Mrs. Sangeeta Sushil Bagadia, Pune V. Asstt.CIT, Pune

ITA 898/PUN/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59988 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-01-2012
• Assessment Year: misc
• Appeal Filed On: 15-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Assessee Lawyers: PRAKASH G JHUNJUNWALA
• Keywords: Gift; Documents seized
• Section: 143(3); 133A; 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTAN T MEMBER S. NO ITA NO ASSTT.YEAR APPELLANT RESPONDENT 1 898/PN/10 1998-99 MRS SANGEETA SUSHIL BAGADIA, APT. NO 401 BAGADIA HOUSE, 23-B KASBA PETH, PUNE 411 001 PAN AAVPB4301N ASSTT.COMMISSIONER OF INCOME-TAX, CEN.CIR.2(1),PUNE 2 899/PN/10 1999-00 -DO- -DO- 3 900/PN/10 2001-02 -DO- -DO- 4 901/PN/10 1998-99 ASSTT. CIT CEN. CIR. 2(1) PUNE SMT SANGEETA SUSHIL BAGADIA, PUNE 5 902/PN/10 1999-00 -DO- -DO- 6 903/PN/10 2001-02 -DO- -DO- ASSESSEE BY : SHRI PRAKASH G JHUNJUNWALA RESPONDENT BY : SHRI S K AMBASTHA DATE OF HEARING : 18.01.2012 DATE OF PRONOUNCEMENT : 30.01.2012 ORDER PER G S PANNU, AM : THESE SIX CROSS-APPEALS BY THE ASSESSEE AND THE DEPARTMENT INVOLVE A COMMON ISSUE AND, THEREFORE, THEY HAVE BEEN HEARD TOGE THER AND ARE BEING DISPOSED OF BY A CONSOLIDATED ORDER FOR THE SAKE OF BREVI TY AND CONVENIENCE. 2. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMIT TED THAT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE INVOLVE PURE POI NTS OF LAW WHEREBY THE VALIDITY OF THE IMPUGNED ASSESSMENTS MADE IN PURSUAN CE TO SECTION 153C OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) HAS B EEN CHALLENGED TO BE INVALID AND, THEREFORE, THE SAME GOES TO THE ROOT OF THE MATTER AND ACCORDINGLY, IT SHOULD BE ADJUDICATED AT THE OUTSET. 3. BRIEFLY PUT THE FACTS AND THE BACKGROUND RELEVANT FO R THE CAPTIONED PROCEEDINGS CAN BE UNDERSTOOD AS FOLLOWS. A SEARCH UNDER SECT ION 132(1) OF THE ACT WAS CARRIED OUT AT THE PREMISES OF SHRI NATWARLA L R BAGADIA AND GROUP ON 29.7.2003. AS A RESULT, ASSESSMENTS UNDER SECTION 153C O F THE ACT IN THE CASE OF PERSONS SEARCHED ARE STATED TO HAVE BEEN COMPLETED ON 31.3.2006. SUBSEQUENTLY ON 30.10.2006, NOTICE UNDER SECTION 153B OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER DIRECTING THE ASSESSEE TO FURNISH RET URNS OF INCOME FOR ASSESSMENT YEARS 1998-99 TO 2003-04. IN COMPLIANCE, THE ASSESSEE FILED HER RETURNS OF INCOME FOR THE RESPECTIVE YEARS. THE ASSE SSMENT YEARS IN APPEAL BEFORE US ARE 1998-99, 1999-2000 AND 2001-02. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES IN ALL THE THREE YEARS STAND ON AN IDENTICAL FOOTING AND, THEREFORE, W E MAY REFER TO THE PROCEEDINGS FOR THE ASSESSMENT YEAR 1998-99 IN ORDER TO A PPRECIATE THE CONTROVERSY. 4. FOR THE ASSESSMENT YEAR 1998-99, IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153C OF THE ACT DATED 30.10.2006, ASSESSEE FILED A RETURN OF INCOME ON 20.11.2006 DECLARING A TOTAL INCOME OF RS 20,360/- . IN THE ASSESSMENT COMPLETED UNDER SECTION 153C READ WITH SECTION 143(3) OF THE ACT DATED 19.12.2007, THE ASSESSING OFFICER HAS TREATED A SUM OF R S 19,48,145/- REPRESENTING GIFTS RECEIVED BY THE ASSESSEE FROM SHRI SOHA N GOENKA NRI AS UNEXPLAINED THEREBY RESULTING ASSESSMENT OF TOTAL INCOME AT RS 19,68,510/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVED TH AT THE ASSESSEE IS A PARTNER IN M/S SUNITA ENTERPRISES AND IS ALSO UNDERT AKING THE BUSINESS OF CAR HIRING. IT IS STATED THAT DURING THE COURSE OF SEARCH SOME DOCUMENTS AND BANK PASS BOOKS OF THE FAMILY MEMBERS WERE FOUND FROM WH ICH IT WAS SEEN THAT ASSESSEE AND HER FAMILY MEMBERS HAD RECEIVED GIFTS OF HUGE AMOUNTS FROM ABROAD. DURING THE IMPUGNED ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF FOREIGN GIFTS RECEIV ED. THE ASSESSEE FURNISHED EXPLANATION THAT THE GIFT WAS RECEIVED FROM CLOSE RELATIVE BEING MATERNAL UNCLE-IN-LAW AND THAT IT WAS RECEIVED ON THE A USPICIOUS OCCASION OF DIWALI. FROM THE COPY OF WRITTEN STATEMENTS PLACED ON R ECORD, IT IS ALSO REVEALED THAT THE ASSESSEE HAD EXPLAINED THE BACKGROUND OF THE DONOR AND OTHER INFORMATION IN SUPPORT OF CREDITWORTHINESS OF THE DONOR. A CERTIFICATE OF FOREIGN INWARD REMITTANCE ISSUED BY THE BANK WAS ALSO FUR NISHED. HOWEVER, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE COULD NOT P RODUCE THE DONOR INSPITE OF SEVERAL REMINDERS AND, THEREFORE, CREDITWOR THINESS AND IDENTITY OF THE DONOR REMAINED UNPROVED AND HENCE, ADDITION OF RS 19 ,48,145/-. 5. IN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (AP PEALS), APART FROM ASSAILING THE ADDITION ON MERITS, ASSESSEE CHALLENGED THE VALIDITY OF ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER TO ISSUE N OTICE UNDER SECTION 153C OF THE ACT DATED 30.10.2006 AND ALSO CONTE NDED THAT THE SAME WAS BARRED BY LIMITATION IN SO FAR AS ASSESSMENT YEARS 199 8-99 AND 1999- 2000 WAS CONCERNED. IT WAS ALSO CONTENDED THAT THE NOTI CE UNDER SECTION 153C WAS BAD IN LAW AS NO DOCUMENTS, BOOKS OF ACCOUNT OR ASSE TS BELONGING TO THE ASSESSEE WERE FOUND OR SEIZED DURING THE SEARCH ACTI ON AND NOR SUCH DOCUMENTS WERE HANDED OVER TO THE ASSESSING OFFICER FOR ISSU ANCE OF NOTICE UNDER SECTION 153C OF THE ACT. IT WAS ALSO CONTENDED THA T THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 153C OF THE ACT WITH OUT RECORDING A VALID SATISFACTION WITHIN THE PERIOD PRIOR TO THE COMPLETION OF SEARCH ASSESSMENTS UNDER SECTION 153A ON 31.3.2006. FOR ALL THE ABOVE RE ASONS, IT WAS SOUGHT TO BE CONTENDED THAT THE ASSESSMENT WAS BAD IN LAW. ON FACTS, IT WAS SOUGHT TO BE MADE OUT THAT THE GIFTS WERE RECEIVED FROM THE MAT ERNAL UNCLE-IN-LAW WHO HAD REQUISITE CREDITWORTHINESS AND OCCASION TO ADVANCE GIFT S AND IN SUPPORT FOLLOWING DOCUMENTS WERE REFERRED TO: (I) GIFT DECLARATION BY DONOR MR SOHAN GOENKA DT 19 .12.07; (II) PASSPORT OF DONOR MR SOHAN GOENKA; (III) BANK REMITTANCE CERTIFICATE; (IV) BANK CREDIT ADVICE & BANK STATEMENT; (V) AFFIDAVIT OF THE ASSESSEE DT 16.1.2010;AND, (VI) ASSESSMENT ORDER U/S 153A OF PARVTIDEVI BAGADIA (M OTHER-IN- LAW). 6. THE COMMISSIONER OF INCOME-TAX (APPEALS) HAS SINCE DEL ETED THE ADDITION BY HOLDING THAT THE MATERIAL ON RECORD WAS ENOUGH TO ESTABLISH THE IDENTITY AND CAPACITY OF THE DONOR AS WELL AS THE GENUI NETY OF THE GIFTS FOR THE REASON THAT THE GIFTS WERE FROM THE MATERNAL UNCLE-IN- LAW OF THE ASSESSEE WITH CLOSE FAMILY AFFINITY. HOWEVER, WHILE DELETING THE AD DITION, IN SO FAR AS THE POINTS OF LAW RAISED BY THE ASSESSEE REGARDING THE INVALI DITY OF THE ASSUMPTION OF JURISDICTION AND THE ASSESSMENT BEING BAD IN LAW WERE DISMISSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). AGAINST THE LATTE R ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS), ASSESSEE IS IN FURTHE R APPEAL BEFORE US N THE STATED GROUNDS OF APPEAL, WHEREAS THE REVENUE IN ITS GROUNDS OF APPEAL HAS CHALLENGED THE ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IN DELETING THE IMPUGNED ADDITION. 7. THE GROUNDS OF APPEALS RAISED BY THE ASSESSEE FOR A.Y. 1999-99 READ AS FOLLOWS, WHICH ARE COMMON: THE APPELLANT PREFERS AN APPEAL AGAINST AN ORDER P ASSED BY LEARNED CIT(A)-IV PUNE, ON FOLLOWING AMONGST OTHER GROUNDS EACH OF WHICH AR E WITHOUT PREJUDICE TO ANY OTHER: 1.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, LD. A.O ERRED IN ISSUING NOTICE U/S 158C DATED 30-10-2006 BEYOND THE PERIOD OF 6 YEARS FROM DATE OF RECEIPT OF SEIZED MATERIAL THEREBY THE ASSESSMENT I S BAD IN LAW; 2.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE REASSESSMENT U/S 158C IS BAD IN LAW AS THE NOTICE U/S 158C IS ISSUED WITHOUT RECORDING A VALID SATISFACTION AND WITHOUT PREJUDICE, THE SATISFACTIO N HAS BEEN RECORDED AFTER COMPLETION OF ASSESSMENT OF SEARCHED PARTY U/S 153A ON 31-3-2006. 3.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE REASSESSMENT U/S 153C IS BAD IN LAW AS NO DOCUMENTS, BOOKS OF ACCOUN TS OR ASSETS BELONGING TO THE APPELLANT WERE FOUND NOR SEIZED DURING SEARC H ACTION NOR ANY DOCUMENTS ARE HANDED TO LEARNED AO FOR ISSUE OF NOT ICE U/S 153C OF THE ACT. 8. IN THIS CONNECTION, WE MAY NOW TAKE UP THE ISSUES EMER GING FROM THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED GROUND NO. 1 BY POINTING OUT THA T IN SO FAR AS THE ASSESSMENT YEAR 1998-99 AND 1999-2000 IS CONCERNED, THE NO TICE ISSUED UNDER SECTION 153C IS BEYOND THE PRESCRIBED PERIOD OF 6 YEARS AND IS, THEREFORE, INVALID AND THE CONSEQUENT ASSESSMENT IS BAD IN LAW. IN THIS CONNECTION, IT WAS POINTED OUT THAT THE ASSESSING OFFICER HAS STATED IN PARA 2.2 OF THE ORDER THAT JURISDICTION WAS TRANSFERRED TO HIM FROM 31.8.2006 AND IT IS ON THAT DATE THE DOCUMENTS SEIZED/REQUISITIONED BELONGED TO THE ASSESSEE HAVE TO BE CONSIDERED TO HAVE BEEN RECEIVED BY THE ASSESSING O FFICER. IT IS SUBMITTED THAT UNDER SECTION 153C READ WITH FIRST PROV ISO TO SECTION 153C(1), THE NOTICE UNDER SECTION 153C SHOULD BE ISSUED FOR THE PRECEDING 6 YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEIZED DOCU MENT OR BOOKS OF ACCOUNT OR ASSETS ARE RECEIVED BY THE ASSESSING OFFICER OF SU CH OTHER PERSON. IN THIS CASE, THE ASSESSING OFFICER STATES TO HAVE RECEIVED THE DOCUMENTS ON 31.8.2006 AND, THEREFORE, NOTICES UNDER SECTION 153C SH OULD HAVE BEEN ISSUED FROM 6 ASSESSMENT YEARS BEGINNING FROM THE ASSESSMENT YEAR 2001-02 ONWARDS, THEREBY RENDERING THE NOTICES ISSUED FOR ASSESSMEN T YEAR 1998-99 AND 1999-2000 AS BARRED BY LIMITATION. IN THIS CONNECT ION, RELIANCE HAS BEEN PLACED ON A DIRECT DECISION OF THE CO-ORDINATE BENCH OF A HMEDABAD TRIBUNAL IN THE CASE OF VIJAY M VIMAWAL V. ACIT 124 TTJ 508 (AHD) . 8. SECONDLY, IT IS CANVASSED THAT NOTWITHSTANDING THE AFO RESAID INFIRMITY, THE NOTICE HAS BEEN ISSUED UNDER SECTION 153C WITHOUT R ECORDING THE NECESSARY SATISFACTION BY THE ASSESSING OFFICER COMPLETING THE ASSESSMENT UNDER SECTION 153A OF THE SEARCHED PERSON AND IT IS FURTH ER CONTENDED THAT IF THE SATISFACTION RECORDED ON 30.10.2006 BY THE PRESENT ASSESSING OFFICER IS ALSO INVALID, INASMUCH AS THE SAME HAS BEEN RECORDED M UCH AFTER THE COMPLETION OF ASSESSMENT UNDER SECTION 153A OF THE SEARCH ED PERSON, WHICH WAS 31.3.2006. IN SUPPORT OF THE AFORESAID PROPOSITION CANVASSED IN GROUND NO. 2, RELIANCE HAS BEEN PLACED ON FOLLOWING JUDGMENTS: I) CIT V. RAMESH KUMAR 338 ITR 126 (P&H); II) ACIT V. KISHORE LAL BALWANT RAI 17 SOT 380 (CHD) ; AND, III) MANOJ AGGARWAL V. DCIT 113 ITD 377 (DEL)(SB). 9. IN SUPPORT OF GROUND NO. 3, IT HAS BEEN ASSERTED TH AT IN THE PRESENT CASE, THE PRECONDITION PRESCRIBED UNDER SECTION 153C HAS N OT BEEN FULFILLED INASMUCH AS THERE IS NO SEIZED MATERIAL BELONGING TO TH E ASSESSEE WHICH HAS BEEN HANDED OVER TO THE ASSESSING OFFICER AND, THEREFORE , THE ASSUMPTION OF JURISDICTION UNDER SECTION 153C IS ALSO BAD IN LAW ON T HIS ASPECT. 10. ON THE OTHER HAND, THE LEARNED CIT-DEPARTMENTAL REPRESENTATIVE HAS DEFENDED THE STAND OF THE ASSESSING OFFICER ON ALL THE A BOVE POINTS BY POINTING OUT TO THE DISCUSSION OF THE ASSESSING OFFICER IN T HE ASSESSMENT ORDER CONTAINED IN PARA 2.2 WHICH READS AS UNDER: 2.2 JURISDICTION OVER THIS CASE WAS NOT WITH THIS OFFICE PRIOR TO 31.8.06. IT WAS ASSIGNED TO THIS OFFICE BY THE CIT-I, PUNE, BY AN O RDER NO. 1/2006-07 DATED 31.8.2006. THEREFOFRE, THE UNDERSIGNED BECAME THE ASSESSING OF FICER IN THIS CASE WITH EFFECT FROM 31.8.2006. CONSEQUENTLY, THE DOCUMENT(S) SEIZE D/REQUISITIONED BELONGING TO THIS ASSESSEE HAVE TO BE CONSIDERED TO HAVE BEEN RECEIVE D BY THE UNDERSIGNED IN THE CAPACITY OF THE ASSESSING OFFICER IN THIS PARTICULA R CASE WITH EFFECT FROM 31.8.2006. PROVISO TO SECTION 153C SYS THAT THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON. A NOTICE UNDER SECTION 153C HAS BEEN ISSUED BY THIS OFFICE ON 30.10.2006. THEREFORE, THE PROCEEDINGS ARE WITHIN THE LIMITATION PROVIDED BY THE PROVISIONS OF SECTION 153C READ WITH SECTION 153B. 11. WITH REGARD TO RECORDING OF SATISFACTION, THE LEAR NED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ASSESSMENT HAS BEEN MAD E AFTER ALLOWING DUE OPPORTUNITY TO THE ASSESSEE ON THE ISSUES RAISED AND IN ANY CASE, THE ASSESSING OFFICER BEFORE ISSUING THE NOTICE UNDER SECTION 15 8BC ON 31.10.2006 RECORDED SATISFACTION FOR THE SAME AND A REF ERENCE TO THE SAME WAS MADE IN THE COURSE OF HEARING BEFORE US. APART THER EFROM, IT IS SOUGHT TO BE CANVASSED THAT THERE WAS NO REQUIREMENT OF RECORDING SATISFACTION BEFORE ISSUING NOTICE UNDER SECTION 153C OF THE ACT. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. TH E CONTROVERSY BEFORE US PRIMARILY REVOLVES AROUND THE VALIDITY OF NO TICE ISSUED UNDER SECTION 153C DATED 30.10.2006 AND THE CONSEQUENTIAL ASSESSMENT M ADE UNDER SECTION 153C READ WITH 143(3) DATED 19.12.2007. A PER USAL OF THE NOTICE DATED 30.10.2006 INDICATES THAT A SEARCH ACTION WAS CONDUCTED UND ER SECTION 132 OF THE ACT IN THE CASE OF BAGADIA GROUP ON 29.7.2003. IN THE SAID NOTICE, COPY OF WHICH IS PLACED AT PAGE 8 OF THE PAPER BOOK, IT IS STATE D THAT IN THE COURSE OF THE AFORESAID SEARCH CERTAIN BOOKS OF ACCOUNT/DOCUMENTS/ASSE TS SEIZED, BELONGED TO THE ASSESSEE. THE ASSESSING OFFICER HAS JUSTIFIED THE NOTICE ISSUED UNDER SECTION 153C ON THE GROUND THAT CERTAIN B OOKS OF ACCOUNT/DOCUMENTS/ASSETS SEIZED BELONGED TO THE ASSESSEE. BEF ORE US, A PERTINENT PLEA HAS BEEN RAISED ON BEHALF OF THE ASSESSEE THAT NO BOOKS OF ACCOUNT/DOCUMENTS/ASSETS SEIZED BELONGED TO THE ASSESSEE AND THAT NO SUCH MATERIAL HAS BEEN HANDED OVER AND, THEREFORE, THE CON DITION PRESCRIBED UNDER SECTION 153C HAS NOT BEEN COMPLIED WITH. 13. IN THIS CONTEXT, WE MAY BRIEFLY TOUCH UPON THREE SECTIONS, NAMELY, 153A, 153B AND 153C WHICH ARE RELEVANT TO ADJUDICATE THE P RESENT CONTROVERSY. ON A PERUSAL OF THE AFORESAID SECTIONS, IT IS CLEAR THAT SECTIO N 153A, 153B AND 153C PRESCRIBE A SCHEME OF ASSESSMENT IN THE CASE OF A SEARCH UND ER SECTION 132 OR REQUISITION UNDER SECTION 133A OF THE ACT. SECTION 15 3A PROVIDES FOR PROCEDURE FOR ISSUANCE OF A NOTICE AND ASSESSMENT OR RE-A SSESSMENT IN THE CASE OF A PERSON WHERE A SEARCH HAS BEEN CONDUCTED UNDER SE CTION 132 OR WHERE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A AFTER 31.5.2003. SECTION 153B PRIM ARILY DEALS WITH TIME LIMIT FOR COMPLETION OF THE ASSESSMENT ENVISAGED UNDER SE CTION 153A. SECTION 153C AND WHICH IS THE SOURCE OF CONTROVERSY BEFORE US PROV IDES THAT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, J EWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMEN TS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFI CER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL P ROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASS ESS OR RE- ASSESS INCOME OF SUCH OTHER PERSON. PERTINENTLY, SECTION 15 3C REQUIRES SATISFACTION ON THE PART OF THE ASSESSING OFFICER ASSESSING THE SEARCHED PERSON THAT ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BEL ONGS TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. TH E SECOND PART OF THE SECTION REQUIRES THAT UPON SUCH SATISFACTION THE ASSESSING O FFICER OF THE PERSON REFERRED TO IN SECTION 153A SHALL HAND OVER SUCH M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED, TO THE ASSESSING OFFICER HAVING J URISDICTION OVER SUCH OTHER PERSON AND, THIRDLY, THE ASSESSING OFFICER OF SUCH OT HER PERSON SHALL PROCEED AGAINST SAID PERSON AND ISSUE NOTICE OR ASSESS OR RE- ASSESS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A OF THE A CT. OSTENSIBLY, THE PROVISIONS OF SECTION 153CCOME INTO PLAY ONLY WHEN WHERE THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS O F ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO A PERSON OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 OR WHOSE BOOKS O F ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE SEIZED UNDER SECTION 132A O F THE ACT. IN FACT, THE HONBLE GUJARAT HIGH COURT IN THE CASE OF VIJAYBH AI N CHANDRANI V. ACIT 333 ITR 436 (GUJ.) HAS OBSERVED THAT A CONDITION PRECED ENT FOR ISSUING NOTICE UNDER SECTION 153C AND ASSESSING OR RE-ASSESSING INCOME OF SUCH OTHER PERSON IS THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOUL D BELONG TO SUCH OTHER PERSON. IN OTHER WORDS, AS EXPLAINED BY THE HON BLE GUJARAT HIGH COURT, IF SUCH A REQUIREMENT IS NOT SATISFIED, RESORT CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C OF THE ACT. 14. IN TERMS OF THE AFORESAID, WE HAVE EXAMINED THE ISSUANCE OF NOTICE UNDER SECTION 153C IN THE PRESENT CASE. THOUGH IN THE N OTICE ISSUED ON 30.10.2006, IT IS STATED THAT IN THE CASE OF BAGADIA GROUP SEARCH ACTION WAS INITIATED U/S 132 OF THE INCOME-TAX ACT 1961 ON 29.7.20 03. IN THE SAID SEARCH CERTAIN BOOKS OF ACCOUNTS/DOCUMENTS/ASSETS SEIZED, BELONGS T O YOU. SO, HOWEVER, FROM THE ORDERS OF AUTHORITIES BELOW THERE D OES NOT EMERGE ANY SUCH POSITION. IN FACT, EVEN IN THE SATISFACTION NOTE DATE D 30.10.2006 ACCOMPANYING THE SAID NOTICE, REFERENCE HAS BEEN MADE TO FOREIGN GIF TS RECEIVED IN THE FOLLOWING MANNER: FURTHER IT IS SEEN THAT, THE ASSESSEE LADY HAS RECEIVED CERTA IN FOREIGN GIFTS FROM SHRI SOHAN GOENKA, NRI IN THE BANK ACCOUNTS O F BANK OF BARODA, PUNE BRANCH. THE DETAILS OF THE SAME ARE AS FO LLOWS: SB A/C NO. DATE AMOUNT 930075 23.12.1997 19,48,145 21.01.1999 21,19,391 28.11.2000 18,69,594 TOTAL 59,37,130 IT IS THUS EVIDENT THAT THERE IS NO MATERIAL SEIZED A T THE TIME OF SEARCH OF THE PERSON REFERRED TO IN SECTION 153A, WHICH COULD BE SAID T O BELONG TO THE ASSESSEE IN SO FAR AS IT RELATED TO THE FOREIGN GIFTS RECE IVED BY THE ASSESSEE. EVEN IF WE TAKE COGNIZANCE OF LETTER FROM JANATA SAHA KARI BANK LTD., PUNE REFERRED TO IN THE SAID SATISFACTION NOTE, IT DOES NOT FIT INTO MATERIAL REFERRED TO IN SECTION 153C SO AS TO TRIGGER PROVISIONS THEREOF. IN F ACT, IT IS QUITE CLEAR THAT NO INCRIMINATING MATERIAL WHATSOEVER HAS BEEN FOUND WH ICH WOULD SHOW THAT PROVISIONS OF SEC TON 153C GET TRIGGERED. THE MERE MEN TION IN THE SATISFACTION NOTE OF FOREIGN GIFTS HAVING BEEN FOUND TO BE BOGUS I N THE CASE OF OTHER FAMILY MEMBERS, DOES NOT AMOUNT TO THE SATISFACTION OF REQUIR EMENTS OF SECTION 153C OF THE ACT. IN FACT, THE HONBLE GUJARAT HIGH COURT I N PARA 12 OF THE ORDER HAS OBSERVED AS UNDER: 12. ON A PLAIN READING OF THE AFORESAID PROVISIONS IT IS APPARENT THAT SECTIONS 153A, 153B AND 153C LAY DOWN A SCHEME FOR ASSESSMEN T IN CASE OF SEARCH AND REQUISITION. SECTION 153A DEALS WITH PROCEDURE FOR ISSUANCE OF NOTICE AND ASSESSMENT OR REASSESSMENT IN CASE OF THE PERSON WHERE A SEARC H IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003. SECTION 153B LAYS DOWN THE TIME LIMIT FOR COMPLETION OF ASSESSMENT UNDER SECTION 153A. SECTION 153C WHIC H IS SIMILARLY WORDED TO SECTION 158BD OF THE ACT, PROVIDES THAT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A HE SHALL PROCEED AGAINS T EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS IN COME OF SUCH OTHER PERSON HOWEVER, THERE IS A DISTINCTION BETWEEN THE TWO PRO VISIONS INASMUCH AS UNDER SECTION 153C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED OR REQUISITIONED BELONG TO SUCH OTHER PERSON, WHEREAS UNDER SECTION 158BD IF THE ASSESSING OFFICER IS SATISFIED THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER SECTION 132 O R WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER SECTION 132A, HE SHALL PROCEED AGAINST SUCH OTHER PERSON UNDER SECTION 158BC. 15. IN TERMS THEREOF, IT IS CLEAR THAT WHEREAS IN THE E RSTWHILE SECTION 158BD A SATISFACTION WAS TO BE ACHIEVED AS TO WHETHER ANY UNDI SCLOSED INCOME BELONGS TO THE OTHER PERSON OR NOT. IN SO FAR AS SECTION 153C IS CONCERNED, IT DOES NOT REQUIRE THE ASSESSING OFFICER OF THE SEARCHED PER SON TO SATISFY THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON OTHER THAN THE PERSON IN RESPECT OF WHOM SEARCH WAS MADE. THE ONLY REQUIREMENT BE ING THAT MONEY, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO SUCH OTHER PERSON. AT THIS POINT, WE MAY ALSO NOTE THAT IN THE COURSE OF HEAR ING WHEN A POINT WAS RAISED BY THE ASSESSEE THAT NO SATISFACTION HAS BEEN RECOR DED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON WHEREAS THE SATISFA CTION NOTE DATED 30.10.2006 HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE ASSESSEE WHO IS SUBJECT TO 153C ASSESSMENT, THE LEARNED DEPARTMENTAL R EPRESENTATIVE WAS ALLOWED OPPORTUNITY TO PRODUCE THE RELEVANT RECORD SO AS TO ESTABLISH THAT THE ASSESSING OFFICER OF THE PERSON SEARCHED/STATED IN SECTION 15 3A OF THE ACT HAS RECORDED ANY SUCH SATISFACTION. THE LEARNED DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT INDEED NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE PERSON SEARCHED. ON THIS COUNT ALSO, IN O UR VIEW, THE ASSUMPTION OF JURISDICTION IS BAD IN LAW. 16. IN VIEW OF THE FOREGOING DISCUSSION, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AND HOLD THAT THE IMPUGNED ASSESSMENTS MADE FOR THE ASSESSMENT YEARS 1998-99, 1999-2000 AND 2001- 02 IN PURSUANCE TO SECTION 153C OF THE ACT ARE BAD IN LAW AND ARE ACCORDINGLY CANCELLED. 17. AS THE ASSESSEE HAS SUCCEEDED ON THE PRELIMINARY GROUND OF JURISDICTION, WE DO NOT DWELL UPON GROUND OF APPEAL R AISED BY THE ASSESSEE ON THE MERIT OF THE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF THE FOREIGN GIFT RECEIVED FROM THE MATERNAL UNCLE-IN-LAW. AS A CONSEQUENCE THEREOF, THE GROUND OF APPEAL OF THE REVENUE IS DISMI SSED. 18. IN THE RESULT, APPEALS OF THE ASSESSEE, VIDE ITA NOS 898, 899, & 900/PN/10 ARE ALLOWED, WHEREAS CROSS-APPEALS OF THE REVE NUE VIDE ITA NOS 901, 902 & 903/PN/10 ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY, 2012. SD/- SD/- (I C SUDHIR) (G.S . PANNU) JUDICIAL MEMBER ACCOUNTANT MEMB ER PUNE DATED: 30 TH JANUARY, 2012 B COPY TO:- 1) ASSESSEE 2) ACIT CEN. CIR. 2(1) PUNE 3) THE CIT (A)-IV, PUNE 4 THE CIT CEN. PUNE 5) DR, A BENCH, I.T.A.T.,PUNE. 6) GUARD FILE TRUE COPY BY ORDER SR. PS, ITAT PUNE