M/s KBL Layout, Bangalore V. ACIT, Bangalore

ITA 709/BANG/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0220 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-06-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G R REDDY CIT I
• Assessee Lawyers: G S PRASHANTH
• Keywords: Search and seizure; Document seized; Principle of natural justice; Period of limitation; Validity of assessment; Assessment record; Revised return; Reason to believe; Documents seized
• Section: 143(3); 153A; 234B; 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO , JUDICIAL MEMBER I.T.A. NO . 709 /BANG/201 3 (ASSESSMENT YEAR : 200 6 - 07 ) M/S. K BL LAYOUT, NOS.1 & 2, 1 ST CROSS, SILICON CI TY LAYOUT, KONANKUNTE, BENGALURU - 560 062 PAN AAAA 6089J VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(1), BENGALURU. APPELLANT RESPONDENT. APPELLANT BY : SHRI G.S. PRASHANTH, C.A. RESPONDENT BY : SHRI G.R. REDDY, CIT I (D.R) DATE OF H EARING : 13.6.2016. DATE OF P RONOUNCEMENT : 25. 7. 201 6 . O R D E R PER SHRI VIJAY P AL RAO, J. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DT.13.03.2013 OF COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 2 ITA NO. 709 /BANG/ 2013 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR AS IT IS AGAINST THE APPELLANT, IS OPPOSED TO LAW. WEIGHT OF EVIDENCE, NATURAL JUSTICE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF TO BE ASSESSED ON A SUM OF RS.1,11,22,9 08/ - AS AGAINST A SUM OF RS.16,20,956/ - AS DECLARED BY THE APPELLANT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WITHOUT PREJUDICE, THE INCOME OUGHT TO HAVE BEEN ESTIMATED AT 5% OR IN EXTREME CASE 8% OF THE TOTAL TURNOVER OF RS.3,78,5 4,8391 - ON THE FACTS OF THE CASE. 4. WITHOUT PREJUDICE, THE INCOME OUGHT TO HAVE BEEN ESTIMATED AT 5% OR IN EXTREME CASE 8% OF RS.3,27,14,2791 - ON THE FACTS OF THE CASE. 5. THE CIT - A ERRED IN ENHANCING THE ASSESSMENT BY M AKING ADDITIONS OF RS.57,81,981/ - ON THE FACTS OF THE CASE. 6. THE ENHANCEMENT MADE BY THE COMMISSIONER IS ON WRONG APPRECIATION OF FACTS AND REQUIRES TO BE MADE NIL UNDER THE FACTS OF THE CASE. 7. THE AUTHORITIES BELOW FAILED TO APPR ECIATE THAT THE CONDITIONS MENTIONED UNDER SECTION 132 OF THE ACT DID NOT EXIST AND CONSEQUENTLY THE SEARCH ITSELF IS NOT VALID ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. THE AUTHORITIES BELOW ERRED AND OUGHT TO HAV E SATISFIED THEMSELVES THAT THE MANDATORY CONDITIONS FOR ACTION UNDER SECTION 132 EXIST AND THEN ONLY ISSUED NOTICES FOR ASSESSMENTS ON THE FACTS AND CIRCUMSTANCES OF THE CASE. THUS THE AUTHORITIES BELOW OUGHT TO HAVE EXAMINED THE VALIDITY OF SEARCH PROCEEDINGS FOR ASSUMPTION OF JURISDICTION UNDER CHAPTER XIV OF THE ACT. 9. THE ORDERS OF THE AUTHORITIES BELOW ARE BAD IN LAW AS THE MANDATORY CONDITIONS TO INVOKE THE JURISDICTION UNDER SECTION 153C 3 ITA NO. 709 /BANG/ 2013 OF THE ACT DID NOT EXIST, OR HAVING NOT BEEN COMPLIED WITH AND CONSEQUENTLY THE ORDERS OF THE AUTHORITIES BELOW ARE BAD IN LAW FOR WANT OF REQUISITE JURISDICTION. 10. THE ORDER PASSED BY THE CIT - (A) IS ON A WRONG APPRECIATION OF FACTS AND IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 11. THE APPELLANT DENIES ITSELF LIABLE TO BE LEVIED TO INTEREST UNDER SECTION 234 A, 234B AND 234C OF THE ACT AND FURTH ER THE COMPUTATION OF INTEREST WAS NOT PROVIDED TO THE APPELLANT AS REGARD TO THE RATE, PERIOD AND METHOD OF CALCULATION OF INTEREST UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT EXPRESSLY URGES THAT THE PERIOD OF LEVY OF INTEREST IS NOT IN ACCORDANCE WITH SECTION 234A,234B AND 234C OF THE ACT. 12. WITHOUT PREJUDICE, THE INTEREST LEVIED UNDER SECTIONS 234 A,B & C OUGHT TO HAVE BEEN WAIVED ON THE FACTS OF THE CASE. 13. THE A PPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 14. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING OF THE APPEAL, THE APPELLANT PRAYS THAT THE APPEAL MA Y BE ALLOWED IN THE INTEREST OF JUSTICE AND EQUITY. 3. THE ASSESSEE IS ASSOC I ATION OF PERSONS ENGAGED IN THE BUSINESS OF REAL ESTATE. A SEARCH WAS CARRIED OUT UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') IN THE CASE OF C R LAKSHMINARAYAN A AND SRI K.B. LAKSHMAN GROUP ON 6 .10.2009 AND CONSEQUENT TO SEARCH PROCEEDINGS OF THE ASSESSEE'S CASE WAS CENTRALISED. DURING THE COURSE OF SEARCH CERT A IN 4 ITA NO. 709 /BANG/ 2013 DOCUMENTS WERE SEIZED. A NOTICE UNDER SECTION 153 C OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE THE ASSESSEE FILED ITS RETURN OF INCOME ON 2.9.2011 DECLARING TOTAL INCOME OF RS.16,20,956 AS IT WAS DECLARED IN THE ORIGINAL RETURN FILED ON 3.11.2006. THE ASSESSEE ALSO FILED A REVISED RETURN IN RESPONSE TO THE NOTICE UNDER SE CTION 153C OF THE ACT ON 23.9.2011 BY DECLARING A TOTAL INCOME OF RS.53,40,927. 4. THE ASSESSING OFFICER PASSED AN ORDER OF ASSESSMENT UNDER SECTION 153C R.W.S. 143(3) DT.28.12.2011 DETERMINING THE TOTAL INCOME OF ASSESSEE AT RS.53,40,927. THUS T HE ASSESSING OFFICER ACCEPTED THE REVISED RETURN OF THE ASSESSEE AND NO ADDITION WAS MADE TO THE REVISED INCOME. HOWEVER ON APPEAL, THE CIT (APPEALS) HAS ENHANCED THE ASSESSMENT AND DETERMINED THE INCOME OF THE ASSESSEE AT RS.1,11,22,908. 4.1 THE ASS ESSEE HAS ALSO RAISED THE GROUNDS FOR VALIDITY OF ASSES SMENT UNDER SECTION 153C UNDER G R O UND NO.9. THIS ISSUE GOES TO THE ROOT OF THE MATTER. THEREFORE WE FIRST TAKE UP THE JURISDICTIONAL ISSUE OF VALIDITY OF ASSESSMENT 5 ITA NO. 709 /BANG/ 2013 UNDER SECTION 153C OF THE ACT. T HE ASSESSEE HAS ALSO RAISED THIS ISSUE IN THE ADDITIONAL GROUND FILED VIDE PETITION DT.8.6.2016. 5. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITTED THAT AS PER THE R E QUIREMENT OF THE LAW THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON AS WELL AS THE ASSESSI NG OFFICER HAVING JURISDICTION OF THE ASSESSEE WAS REQUIRED TO RECORD THE SATISFACTION THAT UNDISCLOSED INCOME BELONGS TO ANY PERSONS OTHER THAN THE PERSONS WITH RESPECT TO WHOM A SEARCH WAS MADE UNDER SEC TION 132 OF THE ACT BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. THE LEARNED AUTHORISED REPRESENTATIVE HAS POINTED OUT THAT THE CIT (APPEALS) HAS THOUGH REPRODUCED THE SATISFACTION NOTE IN THE IMPUGNED ORDER HOWEVER IT IS NOT CLEAR I N WHOSE ASSESSMENT RECORD THIS SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER. THUS THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT EVEN OTHERWISE THE SATISFACTION IS REQUIRED TO BE RECORDED IN THE ASSESSMENT RECORD OF THE PRESENT SEARCH ED A S WELL AS THE RECORD OF THE ASSESSEE BEFORE INITIATING ACTION UNDER SECTION 153C OF THE ACT. HE HAS THUS CONTENDED THAT IN THE ABSENCE OF COMPLIANCE OF 6 ITA NO. 709 /BANG/ 2013 MANDATORY CONDITIONS OF RECORDING THE SATISFACTION THAT UNDISCLOSED INCOME WHICH HAS BEEN TRACED OUT WH EN A SEARCH WAS CARRIED OUT IN RESPECT OF A PERSON. THE SATISFACTION IS REQUIRED TO BE RECORDED AT THE TIME OF INITIATING THE PROCEEDINGS OF ASSESSMENT OF THE PERSON AGAINST WHOM SEARCH WAS CONDUCTED OR DURING THE ASSESSMENT PROCEEDINGS OF SUCH PERSON AN D THEREAFTER TRANSMIT THE RECORD TO THE ASSESSING OFFICER HAVING JURISDICTION OF THE ASSESSEE. ON RECEIPT OF THE RECORD THE ASSESSING OFFICER I S ALSO REQUIRED TO RECORD THE SATISFACTION BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEARS (2014) 362 ITR 673 (SC) AS WELL AS THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. (2016) 380 ITR 612 (DEL) . HENCE THE LEARNED AUTHORISED REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSMENT COMPLETED UNDER SECTION 153C R.W.S. 143(3) OF THE ACT IS ILLEGAL FOR WANT OF JURISDICTION AND THE SAME MAY BE SET ASIDE. 7 ITA NO. 709 /BANG/ 2013 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS SUBMITTED THAT THE ASSESSEE HAS NOT DISPUTED THAT THE SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER AS REPRODUCED BY THE CIT (APPEALS) IN THE IMPUGNED ORDER . SINCE THE ASSESSING OFFICER HAVING JURISDICTION O VER THE SEARCHED PERSON AS WELL AS THE ASSESSEE IS SAME THEREFORE NO SEPARATE SATISFACTION IS REQUIRED ONCE A SATISFACTION IS RECORDED BY THE ASSESSING OFFICER. HE HAS THUS CONTENDED THAT IN THIS CASE THE MANDATORY CONDITION OF REC ORDING SATISFACTION HAS BEEN COMP LIED WITH BY THE ASSESSING OFFICER BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE RECORDING OF SATISFACTI ON IS A MANDATORY CONDITION BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT TO THE EFFECT THAT THE DOCUMENT SEIZED OR OTHER INFORMATION DETECTED DURING THE SEARCH BELONGS TO THE PERSON OTHER THAN THE SEARCHED PERSON AND REVEALS UNDISCLOSED INCOME OF THE PERSON OTHER THAN THE SEARCHED PERSON. SECTION 1 53 C CONFERRED THE AUTHORITY AND JURISDICTION TO THE ASSESSING OFFICER OF A 8 ITA NO. 709 /BANG/ 2013 PERSON SEARCHED AS WELL AS OTHER THAN THE SEARCHED PERSON TO EXAMINE THE DOCUMENTS AND OTHER ASSETS SEIZED DURING TH E SEARCH AND TO ASCERTAIN THAT THEY DO REFLECT UNDISCLOSED INCOME OF THE PERSON OTHER THAN THE SEARCHED PERSON. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. CALCUTTA KNITWEAR S (SUPRA) WHILE CONSIDERING THE VALIDITY OF INITIATING THE PROCEEDINGS UNDER SECTION 158BD HAS HELD IN PARAS 43 & 44 AS UNDER : 43. IN THE LEAD CASE, THE ASSESSING OFFICER HAD PREPARED A SATISFACTION NOTE ON 15.07.2005 THOUGH THE ASSESSMENT PROCEEDINGS IN THE CASE OF A SEARCHED PERSON, NAMELY, S.K. BHATIA WERE COMPLETED ON 30.0 3.2005. AS WE HAVE ALREADY NOTICED, THE TRIBUNAL AND THE HIGH COURT ARE OF THE OPINION THAT SINCE THE SATISFACTION NOTE WAS PREPARED AFTER THE PROCEEDINGS WERE COMPLETED BY THE ASSESSING OFFICER UNDER SECTION 158BC OF THE ACT WHICH IS CONTRARY TO THE PROVI SIONS OF SECTION 158BD READ WITH SECTION 158BE(2)(B) AND THEREFORE, HAVE DISMISSED THE CASE OF THE REVENUE. IN OUR CONSIDERED OPINION, THE REASONING OF THE LEARNED JUDGES OF THE HIGH COURT IS CONTRARY TO THE PLAIN AND SIMPLE LANGUAGE EMPLOYED BY THE LEGISL ATURE UNDER SECTION 158BD OF THE ACT WHICH CLEARLY PROVIDES ADEQUATE FLEXIBILITY TO THE ASSESSING OFFICER FOR RECORDING THE SATISFACTION NOTE AFTER THE COMPLETION OF PROCEEDINGS IN RESPECT OF THE SEARCHED PERSON UNDER SECTION 158BC. FURTHER, THE INTERPRETA TION PLACED BY THE COURTS BELOW BY READING INTO THE PLAIN LANGUAGE OF SECTION 158BE(2)(B) SUCH AS TO EXTEND THE PERIOD OF LIMITATION TO RECORDING OF SATISFACTION NOTE WOULD RUN COUNTER TO THE AVOWED OBJECT OF INTRODUCTION OF CHAPTER TO PROVIDE FOR COST - EFF ECTIVE, EFFICIENT AND EXPEDITIOUS COMPLETION OF SEARCH ASSESSMENTS AND AVOIDING OR REDUCING LONG DRAWN PROCEEDINGS. 44. IN THE RESULT, WE HOLD THAT FOR THE PURPOSE OF SECTION 158BD OF THE ACT A SATISFACTION NOTE IS SINE QUA NON AND MUST BE PREPARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORDS TO THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON. THE SATISFACTION NOTE COULD BE PREPARED AT EITHER OF THE FOLLOWING STAGES: (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROC EEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT; (B) ALONG WITH THE ASSESSMENT PROCEEDINGS UNDER SECTION 158BC OF THE ACT; AND (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS ARE COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERSON. 9 ITA NO. 709 /BANG/ 2013 THUS IT IS CLEAR THAT FOR INITIATING THE PROCEEDINGS UNDER SECTION 158BD OF THE ACT SATISFACTION NOTE IS SIN E QUA AND MUST BE PREPARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORD TO THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OV ER SUCH PERSON. A SIMILAR VIEW HAS BEEN TAKEN BY THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RRJ SECURITIES LTD. (SUPRA) WHILE CONSIDERING THE REQUIREMENT OF RECORDING OF SATISFACTION BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE AC T IN PARAS 36 TO 38 AS UNDER : 36. THE DECISION IN SSP AVIATION (SUPRA) CANNOT BE UNDERSTOOD TO MEAN THAT THE AO HAS THE JURISDICTION TO MAKE A REASSEMENT IN EVERY CASE, WHERE SEIZED ASSETS OR DOCUMENTS ARE HANDED OVER TO THE AO. THE QUESTION WHETHER THE DOCUMENTS/ASSETS SEIZED COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOME HAS TO BE CONSIDERED BY THE AO AFTER EXAMINING THE SEIZED ASSETS/DOCUMENTS HANDED OVER TO HIM. IT IS ONLY IN CASES WHERE THE SEIZED DOCUMENTS/ASSETS COULD POSSIBLY REFLECT ANY UNDISCLOS ED INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS, THAT FURTHER ENQUIRY WOULD BE WARRANTED IN RESPECT OF THOSE YEARS. WHILST, IT IS NOT NECESSARY FOR THE AO TO BE SATISFIED THAT THE ASSETS/DOCUMENTS SEIZED DURING SEARCH OF ANOTHER PERSON REFLECT UNDISCLOSED INCOME OF AN ASSESSEE BEFORE COMMENCING AN ENQUIRY UNDER SECTION 153C OF THE ACT, IT WOULD BE IMPERMISSIBLE FOR HIM TO COMMENCE SUCH ENQUIRY IF IT IS APPARENT THAT THE DOCUMENTS/ASSETS IN QUESTION HAVE NO BEARING ON THE INCOME OF THE ASSESSEE F OR THE RELEVANT ASSESSMENT YEARS. 37. AS EXPRESSLY INDICATED UNDER SECTION 153C OF THE ACT THE ASSESSMENT OR REASSESSMENT OF INCOME OF A PERSON OTHER THAN A SEARCHED PERSON WOULD PROCEED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE ACT. THE CON CLUDED ASSESSMENTS CANNOT BE INTERFERED WITH UNDER SECTION 153A OF THE ACT UNLESS THE INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE HAS BEEN SEIZED. 38. AS INDICATED ABOVE, IN THE PRESENT CASE, THE DOCUMENTS SEIZED HAD NO RELEVANCE OR BEARING ON THE INC OME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS AND COULD NOT POSSIBLY REFLECT ANY UNDISCLOSED INCOME. 10 ITA NO. 709 /BANG/ 2013 THE HON'BLE HIGH COURT HAS HELD THAT THE ASSESSING OFFICER IS R E QUIRED TO EXAMINE THE SEIZED ASSETS O R THE DOCUMENTS HANDED OVER TO HIM TO ASCER TAIN T HE POSSIBLE UNDISCLOSED INCOME OF THE ASSESSEE AND THEREFORE FURTHER ENQUIRY WOULD BE WARRANTED IN RESPECT OF SIX YEARS FROM THE DATE OF SEARCH. THOUGH IT IS NOT NECESSARY FOR THE ASSESSING OFFICER TO ESTABLISH THAT THERE IS UNDISCLOSED INCOME OF AN ASSESSEE HOWEVER THE ASSESSING OFFICER SHOULD HAVE A REASON TO BELIEVE THAT THE DOCUMENTS SEIZED DURI NG THE SEARCH REFLECT UNDISCL O S ED INCOME OF THE ASSESSEE BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. IN THE CASE ON HAND, THE CIT (APPEALS) HAS RECORDED THE SATISFA C TION NOTE AND DISPOSED OF THE ISSUE AS UNDER : 2) WHETHER JURISDICTION U/S.153C WAS CORRECTLY INVOKED. THIS ISSUE HAS NOT BEEN ELABORATED. IN ANY CASE, THE RECORDS HAVE BEEN PERUSED AND IT IS OBSERVED THAT PU RSUANT TO SEARCH AND SEIZURE IN THE CASE OF C R LAKSHMINARYANA AND K B LAKSHMAN GROUP OF CASES, ACTION UNDER SECTION 153C WERE INITIATED IN THE CASE OF THE APPELLANT. REASONS FOR THE SAME HAVE DULY BEEN RECORDED BY THE ASSESSING OFFICER, WHO IS ALSO THE A SSESSING OFFICER INITIATING 153A IN RESPECT OF SRI K B LAKSHMAN, THE PERSON IN WHOSE CASE SEARCH HAS BEEN INITIATED. THE REASONS RECORDED ARE AS UNDER: SATISFACTION NOTE FOR INITIATING ACTION U/S.153C. 11 ITA NO. 709 /BANG/ 2013 ACTION U/S.132 WAS CONDUCTED IN THE RESIDENTI AL PREMISES OF SRI K B LAKSHMAN ON 6.10.2009 BASED ON THE AUTHORISATION ISSUED BY THE ADDL. DIT (INV) - II, BANGALORE VIDE WARRANT NO. DT DURING THE COURSE OF SEARCH IN THE CASE OF SRI C R LAKSHMINARAYANA AND K B LAKSHMAN GROUP THE FOLLOWING BOOKS/ DOCUMENTS WERE FOUND AND SEIZED U/S.132. EXHIBIT I.D. PAGE NOS. A/KBL/03 131 TO 138 A/KBL/04 1 TO 5 A/KBL/05 5 TO 8 ON A SCRUTINY OF THE ABOVE DOCUMENTS SEIZED IT IS SEEN THAT THE ABOVE MATERIALS BELONGS TO M/S. KBL LAYOUT, I AM SATISFIED THAT AC TION UNDER SECTION 153C HAS TO BE INITIATED IN THE CASE OF M/S. KBL LAYOUT FOR THE A.YS 2004 - 05 TO 2009 - 10. HENCE, ISSUE NOTICE U/S.153C. THE APPELLANT HAS NEVER QUESTIONED THE SAME BEFORE THE ASSESSING OFFICER AND HAS FILED A RETURN OF INCOME ON 23 .09.2011 AFTER BEING ISSUED A NOTICE U/S. 153C. THE ASSESSING OFFICER HAS ACCEPTED TOTAL INCOME AS RETURNED BY THE APPELLANT ITSELF. AS ALL REQUIREMENTS OF SECTION 153C HAVE BEEN MET, THE INVOKING OF JURISDICTION BY ASSESSING OFFICER IS IN ORDER AND IS UPHELD. AS IT IS APPARENT THAT THE CIT (APPEALS) HAS REPRODUCED THE REASONS RECORDED/SATISFACTION NOTE FOR INITIATING THE ACTION UNDER SECTION 153C OF THE ACT HOWEVER , IT IS NOT CLEAR WHETHER THE SATISFACTION W A S RECORDED IN THE 12 ITA NO. 709 /BANG/ 2013 ASSESSMENT PROCEEDIN GS OF THE SEARCHED PERSON OR IT WAS RECORDED BY THE ASSESSING OFFICER AT THE TIME OF INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. AS WE HAVE DISCUSSED IN FOREGOING PARAS THAT RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON EITHER DURING THE ASSESSMENT PROCEEDINGS OR JUST ON COMPLETION OF THE ASSESSMENT PROC EEDINGS OF THE SEARCHED PERSON I S A MANDATORY REQUIREMENT BEFORE HANDING OVER THE SEIZED MATERIAL FOR INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. NEI THER THE CIT (APPEALS) HAS GIVEN ANY FINDING ABOUT THE STAGE AND ASSESSMENT PROCEEDINGS IN WHICH THE ALLEGED SATISFACTION IS RECORDED NOR ANY RECORD HAS BEEN PRODUCED BEFORE US TO ASCERTAIN THE CORRECT FACTUAL POSITION OF THE SATISFACTION RECORDED BY THE ASSESSING OFFICER. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET SIDE THIS ISSUE TO THE RECORD OF THE CIT (APPEALS) FOR DECIDING THE SAME BY GIVING A DETAILED FACTUAL FINDING AS WELL AS THE VALIDITY OF ASSESSMENT UNDER SECTION 153C OF THE ACT TO THE EXTENT OF THE ENHANCEMENT OF ASSESSMENT MADE BY THE CIT (APPEALS). SINCE THE JURISDICTION AL 13 ITA NO. 709 /BANG/ 2013 ISSUE HAS BEEN SET ASIDE TO THE RECORD OF THE CIT (APPEALS) FOR FRESH ADJUDICATION , THEREFORE T HE OTHER ISSUES RAISED BY THE ASSESSEE ARE KEPT OPE N. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/07/ 201 6 . SD/ - (ABRAHAM P GEORGE) A CCOUNTANT MEMBER SD/ - (VIJAY PAL RAO) JUDICIAL MEMBER *REDDY GP COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE