SURENDRA SINGH RAJAWAT, Jaipur V. ACIT, Jaipur

ITA 95/JPR/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2109 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 06-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: A K KANODIA
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Corroborative evidences; Documents seized
• Section: 143(3); 153A; 69

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,O JH HKKXPUN] YS[KK LNL; LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM VK;DJ VIHY LA-@ ITA NO. 95 & 96/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2006-07 & 2008-09 (U/S 143(3) 153A/153C) OF T HE ACT SHRI SURENDRA SINGH RAJAWAT MEGHNA VIHAR, BANGAR CEMENT GODOWN TONK ROAD CUKE VS. THE ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFCPA 5095 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 69,70/JP/2014 & 777/ JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2006-07, 2007-08 & 2006-07 U/S 271D, 271E AND 271E OF THE ACT SHRI SURENDRA SINGH RAJAWAT MEGHNA VIHAR, BANGAR CEMENT GODOWN TONK ROAD CUKE VS. THE ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AFCPA 5095 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI A.K. KANODIA, CA JKTLO DH VKSJ LS@ REVENUE BY:SHRI R.A. VERMA, ADDL. CIT - DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/01/2018 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 21 /02/2018 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED THE APPEALS AGAINST THE OR DER OF THE LD. CIT(A),CENTRAL, JAIPUR DATED 5-12-2013 FOR THE AS SESSMENT YEAR 2006- 07 AND 2008-09 RESPECTIVELY IN THE MATTER OF 143(3) /153A & 153C OF THE ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 2 ACT . THE ASSESSEE HAS ALSO FILED THE PENALTY APPE ALS AGAINST THE ORDER OF THE LD. CIT(A), CENTRAL, JAIPUR DATED 25-11-2013 FO R THE ASSESSMENT YEAR 2006-07 AND 2007-08 PERTAINING TO SECTION 271D & 2 71E RESPECTIVELY AND LD. CIT(A)-4, JAIPUR ORDER DATED 28-06-2016 FOR THE ASSESSMENT YEAR 2006-07 PERTAINING TO SECTION 271E OF THE ACT. THE GROUNDS OF APPEAL RAISED IN THE RESPECTIVE APPEALS ARE AS UNDER:- ITA NO.95/JP/2014 A.Y. 2006-07 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 6.00 LACS WITHOUT CONSIDERING THE SUBMISSION OF THE APPELLANT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 3.00 LACS U/S 69 PAID TO KALYAN WITHOUT CONSIDERING THE SUBMISSION OF THE APPELLANT AND ASCERTAINING THE TR UE NATURE OF THE TRANSACTION. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 7.47 LACS U/S 69 MADE IN THE NAME OF HIS WIFE FOR P URCHASING THE LAND WHICH WAS MADE OUT OF HIS PAST PERSONAL SA VING LOOKING TO THE AGE OF APPELLANT AND NATURE OF THE B USINESS CARRIED BY HIM AS THIS AMOUNT WAS NOMINAL. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING VARIOUS A DDITIONS/ DISALLOWANCES MADE ARBITRARY, ILLEGAL, CONTRARY TO LETTER AND SPIRIT OF SEC 143(3)/ 153A/153C OF THE ACT. ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 3 ITA NO. 96/JP/2014 A.Y. 2008-09 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE APPLI CATION U/S 145(3) WITHOUT ASSIGNING THAT ACCOUNTS ARE EITHER I NCORRECT OR INCOMPLETE AND AT THE TIME WITHOUT POINTING OUT THA T ACCOUNTING STANDARD HAS NOT BEEN REGULARLY FOLLOWED OR METHOD OF ACCOUNTING U/S 145(1) HAS NOT BEEN REGULA RLY FOLLOWED. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 55,830/- ON ACCOUNT OF ESTIMATING THE NET PROFIT @ 9% ON SALES OF RS. 7.00 LACS APPLYING THE PROVISION OF SE C 145(3) WITHOUT REJECTING THE SALES FIGURE AMOUNTING TO RS. 5,03,364/- AS SHOWN IN SALES TAX RETURN AND WITHOUT CONSIDERING THE PAST HISTORY OF THE ASSESSEE AND CO MPARABLE CASES IN THE SIMILAR TRADE LIKEWISE, LD. CIT(A), CE NTRAL IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF AO CHOOSING T HE ASSESSMENT YEAR 2010-11 AS BASIS TO APPLY THE NET P ROFIT RATE WHICH IS NOT VALID AND LAWFUL DUE TO THE FACT THAT SUCCEEDING YEAR CANNOT BE BASIS TO COMPLETE THE ASSESSMENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 3.00 LACS ON ACCOUNT OF DIFFERENCE BETWEEN DLC AND ACTUAL RATE WITHOUT COMING TO THE CONCLUSION THAT EXCESS M ONEY HAS BEEN INVESTED BY THE ASSESSEE U/S 69B AND AT THE SA ME TIME CONFIRMING THE APPLICATION OF SEC 53C. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ADDIT ION OF RS. 10,98,950/- WITHOUT REJECTING THE DETAILS OF SHORTA GE FURNISHED BY THE ASSESSEE ON ACCOUNT OF SHORTAGE OF LAND OF 444 SQ. YARDS RESPECTIVELY. ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 4 5. BECAUSE THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THAT ASSESSMENT ORDER PASSED AND VARIOUS ADDITIONS/ DISALLOWANCES MADE ARBITRARY, ILLEGAL, C ONTRARY TO LETTER AND SPIRIT OF SEC 143(3)/ 153A/153C OF THE A CT. ITA NO. 69/JP/2014 A.Y. 2006-07 U/S 271D 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271D 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271D AMOUNTING TO RS. 10.00 LACS FOR VI OLATION OF SEC 269SS WHICH WAS THE AMOUNT RECEIVED FROM SHRI S HOY NARAYAN YADAV AS ADVANCE AGAINST BUSINESS DEALING R S. 10.00 LACS INSTEAD OF LOAN OR DEPOSIT AND INTEREST WAS PAID ON SUCH ADVANCES FOR FAILURE TO FULFILL THE DEAL. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING THE PENALTYUU271D AMOUNTING TO RS. 10.00LACS DUE TO THE FACT THAT ORIGINAL APPEAL AGAINST PASSED BY ACIT, CENTRA L CIRCLE- 1, JAIPUR (143(3)/ 153A/153C IS PENDING AND WHICH H AS DIRECT BEARING ON THE ISSUE RAISED IN THE INSTANT A PPEAL. ITA NO. 70/JP/2014 A.Y. 2007-08 U/S 271E 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271E. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 5 ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271E AMOUNTING TO RS. 11.16 LACS FOR VI OLATION OF SEC 269T WHICH WAS THE AMOUNT REPAID TO SHRI SHOY N ARAYAN YADAV RETURNING BACK AS ADVANCE AGAINST BUSINESS D EALING RS. 11.16 LACS INSTEAD OF LOAN OR DEPOSIT AND INTER EST WAS PAID ON SUCH ADVANCES FOR FAILURE TO FULFILL THE DE AL. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING THE PENALTY U/S 271E AMOUNTING TO RS. 11.16 LACS DUE T O THE FACT THAT ORIGINAL APPEAL AGAINST PASSED BY ACIT, CENTRA L CIRCLE- 1, JAIPUR (143(3)/ 153A/153C IS PENDING AND WHICH H AS DIRECT BEARING ON THE ISSUE RAISED IN THE INSTANT A PPEAL. ITA NO. 777/JP/2016 A.Y. 2006-07 U/S 271E 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271E AMOUNTING TO RS. 1,24,700/- 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN LAW AS WELL AS ON FACTS WHILE CONFI RMING THE ACTION OF LD. JCIT, CENTRAL RANGE, JAIPUR FOR IMPOS ING PENALTY U/S 271D AMOUNTING TO RS.1,24,700/- FOR VIO LATION OF SEC 269T WHICH WAS THE AMOUNT REPAID TO SHRI SHOY NARAYAN YADAV RETURNING BACK AS ADVANCE AGAINST BU SINESS DEALING RS. 1,24,700 INSTEAD OF LOAN OR DEPOSIT AND INTEREST WAS PAID ON SUCH ADVANCES FOR FAILURE TO FULFILL TH E DEAL. 2.1 FURTHER IT IS NOTED THAT THE LD.AR OF THE ASSES SEE IN RESPECT OF ITA NO.95 & 96/JP/2014 HAS PRAYED FOR ADMISSION OF ADDI TIONAL GROUNDS OF APPEAL AS UNDER:- ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 6 ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE AO WAS NOT JUSTIFIED WHILE PASSING THE ORDER U/S 143(3) R.W.S. 153A/153C OF THE ACT WITHOUT RECORDING ITS SATISFACTION OF PERSON SE ARCHED THAT ANY MONEY BUILLION JEWELLERY OR OTHER ARTICLE OR THING OR BOOKS OF ACCOUNTS OR DOCUMENTS SELFED BELONG TO OTHER THAN P ERSON SEARCHED WHICH IS SINE QUA NON FOR INITIATING ACTION U/S 153 C. 2.2 THE LD.AR OF THE ASSESSEE TO THIS EFFECT FILED THE FOLLOWING WRITTEN SUBMISSION. 1.THAT APPELLANT PRAYS TO ADMIT THE ADDITIONAL GR OUND OF APPEAL IN THE INTEREST OF NATIONAL JUSTICE TO DIRECT AO TO ASSESS THE CORRECT INCOME AS PER PROVISIONS OF INCOME TAX ACT 1961. 2. THAT ASSESSING OFFICER PASSED THE ORDER U/S 143( 3) READ WITH SECTION 153A/153C OF THE INCOME TAX ACT 1961 ON 19/12/2011 AT THE TOTAL INCOME OF RS 17,58,310/- 3. THAT ASSESSING OFFICER PASSED THE ORDER IN MECHA NICAL MANNERS IN THE ORDER HE HAS NOT RECORDED ITS SATISFACTION ON RECOR D ABOUT PERSON SEARCHED THAT ANY MONEY BULLION JEWELRY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENT SEALED BELONGS TO APPELLANT OTH ER THAN PERSON SEARCHES. THIS IS SINE QUA NON FOR IMITATING ACTION UNDER SE CTION 153C. THE PROPOSED LEGAL GROUND OF APPEAL IS BASED ON FOLLOWING REASON AND AS CONTENT IN THE CASE CIT VS LAVANYA LAND (P.) LTD 83 TAXMANN.COM 161 IN THE CASE. SECTION 153C (1) AS IT STOOD PRIOR TO AMENDMENT BY THE FINANCE ACT, 2015 (W.E.F. 01-06-2015) READS AS UNDER: 153C (1) NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENT SEIZED OR REQUISITIONED BELONG OR BELONG T O A PERSON OTHER THAN PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OF 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 SUCH OTHER PERSON AND ISSUE NO TICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH T HE PROVISIONS OF SECTION 153A, IF THAT ASSESSING OFFICER IS SATISFIED THAT T HE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PER SON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB- SECTIO N (1) OF SECTION 153A, ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 7 (I) FROM VARIOUS OBSERVATIONS OF THE COURTS AS MENTIONE D ABOVE, IT CAN BE INFERRED THAT A SATISFACTION NOTE MUST SHOW THE NAM E OF PERSON SEARCHED, DATE OF THE SEARCH , THE DATE OF RECOR DING SATISFACTION NOTE, THE PLACE/PREMISE FROM WHERE THE ASSETS/DOCUMENTS , SAID TO BE BELONGING TO THE ,OTHER PERSON, WERE SEIZED, OR T HE AUTHORITY FROM WHERE REQUISITIONED, THE IDENTIFICATION/ DESCRIPTIO N OF SUCH ASSETS/DOCUMENT, THE NATURE OF INQUIRIES CARRIED O UT BEFORE COMING TO THE PERSON SEARCHED, BUT BELONG TO OTHER PERSON , OR THAT THE PERSON SEARCHED, DISCLAIMED THOSE ASSETS/DOCUME NTS 19 , CLEAR IDENTIFICATION OF OTHER PERSON AND HIS AO ( NO C ASE OF MISTAKEN IDENTITY), WHETHER ASSESSMENT OF THE PERSON SEARC HED IS COMPLETED OF PENDING. IF COMPLETED DATE OF COMPLETION. THE SATIS FACTION NOTE MUST ALSO INDICATE THE ASSESSMENT YEARS TO WHICH MATERIA L FOUND IN THE SEARCH RELATES TO 20 . (II) THE SATISFACTION HAS TO BE IN WRITING AND CAN BE GATHERED FROM THE ASSESSMENT ORDER PASSED IN RESPECT OF THE SEARCHED PERSON, IF IT IS SO MENTIONED/ RECORDED OR FROM ANY OTHER ORDER, NOTE O R RECORD MAINTAINED BY THE ASSESSING OFFICER OF THE SEARCH PERSON. 21 (III) THE SATISFACTION NOTE MUST BE RECORDED BY THE PERS ON SEARCHED AND NOT BY THE AO OF OTHER PERSON. 22 (IV) WHERE AO OF THE PERSON SEARCHED AND AO OF THE OT HER PERSON. IS THE SATISFACTION NOTE CAN BE PLACED IN THE FILE OF OTHER PERSON. IT WILL NOT VITIATE THE PROCEEDINGS. 23 FOR INVOKING SECTION 153C, THE AO OF THE PERSON S EARCHED MUST BE SATISFIED THAT CERTAIN SEIZED ASSETS/ DOCUMENTS DO NOT BELO NG TO THE PERSON SEARCHED BUT BELOG TO OTHER PERSON. IN ABSENCE OF SUCH SA TISFACTION, PROCEEDINGS INITIATED U/S. 153C WILL BE INVALID. IT IS NECESSAR Y THAT THE AO OF THE PERSON SEARCHED MUST PUT A SATISFACTION NOTE IN THE FI LE OF PERSON SEARCHED, IF HE IS ASSESSING OFFICER OF BOTH. SATISFACTION NOTE SHO ULD CONTAIN CERTAIN SPECIFIC INGREDIENT TO SHOW AN APPLICATION OF MIND. THEREAFT ER THE ASSETS/ DOCUMENTS SHOULD BE HANDED OVER TO THE AO OF OTHER PERSON W HO HAS TO APPLY HIS MIND AS TO WHETHER THE ASSETS/DOCUMENT HAVE ANY BEARIN G ON THE DETERMINATION OF TOTAL INCOME OF OTHER PERSON. IN OTHER WORDS, IF THERE IS NO INCRIMINATING MATERIAL IN THE ASSETS/DOCUMENTS RECEIVED BY HIM, HE NEED NOT INITIATE PROCEEDINGS U/S 153C. THE SUBSTITUTION OF EXPRESSIO NS PERTAINS TO OR RELATES TO IN PLACE OF BELONGS TO IN THE POST-AMENDMENT PROVISIONS WIDENS THE LINK OF DOCUMENTS/ INFORMATION WITH OTHER PERSON. IT N EED NOT BE CONFINED TO SIMPLY OWNERSHIP, BUT EXTENDS TO ANY CONNECTION OR CONCERN OF OTHER PERSON WITH THEM. IF THERE ARE SEVERAL OTHER PERSON REFE RRED TO IN THE SEIZED DOCUMENTS, IT WILL REQUIRE SUPPORTING EVIDENCE AND APPLICATION OF MIND TO NARROW DOWN THE CHOICE TO A SPECIFIC OTHER PERSON . ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 8 4. IT IS SETTLED LAW THAT ASSESSING OFFICER HAS TO RECORD ITS SATISFACTION ON RECORD SUCH SATISFACTION NOTE IS TO BE PLACED IN F ILE OF SUCH PERSONS AND RELEVANT DOCUMENT SHOULD ALSO BE TRANSFERRED FROM F ILE OF PERSON SEARCHED TO FILE OF SUCH OTHER PERSON THEREAFTER IN CAPACITY OF ASSESSING OFFICER ISSUE NOTICE. 5. NOWHERE IN THE ORDERS SATISFACTION HAS BEEN RECO RDED AND COPY OF SATISFACTION HAS NOT BEEN PROVIDED TO APPELLANT. 6. THAT APPELLANT RELIES ON FOLLOWING CITATION- NARSI CREATIONS V. DY. CIT [2016] 70 TAXMANN.COM 15 6 (DELHI TRIB.) ASSTT. CIT V. GLOBAL ESTATE [2013] 32 TAXMANN.COM 1 58/142 ITD 740 (AGRA TRIB.) ITO V. ARUN KUMAR KAPOOR [2011] 16 TAXMANN.COM 373/ [2012] 50 SOT 87 (URO) (ASR.) CIT V. VEERPRABHU MARKETING LTD. [2016] 73 TAXMANN. COM149 (CALCUTTA) ASSTT. CIT V. AMIT PANDE [2011] 14 TAXMANN.COM 93/4 8 SOT 4(URO) (INDORE) FURTHER MATTER HAS ALSO BEEN DEALT BY CBDT AS UNDER :- THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURP OSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HONBLE SUPREME COURT IN THE CASE OF M/S CA LCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO. 3958 OF 2014 DATED 12.03.2014 (AVAILABLE IN NJRS AT 2014-LL-0312-51) HAS LAID DOW N THAT FOR THE PURPOSE OF SECTION 158BD OF THE ACT, RECORDING OF A SATISFACTI ON NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREPARED BY THE AO BE FORE HE TRANSMITS THE RECORD TO THE OTHER AO WHO HAS JURISDICTION OVER SU CH OTHER PERSON U/S 158BD. THE HONBLE COURT HELD THAT THE SATISFACTION NOTE COULD BE PREPARED AT ANY OF THE FOLLOWING STAGES: (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROCEEDINGS AGAINST THE SEARCHED PERSON UNDER SECTION 158BC OF THE ACT: OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UND ER SECTION 158BC THE ACT; (C) IMMEDIATELY AFTER ASSESSMENT PROCEEDINGS ARE C OMPLETED UNDER SECTION 158BC THE ACT OF THE SEARCHED PERSON. 2. SEVERAL HIGH COURTS HAVE THAT THE PROVISION OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILAR/PARI-MATERIA TO THE PROVISION OF SECTION 158BD OF THE ACT ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 9 AND THEREFORE, THE ABOVE GUIDELINES OF THE HONBLE SC, APPLY TO PROCEEDING U/S 153C OF THE IT ACT FOR THE PURPOSES OF ASSESSMENT O F INCOME OF OTHER THAN THE SEARCHED PERSON. THIS VIEW HAS BEEN ACCEPTED BY CBD T. 3. THE GUIDELINES OF THE HONBLE SUPREME COURT AS REFERRED TO IN PARA 2 ABOVE, EITHER WITH REGARD TO RECORDING OF SATISFACT ION NOTE, MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIANCE. IT IS FURT HER CLARIFIED THAT EVEN IF THE AO OF THE SEARCHED PERSON AND THE OTHER PERSON IS O NE AND THE SAME, THEN ALSO HE IS REQUIRED TO RECORD HIS SATISFACTION AS HAS BE EN HELD BY THE COURTS. 4. IN VIEW OF THE ABOVE, FILING OF APPEALS ON THE ISSUE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DECIDED IN THE LI GHT OF THE ABOVE JUDGMENT. ACCORDINGLY , THE BOARD HEREBY DIRECTS THAT PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE UNDER SECTION 158BD /153C SHOULD BE WITHDRAWN /NOT PRESSED IF IT DOES NOT MEET THE GUID ELINES LAID DOWN BY THE APEX COURT. AS PER THE AFORESAID CIRCULAR, AT THE TIME OF OR AL ONG WITH INITIATION OF THE PROCEEDINGS, AGAINST THE SEARCHED PERSON OR THI RD PARTY UNDER SECTION 153C OR IN THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SE CTION 153C OF THE ACT, OR IMMEDIATELY AFTER THE ASSESSMENT PROCEEDING ARE COM PLETED U/S 153C OF THE ACT, RECORDING OF SATISFACTION IS REQUIRED. IN ORDER TO FIND OUT THE FACT WHETHER THE SATISFACT ION NOTE FOR ISSUING THE NOTICE U/S 153A R.W.S. 153C OF THE ACT WAS ISSUED IN THE CASE OF SHRI SURENDERA SINGH RAJAWAT, THE BENCH REQUIRED THE DEP ARTMENT TO SUBMIT THE PROOF AS TO THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. THE LD. DR FILED A LETTER NO. ACIT/CC-1/JAIPUR/2017-18/G/684 D ATED 25-07-2017 ISSUED BY THE ACIT, CENTRAL CIRCLE-1, JAIPUR, THE C ONTENTS OF WHICH ARE AS UNDER:- THE ADDL. COMMISSIONER OF INCOME-TAW (SR.DR) INCOME TAX APPELLATE TRIBUNAL G-4, RAJMAHAL RESIDENCY AREA, C-SCHEME JAIPUR ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 10 SUB: IN THE CASE OF SHRI SURENDA SINGH RAJAWAT, JAI PUR (PAN: - AIBPR 3109 G), IN ITA NO. 95 & 96/JP/2014 FOR A.Y. 2006-07 AND 2008-09 REG. SIR, KINDLY REFER TO YOUR OFFICE LETTER NO. ADDL. CIT(SR.DR)/ITAT/JAIPUR/2017-18/356 DATED 20-07-2017 ON THE ABOVE MENTIONED SUBJECT. IN THIS REGARD, THE FOLLOWING REQUISITE RECORDS ARE BEING SUBMITTED IN ORIGINAL FOR YOUR KINDLY PERUSAL AND N ECESSARY ACTION. 1. SURVEY FOLDER OF SHRI SURENDER SINGH RAWAT (AO COVE R) OF MAHAMAYA CHAMBERS LB-10, MEGHNA VIHAR, TONK ROAD, JAIPUR 2. SEARCH FOLDER OF M/S. MAYURATOWNSHIP PROJECT DEVELO PERS PVT LTD. (AO COVER) OF 3, GREEN NAGAR, GOPALPURA, J AIPUR 3. ASSESSMENT FOLDERS OF SHRI SURENDERA SINGH RAJAWAT FOR A.Y. 2006-07 AND 2008-09 FURTHER, NO SATISFACTION NOTE FOR ISSUING NOTICE U/ S 153A R.W.S. 153C OF THE ACT COULD BE FOUND ON RECORD IN THE CAS E OF SHRI SURENDRA SINGH RAJAWAT FOR A.Y. 2006-07 AND 2008-09. YOURS FAITHFULLY, SD/- (DEVANGI SWARNKAR) ASSTT. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, JAIPUR ENCL: ORIGINAL ASSTT. RECORD 2006-07 & 2008-09 SURVEY FOLDER COPY TO:- THE ADDITIONAL COMMISSIONER OF INCOME-TAX, CENTRAL RANGE, JAIPUR FOR KIND INFORMATION. SD/- ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 1, JAIPUR 2.3 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE BRIEF FACTS OF THE CASE AS EMERGES FROM THE ASSESSMENT ORDER ARE THAT A SEARCH AND SEIZURE OPER ATION U/S 132(1) OF THE ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 11 I.T. ACT, 1961 WAS CARRIED OUT ON 29-03-2010 AT THE BUSINESS PREMISES OF THE MAYURA TOWNSHIP PROJECT DEVELOPERS PVT LTD. AN D ITS DIRECTORS AND ITS CLOSE ASSOCIATES SHRI GAURA KUMAR SHARMA ETC. IN CONSEQUENCE OF SURVEY ACTION IN THE CASE OF THE ASSESSEE. DURING T HE COURSE OF SURVEY PROCEEDINGS, THE ASSESSEE ADMITTED CLOSE ASSOCIATED WITH SHRI GAURAV KUMAR SHARMA AND MAYURA GROUP FOR REAL ESTATE DEALI NGS. SHRI GAURAV KUMAR SHARMA AND DIRECTORS OF M/S. MAYURA TOWNSHIP PROJECT DEVELOPERS PVT LTD ALSO ADMITTED SUBSTANTIAL TRANSA CTIONS WITH THE ASSESSEE. BANK ACCOUNT OF THE ASSESSEE WAS ADMITTED LY UTILIZED BY MAYURA GROUP FOR ITS UNDISCLOSED PAYMENT FOR LAND DEALINGS MADE THROUGH THE ASSESSEE. CONSIDERING ALL THESE FACTS, THE CASE OF THE ASSESSEE WAS CENTRALIZED TO CENTRAL CIRCLE 1, JAIPUR BY THE CI T-III JAIPUR VIDE HIS ORDER NO. CIT-III/DCIT/HQR/JAIPUR/10-11/452 DATED 20-05-2010. NOTICE U/S 153A READ WITH SECTION 153C OF THE I.T. ACT, 19 61 WAS ISSUED TO THE ASSESSEE ON 15-07-2011 WHICH WAS DULY SERVED. IN RE SPONSE TO NOTICE ISSUED U/S 153A/153C, THE ASSESSEE FURNISHED HIS RE TURN OF INCOME ON 24- 08-2011 DECLARING TOTAL INCOME OF RS. 91,310/- FOR THE YEAR UNDER CONSIDERATION. ACCORDINGLY THE AO ASSESSED THE TOTA L INCOME OF THE ASSESSEE AT RS. 17,58,310/-. IN FIRST APPEAL, THE L D. CIT(A) HAS PARTLY ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 12 ALLOWED THE APPEAL OF THE ASSESSEE. IN THIS CASE, T HE ISSUE OF RECORDING OF SATISFACTION FOR THE PURPOSE OF SECTION 153C IS THE SUBJECT MATTER OF LITIGATION THROUGH ADDITIONAL GROUND. IT IS NOTED T HAT THE AO HAS PASSED THE ORDER U/S 143(3) & 153C ON THE BASIS OF IMPOUNDED D OCUMENTS FOUND DURING THE COURSE OF SURVEY . IT IS A PRIMARY CONDITION FOR PASSING THE ORDER U/S 153C THAT THERE SHOULD BE SATISFACTION OF AO O F SEARCHED PERSON THAT SEIZED DOCUMENTS BELONGED TO THE PERSON OTHER THAN SEARCHED PERSON. FROM THE LETTER DATED 25-07-2017 ISSUED BY THE ACI T, CENTRAL CIRCE-1, JAIPUR, IT IS NOT ESTABLISHED THAT WHETHER SATISFA CTION WAS RECORDED IN THE CASE OF SEARCHED PERSON OR NOT. SHE HAS SIMPLY STAT ED THAT SATISFACTION NOTE COULD NOT FOUND IN THE RECORD OF ASSESSEE. HE NCE, THE CLAIM OF ASSESSEE THAT NO SATISFACTION RECORDED IN THE CASE OF SEARCHED PERSON COULD NOT BE ACCEPTED AT THIS LEVEL ONLY ON THE BASIS OF SUCH LETTER. HOWEVER, IT IS LEGAL ISSUE WHICH ALSO NEEDS FACTUAL VERIFICATIO N OF RECORDS OF SEARCHED PERSON. THEREFORE, IN THE INTEREST OF JUSTICE AND E QUITY THE MATTER IS RESTORED BACK TO THE FILE OF THE AO. 3.1 NOW WE TAKE UP THE ASSESSEE'S APPEAL IN ITA NO. 69/JP/2014, 70/JP/2014 AND 777/JP/2014 FOR THE ASSESSMENT YEAR 2006-07 AND 2007- ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 13 08 IMPOSING PENALTY OF RS. 10.00 LACS U/S 271D, RS. 11.16 LACS U/S 271E AND RS. 1,24,700/- U/S 27E OF THE ACT. 3.2 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. DURING THE COURSE OF HEARING, THE LD.AR OF THE ASSESSEE PRAYED THAT THE LOWER DID NOT PROVIDE ADEQ UATE OPPORTUNITY TO CONTEST THE CASE AS TO THE ABOVE PENALTY ISSUES. TH E LD. DR OBJECTED THE CONTENTION OF THE LD.AR OF THE ASSESSEE. WE FEEL TH AT IN THE INTEREST OF JUSTICE AND EQUITY, THE ASSESSEE SHOULD BE PROVIDED ADEQUATE OPPORTUNITY TO SUBMIT THE RELEVANT DETAILS BEFORE THE AO AS TO THE RESPECTIVE PENALTY IMPOSED ABOVE. IN THIS VIEW OF THE MATTER OF LEVY O F THE PENALTY ON THE ASSESSEE ARE RESTORED BACK TO THE FILE OF THE AO FO R AFRESH DECISION BY PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 4.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PUROSES.. ORDER PRONOUNCED IN THE OPEN COURT ON 21 -02-2018. SD/- SD/- FOT; IKY JKO HKKXPUN (VIJAY PAL RAO) ( BHAGCHAND) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21 /02/ 2018 *MISHRA ITA NO.95/JP/2014 SHRI SUREN DRA SINGH RAJAWAT VS ACIT, CENTRAL CIRCLE - 1,JAIP UR 14 VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI SURENDRA SINGH RAJAWAT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CENTRAL CIRCLE 1, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.95/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. 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