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09. ACCORDINGLY, THE CROSS OBJECTIONS NOS. 354 TO 358/D EL/2014 PERTAINING TO ASSESSMENT YEAR 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09 ARE PARTLY ALLOWED IN THE TERMS INDICATED HEREINABOVE A ND REVENUES APPEAL IN ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 18 ITA NO. 6405 TO 6409 FOR THE ASSESSMENT YEARS 2004- 05, 2005-06, 2006-07, 2007-08 AND 2008-09 ARE DISMISSED, AS INFRUCTUOUS. 5. IN THE INSTANT CASE ALSO, THE REVENUE HAS NOT PL ACED ANY SATISFACTION RECORDED BY THE A.O. OF THE SEARCHED PERSONS ON REC ORD PERTAINING TO ASSESSMENT YEARS 2003-04 TO 2008-09. THEREFORE, IN THE ABSENCE OF SUCH SATISFACTION BY THE A.O. OF THE SEARCHED PERSONS, T HE ASSESSMENT FRAMED BY INVOKING THE PROVISIONS OF SECTION153C CANNOT BE SU STAINED. ACCORDINGLY, THE ASSESSMENT ORDERS PERTAINING TO ASSESSMENT YEAR S 2003-04 TO 2008-09 ARE HEREBY QUASHED. CONSEQUENTLY, THE CROSS APPEALS OF REVENUE IN C.O.NOS. 6553, 6554, 6555 AND 6556/DEL/2014 ARE DISMISSED FO LLOWING OUR DECISION IN CROSS OBJECTION NOS. 353TO 358/DEL/2014 IN CASE OF IECS LTD. (SUPRA). 6. IN VIEW OF ABOVE, ALL THE APPEALS FILED BY ASSES SEE IN I.T.A.NOS. 6336, 6337, 6338, 6339, 6340 & 6341/DEL/2014 ASSESSMENT Y EARS : 2003-04 TO 2008-09 ARE PARTLY ALLOWED AND CROSS OBJECTIONS O F REVENUE IN I.T.A.NOS. 6553, 6554, 6555 & 6556/DEL/2014 (ASSESSMENT YEAR 2 005-06 TO 2008-09) ARE DISMISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH, 2015. SD./- SD./- ( S. V. MEHROTRA) (KUL BHAR AT) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 13 TH MARCH, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.6336-6341/DEL/2014 I.T.A.NOS.6553-6556/DEL/2014 19 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 10/3 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 10,11, SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 13/3 SR. P S/PS 6 KEPT FOR PRONOUNCEMENT 13/3 SR. PS/PS 7 FILE SENT TO BENCH CLERK 13/3 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER