Sri. K. Asghar Khan, Hospet V. DCIT, Bangalore

ITA 928/BANG/2015

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8782 (ITAT-BANGALORE)
• Duration Of Justice: 6 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-07-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D ILIP JUNIOR
• Assessee Lawyers: V SRINIVASAN
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 201; 158BD; 153C; 132; 15

Judgement Text

ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.926/BANG/2015 ASSESSMENTYEAR: 2010-11 M/S. ARSHAD ISPAT KHAN BUILDING, COLLEGE ROAD BEHIND HDFC BANK HOSPET 583 201 PAN NO :AAPFM8139B VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2(3) BANGALORE APPELLANT RESPONDENT ITA NO.928 & 929/BANG/2015 ASSESSMENT YEAR: 2008-09 & 2010-11 SRI K. ASGHAR KHAN BESIDE COLLEGE GROUND COLLEGE ROAD HOSPET 583 201 PAN NO : ANJPK6608A VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2(3) BANGALORE APPELLANT RESPONDENT ITA NO.930 & 931/BANG/2015 ASSESSMENT YEAR: 2009-10 & 2010-11 M/S. ARSHAD EXPORTS KHAN BUILDING, COLLEGE ROAD BEHIND HDFC BANK HOSPET 583 201 PAN NO : AAOFA8098A VS. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2(3) BANGALORE APPELLANT RESPONDENT ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 2 OF 12 APPELLANT BY : SHRI V. SRINIVASAN, A.R. RESPONDENT BY : SHRI DILIP, JUNIOR STANDING COUNSEL FOR DEPARTMENT DATE OF HEARING : 29.07.2021 DATE OF PRONOUNCEMENT : 30.07.2021 O R D E R PERB.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEALS FILED BY THE RESPECTIVE ASSESSEES ARE D IRECTED AGAINST THE ORDERS PASSED BY LD. CIT(A)-11, BENGALU RU IN THEIR RESPECTIVE HANDS AND THEY RELATE TO THE ASSESSMENT YEARS MENTIONED IN THE CAPTION. IN ALL THESE APPEALS, TH ESEASSESSEES HAVE CHALLENGED THE VALIDITY OF INITIATION OF PROCEEDING S U/S 153C OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SHORT]. ACCORDI NGLY, ALL THESE APPEALS WERE HEARD ON THE ABOVE SAID PRELIMINARY IS SUE ONLY. 2. THE FACTS RELATING TO THE ABOVE SAID ISSUE ARE S TATED IN BRIEF. M/S. ARSHAD ISPAT AND M/S. ARSHAD EXPORTS ARE PARTN ERSHIP FIRMS. THE ASSESSMENTS IN ALL THE ABOVE SAID 5 CASES HAVE BEEN COMPLETED BY THE A.O. U/S 143(3) R.W.S. 153C OF THE ACT. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT IN THE CASE OF SHRI B. NAGENDRA. IN CONNECTION THEREWITH, THE P REMISES OF M/S. ARSHAD ISPAT& M/S. ARSHAD EXPORTS AND RESIDENCE OF MR. K. ASGHAR KHAN WERE ALSO SEARCHED ON 25.10.2010, I.E., THE PR EMISES OF THE ASSESSEES BEFORE US WERE SUBJECTED TO SEARCH AS PAR T OF SEARCH AND SEIZURE OPERATIONS CONDUCTED IN THE HANDS OF SHRI B NAGENDRA. SUBSEQUENTLY, ALL THE CASES WERE CENTRALIZED WITH D EPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2(3), B ENGALURU. HENCE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND OTHER ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 3 OF 12 PERSONS, BEING THE ASSESSEES HEREIN CAME TO BE ONE AND SAME PERSON. 3. SUBSEQUENTLY, THE A.O. ISSUED NOTICES UNDER S ECTION 153C OF THE ACT TO THE ASSESSEES HEREIN FOR THE YEARS MENTI ONED IN THE CAPTION. THEREAFTER, THE A.O. COMPLETED THE ASSESSM ENT IN THE HANDS OF ABOVE SAID ASSESSEES FOR THE YEARS UNDER C ONSIDERATION U/S 143(3) R.W.S. 153C OF THE ACT. IT IS THE CONTE NTION OF THE ASSESSEES HEREIN THAT THE INITIATION OF PROCEEDINGS U/S 153C OF THE ACT IS NOT VALID AND HENCE THE IMPUGNED ASSESSMENTS SHOULD BE QUASHED. 4. IN ORDER TO APPRECIATE THE CONTENTIONS OF THE ASSESSEE, WE EXTRACT BELOW THE PROVISIONS OF SEC.153C, WHICH ARE RELEVANT FOR THE YEARS UNDER CONSIDERATION, SINCE THIS PROVISION HAS BEEN AMENDED OFTEN. PROVISIONS OF SEC.153C WERE INTRODUCED BY F INANCE ACT, 2003 AND THE SAME READ AS UNDER:- 153C. ASSESSMENT OF INCOME OF ANY OTHER PERSON.N OTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SEC TION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OF FICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE 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 , THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISI TIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION O VER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EA CH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR RE ASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF S ECTION 153A. ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 4 OF 12 THE FINANCE ACT, 2005 MADE FOLLOWING AMENDMENTS:- 47. IN THE INCOME-TAX ACT, WITH EFFECT FROM THE 1ST DAY OF JUNE, 2003, (A ) SECTION 153C SHALL BE NUMBERED AS SU B-SECTION (1) THEREOF AND IN SUB- SECTION (1) AS SO NUMBERED, THE FOLLOWING PROVISO S HALL BE INSERTED AND SHALL BE DEEMED TO HAVE BEEN INSERTED, NAMELY: ' PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKIN G OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACC OUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFF ICER HAVING JURISDICTION OVER SUCH OTHER PERSON.'; (B ) AFTER SUB-SECTION (1) AS SO NUMBERED , THE FOLLOWING SUB-SECTION SHALL BE INSERTED AND SHALL BE DEEMED TO HAVE BEEN INSERTED, NAMELY: '(2) WHERE BOOKS OF ACCOUNT OR DOCU MENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FO R THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CO NDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND I N 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 SECTION 142 HAS BEE N ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEE N SERVED AND LIMITATION OF SERVING THE NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE, BEFORE THE DATE OF RECEIVING THE BO OKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HA VING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISS UE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSO N OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A.'. 5. THE ABOVE SAID PROVISIONS WERE INTERPRETED BY HONBLE SUPREME COURT IN THE CASE OF M/S SUPER MALLS PRIVATE LIMITE D VS. PRINCIPAL COMMISSIONER OF INCOME TAX (423 ITR 281)(SC). THE RELEVANT OBSERVATIONS ARE EXTRACTED BELOW:- ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 5 OF 12 5. WE HAVE HEARD THE LEARNED COUNSEL FOR THE RESPE CTIVE PARTIES AT LENGTH. 5.1 AS OBSERVED HEREINABOVE, THE SHORT QUESTION WHI CH IS POSED FOR THE CONSIDERATION OF THIS COURT IS, WHETHER THERE IS A COMPLIANCE OF THE PROVISIONS OF SECTION 153C OF THE ACT BY THE ASSESSING OFFICER AND ALL THE CONDITIONS WHICH ARE REQUIRED TO BE FULFILLED BEFOR E INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT HAVE BEEN SATISFIED OR NOT? 6. THIS COURT HAD AN OCCASION TO CONSIDER THE SCHEM E OF SECTION 153C OF THE ACT AND THE CONDITIONS PRECEDENT TO BE FULFILLE D/COMPLIED WITH BEFORE ISSUING NOTICE UNDER SECTION 153C OF THE ACT IN THE CASE OF CALCUTTA KNITWEARS (SUPRA) AS WELL AS BY THE DELHI HIGH COUR T IN THE CASE OF PEPSI FOOD PVT. LTD. (SUPRA). AS HELD, BEFORE ISSUING NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE SATISFIED THAT, INTER ALIA, ANY DOCUMENT SEIZED O R REQUISITIONED BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON. THAT THEREAFTER, AFTER RECORDING SUCH SATISFACTION BY THE ASSESSING OFFICE R OF THE SEARCHED PERSON, HE MAY TRANSMIT THE RECORDS/DOCUMENTS/THINGS/PAPERS ETC. TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. AFTER RECEIPT OF THE AFORESAID SATISFACTION AND UPON EXAMINATION OF SUCH OTHER DOCUMENTS RELATING TO SUCH OTHER PERSON, THE JURISDICTIONAL A SSESSING OFFICER MAY PROCEED TO ISSUE A NOTICE FOR THE PURPOSE OF COMPLE TION OF THE ASSESSMENT UNDER SECTION 158BD OF THE ACT AND THE OTHER PROVISIONS OF CHAPTER XIV -B SHALL APPLY. 6.1 IT CANNOT BE DISPUTED THAT THE AFO RESAID REQUIREMENTS ARE HELD TO BE MANDATORILY COMPLIED WITH. THERE CAN BE TWO EVENTUALITIES. IT MAY SO HAPPEN THAT THE ASSESSING OFFICER OF THE SEA RCHED PERSON IS DIFFERENT FROM THE ASSESSING OFFICER OF THE OTHER PERSON AND IN THE SECOND EVENTUALITY, THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME. WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON IS DIFFERENT FROM THE ASSESSING OFFICER OF THE OTHER P ERSON, THERE SHALL BE A SATISFACTION NOTE BY THE ASSESSING OFFICER OF THE S EARCHED PERSON AND AS OBSERVED HEREINABOVE THAT THEREAFTER THE ASSESSING OFFICER OF THE SEARCHED PERSON IS REQUIRED TO TRANSMIT THE DOCUMENTS SO SEI ZED TO THE ASSESSING OFFICER OF THE OTHER PERSON. THE ASSESSING OFFICER OF THE SEARCHED PERSON SIMULTANEOUSLY WHILE TRANSMITTING THE DOCUMENTS SHA LL FORWARD HIS SATISFACTION NOTE TO THE ASSESSING OFFICER OF THE O THER PERSON AND IS ALSO REQUIRED TO MAKE A NOTE IN THE FILE OF A SEARCHED P ERSON THAT HE HAS DONE SO. HOWEVER, AS RIGHTLY OBSERVED AND HELD BY THE DELHI HIGH COURT IN THE CASE OF GANPATI FINCAP (SUPRA), THE SAME IS FOR THE ADMI NISTRATIVE CONVENIENCE AND THE FAILURE BY THE ASSESSING OFFICER OF THE SEA RCHED PERSON, AFTER PREPARING AND DISPATCHING THE SATISFACTION NOTE AND THE DOCUMENTS TO THE ASSESSING OFFICER OF THE OTHER PERSON, TO MAKE A NO TE IN THE FILE OF A SEARCHED PERSON, WILL NOT VITIATE THE ENTIRE PROCEE DINGS UNDER SECTION 153C OF THE ACT AGAINST THE OTHER PERSON. AT THE SAME TIME, THE SATISFACTION NOTE BY THE ASSESSING OFFICER OF THE SEARCHED PERSO N THAT THE DOCUMENTS ETC. SO SEIZED DURING THE SEARCH AND SEIZURE FROM T HE SEARCHED PERSON BELONGED TO THE OTHER PERSON AND TRANSMITTING SUCH MATERIAL TO THE ASSESSING OFFICER OF THE OTHER PERSON IS MANDATORY. HOWEVER, IN THE CASE ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 6 OF 12 WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME, IT IS SUFFICIENT BY THE ASSESSING OFFI CER TO NOTE IN THE SATISFACTION NOTE THAT THE DOCUMENTS SEIZED FROM TH E SEARCHED PERSON BELONGED TO THE OTHER PERSON. ONCE THE NOTE SAYS SO , THEN THE REQUIREMENT OF SECTION 153C OF THE ACT IS FULFILLED. IN CASE, WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME, THERE CAN BE ONE SATISFACTION NOTE PREPARED BY THE ASSESSING OFFICER , AS HE HIMSELF IS THE ASSESSING OFFICER OF THE SEARCHED PERSON AND ALSO T HE ASSESSING OFFICER OF THE OTHER PERSON. HOWEVER, AS OBSERVED HEREINABOVE, HE MUST BE CONSCIOUS AND SATISFIED THAT THE DOCUMENTS SEIZED/R ECOVERED FROM THE SEARCHED PERSON BELONGED TO THE OTHER PERSON. IN SUCH A SITUATION, THE SATISFACTION NOTE WOULD BE QUA THE OTHER PERSON. TH E SECOND REQUIREMENT OF TRANSMITTING THE DOCUMENTS SO SEIZED FROM THE SEARC HED PERSON WOULD NOT BE THERE AS HE HIMSELF WILL BE THE ASSESSING OFFICE R OF THE SEARCHED PERSON AND THE OTHER PERSON AND THEREFORE THERE IS NO QUES TION OF TRANSMITTING SUCH SEIZED DOCUMENTS TO HIMSELF. 6.2. NOW LET US CONSIDER FROM THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER, IN THE PRESENT CASE. WHETHER THE RE IS A SUFFICIENT COMPLIANCE OF SECTION 153C OF THE ACT OR NOT. THE SATISFACTION NOTE READS AS UNDER: NAME AND ADDRESS OF THE ASSESSEE : M/S SUPER MALLS (P) LTD. SECTOR 12, HUDA, KARNAL REGD. OFFICE AT 51, TRANSPORT CENTRE PUNJABI BAGH, NEW DELHI. PAN : AAICS2163F STATUS : COMPANY REASONS/SATISFACTION NOTE FOR TAKING UP THE CASE OF M/S SUPER MALLS (P) LTD. SECTOR-12, HUDA, KARNAL REGD. OFFICE AT 51, TR ANSPORT CENTRE, PUNJABI BAGH, NEW DELHI UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICE U/S 127 OF THE INCOME TAX ACT , 1961 BY THE WORTHY COMMISSIONER OF INCOME TAX-III NEW DELHI VIDE ORDER F. NO. CITIII/DELHI/CENTRALIZA TION/1012-1312455 DATED 15.01.2013. BY VIRTUE OF THE AUTHORIZATION OF THE DIRECTOR OF I NCOME TAX (INVESTIGATION), CHANDIGARH, A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 08/09.04.2010 AT THE RESIDENTIAL/BUSINESS PR EMISES OF SH. TEJWANT SINGH & SH. VED PARKASH BHARTI GROUP OF CASES, KARN AL, PANIPAT & DELHI AND A SURVEY U/S 133 A OF THE IT. ACT , 1961 WAS ALSO CARRIED OUT AT THE BUSINESS PREMISES OF M/S SUPER MALL (P) LTD. KARNAL & NEW DELHI. DURING ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 7 OF 12 THE COURSE OF SEARCH ON 08/09.04.2010 AT RESIDENCE OF SH. VED PARKASH BHARTI WHO IS A DIRECTOR IN THE ASSESSEE COMPANY M/ S SUPER MALL (P) LTD., PEN DRIVES WERE FOUND AND SEIZED AS PER ANNEXURE-3 FROM VEHICLE NO. HR06N-0063 PARKED IN FRONT OF THE RESIDENCE OF SH. VED PARKASH BHARTI. SOME DOCUMENTS AS PER ANNEXURE A-1 WERE SEIZED AFTE R TAKING PRINT OUT OF THE ABOVE SAID PEN DRIVES. THESE DOCUMENTS CONTAIN THE DETAILS OF CASH RECEIPT ON SALE OF SHOP/OFFICES AT M/S SUPER MALL, KARNAL ALSO BESIDE OTHER CONCERNS. THESE DOCUMENTS ARE REQUIRED FOR AS SESSMENT PROCEEDINGS. DURING THE STATEMENT OF SH. VED PARKASH BHARTI AT T HE TIME OF SEARCH, HE HAS ALSO STATED THAT THESE DOCUMENTS PERTAIN TO HIM AND M/S SUPER MALL (P) LTD., KARNAL IN WHICH HE IS DIRECTOR . IN VIEW OF THE ABOVE AND AS PER THE PROVISIONS OF SUB-SECTION 91 OF SECT ION 153C OF THE ACT, I AM SATISFIED THAT THE DOCUMENT SEIZED FROM THE RESIDEN CE OF SH. VED PARKASH BHARTI BELONGS TO A PERSON I.E. SUPER MALL (P) LTD ., OTHER THAN THE PERSON REFERRED IN SECTION 153A . ACCORDINGLY, IT IS DIRECTED TO ISSUE SUCH PERSON (M/S SUPER MALL (P) LTD.) NOTICE AND ASSESS AND REA SSESS INCOME IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF THE ACT. DATED: 22.02.2013 SD/- (VED PARKASH KAL IA) FROM THE AFORESAID SATISFACTION NOTE, IT EMERGES TH AT THE ASSESSING OFFICER IS SATISFIED THAT THE DOCUMENTS CONTAINING THE DETA ILS OF THE CASH RECEIPTS ON SALE OF SHOP/OFFICES AT M/S SUPER MALL, KARNAL BELO NGED TO THE OTHER PERSON ASSESSEE M/S SUPER MALL. HE IS ALSO SATISFIED T HAT THE DOCUMENTS/PEN DRIVE ARE SEIZED FROM THE SEARCHED PERSON. HE IS AL SO SATISFIED THAT THE DOCUMENTS SO SEIZED FROM THE RESIDENCE OF THE SEARC HED PERSON/VED PRAKASH BHARTI BELONGED TO THE ASSESSEE THE OTHER PERSON. THEREFORE, THE ASSESSING OFFICER WAS SATISFIED AND IT IS SPECIFICA LLY MENTIONED THAT THE DOCUMENTS SO SEIZED BELONGED TO THE ASSESSEE THE OTHER PERSON. THEREFORE, IT CANNOT BE SAID THAT THE MANDATORY REQUIREMENTS O F SECTION 153C OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, HA VE NOT BEEN COMPLIED WITH. THE SATISFACTION NOTE BY THE ASSESSING OFFICE R CLEARLY STATES THAT THE DOCUMENTS SO SEIZED BELONGED TO THE OTHER PERSON THE ASSESSEE AND NOT THE SEARCHED PERSON. THUS, THE HIGH COURT IS JUSTIF IED IN OBSERVING THAT THE REQUIREMENT OF SECTION 153C HAS BEEN FULFILLED. ON FACTS, WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY THE HIGH COURT ON THE REQUIREMENT OF SECTION 153C OF THE ACT BEING FULFILLED BY THE ASSESSING OFFICER BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. 7. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED ABOVE, ALL THESE APPEALS FAIL AND THE SAME DESERVE TO BE DISMISSED A ND ARE ACCORDINGLY DISMISSED. NOW, THE LEARNED ITAT SHALL DECIDE AND D ISPOSE OF THE APPEALS AFRESH ON MERITS, AT THE EARLIEST, IN ACCORDANCE WI TH LAW, AS OBSERVED BY THE HIGH COURT IN THE IMPUGNED JUDGMENT(S) AND ORDER(S) . ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 8 OF 12 6. THE HONBLE SUPREME COURT HAS INTERPRETED THE THEN EXISTING PROVISIONS OF SEC.153C AS UNDER:- (A) BEFORE ISSUING NOTICE U/S 153C OF THE ACT, THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE SATISFIED THAT, INTER ALIA, ANY DOCUMENT SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON. (B) AFTER RECORDING SUCH SATISFACTION BY THE AO OF THE SEARCHED PERSON, HE MAY TRANSMIT THE RECORDS/DOCUMENTS/THING S/PAPERS ETC., TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. (C) AFTER RECEIPT OF THE AFORESAID SATISFACTION A ND UPON EXAMINATION OF SUCH OTHER DOCUMENTS RELATING TO SUC H OTHER PERSON, THE JURISDICTIONAL ASSESSING OFFICER MAY PROCEED TO ISSUE NOTICE FOR THE PURPOSE OF COMPLETION OF THE ASSESSMENT UNDER S ECTION 158BD OF THE ACT AND OTHER PROVISIONS OF CHAPTER XIV-B SH ALL APPLY. (D) FAILURE OF THE AO OF THE SEARCHED PERSON, AFT ER PREPARING AND DISPATCHING THE SATISFACTION NOTE AND THE DOCUM ENTS TO THE AO OF THE OTHER PERSON, TO MAKE NOTE IN THE FILE OF SE ARCHED PERSON, WILL NOT VITIATE THE ENTIRE PROCEEDINGS UNDER SECTION 15 3C OF THE ACT AGAINST THE OTHER PERSON. (E) AT THE SAME TIME, THE SATISFACTION NOTE BY THE AO OF THE SEARCHED PERSON THAT THE DOCUMENTS ETC., SO SEIZED DURING THE SEARCH AND SEIZURE FROM THE SEARCHED PERSON TO THE OTHER PERSON AND TRANSMITTING SUCH MATERIAL TO THE AO OF THE OTH ER PERSON IS MANDATORY. (F) HOWEVER, IN THE CASE WHERE THE AO OF THE SEARC HED PERSON AND THE OTHER PERSON IS THE SAME, IT IS SUFFICIENT BY THE AO TO NOTE IN THE SATISFACTION NOTE THAT THE DOCUMENTS SEIZED FROM THE SEARCHED PERSON BELONGED TO THE OTHER PERSON. ONCE THE NOTE SAY SO, THEN THE REQUIREMENT OF SECTION 153C OF THE ACT IS FULFILLED. IN CASE, WHERE THE AO OF THE SEARCHED PERSON AND THE O THER PERSON IS ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 9 OF 12 THE SAME, THERE CAN BE ONE SATISFACTION NOTE PREPAR ED BY THE ASSESSING OFFICER, AS HE HIMSELF IS THE ASSESSING O FFICER OF THE SEARCHED PERSON AND ALSO THE ASSESSING OFFICER OF T HE OTHER PERSON. (G) HOWEVER, THE AO MUST BE CONSCIOUS AND SATISF IED THAT THE DOCUMENTS SEIZED/RECOVERED FROM THE SEARCHED PE RSON BELONGED TO THE OTHER PERSON. 7. IT IS THE CONTENTION OF THESE ASSESSEES THA T THE ASSESSING OFFICER HAS NOT RECORDED SATISFACTION THAT THE MATE RIALS ETC FOUND DURING THE COURSE OF SEARCH BELONG TO THEM. IN ORD ER TO APPRECIATE THIS CONTENTION OF THE ASSESSEES, WE EXTRACT BELOW THE SATISFACTION RECORDED IN THE HANDS OF THESES ASSESSEES. THE REV ENUE HAS FURNISHED COPIES OF SATISFACTION RECORDED IN THE CA SES OF M/S ARSHAD EXPORTS AND SRI K ASGAR KHAN. THE AO HAS ALSO FUR NISHED COPIES OF SATISFACTION NOTE IN THE CASE OF ALL THE THREE A SSESSEES IN THE REMAND REPORT FILED BEFORE LD CIT(A). ALL THESE SA TISFACTION NOTES APPEAR TO HAVE BEEN TAKEN FROM THE FILES OF ASSESSE ES HEREIN. IN THE INSTANT CASES, THE ASSESSING OFFICER IS THE SAME FO R SEARCHED PERSON AND ALSO THE ASSESSEES HEREIN, BEING OTHER PERSONS . THE SATISFACTION NOTE FOR THE YEARS UNDER CONSIDERATION FOR ALL THE THREE ASSESSEES ARE EXTRACTED BELOW:- (A) ARSHAD ISPAT A.Y. 2010-11 A SEARCH ACTION U/S 132 WAS INITIATED IN THE CASE OF SRI B. NAGENDRA AND IN CONNECTION WITH THE SAME, THE PREMISES OF M/S. A RSHAD ISPAT, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR, COLLEGE ROAD, HOSPET WAS ALSO SEARCHED AND DOCUMENTS/ASSETS WERE SEIZED AS PER INVENTORY A ANNEXED TO THE PANCHANAMA DATED 25.10.2010 AND A-1/A1 ANNEXED TO T HE PANCHANAMA DATED 3.11.2011 FOR THE SEARCH CONDUCTED IN THE PRE MISES OF M/S. ARSHAD ISPAT, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR, COLLEGE ROAD, HOSPET. HENCE, A NOTICE CALLING FOR THE RETURN OF INCOME FO R THE A.Y. 2010-11 AS ENVISAGED U/S 153C ISSUED. ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 10 OF 12 (B) SRI K. ASGHAR KHAN (A) A.Y. 2008-09 (A) A SEARCH ACTION U/S 132 WAS INITIATED IN THE CASE OF SRI B. NAGENDRA AND IN CONNECTION WITH THE SAME, THE PREMISES OF SR I ASGAR KHAN, NEAR COLLEGE GROUND, COLLEGE ROAD, HOSPET WAS ALSO SEARC HED AND DOCUMENTS/ASSETS WERE SEIZED AS PER INVENTORY A A NNEXED TO THE PANCHANAMA DATED 25.10.2010 FOR THE SEARCH CONDUCTE D IN THE PREMISES OF SRI ASGAR KHAN, NEAR COLLEGE GROUND, COLLEGE ROA D, HOSPET. HENCE, A NOTICE CALLING FOR THE RETURNS OF INCOME F OR THE ASST. YEAR 2008-09 AS ENVISAGED U/S 153C ISSUED. (B) A.Y. 2010-11: (B) A SEARCH ACTION U/S 132 WAS INITIATED IN THE C ASE OF SRI B. NAGENDRA AND IN CONNECTION WITH THE SAME, THE PREMI SES OF SRI ASGAR KHAN, NEAR COLLEGE ROAD, HOSPET WAS ALSO SEARCHED A ND DOCUMENTS/ASSETS WERE SEIZED AS PER INVENTORY A A NNEXED TO THE PANCHANAMA DATED 25.10.2010 FOR THE SEARCH CONDUCTE D IN THE PREMISES OF SRI ASGAR KHAN, NEAR COLLEGE GROUND, COLLEGE ROA D, HOSPET. HENCE, A NOTICE CALLING FOR THE RETURNS OF INCOME F OR THE ASST. YEAR 2010-11 AS ENVISAGED U/S 153C ISSUED. (C) M/S. ARSHAD EXPORTS (A) A.Y. 2009-10 (A) A SEARCH ACTION U/S 132 WAS INITIATED IN THE CASE OF SRI B. NAGENDRA AND IN CONNECTION WITH THE SAME, THE PREMISES OF M/ S. ARSHAD EXPORTS, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR COLLEGE ROAD, HOSPET WAS ALSO SEARCHED AND DOCUMENTS/ASSETS WERE SEIZED AS PER IN VENTORY A ANNEXED TO THE PANCHANAMA DATED 25.10.2010 AND A-1/ A1 ANNEXED TO THE PANCHANAMA DATED 2.11.2011 FOR THE SEARCH CONDU CTED IN THE PREMISES OF M/S. ARSHAD EXPORTS, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR COLLEGE ROAD, HOSPET. THIS CASE IS CENTRALIZ ED TO THIS OFFICE VIDE CIT GULBARGA ORDER F.NO.90/NOTIFICATION/CIT-GLB/201 0-11 DATED 22.3.2011. HENCE, A NOTICE CALLING FOR THE RETURNS OF INCOME F OR THE ASST. YEAR 2009-10 AS ENVISAGED U/S 153C ISSUED. ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 11 OF 12 (B) A.Y. 2010-11: (B) A SEARCH ACTION U/S 132 WAS INITIATED IN THE CASE O F SRI B. NAGENDRA AND IN CONNECTION WITH THE SAME, THE PREMISES OF M/S. A RSHAD EXPORTS, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR COLLEGE ROAD, HOSPET WAS ALSO SEARCHED AND DOCUMENTS/ASSETS WERE SEIZED AS PER IN VENTORY A ANNEXED TO THE PANCHANAMA DATED 25.10.2010 AND A-1/ A1 ANNEXED TO THE PANCHANAMADATED 2.11.2011 FOR THE SEARCH CONDUC TED IN THE PREMISES OF M/S. ARSHAD EXPORTS, KHAN BUILDING, 3 RD CROSS, VIJAY NAGAR COLLEGE ROAD, HOSPET. THIS CASE IS CENTRALIZ ED TO THIS OFFICE VIDE CIT GULBARGA ORDER F.NO.90/NOTIFICATION/CIT-GLB/201 0-11 DATED 22.3.2011. HENCE, A NOTICE CALLING FOR THE RETURNS OF INCOME F OR THE ASST. YEAR 2010-11 AS ENVISAGED U/S 153C ISSUED. 8. A CAREFUL PERUSAL OF THE SATISFACTION NOTES EXTRACTED ABOVE WOULD SHOW THAT THE ASSESSING OFFICER HAS RECORDED THE FACT OF CONDUCTING OF SEARCH IN THE PREMISES OF THE ASSESSE ES HEREIN AND SEIZURE OF CERTAIN DOCUMENTS. HOWEVER, THE SEARCH IN THE PREMISES OF THE ASSESSEES IS ON THE BASIS OF WARRANT ISSUED IN THE NAME OF SRI B NAGENDRA. HENCE THE ASSESSEES HEREIN ARE OTHER PERSONS, AS REFERRED TO IN SEC.153C OF THE ACT. IN NONE OF TH E SATISFACTION NOTES, THE AO HAS RECORDED A FINDING THAT THE SEIZE D DOCUMENTS BELONG TO THE ASSESSEES HEREIN. THE HONBLE SUPR EME COURT HAS HELD IN THE CASE OF SUPER MALLS PRIVATE LIMITED (SU PRA) THAT THE AO MUST BE CONSCIOUS AND SATISFIED THAT THE DOCUMENTS SEIZED/RECOVERED FROM THE SEARCHED PERSON BELONGED TO THE OTHER PERSON. HENCE, IT IS THE DUTY OF THE AO TO APPLY HIS MIND AND SHOULD CONSCIOUSLY AND MANDATORILY STATE IN THE SAT ISFACTION NOTE THAT THE SEIZED DOCUMENTS BELONG TO OTHER PERSON. WITHOUT RECORDING SUCH A SATISFACTION, IT CANNOT BE PRESUME D THAT THE SEIZED MATERIALS BELONG TO OTHER PERSONS, IN WHICH CASE THE AO COULD NOT HAVE INITIATED PROCEEDINGS AGAINST THE OTHER PERSO NS U/S 153C OF THE ACT. ITA NOS.926, 928, 929, 930 & 931/BANG/2015 M/S. ARSHAD ISPAT, SRI ASGHAR KHAN & M/S. ARSHAD EXPORTS, HOSPET PAGE 12 OF 12 9. IN VIEW OF THE FOREGOING DISCUSSIONS, WE ARE OF THE VIEW THAT THE INITIATION OF PROCEEDINGS U/S 153C OF THE ACT IN TH E INSTANT CASES IS BAD IN LAW. ACCORDINGLY, WE QUASH THE ORDERS PASSE D BY THE TAX AUTHORITIES IN THE HANDS OF THE ASSESSEES HEREIN FO R THE YEARS UNDER CONSIDERATION. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSE SSEES ARE TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUL, 2021. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 30 TH JUL, 2021. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.