Shri Rupam Rajendra Gorecha, Dahod V. The ITO, Ward-2, Dahod

ITSSA 151/AHD/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7672 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 17-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: A L THAKKAR
• Keywords: Search and seizure; Opportunity of being heard; Question of law; Assessment record; Right to appeal; Reason to believe; Documents seized; Set aside
• Section: 143(3); 153A; 147; 131; 148; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER (SS) ./IT(SS)A NO.151/AHD/2018 ( / ASSESSMENT YEAR : 2014-15) SHRI RUPAM RAJENDRA GORECHA NAWA BAZAR AT & POST LIMDI, TAL-JHALOD DIST.DAHOD 389 180 / VS. THE INCOME TAX OFFICER WARD-2 DAHOD ./ ./ PAN/GIR NO. : AHYPG 8190 Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI A.L. THAKKAR, AR / RESPONDENT BY : SHRI O.P. SHARMA, CIT-DR / DATE OF HEARING 11/06/2019 !'# / DATE OF PRONOUNCEMENT 24/07/2019 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)4, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB/4-102 91/2016-17 DATED 27/02/2018 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.153C R.W.S.143(3) OF THE INCOME TAX ACT, 1961(HEREINAFTE R REFERRED TO AS 'THE ACT') DATED 25/10/2016 RELEVANT TO ASSESSMENT YEAR (AY) 2014-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 2 - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN P ASSING AN ORDER DTD. 25/10/2016 U/S.153C R.W.S.143(3) OF THE I.T. ACT, 1 961 WHEN THE REQUISITION U/S.132A OF THE ACT WAS ALREADY HELD IL LEGAL AS PER ORDER DTD. 01/12/2015 PASSED BY THE HONBLE MADHYA PRADESH HIG H COURT. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S THEREBY ERRED IN CONFIRMING THE ORDER DTD. 25/10/2016 PASSED BY THE ASSESSING OFFICER U/S.153C R.W.S.143(3) OF THE I.T. ACT, 1961 WHICH I S NULL AND VOID AB INITIO. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE PASSING OF ORDER U/S.153C R.W.S. 143 (3) OF THE I.T. ACT, 1961 IN ABSENCE OF RECORDING SATISFACTION AS REQUIR ED BY LAW. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ORDER DTD. 25/10/2016 PASSED BY THE ASSESSING OFFICER WHICH IS NULL AND VOID ON THE GROUND THAT THE JCIT HAD GIVEN HIS APPROVAL U/S.153D OF THE ACT WITHOUT APPLICATION OF MIND AND WILLFULLY DISOBEYING THE ORDER DTD. 01/12/2015 PASSED BY THE HONBLE ML HIGH COURT. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ADDITION OF RS.2,05,22,600/- MADE BY THE ASSESSING OFFICER FOR THE ALLEGED UNACCOUNTED SILVER BULLION OF 479.5 0 KGS. SEIZED BY THE DEPARTMENT IN SPITE OF THE FACT THAT THE SAME BEING PURCHASES THROUGH ACCOUNT PAYEE CHEQUE/STOCK IN TRADE/BUSINESS ASSETS OF THE APPELLANT IN RESPECT OF WHICH HONBLE MP HIGH COURT HAS GIVEN A FINDING AFTER APPRECIATING THE EVIDENCES THAT THE ASSET WAS DULY EXPLAINED. 5. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN CONFIRMING THE ADDITION OF RS.27,80,100/- MADE BY T HE ASSESSING OFFICER FOR THE ALLEGED UNACCOUNTED CASH IN SPITE OF THE FA CT THAT THE SAME BEING BUSINESS ASSETS OF THE APPELLANT IN RESPECT OF WHIC H HONBLE MP HIGH COURT HAS GIVEN A FINDING AFTER APPRECIATING THE EV IDENCES THAT THE ASSET WAS DULY EXPLAINED. 6. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN NOT APPRECIATING THE VARIOUS EVIDENCES AND OTHER MATERI AL FURNISHED DURING THE COURSE OF ASSESSMENT/APPELLATE PROCEEDINGS WHIC H HAVE WRONGLY BEEN CLAIMED NOT TO HAVE BEEN FILED BY THE ASSESSING OFF ICER WHILE DRAWING ADVERSE INFERENCE AGAINST THE ASSESSEE. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY, WITHDRAW ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF H EARING OF APPEAL. IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 3 - THE ASSESSEE VIDE LETTER DATED 04-06-2019 HAS ALSO FILED ADDITIONAL GROUND OF APPEAL: 1. THAT THE REQUISITION U/S.132A(1)(C) OF THE ACT WAS WITHOUT JURISDICTION AND WITHOUT HAVING REASON TO BELIEVE THEREFORE REQUISIT ION ITSELF IS INVALID, ILLEGAL AND CONTRARY TO THE PROVISIONS OF THE ACT. ACCORDINGLY, THE PROCEEDINGS U/S.153A/153C OF THE ACT ARE ALSO ILLEG AL AND BAD IN LAW AND THE ASSESSMENT MADE IN PURSUANCE THEREOF DESERVES T O BE QUASHED. 2. AT THE OUTSET, THE LD. AR FOR THE ASSESSEE B EFORE US SUBMITTED THAT THE ADDITIONAL GROUND RAISED VIDE LETTER DATED 04-0 6-2019 IS LEGAL IN NATURE, AND ALL THE RELEVANT DETAILS IN RESPECT OF SUCH GROUND ARE AVAILABLE ON RECORD. ACCORDINGLY, THE LD. AR PRAYED BEFORE US FOR THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL. 3. ON THE OTHER HAND, THE LD. DR DID NOT RAISE AN Y OBJECTION ON THE ADMISSION OF THE ADDITIONAL GROUND OF APPEAL RAISED BY THE ASSESSEE. 4. WE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIALS AVAILABLE ON RECORD. IT IS A FACT ON RECORDS THAT ALL THE INFORM ATION RELATED TO THE ISSUE RAISED BY THE ASSESSEE IN THE ADDITIONAL GROUND OF APPEAL ARE AVAILABLE IN THE ORDER OF THE AUTHORITIES BELOW. AS SUCH, THERE IS NO NEED TO MAKE ANY REFERENCE TO ANY ADDITIONAL DOCUMENT. BESIDES THE ABOVE, WE ALSO NOTE THAT THE ISSUE RAIS ED BY THE ASSESSEE IN THE ADDITIONAL GROUND OF APPEAL IS LEGAL IN NATURE WHICH CAN BE ADMITTED AT ANY STAGE DURING THE PROCEEDINGS. IN THIS REGARD , WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF THE HONBLE SUPREME C OURT IN THE CASE OF IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 4 - NTPC LTD VS.CIT REPORTED IN 229 ITR 383 WHEREIN IT WAS HELD AS UNDER: UNDER SECTION 254, THE TRIBUNAL MAY, AFTER GIVING BOTH THE PARTIES TO THE APPEAL AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORD ERS THEREON AS IT THINKS FIT. THE POWER OF THE TRIBUNAL IN DEALING WITH APPEALS I S THUS EXPRESSED IN THE WIDEST POSSIBLE TERMS. THE PURPOSE OF THE ASSESSMEN T PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX L IABILITY OF AN ASSESSEEIN ACCORDANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT O F A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON-TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUES TION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS A RE ON RECORD IN RESPECT OF THAT ITEM. THERE IS NO REASON TO RESTRICT THE POWER OF T HE TRIBUNAL UNDER SECTION 254 ONLY TO DECIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF THE COMMISSIONER (APPEALS). BOTH THE ASSESSEE AS WELL A S THE DEPARTMENT HAVE A RIGHT TO FILE AN APPEAL/CROSS OBJECTIONS BEFORE THE TRIBUNAL. THERE IS NO REASON WHY THE. TRIBUNAL SHOULD BE PREVENTED FROM C ONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER. THE VIEW THAT THE TRIBUNAL IS CONFINED ONLY TO ISSU ES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER (APPEALS) TAKES TOO NARROW A VIEW OF THE POWERS OF THE TRIBUNAL. UNDOUBTEDLY, THE TRIBUNAL WILL HAVE T HE DISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIBUNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACT S WHICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS THERE IS NO REASON WHY SUCH A QUESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSEE. IN THE INSTANT CASE, THEREFORE, THE TRIBUNAL HAD JU RISDICTION TO EXAMINE A QUESTION OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE LOWER AUTHORITIES AND HAVING A BEARING ON THE TAX LIABILITY OF THE AS SESSEE. IN VIEW OF THE ABOVE, WE ADMIT THE ADDITIONAL GROUN D OF APPEAL RAISED BY THE ASSESSEE AND PROCEED TO ADJUDICATE THE SAME. THE ASSESSEE IN THE ADDITIONAL GROUND OF APPEAL HAS CHALLENGED THE PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT . IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 5 - 5. BEFORE COMING TO THE SPECIFIC ISSUE, WE FI ND IT PERTINENT TO NOTE THE HISTORY OF THE FACTS OF THE CASE IN BRIEF, WHICH GO ES AS FOLLOWS. SHRI NAYAN KOTHARI WAS CAUGHT BY THE POLICE DEPARTMENT O F UJJAIN, INDORE WITH THE CASH OF RS. 27,80,110/- AND SILVER HAVING THE WEIGHT OF 479.50 KGS DATED 11 TH MARCH 2014 AT 9 AM. SUBSEQUENTLY, THE INDORE POL ICE INFORMED TO THE INCOME TAX DEPARTMENT OF INDORE. AF TER RECEIVING THE INFORMATION, THE INCOME TAX DEPARTMENT OF INDORE IN ITIATED THE PROCEEDINGS AGAINST NAYAN KOTHARI BY ISSUING A NOTI CE UNDER SECTION 132A OF THE ACT. FURTHER, THE INCOME TAX AUTHORITY RECORDED THE STATEMENT ON OATH OF SHRI NAYAN KOTHARI UNDER SECTI ON 131 OF THE ACT DATED 11 TH OF MARCH 2014. SHRI NAYAN KOTHARI IN THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT INTIMATED THAT SUCH CA SH AND JEWELLERY BELONGS TO THE ASSESSEE. ACCORDINGLY, THE ASSESSEE WAS CALLED UPON TO FURNISH THE STATEMENT UNDER SECTION 131 OF THE ACT ON OATH BY THE INCOME TAX AUTHORITY UJJAIN, INDORE. THE ASSESSEE IN THE S TATEMENT DATED 13/3/2014 ADMITTED THAT THE IMPUGNED CASH BELONGS T O HIS FAMILY AND THE JEWELLERY BELONGS TO HIM. THE ASSESSEE ALSO SUBMITT ED IN THE STATEMENT THAT SUCH JEWELLERY WAS PURCHASED ON CREDIT FROM RI DHI SIDHI CORPORATION, AHMEDABAD. SUBSEQUENTLY, THE AO ISSUED A NOTICE TO THE ASSESSE E UNDER SECTION 153C OF THE ACT DATED 4 TH AUGUST 2015. THE ASSESSEE IN RESPONSE TO SUCH NOTI CE FILED THE RETURN OF INCOME UNDER SECTION 153C OF TH E ACT DECLARING TOTAL INCOME OF RS.7,54,980/- ONLY. SUBSEQUENTLY, NOTICE UNDER SECTION 143(2)/142(1) SERVED UPON THE ASSESSEE DATED 28 TH SEPTEMBER 2015. IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 6 - NOW, WE FIRST, PROCEED TO ADJUDICATE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WHEREIN THE VALIDITY OF THE PROCEEDINGS UN DER SECTION 153C OF THE ACT HAS BEEN CHALLENGED. THE LD. AR FOR THE ASSESSEE HAS CHALLENGED THE REAS SESSMENT PROCEEDINGS BY SUBMITTING AS UNDER: 8. AT THE OUTSET IT IS SUBMITTED THAT AS HAS BEEN HELD BY THE HON.M.P. HIGH COURT THAT THERE IS NO VALID REQUSITIOON WHICH HAS ALSO BEEN AFFIRMED BY THE HON.SUPREME COURT. IN VIEW OF THE SAME THE PROCEEDINGS UNDERTAKEN U/S.153A/153C ARE INVALID. FOR THE PURP OSE OF INVOKING THE PROCEEDINGS U/S.153A/153C, IT IS NECESSARY FOR THER E TO EXIST OF VALID SEARCH/REQUISITION PROCEEDINGS U/S.132/132A OF THE ACT. WHERE THE REQUISITION U/S.132A HAS ALREADY BEEN DECLARED INVA LID, THE PROCEEDINGS WHICH EMERGE IN THE FORM OF ASSESSMENT BEING UNDERT AKEN U/S.153A/153C WOULD ALSO CONSEQUENTIALLY FAIL. IT IS THEREFORE S UBMITTED THAT THE ORDER PASSED BY THE AO SUBSEQUENT TO THE ORDER HAVING BE EN DECLARED INVALID BY THE HON.M.P.HIGH COURT DATED 01.12.2015 DESERVES TO BE QUASHED AT THE PRIMARY STAGE ITSELF. WITHOUT PREJUDICE TO THE ABOVE IT IS HEREBY SUBMITT ED THAT REQUISITION OF CASH AND SILVER WAS MADE IN THE HANDS OF ONE NAYAN KOTHARI WHO HAD INTIMATED THAT THE GOODS IN QUESTION BELONG TO THE APPELLANT I.E. SHRI RUPAM GORECHA. ACCORDINGLY, PROCEEDINGS U/S.153A OF THE ACT WERE INITIATED IN THE CASE OF LATE SHRI NAYAN KOTHARI RE PRESENTED BY HIS FATHER AND LEGAL HEIR SHRI RAJENDRA KOTHARI. IN THE CASE OF SHRI NAYAN KOTHARI, ORDER U/S.153A R.W.S. 143(3) OF THE ACT DATED 24.10 .2016 HAS BEEN PASSED BY INCOME TAX OFFICER, WARD-2, DAHOD. THE COPY OF THE ORDER HAS BEEN PALCED ON APGE 43 TO 46 OF THE PAPER-BOOK. IT IS R ELEVANT TO NOTE THAT IN PARAGRAPH-7 OF THE AFORESAID ORDER, THE AO HAS R EFERRED TO OBTAINING APPROVAL OF ADDITIONAL COMMISSIONER OF INCOME TAX, PANCHMAHAL, RANGE-GODHRA U/S.153D OF THE ACT VIDE LETTER DATED 25.10.2016 WHEREAS THE ORDER IN QUESTION HAS BEEN ALREADY PASSED ON 24 .10.2016 I.E. PRIOR TO IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 7 - THE APPROVAL. THIS ONLY GOES TO DEMONSTRATE THAT T HE ORDER HAS BEEN PASSED BY THE AO WITHOUT OBTAINING THE REQUISITE AP PROVAL U/S.153D WHICH MAKES THE ASSESSMENT U/S.153A AS ILLEGAL. RE LIANCE IS PLACED IN THE CASE OF PR.CIT V SUNRISE FIANNCE (P) LTD. (2018 ) 252 TAXMAN 407 (GUJ.) WHEREIN IT WAS HELD THAT SECTION 153D, READ WITH SECTION 153A OF THE INCOME-TAX ACT, 1961 SEARCH AND SEIZURE PRI OR APPROVAL ASSESSMENT YEAR 2007-08 WHETEHR ON ASSESSMENT ORD ER UNDER SECTION 153C CAN BE PASSED BY INCOME TAX OFFICER ONLY AFTER OBTAINING PRIOR APPROVAL UNDER SECTION 153D OF JOINT COMMISSIONER I NASMUCH AS COMPLIANCE OF SECTION 153D REQUIREMENT IS ABSOLUTE HELD YES [PARAS 9 AND [1] [IN FAVOUR OF ASSESSEE]. THEREFORE, IT IS ESTABLISHED BEYOND DOUBT THAT THE ASSESSMENT U/S.153A MADE IN THE CASE OF LA TE SHRI NAYAN KOTHARI IS INVALID, ILLEGAL AND BAD IN LAW BOTH ON THE GROUND THAT THAT THERE IS NO VALID REQUISITION U/S.132A OF THE ACT A ND ALSO THE FACT THAT ASSESSMENT HAS COME TO BE COMPLETED WITHOUT OBTAINI NG APPROVAL U/S.153D OF THE ACT. IN VIEW OF THE PROCEEDINGS U/ S.153A ITSELF BEING ILLEGAL THE SUCCEEDING PROCEEDINGS U/S.153C OF THE ACT WOULD ALSO FAIL. 10. SINCE THE ASSESSMENT IN QUESTION IN THE CASE O F THE APPELLANT HAS BEEN CONDUCTED U/S.153C PROCEEDINGS, THE PROVISIONS OF THE SAME ARE REPRODUCED FOR EASY REFERENCE: ASSESSMENT OF INCOME OF ANY OTHER PERSON. 37 38 153C . 39 [(1)] 40 [NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SE CTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, 41 BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUIS ITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINE D THEREIN, RELATES 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 JURI SDICTION OVER SUCH OTHER PERSON] 42 [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST E ACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR RE ASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A , IF, IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 8 - THAT ASSESSING OFFICER IS SATISFIED THAT THE 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 43 [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR R EQUISITION IS MADE AND] FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFE RRED TO IN SUB- SECTION (1) OF SECTION 153A ] :] 44 [ PROVIDED THAT IN CASE OF SUCH OTHER PERSON, THE REFERENCE T O THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION132A IN THE SECOND PROVISO TO 45 [SUB-SECTION (1) OF] SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF REC EIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON :] 46 [ PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES 47 MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIF Y THE CLASS OR CLASSES OF CASES IN RESPECT OF SUCH OTHER PERSON, IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY P RECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE 48 [AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS AS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A ] EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABAT ED.] 49 [(2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER 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 IN RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHE R PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB-SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UNDER SUB-SECT ION (2) OF SECTION 143 HAS EXPIRED, OR IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 9 - (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R 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 .] 11. THEREFORE, FOR THE APPLICABILITY OF THE PROVIS IONS OF SECTION 153C OF THE ACT, THE FOLLOWING CONDITIONS ARE REQUIRED TO B E SATISFIED. I. THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OF OTHER VALUATION ARTICLE OR THINGS OR B OOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELON GS OR BELONG TO A PERSON OTHER THAN THE PERSON WITH RESPE CT TO WHOM THE SEARCH IS INITIATED OR REQUISITIONED IS MADE. II. THE BOOKS OF ACCOUNTS, DOCUMENTS OR ASSETS SEIZED O R REQUISITIONED SHALL BE HANDED OVER TO THE AO HAVIN G JURISDICTION OVER SUCH OTHER PERSON. III. THE AO SHALL PROCEED AGAINST WHICH SUCH OTHER PERS ON IN THE SAME MANNER AS THE PERSON SEARCHED TO MAKE ASSESSME NT OR REASSESSMENT IN ACCORDANCE WITH THE PROVISIONS OF S ECTION 153A OF THE ACT. 12. THE PLAIN READING OF THE ABOVE PROVISION WOULD REVEAL THAT FOR THE PURPOSE OF INVOKING THE PROVISIONS OF SECTION 153C OF THE ACT THERE HAS TO BE A VALID REQUISITION WHEREIN ANY MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE OR THINGS HAS BEEN REQUISITIONED. AS HAS B EEN HELD BY THE HON.M.P. HIGH COURT AND AFFIRMED BY THE HON.SUPREME COURT, THERE IS NO VALID REQUISITION. ONCE THERE IS NO VALID REQUI SITIONED, THE PROCEEDINGS OF SECTION 153A CANNOT BE UBUTUATED, / TGE ORIVSUIBS IF SECTUIDB 153/C FIKKIW TGE ORIVSUUIBS IF SECTUIB 153 /A, UIT US IBKT WGERE ABT VAKYABKE ARTUCKE IR TGUBG WGUCG GAS BEEB SEUZED IR REQYUISUTUIBED YBDER WGUCG A VAKUD 153/A ORICEEDUBGS GAVE BEEB UBU TUATEDM CAN PROCEEDINGS U/S.153C OF THE ACT CAN BE INVOKED AND NOT OTHERWISE. AS DEMONSTATED, THE REQUISITION PROCEEDINGS IN CASE FO LATE SHRI NAYAN IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 10 - KOTHARI HAVE BEEN SET ASIDE BY THE HON.M.P. HIGH CO URT. ONCE THE REQUISITION PROCEEDINGS ITSELF HAVE BEEN SET ASIDE INITIATING PROCEEDINGS U/S.153C WOULD NOT BE VALID. THE REAON BEING THAT WHERE 153A PROCEEDINGS DO NOT SURVIVE THE QUESTION OF THAT ASS ESSING OFFICER EXERCISING HIS SATISFACTION THAT THE GOODS BELONG T O SOMEBODY ELSE ITSELF WOULD NOT ARISE. SUCH SATISFACTION HAS TO BE EXERC ISED ONLY IN THE PROCEDDINGS U/S.153A OF THE ACT. THE PROCEEDINGS O F SECTION 153C WOULD ALWAYS SUCCEED THE PROCEEDINGS U/S.153A WHICH HAVE BEEN QUASHED BY THE HON.MP HIGH COURT AND AFFIRMED BY THE HON.SUPRE ME COURT. ALSO APPROVAL U/S.153D NOT HAVING BEEN OBTAINED THE PROC EEDINGS U/S.153A WOULD FAIL BY ITSELF. ONCE 153A PROCEEDINGS FAIL A ND HAVE NO LEGS TO STAND ON, THE AO CANNOT HAVE ANY SATISFACTION THAT THE AFORESEAID ASSETS BELONG TOA 3 RD PARTY AND INTIMATE THE AO OF SUCH 3 RD PARTY FOR INTIATING PROCEEDINGS U/S 153C OF THE ACT. 13. IT IS A SETTLED POSITION OF LAW THAT PROCEEDIN GS U/S.153A SHALL ALWAYS PROCEDE THE PROCEEDINGS U/S.153C OF THE ACT. WHERE THE PROCEEDINGS U/S.153A BECOME INVALID THE QUESTION OF PROCEEDINGS U/S.153C WOULD NTO ARISE. RELIANCE IS PLACED IN THE CASE OF RAHU RAM GRIH (P) LTD. V ACIT (2012) 52 SOT 63 (LUCK.) (URO) WHEREIN IT WAS HELD THAT SECTION 153A, READ WITH SECTION 132A AND 153C, OF THE INCOME-TAX ACT, 1961 SEARCH AND SEIZURE ASSESSMENT IN CASE OF ASSESSMETN YE ARS 2002-03AND 2003-04 WHETHER PROCEEDINGS UNDER SECTION 153A AL WAYS PRECEDE PROCEEDINGS UNDER SECTION 153C AND WITHOUT INITIATI NG ANY ACTION UNDER SECTION 153A AGAINST PERSON SEARCHED, ACTION UNDER SECTION 153C CANNOT BE INITIATED AGAINST SAME OTHER PERSONS HELD, YES [IN FAVOUR OF ASSESSEE]. 14. FURTHER, IT IS ALSO SUBMITTED THAT THERE HAS BE EN NON APPLICATION OF MIND ON THE PART OF THE ADDITIONAL COMMISSIONER FO INCOME TAX, PANCHMAHAL RANGE, GODHRA WHILE GRANTING APPROVAL U/ S.153D OF THE ACT. THE COPY OF THE LETTER DATED 24.10.2016 WRITT EN BY THE AO SEEKING THE APPROVAL IS ENCLOSED. THE PERUSAL OF THE SAME WOULD REVEAL THAT THE SAME HAS BEEN RECEIVED BY THE OFFICE OF THE ADDITIO NAL COMMISSIONER OF INCOME TAX. PANCHMAHAL RANGE, GODHRA ON 25.10.2016 . THE ADDITIONAL COMMISSIONER OF INCOME TAX, PANCHMAHAL RANAGE, GODH RA HAS GRANTED APPROVAL ON 25.10.2016 ITSELF I.E. THE SAME DAY WHE N THE APPLICATION HAS IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 11 - BEEN RECEIVED. THE PERUSAL OF THE ASSESSMENT RECOR DS WOULD REVEAL THAT MORE THAN 500 PAGES WERE SUBMITTED DURING THE COURS E OF ASSESSMENT PROCEEDINGS IN THE CASE OF THE APPELLANT AND THE LD . ADDITONAL COMMISSIONER HAD MECHANICALLY GRANTED APPROVAL ON T HAT SAME DATE WHICH ONLY SHOWS ABSOLUTE NON APPLICATION OF MIND. EVEN ON THIS ACCOUNT, THE ASSESSMENT SO FRAMED SHOULD BE TREATED AS INVALID AND ILLEGAL. RELIANCE IS PLACED IN THE CASE OF SMT. SH REELEKHA DAMANI V DCIT (2015) 173 TTJ 332 (MUMBAI) WHEREIN IT WAS HEL D THAT SECTION 153D OF THE INCOME-TAX ACT, 1961 SEARCH AND SEIZU RE PRIOR APPROVAL NECESSARY FOR ASSESSMENT ASSESSMENT YEAR 2007-08 WHERE APPROVAL GRANTED BY ADDITIONAL COMMISSIONER WAS DEVOID OF AN Y APPLICATION OF MIND AND WITHOUT CONSIDERING MATERIALS ON RECORD, A SSESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 153A WAS TO BE SET ASIDE [IN FAVOUR OF ASSESSEE] 15. LAST BUT NOT THE LEAST IT IS SETTLED POSITION OF LAW THAT SATISFACTION HAS TO BE RECORDED BOTH BY THE AO OF THE REQUISITIONED PARTY I.E. NAYAN KOTHARI AS WELL AS BY THE AO OF THE APPELLANT I.E. RUPAM GORECHA FOR INVOKING THE PROVISIONS OF SECTION 153C OF THE ACT. WHEN THE RECORDING OF SUCH SATISFACTION IS MISSING THE PROCEEDINGS U/S .153C OF THE ACT WOULD FAIL AND THE ASSESSMENT WOULD BE BAD IN LAW. AT TH IS JUNCTURE ATTENTION IS INVITED TO THE ORDER PASSED IN THE CASE OF SHRI NAY AN KOTHARI WHICH IS PLACED ON PAGE 43 TO 46 OF THE PB . THE AO HAS NTO MADE ANY REFERENCE TO THE SATISFACTION RECORDED WITH REFERENCE TO THE ASSETS REQUISITIONED AS BELONGING TO THE APPELLANT AND THEREBY INVOKING SEC TION 153C OF THE ACT. THE COPY OF THE ORDER SHEET IN THE CASE OF NAYAN KO THARI HAS BEEN PALCED ON PAGAE 47 & 48 OF THE PB . THE PERUSAL OF THE ORDER SHEET WOULD ALSO REVEAL THAT NO SATISFACTION HAS BEEN RECORDED BY TH E AO OF NAYAN KOTHARI WITH RESPECT TO THE ASSETS BELONGING TO THE APPELLANT AND THEREBY INTIMATING THE AO OF RUPAM GORECHA I.E. THE APPELLA NT FOR INITIATING 153C PROCEEDINGS. INCIDENTALLY, THE AO IN THE CAS E OF THE REQUISITIONED PARTY AND THE APPELLANT IS THE SAME I.E. ITO, WARD- 2, DAHOD. EVEN UNDER SUCH CIRCUMSTANCES RECORDING OF SATISFACTION IS MAN DATORY AS HELD BY VARIOUS COURTS. INFORMATION WAS ALSO SOUGHT FOR UN DER THE RIGHT TO INFORMATION ACT, 2005 IN THE CASE OF NAYAN KOTHARI AND THE REPLY HAS BEEN PLACED ON PAGE 69 OF THE PB. THE AO HAS STAT ED THAT FOR PROCEEDINGS U/S.153A OF THE ACT THERE IS NO NECESSI TY TO PREPARE SATISFACTION NOTE. THE AO HAS BEEN VERY CATEGORIC AL THAT NO IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 12 - SATISFACTION NOTE IS ON RECORD ON THE SCRUTINY AS SESSMENT FOLDER OF NAYAN KOTHARI AND THEREFORE, COPY OF SATISFACTION N OTE IS NOT AVAILABLE. IT ONLY GOES TO INDICATE THAT THE AO OF THE REQUISI ONED PARTY I.E. NAYAN KOTHARI HAS NTO RECORDED ANY SATISFACTION THAT ASSE TS BELONGING TO THE APPELLANT HAVE BEEN REQUISITIONED WHICH NECESSITATE THE INVOKING OF 153C PROCEEDINGS. 16. EVEN IN CASE OF THE APPELLANT, THE COPY OF THE SATISFACTION NOTE WAS SOUGHT FOR VIDE LETTER DATED 22.09.2015. THE ASSES SING OFFICER VIDE LETTER DATED 28.09.2015 PLACED ON PAGE 72 OF PAPER-BOOK HA S CLEARLY INDICATED THAT THIS BEING NOT A CASE OF REGULAR SEA RCH THERE IS NO NECESSITY TO PREPARE SATISFACTION NOTE IN HIS ASSESSMENT PROC EEDINGS. ACCORDINGLY, SATISFACTION NOTE IS NOT ON THE RECORD OF ASSESSM ENT PROCEEDINGS OF THE APPELLANT AND THEREFORE, HE EXPRESSED HIS INABILITY TO SUPPLY THE SAEM AND HAS ALSO INDICATED THE NON REQUIREMENT OF THE SAME. ATTENTION IS ALSO DRAWN TO PAGE 117 OF THE PAPER-BOOK WHICH IS THE OR DER SHEET IN THE CASE OF RUPAM GORECHA. PERUSAL OF THE ORDER SHEET W OULD REVEAL THE ISSUANCE OF NOTICE U/S.153C OF THE ACT DATED 04.08. 2008. HOWEVER, THERE IS NO RECORDING OF SATISFACTION IN THE ORDER SHEET ALSO PRUIOR TO THE ISSUANCE OF THE NOTICE U/S.153C. THEREFORE, FROM THE ABOVE FACTS IT IS CLEAR THAT NEITHER THE AO OF THE REQUISITIONED PART Y NOR THE AO OF THE APPELLANT HAVE RECORDED ANY SATISFACTION AS CONTEMP LATED U/S.153C PROCEEDINGS TO INVOKE THE AFORESEAID PROCEEDINGS. 17. THE SATISFACTION NOTE DATED 31.07.2015 PLACED ON PG.120 OF THE PB REISES DOUBTS SINCE THE AO HAS VIDE LETTER DATED 2 8.9.2015 PLACED ON PAGE 112 OF THE PB I.E. SUBSEQUENTLY CATEGORICALLY STATED THAT NO SUCH SATISFACTION NOTE HAD BEEN RECORDED. IT IS ALSO WORTHWHILE TO NOTE THAT THE COPY OF THIS SATISFACTION RECORDED ALSO DOES NO T FIGURE IN THE ORDER SHEET PLACED BEFORE YOUR HONOUR PERUSAL. 18. NON RECORDING OF SATISFACTION IS FATAL TO THE UNDERTAKING OF PROCEDDINGS U/S.153C OF THE ACT. APART FROM THE VA RIOUS DECISIONS RELIED UPON AS REFERRED IN THE ORDER OF THE LD.CIT(A)-4, V ADODARA, RELIANCE IS PALCED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS IN SUPPORT OF OUR CONTENTION: I. PARSHWA CORPORATION VS. DCIT (2016) 46 ITR (T) 26 6 (AHD.) IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 13 - II. SMT.REKHABEN THAKKAR V ACIT (2015) 155 ITRD 54 (AHD .) III. N.S. SOFTWARES (2018) 403 ITR 259 (DEL.) IV. MANISH MAHESHWARI V. ACIT (2007) 289 ITR 341 (SC) ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE SA TISFACTION NOTE WAS DULY RECORDED BY THE AO HAVING JURISDICTION OVER TH E ASSESSEE BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF TH E ACT. THE LD. DR ALSO SUBMITTED THAT THE INFORMATION OBTAINED BY THE ASSESSEE UNDER THE RTI, WHICH STATES THAT THERE WAS NO SATISFACTION NO TE AVAILABLE ON RECORD, REPRESENTS THE TECHNICAL ERROR. THEREFORE, THE SAME NEEDS TO BE IGNORED. THE LD. DR VEHEMENTLY SUPPORTED THE ORDER OF THE AU THORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH T HE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT C ASE, THE LD. AR FOR THE ASSESSEE HAS CHALLENGED THE PROCEEDINGS INITIATED U NDER SECTION 153C OF THE ACT ON VARIOUS GROUNDS WHICH HAVE BEEN ELABORAT ED IN THE PRECEDING PARAGRAPH. ONE OF THE ALLEGATIONS OF THE ASSESSEE I S THAT THERE WAS NO SATISFACTION RECORDED BY THE AO AS ENVISAGED UNDER THE PROVISIONS OF SECTION 153C OF THE ACT. IN THIS REGARD, WE FIND IT PERTINENT TO REFER THE PROVISIONS OF SECTION 153C OF THE ACT; 153C. 3 [(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, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER T HAN 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 3A [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND IS SUE NOTICE AND ASSESS IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 14 - OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCOR DANCE WITH THE PROVISIONS OF SECTION 153A , IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR R EQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO I N SUB-SECTION (1) OF SECTION 153A ] :] THE ABOVE PROVISION REVEALS THAT THE AO WAS TO RECO RD TWO SATISFACTIONS. FIRSTLY, THE AO OF THE SEARCHED PERSON WAS TO RECOR D THE SATISFACTION THAT THE MATERIALS REQUISITION FOUND FROM THE SEARCHED P ERSON BELONGS TO THE OTHER PERSON. SECONDLY, THE AO OF OTHER PERSON SHAL L RECORD HIS SATISFACTION THAT THE IMPUGNED REQUISITION MATERIAL S HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME. HOWEVER, IN THE CASE WHERE THE AO IS THE SAME FOR B OTH SEARCHED PERSON AS WELL AS OTHER PERSON, THEN WHILE MAKING AN ASSES SMENT IN CASE OF THE PERSON SEARCHED, THE AO OF THAT PERSON HAS TO RECOR D SUCH SATISFACTION, AND A COPY OF THIS SATISFACTION NOTE IS TO BE PLACE D IN THE FILE OF SUCH OTHER PERSON. ACCORDINGLY, THE RELEVANT DOCUMENTS SHOULD ALSO BE TRANSFERRED FROM THE FILE OF THE PERSON SEARCHED TO FILE OF SUC H OTHER PERSON AND AFTER THAT, IN THE CAPACITY OF AO OF SUCH OTHER PERSON, P ROCEEDINGS U/S 153C, READ WITH SECTION 153A HAVE TO BE INITIATED IN THE CASE OF SUCH OTHER PERSON. THUS, THE AO WHO IS ASSESSING BOTH, THE PER SON SEARCHED AS WELL AS THE OTHER PERSON HAS TO CARRY OUT THE DUAL EXERC ISE, FIRST FOR RECORDING SATISFACTION IN THE CASE OF THE PERSON SEARCHED QUA THE DOCUMENTS BELONGS TO THE OTHER PERSON AND THEN SUCH DOCUMENTS HAVE A BEARING ON THE TOTAL INCOME OF OTHER PERSON. ACCORDINGLY, THE AO IN THE CAPACITY OF THE AO IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 15 - OF OTHER PERSON SHALL INITIATE PROCEEDINGS U/S 153C IN THE CASE OF OTHER PERSON. HOWEVER, ON PERUSAL OF ORDER SHEET ENTRY IN THE CAS E OF NAYAN KOTHARI PLACED ON PAGES 47-48 OF THE 2 ND PAPER BOOK, WE NOTE THAT THERE WAS NO SUCH SATISFACTION RECORDED BY THE AO AS DISCUSSED A BOVE. ON A SPECIFIC QUERY FROM THE BENCH TO THE LD. DR, HE FAILED TO BR ING ANYTHING ON RECORD SUGGESTING THAT THERE WAS THE SATISFACTION RECORDED BY THE AO OF THE SEARCHED PARTY. THIS FACT IS ALSO EVIDENT FROM THE REPLY RECEIVED BY THE ASSESSEE UNDER RTI WHICH IS PLACED ON PAGE 69 OF TH E PAPER BOOK. THE RELEVANT EXTRACT OF THE REPLY UNDER RTI READS AS UN DER: NO.DHD/WD-2/RTI/RK/2017-18 DATE : 11/08/2017 TO SHRI RAJENDRAKUMAR MANEKCHANDJI KOTHARI 32/2, PIPALI BAZAR DHAR, (M.P.) SIR, SUB : YOUR RTI APPLICATION DATED 09/07/2017 REF : ORDER UNDER SECTION 19(6) OF THE RIGHT TO INFORMATION ACT, 2005, VIDE LETTER NO.GDH/ADDL.CIT/PR/RTI/RK/ 2016-17 DATED 31.07.2017. PLEASE REFER TO THE ABOVE. 2. VIDE YOUR APPLICATION DATED 09/07/2017 THE INFORMATION IN RESPECT OF SATISFACTION NOTE IN YOUR CASE U/S153A SOUGHT BY YO U UNDER RTI ACT. AS PER THE PROVISIONS OF SECTION 153A OF THE ACT T HE SATISFACTION OF ASSESSING OFFICER IS NOT REQUIRED BEFORE ISSUANCE O F NOTICE UNDER THIS SECTION. THEREFORE ON VERIFICATION OF THE RECORDS THE DETAIL S I.E. SATISFACTION NOTE IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 16 - U/S.153A IN THE CASE OF LATE SHRI NAYAN KOTHARI FOR A.Y. 2014-15 IS NOT AVAILABLE IN ASSESSMENT RECORDS. FURTHER SINCE AS PER SECTION 153A OF THE ACT THE SATISFACTION OF ASSESSING OFFICER IS NOT REQUIR ED THEREFORE THE ENTRY OF SATISFACTION NOTE IS NOT AVAILABLE IN ORDER SHEET. 3. THIS INFORMATION HAS BEEN PROVIDED TO YOU AS PER ORDER U/S 19(6) OF THE R.T.I. ACT. DATED 31/07/2017 ISSUED BY CPAO, PANCH MAHAL RANGE GODHRA. 4. IF YOU ARE AGGRIEVED BY THE ABOVE DECISION, YOU MAY PREFER AN APPEAL BEFORE THE ADDL. COMMISSIONER OF INCOME-TAX, PANCHM AHAL RANGE, INCOME- TAX OFFICE, CIVIL LINES, GODHRA, WITHIN THIRTY DAYS FROM THE RECEIPT OF THE DECISION. YOURS FAITHFULLY, SD/- [MANOJ KUMAR YADAV ] INCOME-TAX OFFICER & CPIO WARD-2, DAHOD COPY TO : [1] THE ADDL.COMMISSIONER FO INCOME-TAX, PANCHMAHAL RANGE, GODHRA FOR KIND INFORMATION. [SEAL] ( ITO, WARD-2, DAHOD) SIMILARLY, WE ALSO NOTE THAT THERE WAS NO SATISFACT ION RECORDED IN THE CASE OF THE ASSESSEE AS EVIDENT FROM THE ORDER SHEET ENT RIES OF THE AO PLACED ON PAGE 117 TO 119 OF THE 2 ND PAPER BOOK. FURTHERMORE, THE ASSESSEE RECEIVED THE INFORMATION UNDER RTI THAT THERE WAS N O SATISFACTION RECORDED BY THE AO HAVING JURISDICTION OVER THE ASS ESSEE. THE COPY OF REPLY UNDER RTI VIDE LETTER DATED 22-09-2015 IS PLA CED ON PAGE 72 OF THE 2 ND PAPER BOOK. HOWEVER, WE FURTHER NOTE THAT THE AO HAVING JURISDI CTION OVER THE ASSESSEE HAS RECORDED THE SATISFACTION NOTE DATED 3 1 ST JULY 2015, WHICH IS IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 17 - PLACED ON PAGE 53 OF THE 2 ND PAPER BOOK. THUS THERE ARE CONTRADICTORY INFORMATION AVAILABLE ON RECORD. ACCORDINGLY, A DOU BT ARISES ABOUT THE GENUINENESS OF THE SATISFACTION NOTE RECORDED DATED 31 ST JULY 2015. HOWEVER, ON PERUSAL OF THE ORDER SHEET ENTRY OF THE AO HAVING JURISDICTION OVER THE ASSESSEE, IT IS REVEALED THAT THERE WAS NO SUCH ENTRY/RECORDING REGARDING THE IMPUGNED SATISFACTION NOTE RECORDED BY THE AO. ON A QUESTION TO THE LD. DR, HE HAS NOT BROUGHT ANY THING ON RECORD SUGGESTING THE GENUINENESS OF THE SATISFACTION NOTE RECORDED BY THE AO HAVING JURISDICTION OVER THE ASSESSEE. HE SIMPLY ST ATED THAT THERE CAN BE OF TECHNICAL LAPSE REGARDING THE DATE MENTIONED IN THE SATISFACTION NOTE VIZ A VIZ REPLY OF THE RTI. BE THAT AS IT MAY, THERE WAS NO EVIDENCE SUGGESTING THAT THE AO OF NAYAN KOTHARI HAS RECORDED ANY SATISFACTION NOTE BEFORE H ANDING OVER THE REQUISITION MATERIAL TO THE AO HAVING JURISDICTION OVER THE ASSESSEE. FROM THE ABOVE, IT IS CONCLUDED THAT THE RECORDING OF SATISFACTION NOTE FOR INVOKING THE PROVISION OF SECTION 153C IS A MANDATO RY REQUIREMENT AS IT REVEALS THAT THE AO HAS APPLIED HIS MIND TO REACH T O THE CONCLUSION THAT THE MATERIALS BELONG TO THE OTHER PERSON. IF THE AO OF THE PERSON SEARCHED NOT RECORDED THE S ATISFACTION NOTE, THEN INITIATION OF PROCEEDINGS U/S 153C OF THE ACT WAS N OT HELD TO BE VALID. IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 18 - WE FIND SUPPORT AND GUIDANCE FROM THE JUDGMENT OF H ONBLE ITAT DELHI IN THE CASE OF DSL PROPERTIES P. LTD V/S DCIT REPOR TED IN 33 TAXMANN.COM 420 WHERE THE RELEVANT HEAD NOTE READS AS UNDER: FOR INITIATING VALID JURISDICTION UNDER SECTION 15 3C, EVEN IF ASSESSING OFFICER OF PERSON SEARCHED AND ASSESSING OFFICER OF SUCH OTHER PERSON IS SAME, HE HAS TO FIRST RECORD SATISFACTION IN FILE O F PERSON SEARCHED AND THEN SUCH NOTE ALONG WITH SEIZED DOCUMENT/BOOKS OF ACCOU NT IS TO BE PLACED IN FILE OF SUCH OTHER PERSON AND THEREAFTER HE HAS TO ISSUE NOTICE UNDER SECTION 153C WE ALSO DRAW SUPPORT AND GUIDANCE FROM THE JUDGMENT OF HONBLE ITAT AHMEDABAD IN THE CASE OF PARSHWA CORPORATION V/S DC IT REPORTED IN 88 TAXMANN.COM 43 WHERE THE RELEVANT HEAD NOTE READS A S UNDER: I. SECTION 153C OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT OF INCOME OF ANY OTHER PERSON (SCOPE OF) - ASSESSMENT YEARS 2003-04 TO 2008-09 - WHERE NOTICE UNDER SECTION 153C ISSUED BY ASSESSING OFFICER OF PERSON SEARCHED LACKED JURISDICTION, SAME WAS NOT CURABLE BY VIRTUE OF PROVISIONS OF SECTION 292B [IN FAVOUR OF ASSESSEE] AS PER SECTION 292B, ANY NOTICE, SUMMONS OR OTHER P ROCEEDING WOULD NOT BE INVALID MERELY BY REASON OF ANY MISTAKE, DEF ECT OR OMISSION IN SUCH RETURN OF INCOME, ASSESSMENT, NOTICE, SUMMONS OR OTHER PROCEEDING PROVIDED SUCH RETURN OF INCOME, ASSESSME NT, NOTICE, SUMMONS OR OTHER PROCEEDING IS IN SUBSTANCE AND EFF ECT IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THIS ACT. HOWEVER, BEFORE ISSUING OF NOTICE UNDER SECTION 153C, THE SA TISFACTION OF THE ASSESSING OFFICER OF THE PERSON SEARCHED IS ESSENTI AL FOR ASSUMING THE JURISDICTION UNDER SECTION 153C BY THE ASSESSING OF FICER OF SUCH OTHER PERSON. THEREFORE, IN THE ABSENCE OF SATISFACTION B Y THE ASSESSING OFFICER OF THE PERSON SEARCHED, THE ASSESSING OFFIC ER OF THE PRESENT ASSESSEE DOES NOT GET ANY JURISDICTION TO ISSUE SUC H NOTICE. ACCORDINGLY, THE NOTICE UNDER SECTION 153C ISSUED B Y THE ASSESSING OFFICER OF THE PERSON SEARCHED LACKS JURISDICTION W HICH IS NOT CURABLE BY VIRTUE OF THE PROVISIONS OF SECTION 292B. II. SECTION 153C OF THE INCOME-TAX ACT, 1961 - SEARCH AND SEIZURE - ASSESSMENT OF INCOME OF ANY OTHER PERSON - ASSESSME NT YEARS IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 19 - 2003-04 TO 2008-09 - WHERE NO SATISFACTION WAS RECO RDED BY ASSESSING OFFICER OF SEARCHED PERSON AND EVEN ASSES SING OFFICER OF ASSESSEE ALSO DID NOT RECORD SATISFACTION BEFORE ISSUING NOTICE UNDER SECTION 153C TO ASSESSEE, NOTICE ISSUED UNDER SECTION 153C WAS INVALID [IN FAVOUR OF ASSESSEE] FOLLOWING A SEARCH CONDUCTED IN CASE OF 'R', A NOTI CE UNDER SECTION 153C WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CHALLENGED VAL IDITY OF THE NOTICE. HELD THAT, ADMITTEDLY, NO SATISFACTION IS RECORDED BY THE ASSESSING OFFICER OF THE PERSON SEARCHED. IN FACT, NO SATISFACTION IS RE CORDED BY THE ASSESSING OFFICER OF THE ASSESSEE IN INSTANT CASE, PRIOR TO I SSUING NOTICE UNDER SECTION 153C. ONLY IN THE NOTICE UNDER SECTION 153C, SATISF ACTION IS CLAIMED TO HAVE BEEN RECORDED. THE SO-CALLED SATISFACTION RECORDED IN THE NOTICE UNDER SECTION 153C IS TOTALLY VAGUE. IT HAS NOT SPECIFIED WHICH V ALUABLE ARTICLES/THINGS/BOOKS OF ACCOUNT/DOCUMENTS WERE FOU ND FROM 'R' WHICH BELONGS TO THE ASSESSEE. IN VIEW OF ABOVE, THE BASI C CONDITION FOR ISSUE OF NOTICE UNDER SECTION 153C HAS NOT BEEN SATISFIED. T HUS, THE NOTICES ISSUED UNDER SECTION 153C WERE INVALID. AS THE ASSESSEE, HAS SUCCEEDED ON THE TECHNICAL CON TENTION RAISED BY THE LD. AR FOR THE ASSESSEE AS DISCUSSED ABOVE, WE ARE NOT INCLINED TO ADJUDICATE OTHER CONTENTIONS RAISED BY THE LD. AR O N TECHNICAL GROUNDS AS WELL AS ON MERITS. ACCORDINGLY, WE HOLD THAT THE ASSESSMENT FRAMED UNDER SECTION 153C IS NOT SUSTAINABLE, AND ACCORDIN GLY, WE QUASH THE SAME. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 24/07/2019 SD/- SD/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 24/07/2019 &.., .(.. / T.C. NAIR, SR. PS IT(SS)A NO.151/AHD/2018 SHRI RUPAM RAJENDRA GORECHA VS. ITO ASST .YEAR - 2014-15 - 20 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-4, VADODARA 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) $%, / ITAT, AHMEDABAD 1. DATE OF DICTATION 22.7.2019 (WORD PROCESSED BY HO NBLE AM IN HIS COMPUTER BY DRAGON) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 22.7.2019 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.24.7.2019 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.7.2019 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER