Appeal details
Counselvise Citation
[2012] 119 COUNSELVISE.COM (IT) 9064 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
21-12-2012
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
L
Next Hearing Date
19-12-2012
Assessment Year
2004-2005
Appeal Filed On
24-11-2010
Judgement Text
ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 1 OF 18 IN THE INCOME TAX APPELLATE TRIBUNAL 'L' BENCH, MUMBAI BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER ITA NOS.8133, 8137,8138,8136, 8135 & 8132/MUM/2010 (ASSESSMENT YEARS: 2002-03 TO 2007-08) INGRAM MICRO (INDIA) EXPORTS PRIVATE LIMITED, SINGAPORE C/O DELOITTE HASKINS & SELLS, CA, TOWER-3, 27 TH -32 ND FLOOR INDIA BULLS FINANCE CENTRE, ELPHINSTONE MILL COMPOUND, SENAPATI BAPAT MARG, ELPHINSTONE(W) MUMBAI 400013 VS. DY. DIRECTOR OF INCOME TAX (I.T)-3(1) SCINDIA HOUSE, BALLARD ESTATE, NAROTTAMDAS MORARJEE ROAD, MUMBAI 400038 (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI J.D. MISTRI, SHRI NISHANT THAKKER, & SHRI K.K. VED DEPARTMENT BY: SHRI NERENDER KUMAR, DR DATE OF HEARING: 19/12/2012 DATE OF PRONOUNCEMENT: 21/12/2012 O R D E R PER BENCH. THESE SIX APPEALS ARE BY ASSESSEE, A FOREIGN COMPA NY REGISTERED IN SINGAPORE AGAINST WHOM PROCEEDINGS UN DER SECTION 153C WERE INITIATED AND ORDERS UNDER SECTION 144C(1 3) R.W.S. 143(3) WERE PASSED VIDE THE ORDERS DATED 18.10.2010. AS TH E SAID ORDERS WERE COVERED BY THE PROCEEDINGS OF THE DRP UNDER SE CTION 144C(5), ASSESSEE PREFERRED THE PRESENT APPEALS BEFORE THE I TAT QUESTIONING THE VARIOUS ISSUES. IN ALL THE ORDERS THE ISSUES AR E SIMILAR, THEREFORE, FOR THE SAKE OF RECORD THE GROUNDS RAISED IN ASSESS MENT YEAR 2002- 03 ARE EXTRACTED FOR THIS PURPOSE: ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 2 OF 18 1:0 RE.: HOLDING THAT THE APPELLANT HAS A PERMANE NT ESTABLISHMENT ('PE') IN INDIA : 1:1 THE ASSESSING OFFICER HAS ERRED IN HOLDING THAT THE APPELLANT HAS A PERMANENT ESTABLISHMENT (PE') IN I NDIA THROUGH WHICH IT CARRIES OUT ITS SALES IN INDIA. 1 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILIN G ON THE SUBJECT, IT HAS NO PE IN INDIA AND THE STAND TA KEN BY THE ASSESSING OFFICER IN THIS REGARD IS ERRONEOUS, MISCONCEIVED AND NOT IN ACCORDANCE WITH LAW. 1 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFI CER HAS ERRED IN ARRIVING AT VARIOUS UNWARRANTED AND ERRONEOUS CONCLUSIONS UNSUPPORTED BY ANY RELEVANT MATERIAL TO HOLD THAT THE APPELLANT HAD A PE IN IND IA. FURTHER HE ALSO FAILED TO CONSIDER THE CONTRARY MAT ERIAL AND EVIDENCE ADDUCED BY THE APPELLANT. 1: 4 THE APPELLANT SUBMITS THAT THE ASSESSING OF FICER BE DIRECTED TO RECOMPUTE ITS TOTAL INCOME ACCORDING LY. WITHOUT PREJUDICE TO THE FOREGOING: 2:0 RE.: ATTRIBUTION OF PROFITS : 2 : 1 THE ASSESSING OFFICER HAS ERRED IN ATTRIB UTING THE PROFITS MADE BY THE APPELLANT. 2 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILIN G ON THE SUBJECT AND IN PARTICULAR CONSIDERING THE FUNCT IONS CARRIED OUT BY INGRAM MICRO INDIA LTD. IT IS APPARE NT THAT THE SAID INGRAM MICRO INDIA LTD. HAS BEEN REMUNERAT ED ON AN APPROPRIATE BASIS THROUGH THE INCENTIVE MECHA NISM AND HENCE NO FURTHER ATTRIBUTION OF INCOME IS CALLE D FOR. 2 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFI CER BE DIRECTED TO DELETE THE ADDITION SO MADE BY HIM AND TO RECOMPUTE ITS TOTAL INCOME ACCORDINGLY. WITHOUT PREJUDICE TO THE FOREGOING: 3: 0 RE.: ESTIMATION OF BUSINESS INCOME TAXABLE IN INDIA : 3 : 1 THE ASSESSING OFFICER HAS ERRED IN HOLDING THAT 90% OF THE BUSINESS INCOME EARNED BY THE APPELLANT IS ATTRIBUTABLE TO ITS INDIAN PE. ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 3 OF 18 3 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILIN G ON THE SUBJECT 90% OF ITS BUSINESS INCOME CANNOT BE ATTRIBUTED TO THE INDIAN PE AND SAID TO BE ITS PROF ITS TAXABLE IN INDIA AND THE STAND TAKEN BY THE ASSESSI NG OFFICER IN RESPECT THEREOF IS ERRONEOUS, MISCONCEIV ED AND ILLEGAL. 3 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFI CER BE DIRECTED TO RECOMPUTE ITS TOTAL INCOME ACCORDINGLY. 4: 0 RE. : NON-CONSIDERATION FOR DETAILS PLACED ON RECORD : 4 : 1 THE ASSESSING OFFICER HAS ERRED IN NOT CON SIDERING ALL THE DETAILS PLACED ON RECORD BY THE APPELLANT A ND IN PASSING AN ORDER IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 5: 0 RE.: LEVY OF INTEREST U/S. 234A AND 234B OF THE INCOME-TAX ACT, 1961: 5 : 1 THE ASSESSING OFFICER HAS ERRED IN LEVYING INTEREST U/S. 234A AND 234B OF THE INCOME- TAX ACT, 1961 ON THE APPELLANT. 5 : 2 THE APPELLANT SUBMITS THAT CONSIDERING THE FA CTS AND CIRCUMSTANCES OF ITS CASE AND IN THE PARTICULAR THE FACT THAT THE APPELLANT IS A NON-RESIDENT AS ALSO T HE LAW PREVAILING ON THE SUBJECT, NO INTEREST U/S. 234A AN D 234B OF THE INCOME-TAX ACT, 1961 SHOULD BE LEVIED O N IT. 5 : 3 THE APPELLANT SUBMITS THAT THE ASSESSING OFFI CER BE DIRECTED TO DELETE THE INTEREST LEVIED ON IT. 6:0 RE.: GENERAL : 6: 1 EACH OF THE ABOVE GROUNDS OF APPEAL IS WITH OUT PREJUDICE TO THE OTHER 6 : 2 THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND, SUBSTITUTE AND I OR MODIFY IN ANY MANNER WHATSOEVER ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL AT OR BEF ORE THE HEARING OF THE APPEAL. 2. CONSEQUENT TO RAISING OF SUBSTANTIAL DEMANDS, ASSES SEE PREFERRED STAY APPLICATIONS AND VIDE THE ORDERS DAT ED 21.01.2011, STAY WAS GRANTED FOR A PERIOD OF 180 DAYS I.E. TILL 20 TH JULY, 2011 ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 4 OF 18 AND THE CASE WAS ORIGINALLY POSTED ON 06.04.2011. A S THE MATTERS INVOLVED WERE OF INTERNATIONAL TRANSACTIONS, THE CA SES WERE TRANSFERRED TO L BENCH AND ON 20.04.2011 THE LEAR NED COUNSEL FOR ASSESSEE SUBMITTED THAT ASSESSEE HAD SOUGHT INSPECT ION OF RECORDS AND THE COPIES OF CERTAIN DOCUMENTS WHICH AO HAS NO T ALLOWED SO FAR. THEREFORE, THE CASE WAS ADJOURNED TO 30.06.201 1 WITH A DIRECTION TO THE LEARNED DR TO PRODUCE THE RELEVANT ASSESSMENT RECORDS IN ORDER TO EXPEDITE THE DISPOSAL OF THESE STAY GRANTED APPEALS. SUBSEQUENTLY DUE TO VARIOUS REASONS THE CA SES WERE NOT HEARD EITHER BECAUSE THE DR SOUGHT ADJOURNMENT OR B ECAUSE THE BENCH WAS NOT FUNCTIONING. ACCORDINGLY ASSESSEES S TAY WAS EXTENDED PERIODICALLY BY THE ORDERS DATED 05.08.201 1, 10.02.2012 AND FURTHER ORDER DATED 07.09.2012. THE STAY OF DEM AND GRANTED IN THESE CASES WILL EXPIRE ON 31.12.2012. 3. IN THE COURSE OF APPEAL PROCEEDINGS AS THE INSPECTI ON WAS NOT PERMITTED BY AO, AS SUBMITTED BY THE LEARNED COUNSE L, VIDE LETTER DATED 19.04.2011 ASSESSEE RAISED ADDITIONAL GROUNDS ON THE VALIDITY OF THE ORDERS PASSED UNDER SECTION 153C OF THE IT A CT 1961 AS UNDER:- 1.0 RE: VALIDITY OF ORDER PASSED UNDER SECTION 153 C OF THE INCOME TAX ACT, 1961: 1.1 AO HAS ERRED IN PASSING THE IMPUGNED ASSESSMENT ORDER UNDER SECTION 144C(13) R.W.S. 153C R.W.S. 143 (3) WITHOUT COMPLYING WITH THE MANDATORY PROVISIONS OF SECTION 153C. 1.2 THE APPELLANT SUBMITS THAT THE CONSIDERING THE FACTS AND CIRCUMSTANCES OF ITS CASE AND THE LAW PREVAILIN G ON THE SUBJECT THE IMPUGNED ASSESSMENT ORDER HAS BEEN PASSED WITHOUT COMPLYING WITH THE MANDATORY PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT, 1 961 AND HENCE THE SAME IS VOID AB-INITIO. 1.3 THE PROCEEDINGS UNDER SECTION 153C AND THE ASSESSMENT ORDER PASSED UNDER SECTION 144C (13) R.W .S. 153C R.W.S. 143(3) ARE BAD IN LAW IN AS MUCH AS NO SATISFACTION AS CONTEMPLATED UNDER SECTION 153C OF THE ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 5 OF 18 INCOME TAX ACT, 1961 HAS BEEN RECORDED PRIOR TO INITIATION OF PROCEEDINGS UNDER SECTION 153C. 1.4. THE APPELLANT SUBMITS THAT THE IMPUGNED ASSESSMENT ORDER BE HELD TO BE BAD IN LAW AND STRUC K DOWN . 4. THERE IS A DIRECTION FROM THE BENCH TO PRODUCE THE RELEVANT ASSESSMENT RECORDS VIDE ENTRY DATED 20.04.2011 AND CONSEQUENT TO THIS, THE LEARNED DR HAS WRITTEN LETTERS TO AOS AND COPIES WERE FILED EXPLAINING THAT THE REQUIRED DOCUMENTS WERE NOT SUB MITTED BY THE AO CONCERNED. THE LEARNED CIT (DR) SOUGHT ADJOURNME NTS, ORIGINALLY TO 25.04.2012 FOR COMPLYING WITH THE DIR ECTIONS OF THE BENCH AND THE CASE WAS ADJOURNED TO 11.06.2012. HE FURTHER SOUGHT ADJOURNMENT IN WRITING AS THE RELEVANT RECOR DS WERE NOT SUBMITTED BY AO AND THE CASE WAS ADJOURNED FURTHER TO 02.08.2012. AGAIN THE LEARNED CIT (DR) SOUGHT ADJOU RNMENT ON THE REASON THAT THE DDIT CONCERNED WAS REQUESTED TO COM PLY WITH THE SAID DIRECTION AND ALSO HAS DEPUTED HIS INSPECTOR F OR COLLECTING THE REQUISITE MATERIAL AND THE MATTER WAS BEING PURSUED WITH THE DCIT (CC) (OSD) CENTRAL RANGE-7, MUMBAI TO LOCATE THE RE QUISITE DOCUMENTS. ON HIS REQUEST THE CASE WAS ADJOURNED TO 02.08.2012. THIS LETTER OF ADJOURNMENT REQUEST WAS ACCOMPANIED BY A LETTER FROM DDIT(IT)3(1) DATED 31/07/2012 INTIMATING THE P OSITION THAT THE EFFORTS MADE BY THE SAID OFFICER WITH OTHER OFF ICERS FOR PROCUREMENT OF THE RELEVANT DOCUMENTS. SUBSEQUENTLY , THE CASE CAME UP FOR HEARING ON 03.09.2012, 06.11.2012 AND 0 6.12.2012. ON 06.12.2012 THE BENCH FINALLY GAVE A LAST OPPORTU NITY WITH A DIRECTION TO THE LEARNED CIT (DR) TO PRODUCE THE AS SESSMENT RECORDS AND THE CORRESPONDENCE BETWEEN AOS IF ANY, SO THAT ASSESSEES CONTENTION THAT THERE IS NO SATISFACTION RECORDED B EFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C CAN BE VERIFIED. IT WAS FURTHER NOTED THAT SINCE THESE ARE STAY GRANTED MATTERS, WH ICH WAS EXTENDED FOUR TIMES SO FAR, NO FURTHER ADJOURNMENT IN THIS CASE WOULD BE GRANTED AND THE PARTIES WERE INFORMED ACCO RDINGLY. ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 6 OF 18 THEREFORE, THE CASE WAS TAKEN UP ON 19.12.2012 ON W HICH DATE THE LEARNED CIT (DR) FURNISHED THE CORRESPONDENCE ADDRE SSED BY THE ASSTT. DIRECTOR (IT) (INVEST.) UNIT 7(2) MUMBAI TO ADDITIONAL DR (IT) INTERNATIONAL TAXATION RANGE-3 MUMBAI AND A LETTER BY DDIT(IT)3(1) DATED 13.12.2012. AFTER PLACING THE ABOVE TWO CORRE SPONDENCE ON RECORD, THE LEARNED CIT (DR) SUBMITTED THAT THE ORI GINAL RECORD WITH REFERENCE TO SATISFACTION NOTE IS NOT MADE AVAILABL E TO HIS OFFICE SO FAR AND ON THE BASIS OF THE LETTER ADDRESSED BY THE ASSTT. DIRECTOR OF INCOME TAX (INVEST.), ACIT (OSD)-2 CENTRAL RANGE MU MBAI WOULD HAVE RECORDED SATISFACTION FOR THE PURPOSE OF INITI ATING PROCEEDINGS UNDER SECTION 153C AND THEREFORE, SINCE THE RECORD WAS NOT AVAILABLE AT THE MOMENT, IT WAS THE SUBMISSION THAT THE MATTERS CAN BE SET ASIDE TO AO TO FURNISH THE SATISFACTION TO A SSESSEE AND THEN COMPLETE THE ASSESSMENT IF REQUIRED, AS THIS ISSUE WAS NOT RAISED BY EITHER BEFORE AO OR BEFORE THE DRP AND HAVE BEEN RA ISED FOR THE FIRST TIME BEFORE THE ITAT AS AN ADDITIONAL GROUND. 5. THE LEARNED COUNSEL SUBMITTED THAT THIS MATTER BEIN G ADJOURNED FROM 20.04.2011 AND REFERRED TO VARIOUS O RDER SHEET NOTINGS RECORDED AND OPPORTUNITIES WERE GIVEN TO TH E REVENUE FOR FURNISHING THE NECESSARY DOCUMENTS TO SATISFY THAT THE SATISFACTION WAS RECORDED BEFORE INITIATING PROCEEDINGS UNDER SE CTION 153C AND SUBMITTED THAT SINCE ASSESSEE HAS GOT THE STAY EXT ENDED FOR THE LAST TWO YEARS WHICH IS EXPIRING ON 31.12.2012, IT WAS P RAYED THAT NO FURTHER OPPORTUNITY SHOULD BE GIVEN AND ASSESSEES PRELIMINARY OBJECTION ON THE JURISDICTION ITSELF CAN BE DECIDED IN VIEW OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE O F MANISH MAHESHWARI VS. ACIT, 289 ITR 341 (SC) WHICH IN TURN WAS FOLLOWED BY THE COORDINATE BENCH IN THE CASE OF P. SATYANARA YANA VS. ACIT, CENTRAL CHENNAI REPORTED AS 50 SOT 168 CHENNAI (URO )/20 TAXMANN.COM 56, CHENNAI. HE ALSO PLACED ON RECORD T HE JUDGMENT OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF S SP AVIATION LTD ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 7 OF 18 VS. DCIT 20 TAXMANN.COM 214 (DEL) FOR THE PROPOSITI ON THAT IN VIEW OF THE PROVISIONS OF SECTION 153C SATISFACTION THAT REQUIRED TO BE REACHED BY AO HAVING JURISDICTION OVER SEARCHED PER SONS IS THAT VALUABLE ARTICLE OF BOOKS OF ACCOUNT OR DOCUMENTS S EIZED DURING THE SEARCH BELONGS TO A PERSON OTHER THAN SEARCHED PERS ONS AND IT IS NOT NECESSARY THAT THE DOCUMENTS SO SEIZED MUST REF LECT UNDISCLOSED INCOME. HE ALSO PLACED COORDINATE BENCH DECISION IN THE CASE OF M/S APEX TIME P. LTD VS. DCIT IN ITSS(A ) NO.34/MUM/2008 FOR THE BLOCK PERIOD FROM 09.09.1996 TO 09.01.2010 DATED 30.03.2011 WHEREIN ON SIMILAR FACT S THE ITAT QUASHED THE BLOCK ASSESSMENT ORDER FOLLOWING THE JU DGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHW ARI VS. ACIT, 289 ITR 341 (SC). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND EXAMIN ED THE RECORD AS PLACED BEFORE US. THE PRELIMINARY ISSUE R AISED BY ASSESSEE BY WAY OF ADDITIONAL GROUND IS WITH REFERENCE TO TH E VALIDITY OF THE PROCEEDINGS UNDER SECTION 153C. THE ISSUE AROSE ON THE FOLLOWING FACTS. A SEARCH & SEIZURE ACTION UNDER SECTION 132 (1) OF THE ACT WAS CARRIED OUT IN THE CASE OF INGRAM MICRO INDIA PVT. LTD/M/S TECH. PACIFIC (INDIA) LTD AT THEIR BUSINESS PREMISES AT G ATE NO.1A, GODREJ INDUSTRIES COMPLEX, PIROJSHAH NAGAR, VIKHROLI (E) M UMBAI 400079 ON 06/07.09.2007. THE BASIC ALLEGATION AGAINST THE GROUP WAS THAT INGRAM MICRO INDIA EXPORTS PTE LTD/TECH PACIFIC IND IA (EXPORTS) PTE LTD SINGAPORE BASED COMPANY IS NOT PAYING ANY INCOM E TAX IN INDIA THOUGH IT IS HAVING A PERMANENT ESTABLISHMENT IN IN DIA THOUGH INGRAM MICRON INDIA LIMITED/TECH PACIFIC INDIA LTD. IT WAS COMMUNICATED FROM THE INVESTIGATING WING THAT THE P ROCEEDINGS ARE REQUIRED TO BE INITIATED IN THIS CASE TO BRING TO T AX THE PROFITS OF INGRAM MICRO INDIA EXPORTS PTE LTD/TECH PACIFIC IND IA (EXPORTS) PTE. LTD. ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 8 OF 18 7. A NOTICES UNDER SECTION 153C DATED 18.11.2008 WERE ISSUED IN THE CASE OF INGRAM MICRO INDIA EXPORTS (P) LTD F OR ASSESSMENT YEARS 2002-03 TO 2007-08 AND STATED TO BE DULY SERV ED UPON ASSESSEE. IN RESPONSE ASSESSEE FILED RETURNS OF INC OME ON 12.12.2008 DECLARING TOTAL INCOME AT NIL AND IN THE NOTES TO THE RETURN OF INCOME, IT WAS STATED THAT RETURN OF INCO ME IS BEING FILED IN PROTEST AND IN RESPONSE TO THE NOTICE UNDER SECT ION 153C AS ASSESSEE DOES NOT HAVE A PE IN INDIA AS DEFINED IN ARTICLE 5 OF THE DTAA AND ACCORDINGLY PROFITS ARISING TO ITS FROM IT S INDIAN OPERATIONS WILL NOT BE LIABLE TO TAX IN INDIA UNDER ARTICLE 7 OF THE DTAA WITH SINGAPORE. THE FURTHER FACTS RECORDED BY AO IN PAGE 2 OF THE ORDER AS UNDER: M/S INGRAM MICRO INDIA PVT. LTD AND M/S TECH PACIFI C (INDIA) LTD ARE INTO THE BUSINESS OF TRADING IN COMPUTER PE RIPHERALS AND SOFTWARE TO CUSTOMERS IN INDIA AND ABROAD. TPIL HAD A WHOLLY OWNED SUBSIDIARY BY NAME AND STYLE OF TECH P ACIFIC (INDIA) EXPORTS PTE LTD (TPIEPL) REGISTERED AT SING APORE. IN NOVEMBER 2004, THE COMPANY KNOWN AS INGRAM MICRO, U SA HAS ACQUIRED ALL THE SHARES OF TECH PACIFIC, ONE OF THE ASIA PACIFICS LARGEST TECHNOLOGY DISTRIBUTORS FOR 730 M ILLION AUSTRALIAN DOLLARS. AFTER THIS TAKE OVER, TPIEPL CA ME TO BE KNOWN AS M/S INGRAM MICRO INDIA EXPORTS PTE. LTD (I MIEPL). A. THE SET UP OF THE INGRAM GROUP OF COMPANIES IS AS UNDER: (I) M/S INGRAM MICRO INDIA EXPORTS PTE LTD FORMERLY TECH PACIFIC (INDIA) EXPORTS PTE. LTD IS A SINGAPORE BAS ED COMPANY AND IS A WHOLLY OWNED SUBSIDIARY OF INGRAM MICRO IN DIA PVT. LTD HAVING ITS REGISTERED OFFICE AT BANGALORE. (II) M/S INGRAM MICRO INDIA PVT. LTD IS SUBSTANTIAL LY (87.60%) OWNED BY M/S INGRAM MICRO ASIA LTD, A MAURITIUS BAS ED ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 9 OF 18 COMPANY, WHICH IN TURN IS SUBSTANTIALLY (99.98%) OW NED BY M/S. INGRAM MICRO INC., A CALIFORNIA BASED COMPANY. B. THE SET OF TECH PACIFIC GROUP OF COMPANIES IS AS UNDER: (I) TECH PACIFIC (INDIA) EXPORTS PTE. LTD IS A SING APORE BASED COMPANY AND IS A WHOLLY OWNED SUBSIDIARY OF M/S TEC H PACIFIC (INDIA) LTD, A MUMBAI BASED COMPANY, HAVING 12.40% SHAREHOLDING IN INGRAM MICRO INDIA PVT. LTD, A BANG ALORE BASED COMPANY. (II). TECH PACIFIC (INDIA) LTD IS WHOLLY OWNED BY T ECH PACIFIC MAURITIUS LTD., A COMPANY REGISTERED IN BRITISH VIR GINIA ISLAND. (III) TECH PACIFIC MAURITIUS LTD IS WHOLLY OWNED BY M/S TECH PACIFIC ASIA LTD, A COMPANY REGISTERED IN BRITISH V IRGINIA ISLAND. (IV) TECH PACIFIC ASIA LTD IS WHOLLY OWNED BY M/S T ECH PAC. HOLDINGS, A BERMUDA BASED COMPANY. AFTER THE ACQUISITION OF THE TECH. PAC. HOLDINGS S HARES BY INGRAM MICRO INC. IN NOV. 2004,TPIEPL HAS COME TO B E KNOWN AS IMIEPL. FOR THE CALENDAR YEARS 2001 TO 2002 TECH PACIFIC (I NDIA) LTD WAS KNOWN AS GODREJ PACIFIC TECHNOLOGY. 8. IN THE COURSE OF SEARCH, CERTAIN DOCUMENTS, EMAIL CORRESPONDENCE ETC., WERE SEIZED BY THE DEPARTMENT AND AFTER ANALYSIS OF THE SAME, AO CAME TO THE CONCLUSION THA T ASSESSEE HAD A PERMANENT ESTABLISHMENT IN INDIA AND ACCORDINGLY ON THE BASIS OF THE SEIZED DOCUMENTS ARRIVED AT THE INCOMES IN THE RESPECTIVE ASSESSMENT YEARS AND PROPOSED A DRAFT ASSESSMENT OR DER. ASSESSEE OBJECTED TO THE DRAFT ASSESSMENT ORDER BEFORE THE D RP-I AND DRP-I VIDE DIRECTION DATED 29.09.2010 AFFIRMED THE STAND OF AO THAT THERE ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 10 OF 18 IS A PERMANENT ESTABLISHMENT AND ALSO COMPUTATION O F INCOME. HOWEVER, VIDE PARA 6 OF THE ORDER, INSTEAD OF ASSES SING THE 100% INCOME OF ASSESSEE AS ATTRIBUTABLE TO PE IN INDIA, THE DRP DIRECTED THAT 90% OF THE INCOME TO BE ASSESSED AS ATTRIBUTAB LE TO PE IN INDIA, WHEREAS THE BALANCE 10% CAN BE TREATED AS AC TIVITIES RELATED TO SINGAPORE. CONSEQUENT TO THE DIRECTIONS OF THE D RP, AO ASSESSED THE INCOMES IN THE RESPECTIVE ASSESSMENT YEARS AS U NDER: ASSESSMENT YEAR AMOUNT ( ` .) 2002-03 49,67,123 2003-04 1,50,21,580 2004-05 3,73,20,602 2005-06 5,77,74,172 2006-07 7,20,90,268 2007-08 8,12,33,549 9. THE ADDITIONAL GROUND RAISED BY ASSESSEE BEING A LE GAL GROUND GOES TO THE ROOT OF THE MATTER. AS BRIEFLY STATED, IT SEEMS AO DID NOT ALLOW THE INSPECTION OF THE RECORD TO ASSESSEE/COUN SEL AND ACCORDINGLY THEY HAVE RAISED AN ADDITIONAL GROUND A BOUT THE VALIDITY OF THE PROCEEDINGS UNDER SECTION 153C IN THE ABSENC E OF ANY SATISFACTION BEING RECORDED BY THE OFFICER WHO WAS ASSESSING THE SEARCHED PARTY. THERE IS NO DISPUTE ON THE FACT THA T ASSESSEE WAS NOT SEARCHED AND THE SEARCH HAS BEEN CONDUCTED IN T HE CASE OF INGRAM MICRO INDIA (P) LTD/TECH PACIFIC INDIA LTD A T THEIR BUSINESS PREMISES IN MUMBAI. THEREFORE, AS PER THE PROVISION S OF SECTION 153A AND 153C, PROCEEDINGS CAN ONLY BE INITIATED ON LY AFTER AO COMES TO A SATISFACTION THAT THE SEIZED MATERIAL PE RTAINS TO OTHER PERSONS OTHER THAN THE SEARCHED PARTY AND CONSEQUEN TLY AO ALSO COMES TO THE CONCLUSION THAT PROCEEDINGS ARE REQUIR ED TO BE INITIATED IN THE OTHER PARTIES CASE. NOWHERE IN THE ASSESSMENT ORDER THERE IS ANY RECORDING OF THE FACT THAT THERE WAS S ATISFACTION RECORDED BY AO ASSESSING INGRAM MICRO INDIA (P) LTD . IN FACT AFTER ASSESSEE HAS RAISED AN ADDITIONAL GROUND, THE DEPAR TMENT WAS SPECIFICALLY ASKED TO PRODUCE THE RELEVANT CORRESPO NDENCE BETWEEN ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 11 OF 18 AOS AND THE SATISFACTION NOTE RECORDED FOR INITIATI NG PROCEEDINGS AND IN FACT THE ENTIRE RECORD OF THE ASSESSMENTS HA VE BEEN TO DIRECTED TO BE PRODUCED TO EXAMINE THE CONTENTIONS RAISED BY ASSESSEE THAT THERE IS NO SATISFACTION RECORDED. AS STATED EARLIER, THIS BENCH HAS DIRECTED THE DR TO FURNISH THE NECES SARY RECORDS AS EARLY AS 28.04.2011 FOLLOWED BY REPEATED DIRECTIONS AND AS THE LAST OPPORTUNITY ON 06.12.2012. THE DR WAS DIRECTED TO P RODUCE THE ASSESSMENT RECORD AND THE CORRESPONDENCE BETWEEN AO S AND IT WAS FURTHER STATED THAT SINCE THE STAY WAS EXTENDED FOU R TIMES, NO FURTHER EXTENSION WILL BE GRANTED. INSPITE OF THE A BOVE AND ALSO ON THE BASIS OF THE CORRESPONDENCE PLACED BY THE DRS O N RECORD, IT SEEMS THAT NO SERIOUS EFFORTS WERE MADE BY THE REVE NUE TO FURNISH THE RELEVANT SATISFACTION NOTE RECORDED BY AO NOR T HE RELEVANT RECORDS WERE SUBMITTED AS DIRECTED BY THE BENCH. DE SPITE REPEATED EFFORTS AND REQUESTS FOR ADJOURNMENT BY THE DR FOR FURNISHING THE RECORD, THE RECORD HAS NOT BEEN SENT BY THE OFFICER S OR ANY SATISFACTION HAS BEEN PLACED ON RECORD. SINCE MORE THAN 20 MONTHS HAVE PASSED FROM THE TIME THE FIRST DIRECTION WAS G IVEN TO THE REVENUE AND SINCE THREE DIFFERENT CIT (DRS) HAVE FO LLOWED UP THE MATTER WITH THE CONCERNED AOS, WE ARE OF THE OPINIO N THAT THERE IS NO SATISFACTION RECORDED WHILE INITIATING THE PROCE EDINGS UNDER SECTION 153C EITHER BY AO WHO ASSESSED THE SEARCHED PARTY OR EVEN BY AO WHO COMPLETED THE ASSESSMENT IN ASSESSEES CA SE. 10. SINCE ASSESSEE IS NOT SEARCHED PARTY, IT IS NECESSA RY TO RECORD A SATISFACTION UNDER THE PROVISIONS OF SECTION 153C . THE PROVISIONS OF SECTION 153C ARE AS UNDER: 153C. [(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 OTH ER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERS ON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 12 OF 18 THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH S UCH 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 :] PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTI ON 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SEC OND PROVISO TO 91 [SUB-SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON : PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZE TTE, SPECIFY THE CLASS OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSI NG THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMEN T HAS ABATED. (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 JURISDICTION OVER SUCH OTHER PERSON AFTER THE DUE D ATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CO NDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECT ION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTI ON 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 SECTI ON 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTIC E UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN M ADE, ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 13 OF 18 BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTI CE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSO N OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECT ION 153A.] THIS PROVISION IS PARI MATERIA WITH THE PROVISIONS OF SECTION 158BD (IN THE BLOCK ASSESSMENT PROCEDURE). 11. THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) ANALYZED THE PROVISIONS OF SECTI ON 158 BD R.W.S. 158BC AND DECIDED AS UNDER: CONDITION PRECEDENT FOR INVOKING A BLOCK ASSESSMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISION WOULD APPLY IN THE CASE OF ANY PERSON, IN RESPECT OF WHOM SEARCH HAS BEEN CARRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSE TS HAVE BEEN REQUISITIONED UNDER SECTION 132A. SECTION 158BD, HOWEVER, PROVIDES FOR TAKING RECOURSE TO A B LOCK ASSESSMENT IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER PERSON, THE CONDITIONS PRECEDENT WHEREFOR ARE : ( I ) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFI CER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH W AS MADE UNDER SECTION 132; ( II ) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED H AD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON; AND ( III ) THE ASSESSING OFFICER HAS PROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISION S OF SECTION 158BD THUS, ARE REQUIRED TO BE SATISFIED BE FORE THE PROVISIONS OF THE CHAPTER XIV-B ARE APPLIED IN RELATION TO ANY PERSON, OTHER THAN THE PERSON WHOSE PREMISES HAD BEEN SEARCHED UNDER SECTION 132 OR WHO SE DOCUMENTS AND OTHER ASSETS HAD BEEN REQUISITIONED UNDER SECTION 132A. A TAXING STATUTE, AS IS WELL-KNOWN, MUST BE CONSTRU ED STRICTLY. LAW IN THIS REGARD IS CLEAR AND EXPLICIT. THE NOTICE IN QUESTION ISSUED UNDER SECTION 158BD DID N OT RECORD ANY SATISFACTION ON THE PART OF THE ASSESSIN G ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 14 OF 18 OFFICER. DOCUMENTS AND OTHER ASSETS RECOVERED DURIN G SEARCH HAD NOT BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION IN THE MATTER. NO PROCEEDING UNDER SECTION 158BC HAD BEEN INITIATE D. THERE WAS, THUS, A PATENT NON-APPLICATION OF MIND. A PRESCRIBED FORM HAD BEEN UTILIZED. EVEN THE STATUS OF THE ASSESSEE HAD NOT BEEN SPECIFIED. IT HAD ONLY BEEN MENTIONED THAT THE SEARCH WAS CONDUCTED IN THE MONT H OF NOVEMBER, 1995. NO OTHER INFORMATION HAD BEEN FURNISHED. THE PROVISIONS CONTAINED IN CHAPTER XIV- B ARE DRASTIC IN NATURE. IT HAS DRACONIAN CONSEQUENCES. S UCH A PROCEEDING CAN BE INITIATED ONLY IF A RAID IS CONDU CTED. WHEN THE PROVISIONS ARE ATTRACTED, LEGAL PRESUMPTIO NS ARE RAISED AGAINST THE ASSESSEE. THE BURDEN SHIFTS ON THE ASSESSEE. AUDITED ACCOUNTS FOR A PERIOD OF TEN YEARS MAY HAVE TO BE REOPENED. SINCE THE ASSESSING OFFICER HAD NOT RECORDED ITS SATISFACTION, WHICH IS MANDATORY AND THE ASSESSING OFFICER ALSO HAD NOT TRANSFERRED THE CASE TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE MATT ER, THE IMPUGNED JUDGMENTS OF THE HIGH COURT COULD NOT BE SUSTAINED. 12. COORDINATE BENCH OF THE ITAT IN THE CASE OF P. SATY ANARAYANA VS. ACIT CHENNAI (SUPRA) HAS CONSIDERED THE NOTICE ISSUED UNDER SECTION 153C AS INVALID IF NO SATISFACTION WAS RECO RDED AS TO WHOM SEIZED MATERIAL BELONGS. IT WAS HELD AS UNDER: FACTS . A SEARCH AND SEIZURE OPERATION ON RESIDENTIAL AND BUSINESS PREMISES OF ASSESSEE'S FATHER WAS CARR IED OUT. ON THE BASIS OF THE SEIZED MATERIAL FOUND IN T HE COURSE OF THE SEARCH, NOTICE UNDER SECTION 153C, RE AD WITH SECTION 153A, WAS ISSUED TO THE ASSESSEE. IN RESPONSE THERETO, THE ASSESSEE FILED ITS RETURN AND ASSESSMENT WAS COMPLETED. THE ASSESSEE CONTENDED THAT THE ASSESSING OFFICER HAD NOT RECORDED ANY SATISFACTION EITHER IN CASE OF SEARCHED PERSON OR I N CASE OF THE ASSESSEE AND, THEREFORE, IMPUGNED NOTICE WAS INVALID AND CONSEQUENTIAL ASSESSMENT WAS TO BE ANNULLED. ON APPEAL: HELD ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 15 OF 18 A PERUSAL OF THE ORDER SHEET RECORDING ITSELF CLEAR LY SHOWS THAT THE ASSESSING OFFICER WHEN HE MADE THE RECORDING, WAS CATEGORICAL IN HIS VIEW THAT THE REA SONS RECORDED IS NO PRE-CONDITION FOR ACTION UNDER SECTI ON 153C AND THE POINTS NOTED ARE FOR THE SAKE OF READY REFERENCE AND APPROPRIATE ACTION. ONCE THE ASSESSIN G OFFICER HIMSELF HAS ACCEPTED THAT THE RECORDING OF REASONS IS NOT A PRE-CONDITION FOR ACTION UNDER SEC TION 153C AND HAS ACCEPTED THAT THE POINTS ARE NOTED FOR THE SAKE OF READY REFERENCE AND APPROPRIATE ACTION, OBVIOUSLY CANNOT BE TREATED AS REASONS RECORDED. A READING OF THE PROVISIONS OF SECTION 153C CLEARLY S HOWS THAT IT IS IN PARI MATERIA WITH THE PROVISIONS OF S ECTION 158BD. WHILE INTERPRETING THE PROVISIONS OF SECTION 158BD IN THE CASE OF MANISH MAHESHWARI V. ASSTT. CI T [2007] 289 ITR 341 / 159 TAXMAN 258 (SC), MORE SPECIFICALLY THE SATISFACTION OF THE ASSESSING OFFI CER, THE SUPREME COURT HAS CATEGORICALLY HELD THAT THE SATISFACTION IS TO BE RECORDED. ADMITTEDLY, THE ASS ESSING OFFICER IN THE INSTANT CASE IS THE SAME AS THAT OF FATHER OF ASSESSEE ALSO. THE REVENUE HAS NOT BEEN ABLE TO SHO W ANY RECORDING OF SATISFACTION EITHER IN THE CASE OF SEARCHED PERSON OR IN THE CASE OF THE ASSESSEE AND, CONSEQUENTLY, IN VIEW OF THE PRINCIPLES LAID DOWN B Y THE SUPREME COURT IN THE ABOVE CASE, THE NOTICE ISSUED UNDER SECTION 153C READ WITH SECTION 153A IS LIABLE TO BE HELD AS INVALID. THUS, THE CONSEQUENTIAL ASSESSM ENT PASSED UNDER SECTION 153C, READ WITH SECTION 153A A RE ANNULLED ON ACCOUNT OF THE INVALIDITY OF THE NOTICE UNDER SECTION 153C READ WITH SECTION 153A. 13. IN THE CASE OF M/S APEX TIME PVT. LTD VS. DCIT IN I TSS(A) NO.34/MUM/2008, DATED 30.03.2011 THE ITAT A BENCH CONSIDERED THE PROVISIONS OF SECTION 158BD, AND HAS DECIDED A S UNDER: 5. THE LEARNED COUNSEL FOR THE ASSESSEE, MR. M.P. MAKHIJA, SUBMITTED THAT THERE WAS NO SATISFACTION RECORDED BY THE AO, WHO COMPLETED THE BLOCK ASSESSMENT OF NANDOKYA GROUP OF CASES, THAT UNDISCLOSED INCOME BELONGING TO THE ASSESSEE HAS BEEN FOUND DURING THE COURSE OF SEARCH AND HENCE THE NOTICE U/S 158BD WAS BAD IN LAW. 6. THIS BENCH, IN VIEW OF THE RIVAL CONTENTIONS ON THE ISSUE AS TO WHETHER A SATISFACTION NOTE HAS BEEN ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 16 OF 18 RECORDED OR NOT, ON 8-9-2009, DIRECTED THE LEARNED DR TO PRODUCE THE ASSESSMENT RECORDS. SIMILAR DIRECTIO NS WERE GIVEN ON 10-11-2009. THEREAFTER THE LEARNED DR HAD SOUGHT ADJOURNMENT ON 18-01-2010. ON 26-10- 2010 THE DIRECTIONS WERE ONCE AGAIN REPEATED BY THE BENCH. ON 13-01-2011 THE LEARNED DR SOUGHT ADJOURNMENT ON THE GROUND THAT THE RECORDS ARE NOT AVAILABLE. TODAY BEFORE US THE LEARNED DR MR. P.K. DAS, FILED A SET OF CORRESPONDENCE, WHEREIN THE DR HAS REQUESTED THE CONCERN AO AS WELL AS THE CONCERN CIT VIDE LETTER DATED 26 TH OCT., 2010 AND 8 TH MARCH, 2011 TO FURNISH THE SATISFACTION NOTE RECORDED BY T HE AO, AND ALSO TO SUBMIT THE ASSESSMENT RECORD AS DIRECTED BY THE BENCH. HE SUBMITTED THAT DESPITE THESE REPEATED EFFORTS, THE RECORD HAS NOT BEEN SEN T BY THE CONCERNED AUTHORITIES. HE PRAYED FOR MORE TIME. 7. MR. M.P. MAKHIJA, THE LEARNED A.R. SUBMITTED THA T ADVERSE INFERENCE SHOULD BE TAKEN AND THE BENCH SHOULD DECIDE THE CASE IN HIS FAVOUR AS MORE THAN 1 YEARS HAS ELAPSED SINCE DIRECTIONS WERE GIVEN TO THE REVENUE AND NO RECORDS ARE PRODUCED TILL DATE. 8. AFTER HEARING RIVAL CONTENTIONS, WE AGREE WITH T HE SUBMISSIONS OF MR. M.P. MAKHIJA THAT NO USEFUL PURPOSE WOULD BE SERVED BY ADJOURNING THE MATTER ONCE AGAIN, TO GIVE FURTHER TIME TO THE REVENUE, FO R PRODUCING THE RECORDS, AS MORE THAN 1 YEAR HAS ELAPSED SINCE THE DATE OF ISSUAL OF DIRECTIONS. HEN CE ADVERSE INFERENCE IS TAKEN AND GROUND NO.2 OF THE ASSESSEE THAT NO SATISFACTION WAS RECORDED BY THE A O WHO COMPLETED THE BLOCK ASSESSMENT OF NANDOKYA GROUP OF CASES, APPEARS TO BE FACTUALLY CORRECT. T HUS WE QUASH THE BLOCK ASSESSMENT ORDER BY APPLYING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F MANISH MAHESHWARI 289 ITR 341 WHEREIN IT IS HELD THAT (I) SATISFACTION MUST BE RECORDED BY THE ASSESSING OFFICER THAT UNDISCLOSED INCOME BELONG T O ANY PERSON, OTHER THAN THE PERSON WITH RESPECT OF WHOM SEARCH WAS MADE U/S 132 OF THE ACT, AND (II) THE BOOKS OF ACCOUNT OR THE DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAD TO BE HANDED OVER TO TH E AO HAVING JURISDICTION OVER SUCH OTHER PERSONS . ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 17 OF 18 14. THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF SSP AVIATION LTD. VS. DCIT 20 TAXMANN.COM 214 (DEL.) DATED 29.03 .2012 HELD AS UNDER: IN VIEW OF PROVISIONS OF SECTION 153C, SATISFACTIO N THAT IS REQUIRED TO BE REACHED BY ASSESSING OFFICER HAVI NG JURISDICTION OVER SEARCHED PERSON IS THAT VALUABLE ARTICLE OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING SEAR CH BELONG TO A PERSON OTHER THAN SEARCHED PERSON AND, IT IS NOT NECESSARY THAT DOCUMENTS SO SEIZED MUST REFLECT ANY UNDISCLOSED INCOME. 15. RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS ON T HE ISSUE AS DISCUSSED ABOVE, WE ARE OF THE OPINION THAT THERE I S NO SATISFACTION RECORDED BY AO BEFORE INITIATING PROCEEDINGS UNDER SECTION 153C. INSPITE OF GIVING SUFFICIENTLY ADEQUATE TIME TO THE REVENUE FOR PRODUCTION OF THE NECESSARY RECORDS AND CONSIDERING THE FACT THAT AO REFUSED TO ALLOW INSPECTION TO ASSESSEE AS RECOR DED BY THE BENCH ON 20.04.2011, WE HAVE NO OPTION THAN TO TAKE AN AD VERSE VIEW THAT NO SATISFACTION WAS RECORDED BY AO BEFORE ISSUANCE OF NOTICE UNDER SECTION 153C. THE REVENUE HAS NOT BEEN ABLE TO SHOW ANY SATISFACTION RECORDED EITHER IN THE CASE OF SEARCHE D PERSON OR IN THE CASE OF ASSESSEE AND CONSEQUENTLY IN VIEW OF THE PR INCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF MA NISH MAHESHWARI VS. ACIT (SUPRA), A NOTICE ISSUED UNDER SECTION 153C R.W.S. 153A IS LIABLE TO BE HELD AS INVALID. THUS, THE CONSEQUENTIAL ASSESSMENTS PASSED UNDER SECTION 153C R.W.S. 144C A RE ANNULLED ON ACCOUNT OF THE INVALIDITY OF THE NOTICES UNDER S ECTION 153C. ASSESSEES ADDITIONAL GROUNDS ARE ACCORDINGLY ALLOW ED IN ALL THE IMPUGNED ASSESSMENT YEARS. SINCE ASSESSEES ADDITIO NAL GROUND IS ALLOWED ON THE PRELIMINARY ISSUE OF JURISDICTION, T HERE IS NO NEED FOR ADJUDICATING THE ISSUES ON MERIT IN ANY OF THE ASSE SSMENT YEARS. ACCORDINGLY, THE OTHER GROUNDS RAISED ARE CONSIDERE D ACADEMIC AND HENCE, NOT ADJUDICATED. ITA NOS.8133 8137 8138 8136 8135 AND 8132 OF 2010 I NGRAM MICRO INDIA EXPORTS PVT LTD MUMBAI PAGE 18 OF 18 16. ALL THE IMPUGNED ASSESSMENT ORDERS PASSED IN THESE RESPECTIVE ASSESSMENT YEARS BY AO ARE HEREBY ANNULL ED. 17. IN THE RESULT, APPEALS FILED BY ASSESSEE ARE ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST DECEMBER, 2012. SD/- SD/- (AMIT SHUKLA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 21 ST DECEMBER, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, L BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI
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