M/s. Shree Raghuram Grih Pvt. Ltd., V. ACIT, Kanpur

ITA 92/LKW/2011

• Counselvise Citation: 9223714 RSA 2011
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-11-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 21-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Loose papers; Block assessment; Documents seized
• Section: 142(1); 153A; 68; 132; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI B. R. JAIN , ACCOUNTANT MEMBER ITA NO S . 92 & 93/LKW/2011 ASSESSMENT YEAR S : 2002 - 03 AND 2003 - 04 M/S RAGHU RAM GRIH PVT. LTD. SEWA K SADAN, MAHESHWARI DEVI ROAD BANDA V. ACIT RANGE 4, KANPUR PAN: AFKPS3292P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI. AMIT SHUKLA, ADVOCATE RESPONDENT BY: SHRI. PRAVEEN KUMAR, CIT (DR) DATE OF HEARING: 23.11.2011 DATE OF PRONOUNCEMENT: 06.01 .2012 O R D E R PER S UNIL KUMAR YADAV : THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) DATED 13.12.2010 PERTAINING TO ASSESSMENT YEAR S 2002 - 03 AND 2003 - 04 ON VARIOUS COMMON GROUNDS. 2 . THE MAIN GROUND RAISED IN THESE APPE ALS RELATE S TO THE VALIDITY OF ASSESS MENT FRAMED CONSEQUENT TO THE NOTICE ISSUED UNDER SECTION 153A OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED IN SHORT THE ACT) READ WITH SECTION 153C OF THE ACT WITHOUT REQUISITE SATISFACTION OF THE CONCERNED ASSE SSING OFFICER WHO HAS INITIATED ACTION UNDER SECTION 153A OF THE ACT BEFORE HANDING OVER THE RELEVANT MATERIALS TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE. : - 2 - : 3 . BRIEFLY THE FACTS BORNE OUT FROM THE RECORD ARE THAT THE OFFICERS OF THE CENTRAL EXCISE DEPARTMENT SEARCHED THE RESIDENTIAL PREMISES OF THE MANAGING DIRECTOR ON 8.6.2002 AND SEIZED CERTAIN DOCUMENTS, COMPUTER AND CASH. CONSEQUENTLY A W ARRANT OF AUTHORIZATION UNDER SECTION 132A OF THE ACT WAS ISSUED ON 7.8.2003 TO REQUIRE THE JOINT CO MMISSIONER OF CENTRAL EXCISE, ALLAHABAD IN THE CASE OF M/S CHANDRA KAMAL CORPORATION, M/S V IRAT OVERSEAS PVT. LTD., BANDA AND OTHERS TO DELIVER THE SEIZED ASSETS, BOOKS OF ACCOUNT AND OTHER DOCUMENTS RELATING THERETO TO THE REQUISITIONING AUTHORITY. DURIN G THE COURSE OF REQUISITION PROCEEDINGS UNDER SECTION 132A OF THE ACT, IT WAS INFORMED BY THE JOINT COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD TELEPHONICALLY THAT AN AMOUNT OF ` 50,80,905 WAS DEPOSITED IN THE ACCOUNT OF M/S SHRI RAGHU RAM GRIH PVT. LTD. AND SHRI CHANDRA MOHAN SAHU, WHO WAS THE MANAGING DIRECTOR OF THE COMPANY. THE OPERATION OF BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH UNION BANK OF INDIA, STATION ROAD, BANDA WAS PROHIBITED UNDER SECTION 281B OF THE ACT AFTER TAKING APPROVAL OF THE COMMISS IONER OF INCOME - TAX - II, KANPUR. BEFORE MAKING ATTACHMENT UNDER SECTION 281B OF THE ACT, NECESSARY ACTION UNDER SECTION 153A READ WITH SECTION 153C OF THE ACT WAS TAKEN. ACCORDINGLY NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT AND QUESTIONNAIRES WER E ISSUED. IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A READ WITH 153C OF THE ACT ON 22.12.2004, THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 27.1.2005 AT NIL INCOME. ACCOR D INGLY ASSESSMENT WAS FRAMED IN THE HANDS OF THE ASSESSEE UNDER SECTION 153 C R EAD WITH 153 A OF THE ACT. WHILE FRAMING THE ASSESSMENT, SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE WAS DOUBTED AND ADDITION OF ` 51,70,000 WAS MADE UNDER SECTION 68 OF THE ACT. 4 . AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A) AND VALIDITY OF ACTION INIT IATED UNDER SECTION 153C OF THE ACT WAS CHALLENGED BESIDES CHALLENGING THE ISSUE ON MERITS I.E. ADDITION MADE UNDER SECTION 68 OF THE ACT. IT WAS EMPHATICALLY ARGUED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT SEARCH WAS : - 3 - : CONDUCTED BY THE OFFICERS OF CENTRA L EXCISE DEPARTMENT UPON M/S CHANDRA KAMAL CORPORATION, M/S VIRAT OVERSEAS PVT. LTD. AND OTHERS AND CERTAIN DOCUMENTS, COMPUTER AND CASH WERE SEIZED. CONSEQUENT LY A WARRANT OF AUTHORIZATION UNDER SECTION 132A OF THE ACT WAS ISSUED ON 7.8.2003 REQUIRING TH E JOINT COMMISSIONER OF CENTRAL EXCISE, ALLAHABAD IN THE CASE OF M/S CHANDRA KAMAL CORPORATION, M/S VIRAT OVERSEAS PVT. LTD. AND OTHERS TO DELIVER THE SEIZED ASSETS/DOCUMENTS RELATING THERETO TO THE REQUISITIONING AUTHORITY SO THAT THE ASSESSING OFFICER HA VING JURISDICTION OVER M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. MAY FRAME THE ASSESSMENT UNDER SECTION 153A OF THE ACT. IN THE CASE OF THE ASSESSEE , NO MATERIAL WAS RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSES SEE FROM THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED/REQUISITIONED PARTIES I.E. M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. AFTER VALID SATISFACTION RECORDED BY HIM. THEREFORE, INITIATION OF PROCEEDINGS UNDER SECTION 153 C READ WITH SECTION 153 A OF THE ACT IS NOT VALID , AND THE ASSESSMENT FRAMED CONSEQUENT THERETO IS NOT SUSTAINABLE IN THE EYES OF LAW. THE CONTENTIONS OF THE ASSESSEE WERE EXAMINED BY THE LD. CIT(A), BUT THE ASSESSEE DID NOT FIND FAVOUR WITH HIM . THE CLAI M OF THE ASSESSEE ON MERIT WAS ALSO REJECTED BY THE LD. CIT(A). 5 . AGGRIEVED, THE ASSESSEE PREFERRED APPEALS BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT NO INCRIMINATING DOCUMENT OR MATERIAL WAS RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE FROM THE ASSESSING OFFICER OF THE SE ARCHED OR REQUISITIONED PARTIES I.E. M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. UPON WHOM SEARCH WAS CONDUCTED BY THE CENTRAL EXCISE DEPARTMENT AND CERTAIN DOCUMENTS, COMPUTER AND CASH WERE S EIZED. MOREOVER, NOTHING IS AVAILABLE ON RECORD THAT SATISFACTION WAS EVER RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED OR REQUISITIONED PARTIES THAT A PARTICULAR DOCUMENT OR MATERIAL PERTAINS TO THE ASSESSEE. IN THE ABSENCE OF VALID : - 4 - : SATISFACTION AND HANDING OVER OF RELEVANT MATERIALS TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE, DIRECTION TO INITIATE PROCEEDINGS UNDER SECTION 153 C READ WITH SECTION 153 A OF THE ACT DESERVES TO BE KNOCKED DOWN AS IT IS NOT SUSTA INABLE IN THE EYES OF LAW. 6 . THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE OFFICE NOTE (CONFIDENTIAL) OF THE ASSISTANT COMMISSIONER OF INCOME - TAX - 4, KANPUR I.E. THE ASSESSING OFFICER WITH THE SUBMISSION THAT THE ADDITIONAL CIT, RANGE VI , KANPUR HAS RECEIVED A LETTER IN WHICH IT IS MENTIONED THAT A SEARCH WAS CONDUCTED BY THE PREVENTIVE DEPARTMENT OF CENTRAL EXCISE AND VARIOUS BOOKS OF ACCOUNT, DOCUMENTS AND LOOSE PAPERS WERE SEIZED. THEREAFTER WARRANT OF AUTHORIZATION UNDER SECTION 132A OF THE ACT WAS ISSUED BY THE DIRECTOR GENERAL OF INCOME - TAX (INVESTIGATION) ON 7.8.2003 IN THE CASE OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. DURING THE COURSE OF REQUISITION PROCEEDINGS UNDER SECTION 132A OF THE ACT, IT WAS INFOR MED BY THE JOINT COMMISSIONER (PREVENTIVE), CENTRAL EXCISE, ALLAHABAD TELEPHONICALLY THAT AN AMOUNT OF ` 50,80,905 WAS DEPOSITED IN THE ACCOUNT OF M/S SHRI RAGHU RAM GRIH PVT LTD AND SHRI CHANDRA MOHAN SAHU, MANAGING DIRECTOR OF THE COMPANY. IT WAS ALSO ME NTIONED IN THE OFFICE NOTE THAT THE ACCOUNTS OF THE ASSESSEE WAS ATTACHED AND BEFORE MAKING ATTACHMENT UNDER SECTION 281B OF THE ACT NECESSARY ACTION UNDER SECTION 153A READ WITH 153C OF THE ACT WAS TAKEN. THE LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED OUR ATTENTION TO THE ORDER OF THE LD. CIT(A) IN WHICH IT IS MENTIONED THAT THE CASES WERE CENTRALIZED UNDER SECTION 127 OF THE ACT WITH ACIT, CIRCLE - 4, KANPUR VIDE ORDER DATED 3.1.2006 BY THE COMMISSIONER OF INCOME - TAX - II, KANPUR. THEREAFTER NOTICE UNDER SECTION 143(2) OF THE ACT WITH WRITTEN QUESTIONNAIRE DATED 5.1.2006 WAS ISSUED TO THE ASSESSEE . M EANING THEREBY THAT BEFORE 3.1.2006 THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE , M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD . WE RE DIFFERENT. THE LD. COUNSEL FOR THE ASSESSEE : - 5 - : FURTHER INVITED OUR ATTENTION TO THE WRIT PETITION FILED BY THE ASSESSEE AGAINST BANK ATTACHMENT PROCEEDINGS AND THEIR LORDSHIPS OF THE JURISDICTIONAL HIGH COURT HAVE CATEGORICALLY GIVEN A FINDING THAT NO MATERIAL OR SEIZED DOCUMENT PERTAINING TO THE ASSESSEE WAS FOUND DURING THE COURSE OF REQUISITION UNDER SECTION 132A OF THE ACT IN THE CASE OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. THE DOCUMENTS THUS SEIZED BY THE CENTRAL EXCISE DEPARTMENT AND ALSO REQUISITIONED BY THE INCOME - TAX DEPARTMENT DO NOT RELATE TO THE BUSINESS ACTIVITIES OF THE PETITIONER I.E. THE ASSESSEE. AS A MATTER OF FACT ENQUIRIES ON THE BASIS OF THESE DOCUMENTS ARE DIRECTED BY THE DEPARTMENT AGAINST CERTAIN PERSO NS OTHER THAN THE PETITIONER I.E. THE ASSESSEE . 7 . THE LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED OUR ATTENTION TO THE ASSESSMENT ORDER PASSED IN THE CASES OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. WITH THE SUBMISSION THAT IN THESE C ASES NOTICE UNDER SECTION 153A READ WITH SECTION 142 OF THE ACT WAS ISSUED ON 24.2.2006 ON THE BASIS OF MATERIAL S COLLECTED FROM THE CENTRAL EXCISE DEPARTMENT AND THE ASSESSEE HAS BEEN REQUESTED TO FILE RETURN ON 13.3.2006 AND IN RESPONSE THERETO THE ASSES SEE S FILED THEIR RETURN S ON 13.3.2006 DECLARING NIL INCOME . M EANING THEREB Y BEFORE 24.2.2006 THERE IS NO FORMATION OF BELIEF OR SATISFACTION BY THE ASSESSING OFFICER HAVING JURISDICTION OVER M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. T HAT THE MATERIALS COLLECTED FROM THE CENTRAL EXCISE DEPARTMENT UNDER SECTION 153A OF THE ACT PERTAINS TO THE ASSESSEE. YET NOTICE UNDER SECTION 153 A READ WITH SECTION 153 C OF THE ACT WAS ISSUED TO THE ASSESSEE ON 22.12.2004. THE LD. COUNSEL FOR THE ASSES SEE FURTHER CONTENDED THAT AT THE TIME OF ISSUANCE OF NOTICE UNDER SECTION 153C OF THE ACT THERE WAS NO SATISFACTION BY ANY OF THE ASSESSING OFFICER WHO HAS REQUISITIONED THE MATERIAL DURING PROCEEDINGS UNDER SECTION 153A OF THE ACT THAT THE MATERIALS SOUG HT IN FACT PERTAINS TO THE ASSESSEE. THEREFORE, THE ACTION : - 6 - : INITIATED UNDER SECTION 153C OF THE ACT IS NOT IN ACCORDANCE WITH LAW AND DESERVES TO BE SET ASIDE. 8 . THE LD. COUNSEL FOR THE ASSESSEE, SHRI AMIT SHUKLA FURTHER INVITED OUR ATTENTION TO THE PROVISIO NS OF SECTION 153A AND 153C OF THE ACT WITH THE SUBMISSION THAT UNDER SECTION 153A OF THE ACT ASSESSMENT IS FRAMED IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUI SITIONED UNDER SECTION 132A OF THE ACT AFTER THE 31ST DAY OF MAY, 2003 . BUT SECTION 153C OF THE ACT CAN ONLY BE INVOKED WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR D OCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 153A OF THE ACT . THER EFORE, FOR INITIATING ACTION UNDER SECTION 153C OF THE ACT, THERE SHOULD BE AN ACTION UNDER SECTION 153A OF THE ACT UPON SOME OTHER ASSESSEE WHERE THE ASSESSING OFFICER CAN FORM A BELIEF OR SATISFACTION THAT THE MATERIAL SEIZED OR REQUISITIONED BELONGS TO THE PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT . BUT IN THE INSTANT CASE, THE ACTION UNDER SECTION 153C OF THE ACT IS TAKEN BEFORE INITIATING AN ACTI O N UNDER SECTION 153A OF THE ACT UPON M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE FOLLOWING JUDGMENTS: - 1 . ACIT V. M.N. RAJARAM [2010] 5 ITR (TRIB) 261 (CHENNAI) 2 . MEGHMANI ORGANICS LTD. V. DCIT [2010] 6 ITR (TRIB) 360 (AHMEDABAD). : - 7 - : 3 . JINDAL STAINLESS LTD. V. ACIT [2009] 122 TTJ (DEL) 902. 4 . ANIL KUMAR BHATIA & ORS. V. ACIT [2010] 1 ITR (TRIB) 484. 5 . DCIT V. SHRI. RAJ KUMAR ARORA (ITA NO. 290/LUC/2009 FOR ASSESSMENT YEAR 2000 - 01). 6 . CIT V. LOVELY EXPORTS (P) LTD [2008] 216 CTR (SC) 195. 7 . JAYA SECURITIES LTD. V. CIT [2008] 166 TAXMAN 7 (ALL.) 8 . VIJAYBHAI N. CHANDRANI V. ACIT [2011] 333 ITR 436 (GUJ.) 9 . ON MERIT, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED HEAVY RELIANCE UPON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPO RTS PVT. LTD., 319 ITR 5 (SC) WITH THE SUBMISSION THAT NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE EVEN IF THE SHARE APPLICATION MONEY WAS DOUBTED . I T CAN AT THE MOST BE ADDED IN THE HANDS OF THE SHARE APPLICANTS. 10 . THE LD. CIT (DR), MR. PRAVEEN KUMAR, ON THE OTHER HAND, HAS SUBMITTED THAT ON RECEIPT OF INFORMATION FROM THE CENTRAL EXCISE DEPARTMENT AND THE ADDITIONAL CIT, RANGE VI, ACTION WAS INITIATED UNDER SECTION 153C READ WITH SECTION 153A OF THE ACT. SHRI. P RAVEEN KUMAR , LD. CIT (DR) FURTHE R PLACED HEAVY RELIANCE UPON THE OFFICE NOTE OF THE ASSESSING OFFICER IN WHICH HE HAS MENTIONED THE FULL DETAILS OF THE INFORMATION RECEIVED BY HIM. THEREFORE, IT CANNOT BE SAID THAT ACTION UNDER SECTION 153C OF THE ACT WAS INITIATED WITHOUT APPLICATION O F PROPER MIND. HE HAS ALSO PLACED HEAVY RELIANCE UPON THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V. P A N CHAJANYAM MANAGEMENT AGENCIES & SERVICES [2011] 239 CTR (KERAL) 424 IN WHICH THEIR LORDSHIPS HAVE OBSERVED THAT WHILE INITIATING P ROCEEDINGS UNDER SECTION 158 BD OF THE ACT , THERE IS NO NECESSITY FOR TRANSFERRING THE FILE FROM ONE OFFICER TO ANOTHER WHERE THE ASSESSING OFFICER , WHO HAD JURISDICTION TO ASSESS SEARCHED A SSESSEE , IS THE VERY SAME OFFICER WHO HAS JURISDICTION TO ASSESS TH E FIRM : - 8 - : BECAUSE THE PERSON SEARCHED IS THE MANAGING PARTNER AND BASED ON THE MATERIAL GATHERED DURING SEARCH ASSESSMENT IS MADE ON THE PARTNERSHIP FIRM. IT WAS FURTHER OBSERVED THAT THERE IS NO MENTION IN SECTION 158BD OF THE ACT THAT THE ASSESSING OFFICER BEFORE TRANSFERRING THE FILE TO ANOTHER OFFICER HAVING JURISDICTION TO ASSESS THE PERSON OTHER THAN THE ASSESSEE PROCEEDED UNDER SECTION 132 OR 132A OF THE ACT HAS TO RECORD HIS SATISFACTION IN WRITING. THEREFORE, THERE IS NO REQUIREMENT IN SECTION 158BD OF THE ACT THAT SATISFACTION IS RECORDED BEFORE TRANSFERRING THE RECORD. 11 . SHRI. P RAVEEN KUMAR , LD. CIT ( D.R. ) FURTHER PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. OASIS HOSPITALITIES (P) LTD. (DEL) 333 ITR 119 IN SUPPORT OF HIS CONTENTION THAT BURDEN IS UPON THE ASSESSEE TO EXPLAIN THE NATURE AND SOURCE OF THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AND IF HE FAILS TO DO SO, ADDITION CAN BE MADE. BESIDES, THE LD. CIT (DR) HAS ALSO PLACED HEAVY RELIANCE UP ON THE ORDER OF THE LD. CIT(A). 12 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE DOCUMENTS PLACED ON RECORD, WE FIND THAT THE ASSESSMENT IN THE HANDS OF THE ASSESSEE WAS FRAMED UNDER SECTION 153C READ WITH SECTION 153A OF THE ACT. UNDISPUTEDLY THE SEARCH WAS CONDUCTED BY THE OFFICERS OF THE CENTRAL EXCISE DEPARTMENT O N THE PREMISES OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. ON 8.6.2002 AND SEIZE D CERTAIN DOCUMENTS, COMPUTER AND CASH. CONSEQUENT UPON, WARRANT OF AUTHORIZATION UNDER SECTION 132A OF THE ACT WAS ISSUED ON 7.8.2003 TO REQUIRE THE JOINT COMMISSIONER, CENTRAL EXCISE DEPARTMENT IN THE CASE OF M/S CHANDRA KAMAL CORPORATION, M/S VIRAT OVE RSEAS PVT. LTD. AND OTHERS TO DELIVER THE SEIZED ASSETS, BOOKS OF ACCOUNT AND OTHER DOCUMENTS RELATING THERETO. ON THE BASIS OF MATERIALS COLLECTED FROM THE CENTRAL EXCISE DEPARTMENT, NOTICE UNDER SECTION 153A READ WITH SECTION 142 OF THE ACT DATED 24.2.2 006 WAS : - 9 - : ISSUED TO M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. REQUESTING THEM TO FILE THEIR RETURN OF INCOME ON 13.3.2006. IN THE HANDS OF THE ASSESSEE ACTION WAS TAKEN UNDER SECTION 153C READ WITH SECTION 153A OF THE ACT BY ISSUING NOT ICE UNDER THE SAID SECTION ON 24.12.2004 AND THE SAME WAS SERVED UPON THE ASSESSEE ON 13.1.2005. IN RESPONSE THERETO , RETURN WAS FILED ON 27.1.2005. 13 . UNDISPUTEDLY N EITHER SEARCH WAS CONDUCTED BY THE CENTRAL EXCISE DEPARTMENT UPON THE ASSESSEE NOR ANY ACT ION WAS INITIATED UNDER SECTION 132A OF THE ACT BY THE REVENUE AUTHORITIES REQUESTING THE CENTRAL EXCISE DEPARTMENT FOR HANDING OVER ANY MATERIALS RELEVANT TO THE ASSESSEE. THUS, NO ACTION WAS INITIATED UNDER SECTION 153A OF THE ACT IN THE CASE OF THE ASS ESSEE. THE REVENUE HAS ISSUED A NOTICE FIRST TIME UPON THE ASSESSEE UNDER SECTION 153A READ WITH SECTION 153C OF THE ACT ON 22.12.2004 WHICH WAS SERVED UPON THE ASSESSEE ON 13.1.2005 ON THE BASIS OF LETTER RECEIVED BY THE ADDITIONAL CIT RANGE VI, KANPUR O N 22.12.2004. NOW QUESTION ARISES WHETHER THE NOTICE UNDER SECTION 153A READ WITH SECTION 153C OF THE ACT CAN BE ISSUED ON THE BASIS OF A LETTER RECEIVED BY THE ADDITIONAL CIT ON 22.12.2004. IN ORDER TO UNDERSTAND THE SCHEME OF FRAMING ASSESSMENT IN CASE OF SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT AND DOCUMENTS REQUISITIONED UNDER SECTION 132A OF THE ACT, WE HAVE TO EXAMINE THE PROVISIONS OF SECTIONS 153A TO 153D OF THE ACT BROUGHT ON THE STATUTE BY THE FINANCE ACT, 2003 W.E.F. 1.6.2003. THESE PROVI SIONS HAVE REPLACED THE EARLIER PROVISIONS RELATING TO SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES IN SECTION 158B TO 158BI OF THE ACT. IN THE INSTANT CASE, THE ACTION WAS TAKEN IN THE HANDS OF THE ASSESSEE UNDER SECTION 153C READ WITH SECTION 153A O F THE ACT CONSEQUENT TO THE SEARCH CONDUCTED UPON M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. BY THE PREVENTIVE DEPARTMENT OF CENTRAL EXCISE ON 7.8.2003. THEREFORE, PROVISIONS OF SECTIONS 153A TO 153 C OF THE ACT STAND APPLICABLE IN THE : - 10 - : PRESENT CASE TO FRAME ASSESSMENT. FOR THE SAKE OF REFERENCE, WE PREFER TO REPRODUCE THE SECTION 153A AND 153C OF THE ACT AS UNDER: - [ASSESSMENT IN CASE OF SEARCH OR REQUISITION. 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESS ING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH P ERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN 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, A PPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SE CTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT 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 SHALL ASSESS O R REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB - SECTION] PENDING 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. ASSESSMENT OF INCOME OF ANY OTHER PERSON. 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 OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELO NGS 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 OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSIN G OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR : - 11 - : 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 SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO 97[SUB - SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR AS SETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON.] 14 . FROM THE PLAIN READING OF THESE SECTIONS, WE FIND THAT SECTION 153A IS A PROCEDURAL SECTION WHICH DEALS WITH THE MODE OF ASSESSMENT. A NOTICE UNDER SECTION 153A OF THE ACT CAN ONLY BE ISSUED TO SUCH PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A OF THE ACT AFTER THE 31ST DAY OF MAY, 2003, REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE, RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEAR S IMMEDIATELY PRECEDING ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUI SITION IS MADE. THEREAFTER ASSESSMENT WOULD BE FRAMED AS PER PROVISIONS OF SECTION 143 OF THE ACT. SECTION 153C OF THE ACT DEALS WITH THE SITUATION WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR T HING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE A SSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF S ECTION 153A OF THE ACT . MEANING THEREBY THAT ACTION UNDER SECTION 153C OF THE ACT ALWAYS DEPENDS UPON THE ACTION TAKEN UNDER SECTION 153A UPON SOME OTHER PERSON. THE ASSESSING OFFICER OF THE PERSON IN WHOSE CASE SEARCH WAS CONDUCTED IF : - 12 - : SATISFIED THAT MON EY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONG TO SOME OTHER PERSON , HE AFTER FORMING A BELIEF TO THIS EXTENT SHALL HANDOVER THE RELEVANT MATERIAL TO THE CONCERNED ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSONS . THEREFORE, W ITHOUT INITIATING ACTION UNDER SECTION 153A OF THE ACT UPON A PERSON, ACTION UNDER SECTION 153C OF THE ACT CANNOT BE INITIATED UPON SOME OTHER PERSON. 15 . THE SCOPE OF SECTIONS 153A AND 153C OF THE ACT WAS EXAMINED BY DIFFERENT BENCHES OF THE TRIBUNAL AND VARIOUS HIGH COURTS. IN THE CASE OF ACIT V. M.N. RAJARAM [2010] 5 ITR (TRIB) 261 (CHENNAI), IT WAS HELD THAT SEARCH ASSESSMENT PROCEEDINGS AS CONTEMPLATED UNDER CHAPTER XIV - B CANNOT BE EQUATED WITH SE ARCH ASSESSMENT PROCEEDINGS UNDER SECTION S 153A TO 153D OF THE ACT. BLOCK ASSESSMENT PROCEEDINGS REFER TO SEARCH MATERIALS FOR MAKING AN ASSESSMENT PURSUANT TO SEARCH, WHEREAS SECTION 153C ALONG WITH SECTION 153A OF THE ACT DO NOT REQUIRE THAT THE ASSESSM ENTS HAVE TO BE MADE ONLY WITH REFERENCE TO THE MATERIALS SEIZED AT THE TIME OF SEARCH. BOTH THE SECTIONS SPEC IFY THAT THE ASSESSING OFFICER HA S TO BE SATISFIED. THE S ATISFACTION UNDER SECTION 158BD OF THE ACT REFERS TO UNDISCLOSED INCOME BELONGING TO AN Y PERSON OTHER THAN THE PERSON SEARCHED WHEREAS SATISFACTION UNDER SECTION 153C OF THE ACT IS WITH REGARD TO MONEY, BULLION, JEWELLERY, OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED BELONGING TO ANY PERSON OTHER THAN THE PERSON SEARCHED. THE TRIBUNAL HOWEVER HELD THAT SATISFACTION OF THE ASSESSING OFFICER NEED NOT BE SPECIFICALLY STATED IN SO MANY TERMS BUT IT SHOULD BE DISCERNIBLE FROM THE RECORDING MADE BY THE ASSESSING OFFICER. 9 . IN THE CASE OF MEGHMANI ORGANICS LTD. V. DCIT [ 201 0] 6 ITR (TRIB) 360 (AHMEDABAD), THE TRIBUNAL HAS AGAIN REITERATED THE SAME LEGAL PRO POSITION. : - 13 - : 10 . IN THE CASE OF JINDAL STAINLESS LTD. V. ACIT [2009] 122 TTJ (DEL) 902, THE TRIBUNAL HAS HELD THAT THE ASSESSING OFFICER OF THE PERSON ON WHOM THE SEARCH IS CO NDUCTED HAS TO SATISFY HIMSELF THAT THE VALUABLE ARTICLES OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED DURING THE COURSE OF SEARCH BELONG TO A PERSON OTHER THAN THE PERSON ON WHOM THE SEARCH IS MADE , THEN THAT THE ASSESSING OFFICER SHALL HANDOVER SUCH VALUABLE ARTICLE OR BOOKS OF ACCOUNT TO THE ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON AND NOTICE WILL BE ISSUED ACCORDINGLY UNDER SECTION 153C OF THE ACT. IF THERE IS NO SEARCH IN THE CASE OF THE ASSESSEE, NO ASSESSMENT COULD BE MADE UNDER SECT ION 153A OF THE ACT OR 153C OF THE ACT WITHOUT FOLLOWING THE PROCEDURE PRESCRIBED THEREIN. 11 . IN THE CASE OF VIJAYBHAI N. CHANDRANI V. ACIT [2011] 333 ITR 436 (GUJ.), THEIR LORDSHIPS OF THE HON'BLE GUJARAT HIGH COURT HAVE EXAMINED PROVISIONS OF SECTIONS 153A, 153B, 153C AND 158BD OF THE ACT WHICH ARE SIMILARLY WORDED TO SECTION 153C OF THE ACT AND HELD AS UNDER: - ON A PLAIN READING OF THE AFORESAID PROVISIONS IT IS APPARENT THAT SECTIONS 153A, 153B AND 153C LAY DOWN A SCHEME FOR ASSESSMENT IN CASE OF SEARCH A ND REQUISITION. SECTION 153A DEALS WITH PROCEDURE FOR ISSUANCE OF NOTICE AND ASSESSMENT OR REASSESSMENT IN CASE OF THE PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003. SECTION 153B LAYS DOWN THE TIME LIMIT FOR COMPLETION OF ASSESSMENT UNDER SECTION 153A. SECTION 153C WHICH IS SIMILARLY WORDED TO SECTION 158BD OF THE ACT, PROVIDES THAT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONE Y, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A HE SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER : - 14 - : PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON. HOWEVER, THERE IS A DISTINCTION BETWEEN THE TWO PROVISIONS INASMUCH AS UNDER SECTION 153C NOTICE CAN BE ISSUED ONLY WHERE THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR TH ING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED 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 OR WHOSE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS WERE REQUISITIONED UNDER SECTION 132A, HE SHALL PROCEED AGAINST SUCH OTHER PERSON UNDER SECTION 158BC. THUS A CONDITION PRECEDENT FOR ISSUING NOTICE UNDER SECTION 153C AND A SSESSING OR REASSESSING 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 SHOULD BELONG TO SUCH PERSON. IF THE SAID REQUIREMENT IS NOT SATISFIED, R ECOURSE CANNOT BE HAD TO THE PROVISIONS OF SECTION 153C OF THE ACT. 16 . WE HAVE CAREFULLY EXAMINED THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF MANISH MAHESHWARI V. ACIT, 289 ITR 341 RENDERED WITH RESPECT TO THE PROCEEDINGS UNDER SECTION 158BD OF THE ACT AND HAS CATEGORICALLY HELD AS UNDER: - WHERE THE PREMISES OF A DIRECTOR OF A COMPANY AND HIS WIFE WERE SEARCHED UNDER SECTION 132 OF THE INCOME - TAX ACT, 1961, AND A BLOCK ASSESSMENT HAD TO BE DONE IN RELATION TO THE COMPANY, THE ASSESSING OFFICER HAD TO (I) RECORD HIS SATISFACTION THAT ANY UNDISCLOSED INCOME BELONGED TO THE COMPANY, AND (II) HAND OVER THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AND ASSETS SEIZED TO THE ASSESSING OFFICER HAVING JURISDICTION AGAINST THE COMPANY. : - 15 - : 17 . WE HAVE CAREFULLY EXAMINED THE LANGUAGE USED IN SECTIONS 153C AND 158BD OF THE ACT AND THE MAIN DIFFERENCE IN THE LANGUAGE IS THAT IN SECTION 158BD THE SCOPE OF JURISDICTION OF THE ASSESSING OFFICER IS ONLY WITH RESPECT TO THE UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH WHE REAS IN SECTION 153C THE SCOPE OF JURISDICTION OF THE ASSESSING OFFICER IS WITH RESPECT TO ANY MONEY , BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS WITH RESPECT TO WHICH THE ASSESSING OFFICER SATISFY THAT IT BELONGS TO SUCH OTHER PERSON . BUT SO FAR AS REFERENCE TO WORD SATISFACTION IS MADE, IT IS SAME AS IS AVAILABLE IN SECTION 158BD OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE RATIO LAID DOWN IN THE CASE OF MANISH MAHESHWARI V. ACIT (SUPRA) WITH RESPECT TO THE POINT OF SATISFACTION WILL APPLY FOR INITIATING ACTION UNDER SECTION 153C OF THE ACT. 18 . THE REVENUE HAS PLACED HEAVY RELIANCE UPON THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF CIT V. PANCHAJANYAM MANAGEMENT AGENCIES & SERVICES [2011] 2 39 CTR (KERAL) 424 IN SUPPORT OF HIS CONTENTION THAT THE ASSESSING OFFICER IS NOT REQUIRED TO RECORD HIS SATISFACTION BEFORE TRANSFERRING THE FILE TO ANOTHER OFFICER HAVING JURISDICTION TO ASSESS THE PERSON OTHER THAN THE SEARCHED PERSON. FROM A CAREFUL P ERUSAL OF THIS JUDGMENT, WE FIND THAT IN THAT CASE THE ASSESSING OFFICER WAS THE SAME WHO WAS HAVING JURISDICTION OVER THE PERSONS SEARCHED AND THE PERSON TO WHOM SEARCH MATERIAL RELATES TO. THEREFORE, IN SUCH CIRCUMSTANCES IT MAY NOT BE NECESSARY TO RECO RD SATISFACTION WHILE HANDING OVER THE MATERIALS TO OTHER OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. BUT IN THE CASE OF MANISH MAHESHWARI V. ACIT (SUPRA), IT HAS BEEN CATEGORICALLY HELD BY THE HON'BLE APEX COURT THAT BEFORE HANDING OVER THE MATER IAL RELEVANT TO SUCH OTHER PERSON TO OTHER ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSON IS REQUIRED TO RECORD A SATISFACTION TO THIS EFFECT. : - 16 - : 19 . FROM A CAREFUL PERUSAL OF THE O RDER OF THE LD. CIT(A), WE FIND THAT ORDER UNDER SECTION 127 OF THE ACT CENTRALIZING ALL THESE CASES WERE PASSED ON 3.1.2006 BY THE COMMISSIONER OF INCOME - TAX - II, KANPUR CONFERRING JURISDICTION OVER ALL THE ASSESSE E S I.E. THE PERSONS SEARCHED OR REQUISITIO NED UNDER SECTION 132A OF THE ACT WAS SOUGHT AND THE ASSESSEE. MEANING THEREBY , BEFORE THIS ORDER DATED 3.1.2006 CENTRALIZING ALL CASES AND CONFERRING POWER TO THE ACIT, CIRCLE IV, KANPUR, THE ASSESSING OFFICER S W ERE DIFFERENT HAVING JURISDICTION OVER THE PERSONS SEARCHED OR REQUISITION ED AND THE ASSESSEE. THEREFORE, SATISFACTION OF THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERSONS SEARCHED OR REQUISITION ED UNDER SECTION 132A OF THE ACT IS NECESSARY. IT IS WORTHWHILE TO MENTION HERE THAT NOTICE UNDER SECTION 153C READ WITH 153A OF THE ACT WAS ISSUED ON 22.12.2004 ON RECEIPT OF LETTER BY THE ADDITIONAL CIT, KANPUR ON 22.12.2004. THEREFORE, AT THE TIME WHEN ACTION WAS INITIATED UNDER SECTION 153C OF THE ACT NOWHERE ASSESSMENT WAS PENDING IN THE CA SE S OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. INASMUCH AS ASSESSMENT WAS INITIATED IN THE CASE OF M/S CHANDRA KAMAL CORPORATION AND M/S VIRAT OVERSEAS PVT. LTD. BY ISSUING NOTICE UNDER SECTION 153A READ WITH SECTION 142 OF THE ACT O N 24.2.2006. 20 . PROVISIONS CONTAINED UNDER SECTION 153C OF THE ACT CAN ONLY BE INVOKED WHERE THERE WAS SATISFACTION BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERSON SEARCHED OR REQUISITION ED UNDER SECTION 132A DURING THE COURSE OF ASSESSMENT PROCE EDINGS. THEREFORE PROCEEDINGS UNDER SECTION 153A OF THE ACT ALWAYS PRECEDE THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. WITHOUT INITIATING ANY ACTION UNDER SECTION 153A OF THE ACT, ACTION UNDER SECTION 153C OF THE ACT CANNOT BE INITIATED AGAINST SOME O THER PERSONS. 21 . ON PERUSAL OF RECORD, WE FIND THAT IN THE INSTANT CASE, ACTION UNDER SECTION 153C OF THE ACT WAS INITIATED ON THE BASIS OF INFORMATION RECEIVED : - 17 - : BY THE ADDITIONAL CIT, RANGE IV, KANPUR ON 22.12.2004 WHICH IS NOT PERMISSIBLE UNDER THE LAW. THE RIGHT COURSE AVAILABLE WITH THE REVENUE IF THEY INTEND S TO IN ITIATE ACTION ON THE BASIS OF INFORMATION RECEIVED FROM SOME PERSON , T HEY C OULD INITIATE ACTION UNDER SECTION 153A OF THE ACT REQUIRING THE ASSESSEE TO FURNISH THE REQUISITE INFORMATION, BUT ACT ION UNDER SECTION 153C OF THE ACT IS NOT PERMISSIBLE UNDER THE LAW . THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT ACTION INITIATED BY THE ASSESSING OFFICER UNDER SECTION 153C OF THE ACT BY ISSUING NOTICE UNDER SECTION 153C READ WITH SECTION 153A OF THE ACT IS NOT SUSTAINABLE IN THE EYES OF LAW. WE, THEREFORE, KNOCK DOWN THE ASSESSMENT ORDER PASSED CONSEQUENT TO NOTICE ISSUED UNDER SECTION 153C READ WITH 153A OF THE ACT. 22 . SO FAR AS MERIT OF THE CASE IS CONCERNED, WE ARE OF THE VIEW THAT THE ISSUE IS SQUA RELY COVERED BY THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPORTS (P) LTD [2008] 216 CTR (SC) 195 IN WHICH THEIR LORDSHIPS HAVE CATEGORICALLY HELD THAT IF THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE - COMPANY FROM THE AL LEGED BOGUS SHAREHOLDERS WHOSE NAMES ARE GIVEN TO THE ASSESSING OFFICER, THE DEPARTMENT IS FREE TO REOPEN THEIR INDIVIDUAL ASSESSMENT IN ACCORDANCE WITH LAW . THE SIMILAR VIEW WAS TAKEN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF JAYA SECURITIES LTD. V . CIT [2008] TAXMAN 7 (ALL.). 23 . THE LD. CIT (DR) HOWEVER COMMENTED ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPORTS (P) LTD [2008] 216 CTR (SC) 195 AND PLACED RELIANCE UPON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CAS E OF CIT V. OASIS HOSPITALITIES (P) LTD. BUT NO CITATION OF THE JUDGMENT HAVE BEEN MENTIONED IN THE WRITTEN SUBMISSION FILED BY THE LD. CIT (DR). WE HOWEVER CAREFULLY EXAMINED OTHER JUDGMENTS CITED BY THE REVENUE AND WE FIND THAT THE IMPUGNED ISSUE IS SQU ARELY COVERED BY THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT V. LOVELY EXPORTS (P) LTD [2008] 216 CTR (SC) 195. WE, THEREFORE, DECIDE THE APPEAL ON : - 18 - : MERIT IN FAVOUR OF THE ASSESSEE AND DELETE THE ADDITIONS MADE BY THE ASSESSING OFFICER AND CO NFIRMED BY THE LD. CIT(A) ON ACCOUNT OF SHARE APPLICATION. 24 . SIMILAR ISSUES WERE RAISED IN ITA NO.93/LKW/2011 AND WE ACCORDINGLY DECIDE THEM IN FAVOUR OF THE ASSESSEE. 25 . ONE MORE GROUND IN ITA NO.93/LKW/2011 WAS RAISED WITH REGARD TO THE DISALLOWANCE S OF EXPEN SES AGGREGATING TO ` 1,62,000 UNDER VARIOUS HEADS. IN THIS REGARD, NO ARGUMENT WAS RAISED BY THE LD. COUNSEL FOR THE ASSESSEE. WE, HOWEVER, CAREFULLY PERUSED THE ORDER OF THE LD. CIT(A) AND FIND NO INFIRMITY THEREIN. WE ACCORDINGLY CONFIRM THE SAME. 26 . IN T HE RESULT, APPEAL OF THE ASSESSEE IN ITA NO.92/LKW/2011 IS ALLOWED AND IN ITA NO. 93/LKW/2011 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 6.1.2012. SD/ - SD/ - [B. R. JAIN ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6. 1.2012 JJ: 2912 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR