Smt. Rekhaben Thakkar, Ahmedabad V. The ACIT.,Cent.Circle-1, Baroda

ITSSA 671/AHD/2010

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0758 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 09-06-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 23-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N SOPARKAR
• Keywords: Search and seizure; Reasonable cause; Block assessment; Condonation of delay; Documents seized
• Section: 132; 10; 15

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA/IT(SS)A NO. AY APPELLANT RESPONDENT ITA NO. 3088 TO 3093 /AHD/2008 1999-00 TO 2004-05 SMT. REKHABEN THAKKAR, PROP. M/S. DURGA FINANCE, GENDIGATE ROAD, BARODA PAN : ABLPT 0083 E ACIT, CENTRAL CIRCLE-1 BARODA IT(SS)A NO. 666 TO 671 /AHD/2010 1999-00 TO 2004-05 SMT. REKHABEN THAKKAR, PROP. M/S. DURGA FINANCE, GENDIGATE ROAD, BARODA PAN : ABLPT 0083 E ACIT, CENTRAL CIRCLE-1 BARODA ASSESSEE(S) BY : SHRI S.N. SOPARKAR, AR REVENUE BY : SHRI SUBHASH BAINS, CIT-DR / // / DATE OF HEARING : 09/06/2015 !'# / // / DATE OF PRONOUNCEMENT: 12/06/2015 $% $% $% $%/ // / O R D E R PER BENCH : ITA NOS. 3088 TO 3093/AHD/2008 ARE THE APPEALS FILE D BY THE ASSESSEE AGAINST SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-IV, AHMEDABAD, ALL DATED 05.02.2008, FOR ASSESSMENT YEARS 1999- 2000 TO 2004-2005 RESPECTIVELY. IT(SS)A NOS. 666 TO 671/AHD/2010 ARE THE APPEALS FILED BY THE ASSESSEE AGAINST A CONSOLIDATE D ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-V, BARODA DATE D 02.07.2010 FOR ASSESSMENT YEARS 1999-2000 TO 2004-2005 RESPECTIVEL Y. SINCE THESE APPEALS INVOLVE COMMON ISSUES, THESE WERE HEARD TOGETHER AN D ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVE NIENCE. 2. IT WAS POINTED OUT BY THE LD. COUNSEL FOR THE AS SESSEE THAT THERE IS A SMALL DELAY OF 21 DAYS IN FILING OF THE APPEALS. T HE ASSESSEE HAS ALREADY ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 2 FILED THE APPLICATION FOR CONDONATION OF DELAY SUPP ORTED WITH THE AFFIDAVIT. IT IS EXPLAINED THAT SINCE ALL THE BANK ACCOUNTS OF THE ASSESSEE WERE ATTACHED BY THE INCOME-TAX DEPARTMENT, THE ASSESSEE DID NOT HAVE THE MONEY TO DEPOSIT THE TRIBUNAL FEE OF RS.70,000/-, I.E., RS.1 0,000/- EACH FOR 7 YEARS. HE BORROWED THE SUM OF RS.70,000/- FROM HIS THREE RELA TIVES AND THEN DEPOSITED THE FEES OF RS.70,000/- AND IMMEDIATELY F ILED THE APPEALS. HE SUBMITTED THAT THERE IS A NOMINAL DELAY OF 21 DAYS FOR WHICH THERE WAS A REASONABLE CAUSE. THEREFORE, THE DELAY IN FILING O F THE APPEALS SHOULD BE CONDONED. THE LD. CIT-DR OPPOSED THE CONDONATION O F DELAY. 3. AFTER CONSIDERING THE FACTS OF THE CASE AND ARGU MENTS OF BOTH THE SIDES AND CONSIDERING THE NOMINAL DELAY OF 21 DAYS, WE AR E OF THE OPINION THAT IT WOULD BE IN THE INTEREST OF JUSTICE TO CONDONE THE DELAY IN FILING OF THE APPEALS. WE, THEREFORE, CONDONE THE DELAY IN FILIN G OF THE APPEALS BY THE ASSESSEE AND ADMIT THE APPEALS FOR HEARING ON MERIT . ITA NOS 3088 TO 3093/AHD/2008 ASSESSEES APPEALS : AYS 1999-00 TO 2004-05 4. THE GROUND NO.1.1 IN ASSESSEES APPEAL IN ALL TH E YEARS IS AGAINST THE VALIDITY OF NOTICE U/S 153C WHICH READS AS UNDER:- 1.1 THE ASSESSING OFFICER HAS ERRED IN INITIATING PROCEEDINGS U/S 153C IN THE CASE OF THE APPELLANT SINCE THE PROVISIONS OF S ECTION 153C ARE NOT APPLICABLE ON FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE FACTS OF THE CASE ARE THAT SEARCH AND SEIZUR E PROCEEDINGS WERE CARRIED OUT ON 04.03.2005 AT THE RESIDENTIAL/BUSINE SS PREMISES OF KABHAI CHAUHAN GROUP OF CASES. DURING THE COURSE OF SEARC H, ONE UNDATED CHEQUE OF RS.1,15,000/- ISSUED BY SMT. REKHABEN THAKKAR, P ROPRIETOR OF M/S. DURGA FINANCE IN FAVOUR OF SHRI VIJAY K. CHAUHAN WA S FOUND AND SEIZED. ON THE BASIS OF ABOVE CHEQUE, THE ASSESSING OFFICER I.E. DEPUTY ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 3 COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, BAROD A RECORDED SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF THE INCOME-TAX ACT, DATED 08.11.2005 AND THE NOTICES U/S 153C WERE ISSUED ON THE SAME DAY, I .E., 08.11.2005 FOR ASSESSMENT YEAR 1999-2000 TO 2004-2005. ON APPEAL, THE CIT(A) SUSTAINED THE VALIDITY OF THE NOTICES ISSUED U/S 153C. NOW, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE NOTICE ISSUED U/S 15 3C BEFORE THE ITAT. 6. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE REFERRED TO SATISFACTION NOTE FOR ISSUING NOTICE U/ S 153C OF THE ACT, COPY OF WHICH IS PLACED AT PAGE NO.50 OF THE ASSESSEES PAP ER-BOOK. IT IS SUBMITTED BY THE LD. COUNSEL THAT THIS SATISFACTION NOTE IS R ECORDED BY THE ASSESSING OFFICER OF SMT. REKHABEN THAKKAR, I.E., THE ASSESSE E, AND NOT THE ASSESSING OFFICER OF THE PERSON SEARCHED. HE FURTHER STATED T HAT PROCEEDINGS U/S 153C ARE INITIATED ON THE BASIS OF UNDATED CHEQUE ISSUED BY M/S. DURGA FINANCES PROPRIETOR - SMT. REKHABEN THAKKAR IN FAVOUR OF SHR I VIJAY K. CHAUHAN. THAT THE SEARCH AND SEIZURE PROCEEDINGS WERE CARRIE D OUT IN THE CASE OF KABHAI CHAUHAN GROUP OF CASES ON 04.03.2005. THERE FORE, THE UNDATED CHEQUE PERTAINED TO ASSESSMENT YEAR 2005-06 AND NOT FOR ASSESSMENT YEAR 1999-2000 TO 2004-05 FOR WHICH SATISFACTION DATED 0 8.11.2005 WAS RECORDED. HE, THEREFORE, SUBMITTED THAT WHEN THE SEIZED PAPER DOES NOT BELONG TO ANY OF THE SIX YEARS TO WHICH THE SATISFACTION NOTE WAS RECORDED, OBVIOUSLY THE SATISFACTION IS INVALID SO FAR THE YEARS UNDER CONS IDERATION ARE CONCERNED. HE FURTHER STATED THAT ONCE THE CHEQUE IS ISSUED BY THE ASSESSEE AND HANDED OVER TO THE PAYEE, IT IS THE PAYEE TO WHOM SUCH CHE QUE BELONGS. HE SUBMITTED THAT SECTION 153C USES THE WORD BELONGS TO AND DOES NOT USE THE WORD PERTAINING TO. THAT SECTION 153C HAS BE EN MODIFIED BY THE FINANCE ACT, 2015 WHEREBY THE WORD BELONGS TO HAS BEEN USED WITH REFERENCE TO MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE OR THING. BUT THE WORD PERTAINING TO HAS BEEN USED WITH REF ERENCE TO BOOKS OF ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 4 ACCOUNTS OR DOCUMENTS. THAT IN THE SATISFACTION NOT E, THE ASSESSING OFFICER HIMSELF HAS MENTIONED THAT THE DOCUMENT (CHEQUE) FO UND FROM KABHAI CHAUHAN GROUP OF CASES PERTAINED TO THE ASSESSEE I. E. SMT. REKHABEN THAKKAR. THAT THE PROCEEDINGS U/S 153C CAN BE VALID LY INITIATED AGAINST THE PERSON IF THE DOCUMENT PERTAINING TO HIM IS SEIZED WITH SOME OTHER PERSON FROM ASSESSMENT YEAR 2015-16 ONWARDS AND NOT FOR EA RLIER YEARS. IN VIEW OF THESE FACTS, IT IS SUBMITTED BY THE LD. COUNSEL THA T THE ASSUMPTION OF JURISDICTION U/S 153C BY THE ASSESSING OFFICER IS I LLEGAL AND THEREFORE, THE NOTICE ISSUED U/S 153C SHOULD BE QUASHED. 7. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. HE SUBMITTED THAT THE ASSESSEE IS CARRYING ON ACTIVITIES OF ISSUING CHEQUE TO THIRD P ARTIES SO AS TO FACILITATE THEM TO CARRY ON UN-RECORDED TRANSACTIONS. SUCH AC TIVITIES WERE CARRIED ON BY THE ASSESSEE IN A REGULAR AND SYSTEMATIC MANNER. THE REVENUE DURING THE COURSE OF SEARCH OF KABHAI CHAUHAN GROUP OF CAS ES WAS ABLE TO CATCH HOLD OF UNDATED CHEQUE ISSUED BY M/S. DURGA FINANCE , I.E., ASSESSEES PROPRIETORSHIP CONCERN. HE SUBMITTED THAT THE CHEQU E BELONGS TO THE ASSESSEE, BECAUSE, EVEN AFTER THE ISSUE OF CHEQUE, THE ASSESSEE CAN CONTROL THE TRANSACTION. THE ASSESSEE HAS A FULL RIGHT OF MAKI NG THE STOP PAYMENT FROM THE BANK. THEREFORE, TILL THE CHEQUE IS REALIZED BY THE PAYEE, THE CHEQUE WILL BE BELONGING TO THE ASSESSEE. IN SUPPORT OF THIS CO NTENTION, HE RELIED UPON THE DECISION OF KAMLESHBHAI DHARAMSHIBHAI PATEL VS. CIT, 31 TAXMAN.COM 50 (GUJ.). THE LD. DEPARTMENTAL REPRESENTATIVE FURT HER SUBMITTED THAT THERE IS NO REQUIREMENT OF A FORMAL RECORDING OF SATISFAC TION BY THE ASSESSING OFFICER OF THE PERSON SEARCHED. IF HE IS SATISFIED THAT SOME DOCUMENT BELONGING TO THE PERSON OTHER THAN THE PERSON SEARC HED, HE HAS TO SIMPLY HANDOVER SUCH DOCUMENT TO THE ASSESSING OFFICER OF THE PERSON TO WHOM SUCH DOCUMENT BELONG AND THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 5 PERSON HAS TO ISSUE NOTICE U/S 153C. IN THESE CASE S, SINCE THE ASSESSING OFFICER OF THE PERSON SEARCHED AS WELL AS THE ASSES SING OFFICER OF THE ASSESSEE WERE THE SAME, THERE WAS NO QUESTION OF FO RMALLY HANDING OVER AND TAKING OVER OF THE DOCUMENT. HE REITERATED THAT THE RE IS NO REQUIREMENT OF RECORDING OF FORMAL SATISFACTION, EITHER BY THE ASS ESSING OFFICER OF THE PERSON SEARCHED OR BY THE ASSESSING OFFICER OF THIR D PERSON TO WHOM THE DOCUMENT BELONGS. HOWEVER, IN THIS CASE, THE SATIS FACTION HAS ALREADY BEEN RECORDED BY THE REVENUE. HE SUBMITTED THAT THE ASSE SSING OFFICER OF THE PERSON SEARCHED AS WELL AS THE ASSESSEE ARE THE SAM E; THEREFORE, THE SATISFACTION RECORDED BY THE ASSESSING OFFICER SHOU LD BE DEEMED TO BE SATISFACTION OF BOTH THE OFFICERS. HE, THEREFORE, SUBMITTED THAT ALL THE CONDITIONS FOR INITIATING THE PROCEEDINGS U/S 153C WERE DULY FULFILLED AND THE CIT(A) RIGHTLY SUSTAINED THE VALIDITY OF INITIA TION OF PROCEEDINGS U/S 153C IN THE CASE OF THE ASSESSEE FOR THE YEARS UNDE R CONSIDERATION. THEREFORE, THE SAME SHOULD BE SUSTAINED AND THE GROUND NO.1.1 OF THE ASSESSEES APPEALS SHOULD BE DISMISSED. 8. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BO TH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. SECTION 153C OF THE INCOME-TAX ACT, 1961 READS AS UNDER:- '153C. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 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 DOCUM ENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESS ING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDAN CE WITH THE PROVISIONS OF SECTION 153A:].' ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 6 9. FROM THE ABOVE, IT IS EVIDENT THAT ACTION UNDER SECTION 153C CAN BE TAKEN IN RESPECT OF ANY OTHER PERSON THAN THE PERSO N SEARCHED IF THE ASSESSING OFFICER OF THE PERSON SEARCHED IS SATISFI ED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. IN SUCH CIRCUMSTANCES, HE SHALL HAND OVER TO THE ASSESSING OFFICER OF SUCH OTHER PERSON MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS. THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER PERSON SHALL PROCEED AGAINST THE SAID PERSON TO ASS ESS OR REASSESS HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. THEREFORE, RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE PERSON SEARCHED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED BELONG TO THE PERSON OTHER THAN TH E PERSON SEARCHED IS A SINE QUA NON FOR INITIATING ACTION UNDER SECTION 15 3C. 10. THE LD. DEPARTMENTAL REPRESENTATIVE HAS CONTEND ED THAT THOUGH THE ASSESSING OFFICER OF THE PERSON SEARCHED SHOULD BE SATISFIED THAT MONEY, BULLION, JEWELLERY OR ANY OTHER VALUABLE ARTICLE OR THE BOOKS OF ACCOUNTS OR DOCUMENTS BELONG TO THE PERSON OTHER THAN THE PERSO N SEARCHED, BUT THERE IS NO REQUIREMENT OF RECORDING OF A FORMAL SATISFACTIO N BY HIM. WE ARE UNABLE TO AGREE WITH THIS CONTENTION OF THE LD. DEPARTMENT AL REPRESENTATIVE. WHILE TAKING THIS VIEW, WE DERIVE SUPPORT FROM THE DECISI ON OF HONBLE APEX COURT IN THE CASE OF MANISH MAHESHWARI VS. ACIT AND ANOTHER, REPORTED IN (2007) 289 ITR 341 (SC), WHEREIN THEIR LORDSHIPS AT PAGE 348 HELD AS UNDER:- 'THE CONDITION PRECEDENT FOR INVOKING A BLOCK ASSES SMENT IS THAT A SEARCH HAS BEEN CONDUCTED UNDER SECTION 132, OR DOCUMENTS OR A SSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. THE SAID PROVISIO N WOULD APPLY IN THE CASE OF ANY PERSON IN RESPECT OF WHOM SEARCH HAS BEEN CA RRIED OUT UNDER SECTION 132A OR DOCUMENTS OR ASSETS HAVE BEEN REQUISITIONED UNDER SECTION 132A. SECTION 158BD, HOWEVER, PROVIDES FOR TAKING RECOURS E TO A BLOCK ASSESSMENT ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 7 IN TERMS OF SECTION 158BC IN RESPECT OF ANY OTHER P ERSON, THE CONDITIONS PRECEDENT WHEREFOR ARE : (I) SATISFACTION MUST BE R ECORDED BY THE ASSESSING OFFICER THAT ANY UNDISCLOSED INCOME BELONGS TO ANY PERSON, OTHER THAN THE PERSON WITH RESPECT TO WHOM SEARCH WAS MADE UNDER S ECTION 132 OF THE ACT; (II) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASS ETS SEIZED OR REQUISITIONED HAD BEEN HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON; AND (III) THE ASSESSING OFFICER HAS P ROCEEDED UNDER SECTION 158BC AGAINST SUCH OTHER PERSON. THE CONDITIONS PRECEDENT FOR INVOKING THE PROVISION S OF SECTION 158BD, THUS, ARE REQUIRED TO BE SATISFIED BEFORE THE PROVISIONS OF THE SAID CHAPTER ARE APPLIED IN RELATION TO ANY PERSON OTHER THAN THE PE RSON WHOSE PREMISES HAD BEEN SEARCHED OR WHOSE DOCUMENTS AND OTHER ASSETS H AD BEEN REQUISITIONED UNDER SECTION 132A OF THE ACT.' 11. THOUGH THE ABOVE DECISION WAS GIVEN BY THEIR L ORDSHIPS OF THE HONBLE APEX COURT WITH REFERENCE TO SECTION 158BD OF THE INCOME-TAX ACT; HOWEVER, THE LANGUAGE OF SECTION 158BD AND SECTION 153C OF THE INCOME-TAX ACT ARE ALMOST SIMILAR. THEREFORE, IN OUR OPINION, THE RATIO OF THE DECISION GIVEN WITH REFERENCE TO SECTION 158BD WOULD BE SQUA RELY APPLICABLE WHILE INTERPRETING SECTION 153C. 12. IN THE ABOVE LEGAL BACKGROUND, LET US NOW EXAMI NE THE FACTS OF THE ASSESSEES CASE SO AS TO FIND OUT WHETHER THE JURIS DICTION ASSUMED U/S 153C IS VALID. THE SATISFACTION NOTE RECORDED BY THE AS SESSING OFFICER READS AS UNDER:- NAME OF THE ASSESSEE : SMT. REKHABEN K. THAKKAR PROP. M/S. DURGA FINANCE A.Y. : 1999-00 TO 2004-05 SATISFACTION NOTE FOR ISSUING NOTICE U/S 153C OF TH E ACT SEARCH AND SEIZURE PROCEEDINGS U/S WERE CARRIED OUT ON 04.03.2005 AT THE RESIDENTIAL / BUSINESS PREMISES IN THE KABHAI CHAUH AN GROUP OF CASES. DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. ON SCRUTINY OF THE DOCUMENTS SO SEIZED, IT IS NOTICED THAT CERTAIN ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 8 DOCUMENTS WERE FOUND TO BE PERTAINING TO THE ABOVE ASSESSEE, INCLUDING THE FOLLOWING DOCUMENTS: UNDATED CHEQUE ISSUED BY M/S. DURGA FINANCE IN FAVO UR OF SHRI VIJAY K. CHAUHAN SEIZED FROM THE PREMISES OF SHRI BRIJESH K. CHAUHAN. SINCE, THE ABOVE DOCUMENTS, PERTAINING TO THE ABOVE NAMED ASSESSEE HAVE BEEN FOUND, I AM SATISFIED THAT THE PROVISIONS OF S ECTION 153C OF THE ACT APPLY IN THIS CASE AND, THEREFORE, NOTICE U/S 153C IS BEING ISSUED. BARODA (AMAL GARG) DATE : 08.11.2005 DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE -1, BARODA 13. FROM THE ABOVE, IT IS EVIDENT THAT THE SATISFAC TION IS RECORDED IN THE CASE OF SMT. REKHABEN K. THAKKAR, PROPRIETOR OF M/S . DURGA FINANCE. THUS, THE SATISFACTION IS RECORDED IN THE CASE OF THE PER SON OTHER THAN THE PERSON SEARCHED. AS WE HAVE ALREADY MENTIONED THAT AS PER SECTION 153C, THE ASSESSING OFFICER OF THE PERSON SEARCHED SHOULD BE SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS BELONG TO A PERSON OTHER THAN THE PERSON SEARCHED. ADMITTEDLY, IN THIS CASE, THE SATISFACTION IS RECOR DED NOT BY THE ASSESSING OFFICER OF THE PERSON SEARCHED BUT BY THE ASSESSING OFFICER OF THE PERSON TO WHOM SUCH DOCUMENT CLAIMED TO BE BELONGING. IT WAS CONTENDED BY THE LD. COUNSEL THAT SINCE THE ASSESSING OFFICER OF THE PER SON SEARCHED AS WELL AS THE ASSESSING OFFICER OF SUCH OTHER PERSON IS THE S AME; THEREFORE, THE SATISFACTION RECORDED BY THE ASSESSING OFFICER SHOU LD BE CONSIDERED AS THE PROPER COMPLIANCE OF SECTION 153C. WE ARE UNABLE TO AGREE WITH THIS VIEW OF THE LD. DEPARTMENTAL REPRESENTATIVE. EVEN IF TH E ASSESSING OFFICER ASSESSING THE PERSON SEARCHED AS WELL AS OTHER PERS ON WHOSE ASSETS, BOOKS OF ACCOUNT OR DOCUMENTS WERE FOUND AT THE TIME OF SEAR CH IS SAME, THEN ALSO, FIRST WHILE MAKING THE ASSESSMENT IN THE CASE OF TH E PERSON SEARCHED, HE HAS TO RECORD THE SATISFACTION THAT THE MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DO CUMENTS BELONG TO THE ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 9 PERSON OTHER THAN THE PERSON SEARCHED. THEN, THE CO PY OF THIS SATISFACTION NOTE IS TO BE PLACED IN THE FILE OF SUCH OTHER PERS ON AND THE RELEVANT DOCUMENT SHOULD ALSO BE TRANSFERRED FROM THE FILE O F PERSON SEARCHED TO THE FILE OF SUCH OTHER PERSON. THEREAFTER, IN THE CAPAC ITY OF THE ASSESSING OFFICER OF SUCH OTHER PERSON, THE ASSESSING OFFICER HAS TO ISSUE THE NOTICE UNDER SECTION 153C. THE ASSESSING OFFICER OF THE PERSON S EARCHED AND SUCH OTHER PERSON MAY BE THE SAME BUT THESE ARE TWO DIFFERENT ASSESSEES AND, THEREFORE, THE ASSESSING OFFICER HAS TO CARRY OUT THE DUAL EXE RCISE, FIRST AS THE ASSESSING OFFICER OF THE PERSON SEARCHED IN WHICH H E HAS TO RECORD THE SATISFACTION, DURING THE COURSE OF ASSESSMENT PROCE EDINGS OF THE PERSON SEARCHED. AFTER RECORDING SUCH SATISFACTION NOTE IN THE FILE OF THE PERSON SEARCHED, THE SAME IS TO BE PLACED IN THE FILE OF S UCH OTHER PERSON. THEN, IN HIS CAPACITY AS THE ASSESSING OFFICER OF SUCH OTHER PERSON, HE SHOULD TAKE COGNIZANCE OF SUCH SATISFACTION NOTE AND THEREAFTER ISSUE NOTICE UNDER SECTION 153C. IN THIS CASE, THIS EXERCISE OF RECORD ING THE SATISFACTION DURING THE ASSESSMENT PROCEEDINGS OF THE PERSON SEARCHED H AS NOT BEEN CARRIED OUT. ON THE OTHER HAND, THE ASSESSING OFFICER RECORDED T HE SATISFACTION IN THE CASE OF SUCH OTHER PERSON WHICH DOES NOT SATISFY TH E CONDITION OF ASSUMING JURISDICTION UNDER SECTION 153C. 14. NOTICES U/S 153C HAVE BEEN ISSUED FOR ASSESSMEN T YEAR 1999-2000 TO 2004-2005. THE ONLY DOCUMENT ON THE BASIS OF WHICH THE NOTICES HAVE BEEN ISSUED IS AN UNDATED CHEQUE FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF KABHAI CHAUHAN GROUP ON 04.03.2005. AN UNDATED CHEQUE FOUND ON 04.03.2005 CANNOT PERTAIN TO THE PREVIOUS YEARS 1998-1999 TO 2003- 04. IT CAN PERTAIN TO PREVIOUS YEAR 2004-05 AND TH US, CAN BE RELEVANT ONLY FOR ASSESSMENT YEAR 2005-06 AND NOT IN EARLIER YEARS. A DMITTEDLY, THERE IS NO SEIZED MATERIAL IN THE YEARS FOR WHICH NOTICES U/S 153C HAVE BEEN ISSUED. ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 10 15. AS PER SECTION 153C, AS IT STOOD AT THE RELEVAN T TIME, SECTION 153C WOULD BE APPLICABLE IF THE ASSESSING OFFICER IS SAT ISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED BELONG TO A PERSON OTHER THAN TH E PERSON SEARCHED. THEREFORE, THE QUESTION IS WHETHER THE CHEQUE WHICH IS FOUND DURING THE COURSE OF SEARCH AT KABHAI CHAUHAN GROUP CAN BE SAI D TO BE BELONGING TO THE ASSESSEE. IT IS CONTENDED BY THE LD. COUNSEL TH AT CHEQUE ONCE ISSUED BY A PERSON BECOMES THE PROPERTY OF THE DRAWEE AND THERE FORE, IT CANNOT BE SAID TO BE BELONGING TO THE PERSON WHO ISSUED THE CHEQ UE. THE CHEQUE CANNOT BELONG TO TWO PERSONS AT THE SAME TIME. 16. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, SUBMITTED THAT TILL THE CHEQUE IS ENCASHED, THE PERSON WHO IS SUES THE CHEQUE REMAINS IN CONTROL OF THE CHEQUE, BECAUSE HE CAN MAKE THE STOP PAYMENT OF THE CHEQUE. THE LD. DEPARTMENTAL REPRESENTATIVE HAS ALSO RELIED UPON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KA MLESHBHAI DHARAMSHIBHAI PATEL VS. CIT (SUPRA) SO AS TO CONTEN D THAT THE MEANING OF WORD BELONGING TO QUITE WIDE. 17. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE P ARTIES AND THE FACTS OF THE CASE, WE ARE UNABLE TO AGREE WITH THE CONTENTIO N OF THE LD. DEPARTMENTAL REPRESENTATIVE. THE ASSESSING OFFICER, WHO RECORDE D THE SATISFACTION FOR THE PURPOSE OF ISSUE OF NOTICE U/S 153C, HAS MENTIONED ON SCRUTINY OF THE DOCUMENTS SO SEIZED, IT IS NOTICED THAT CERTAIN DOC UMENTS WERE FOUND TO BE PERTAINING TO THE ABOVE ASSESSEE. THUS, EVEN AS PER ASSESSING OFFICER, WHO RECORDED THE SATISFACTION FOR ISSUE OF NOTICE U/S 1 53C, THE DOCUMENT I.E., THE UNDATED CHEQUE WAS PERTAINING TO THE ASSESSEE AND NOT BELONGING TO THE ASSESSEE. THE DECISION OF THE HONBLE JURISDICTIONA L HIGH COURT RELIED UPON BY THE LD. CIT-DR IS ON DIFFERENT FACTS. IN THE AB OVE CASE, THE ASSESSEE SOLD ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 11 CERTAIN LAND TO THE COMPANY NAMED S. SUBSEQUENTL Y, DURING THE COURSE OF SEARCH AT THE PREMISES OF S, CERTAIN DOCUMENTS IN CLUDING THE SALE DEED AS WELL AS AN AGREEMENT BETWEEN THE TENANT AND THE ASS ESSEE WAS FOUND. THE AGREEMENT BETWEEN THE ASSESSEE AND THE TENANT WAS R ELATING TO THE VACATION OF THE PLOT OF LAND ON CERTAIN PAYMENT MADE BY THE ASSESSEE. THEIR LORDSHIPS OF THE JURISDICTIONAL HIGH COURT HAVE HEL D AGREEMENT BETWEEN TENANTS OF THE PETITIONER WOULD CERTAINLY SATISFY T HE REQUIREMENT OF SECTION 153C OF THE ACT. THUS, THE AGREEMENT BETWEEN THE TENANT AND THE PETITIONER FOUND FROM S WAS HELD TO BE BELONGING TO THE ASSESSEE BECAUSE IT WAS NOT BELONGING TO THE PERSON SEARCHED. HOWEVER, CHEQUE ISSUED BY THE ASSESSEE WAS IN THE NAME OF VIJAY K. CHAUHAN I.E., THE PERSON OF THE GROUP WHICH WAS SEARCHED. THE CHEQUE WAS FOUND FROM THE PERSON UPON WHOM THE CHEQUE WAS DRAWN. THEREFORE, IN OUR OPINION, TH E CHEQUE BELONGS TO THE PERSON UPON WHOM IT WAS DRAWN AND CANNOT BE SAI D TO BE CONTINUED TO BELONGING TO THE PERSON WHO ISSUED THE CHEQUE. TH EREFORE, IN OUR OPINION, THE CONDITIONS FOR ISSUE OF NOTICE U/S 153C WERE NO T SATISFIED. FOR READY REFERENCE, WE MAY SUMMARIZE THE REASONS ON THE BASI S OF WHICH WE FORM OPINION THAT THE CONDITION OF ISSUE OF NOTICE U/S 1 53C WAS NOT SATISFIED, AS UNDER:- A. NO SATISFACTION IS RECORDED BY THE ASSESSING OFFICE R OF THE PERSON SEARCHED. ON THE OTHER HAND, SATISFACTION IS RECOR DED BY THE ASSESSING OFFICER OF SUCH OTHER PERSON IN WHOSE CAS E NOTICE U/S 153C WAS ISSUED. B. THE ONLY DOCUMENT ON THE BASIS OF WHICH NOTICE U/S 153C WAS ISSUED FOR SIX YEARS WAS THE UNDATED CHEQUE FOUND D URING THE COURSE OF SEARCH ON 04.03.2005. THUS, THE CHEQUE WA S NOT PERTAINING TO ANY OF THE YEARS FOR WHICH NOTICE WAS ISSUED U/S 153C. ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 12 C. THE CHEQUE, ON THE BASIS OF WHICH THE NOTICE U/S 15 3C WAS ISSUED, CANNOT BE SAID TO BE BELONGING TO THE ASSESSEE. IN VIEW OF ABOVE, WE ARE OF THE OPINION THAT THE CO NDITIONS FOR ISSUE OF NOTICE U/S 153C WERE NOT SATISFIED. ACCORDINGLY, W E QUASH THE NOTICES ISSUED FOR ASSESSMENT YEARS 1999-2000 TO 2004-2005. CONSEQUENTLY, THE ASSESSMENT ORDERS PASSED IN PURSUANCE TO SUCH NOTIC ES ARE ALSO QUASHED. 18. SINCE WE HAVE ALREADY QUASHED THE ASSESSMENT OR DER, THE OTHER GROUNDS RAISED BY THE ASSESSEE WITH REGARD TO THE A DDITIONS SUSTAINED BY THE CIT(A) DO NOT SURVIVE FOR ADJUDICATION. IT(SS)A NO. 666 TO 671 /AHD/2010 ASSESSEES APPE ALS : AYS 1999-00 TO 2004-05 19. THESE ARE THE APPEALS FILED BY THE ASSESSEE AGA INST THE LEVY OF PENALTY U/S 271(1)(C). IN ALL THESE APPEALS, THE ONLY COMM ON GROUND RAISED BY THE ASSESSEE IS AGAINST THE LEVY OF PENALTY U/S 271(1)( C), WHICH IS SUSTAINED BY THE CIT(A). WHILE DISPOSING OF THE ASSESSEES APPE AL VIDE ITA NOS. 3088 TO 3093/AHD/2008, WE HAVE QUASHED THE ASSESSMENT ORDER S PASSED IN PURSUANCE TO NOTICE U/S 153C FOR ASSESSMENT YEARS 1 999-20000 TO 2004-05. ONCE THE ASSESSMENT ORDERS ARE QUASHED, THE PENALTY LEVIED ON THE BASIS OF SUCH ASSESSMENT ORDERS CANNOT SURVIVE. WE, THEREFOR E, CANCEL THE PENALTY LEVIED FOR ASSESSMENT YEARS 1999-2000 TO 2004-05. 20. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 12 TH JUNE, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 12/06/2015 BIJU T., PS ITA NOS. 3088 TO 3093/AHD/2008 & IT(SS) NOS. 666 TO 671/AHD/2010 - SMT. REKHABEN THAKKAR AYS: 1999-00 TO 2004-05 13 $% &' ($'# $% &' ($'# $% &' ($'# $% &' ($'#/ COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. &+)* / THE RESPONDENT. 3. ,, - / CONCERNED CIT 4. - ( ) / THE CIT(A) 5. '01 & , , / DR, ITAT, AHMEDABAD 6. 123 4 / GUARD FILE . $% $% $% $% / BY ORDER, TRUE COPY 5 55 5/ // / ,6 ,6 ,6 ,6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD