THE ACIT-1(1), Bhopal V. SHRI YOGESH PATERIYA, Bhopal

ITSSA 86/IND/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4667 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 14-02-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-02-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 02-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Keywords: Validity of assessment
• Section: 143(3); 153A; 147; 148; 132; 139

Judgement Text

YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA(SS) NO.86 TO 88/IND/2016 ASSESSMENT YEARS 2006-07 TO 2008-09 C.O. NO. 23 TO 25/IND/2016 ASSESSMENT YEARS 2006-07 TO 2008-09 REVENUE BY SMT. ASHIMA GUPTA, CIT ASSESSEE BY S/SHRI SUMIT NEMA SR. ADVOCATE WITH GAGAN TIWARI, ADVOCATE DATE OF HEARING 0 5 .02.2019 DATE OF PRONOUNCEMENT 1 4 .02.2019 ACIT 1(1), BHOPAL VS. SHRI YOGESH PATERIA, PROP. RADIATION IMAGE COMMUNICATION, M-704, VIJAY STAMBH, PRESS COMPLEX, ZONE-1, MP NAGAR, BHOPAL (APPELLANT) (RESPONDENT ) PAN NO. AHXPP4957H SHRI YOGESH PATERIA, PROP. RADIATION IMAGE COMMUNICATION, M-704, VIJAY STAMBH, PRESS COMPLEX, ZONE-1, MP NAGAR, BHOPAL VS. A CIT 1(1) , BHOPAL (APPELLANT) (RESPONDENT ) PAN NO. AHXPP4957H YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 2 O R D E R PER BENCH. THE ABOVE CAPTIONED BUNCH OF APPEALS FILED AT THE I NSTANCE OF THE REVENUE AND CROSS OBJECTION BY ASSESSEE PERTAIN ING TO ASSESSMENT YEAR 2006-07 TO 2008-09 ARE DIRECTED AGA INST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS) (IN SHORT LD.CIT(A)], UJJAIN DATED 10.03.2016 WHICH ARE AR ISING OUT OF THE ORDER U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE IN COME TAX ACT 1961(IN SHORT THE ACT) DATED 29.12.2009 FRAMED B Y DCIT-1(2) BHOPAL. 2. REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL; ASSESSMENT YEAR 2006-07 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEAL) HAS ERRED IN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.25,48,100/- AS PAYME NT MADE TO SUB CONTRACTORS WHEREAS ALLEGED SUB CONTRACTORS THEMSEL VES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.10,90,600/- MADE TO M/S. NIKITA FILMS WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.27,93,107/- MADE TO M/S. YASH DIGITAL WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 3 ASSESSMENT YEAR 2007-08 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEAL) HAS ERRED IN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,14,32,000/- AS PAY MENT MADE TO SUB CONTRACTORS WHEREAS ALLEGED SUB CONTRACTORS THEMSEL VES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.70,06,355/-- MADE TO M/S. NIKITA FILMS WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.35,78,266/- MADE TO M/S. YASH DIGITAL WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE ON THE ISSUE OF BO GUS EXPENSES ON ACCOUNT OF CABLE NETWORK FROM RS.2,20,50,140/- TO RS.5,00,000/- WHEREAS THE ASSESSEE HAS FAILED TO PRODUCE ANY BILL /VOUCHER RELATING TO SAID EXPENSES DURING THE ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS. ASSESSMENT YEAR 2008-09 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(APPEAL) HAS ERRED IN: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.1,84,50,000/- AS PAY MENT MADE TO SUB CONTRACTORS WHEREAS ALLEGED SUB CONTRACTORS THEMSEL VES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.50,25,222/- MADE TO M/S. NIKITA FILMS WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.60,14,593/- MADE TO M/S. YASH DIGITAL WHEREAS THE ROUTE OF TRANSFER OF FUND TO ALLEGED SU BCONTRACTORS IS YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 4 ESTABLISHED AND THESE ALLEGED SUB CONTRACTORS THEMS ELVES ADMITTED ON OATH THAT THEY WERE ACTING UNDER CONTROL AND AUTHOR ITY OF THE ASSESSEE. 3. ASSESSEE HAS RAISED CROSS OBJECTIONS AS FOLL OWS; ASSESSMENT YEAR 2006-07 (1) THAT THE LEARNED CIT (A) ERRED IN LAW AND ON FA CTS IN CONCLUDING THAT THE AO HAS FOLLOWED THE PROPER PROCEDURE BEFORE ISSUING NOTICE U/S 153C. THE SAID FINDING IS PERVERSE BOTH IN LAW AND ON FACTS S INCE THE NECESSARY 'SATISFACTION' FOR INITIATING 153C PROCEEDINGS WAS NEVER RECORDED IN THE CASE OF THE SEARCHED PERSON I.E. MR. YOGIRAJ SHARNI A. THE ENTIRE ASSESSMENT ORDER IS NULL AND VOID AS THE JURISDICTI ONAL ASPECT OF RECORDING OF SATISFACTION IS COMPLETELY MISSING. THE ASSESSME NT ORDER IS CONTRARY TO THE RATIO OF JURISDICTIONAL HIGH COURT IN CIT VS. M ACHMEN (MP) AND IS HULL AND VOID. (2) THAT WITHOUT PREJUDICE TO THE AFORESAID GROUND, THE LEARNED CIT(A) ALSO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ALLEGED DOCUMENT ILL THE FORM OF PHOTOSTAT COPY OF A BANK ACCOUNT CANNOT CONSTITUTE AN INCRIMINATING MATERIAL SO AS TO FORM A BASIS OF INI TIATING PROCEEDINGS U/S 153C AGAINST MR. PATERIA. ASSESSMENT YEAR 2007-08 (1) THAT THE LEARNED CIT (A) ERRED IN LAW AND ON FA CTS IN CONCLUDING THAT THE AO HAS FOLLOWED THE PROPER PROCEDURE BEFORE ISSUING NOTICE U/S 153C. THE SAID FINDING IS PERVERSE BOTH IN LAW AND ON FACTS S INCE THE NECESSARY 'SATISFACTION' FOR INITIATING 153C PROCEEDINGS WAS NEVER RECORDED IN THE CASE OF THE SEARCHED PERSON I.E. MR. YOGIRA] SHARMA . THE ENTIRE ASSESSMENT ORDER IS NULL AND VOID AS THE JURISDICTI ONAL ASPECT OF RECORDING OF SATISFACTION IS COMPLETELY MISSING. THE ASSESSME NT ORDER IS CONTRARY TO THE RATIO OF JURISDICTIONAL HIGH COURT IN CIT VS. M ACHMEN (MP) AND IS NULL AND VOID. (2) THAT WITHOUT PREJUDICE TO THE AFORESAID GROUND, THE LEARNED CIT(A) ALSO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT THE ALLEGED DOCUMENT IN THE FORM OF PHOTOSTAT COPY OF A BANK ACCOUNT CANNOT CONSTITUTE AN INCRIMINATING MATERIAL SO AS TO FORM A BASIS OF INI TIATING PROCEEDINGS U/S I53E AGAINST MR. PATERLA YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 5 (3) THAT THE LD. CIT(A) WAS NOR JUSTIFIED EITHER I N LAW OR ON FACTS IN SUSTAINING THE ADDITION OF RS. 5,00,000 TOWARDS ALL EGED PAYMENT MADE BY THE ASSESSEE IN RESPECT OF EXPENSES OF CABLE NETWOR K. ASSESSMENT YEAR 2008-09 (1) THAT THE LEARNED CIT (A) ERRED IN LAW AND ON FA CTS IN CONCLUDING THAT THE AO HAS FOLLOWED THE PROPER PROCEDURE BEFORE ISSUING NOTICE U/S 153C. THE SAID FINDING IS PERVERSE BOTH IN LAW AND ON FACTS S INCE THE NECESSARY 'SATISFACTION' FOR INITIATING 153C PROCEEDINGS WAS NEVER RECORDED IN THE CASE OF THE SEARCHED PERSON I.E. MR. YOGIRAJ SHARMA . THE ENTIRE ASSESSMENT ORDER IS NULL AND VOID AS THE JURISDICTI ONAL ASPECT OF RECORDING OF SATISFACTION IS COMPLETELY MISSING. THE ASSESSME NT ORDER IS CONTRARY TO THE RATIO OF JURISDICTIONAL HIGH COURT IN CIT VS. M ACHMEN (MP) AND IS NULL AND VOID. (2) THAT WITHOUT PREJUDICE TO THE AFORESAID GROUND, THE LEARNED CIT(A) ALSO ERRED ILL LAW AND ON FACTS IN NOT APPRECIATING THAT THE ALLEGED DOCUMENT ILL THE FORM OF PHOTOSTAT COPY OF A BANK ACCOUNT CANNOT CONSTITUTE AN INCRIMINATING MATERIAL SO AS TO FORM A BASIS OF INI TIATING PROCEEDING U/S 153C AGAINST MR. PATERIA. 4. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS PROPRIETOR OF M/S. RADIATION IMAGE COMM UNICATION ENGAGED IN THE BUSINESS OF ADVERTISING AND PUBLICIT Y OF VARIOUS GOVERNMENT DEPARTMENTS. RETURN OF INCOME FOR RESPE CTIVE ASSESSMENT YEARS WERE FILED. SEARCH & SEIZURE OPER ATIONS WERE CARRIED OUT U/S 132 OF THE ACT ON 07.09.2017 AT THE PREMISES OF SHRI YOGESH PATERIA. DURING THE COURSE OF SEARCH CE RTAIN INCRIMINATING MATERIAL RELATING TO THE ASSESSEE WER E ALSO FOUND. SUBSEQUENTLY AFTER RECORDING THE REASONS LD.A.O ISS UED NOTICES U/S YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 6 153C R.W.S. 153A OF THE ACT TO FILE RETURN OF INCOM E FOR ASSESSMENT YEAR UNDER APPEAL WHICH WAS DULY COMPLIED AND AFTER RECEIVING THE ASSESSEES SUBMISSION COMPLETED THE ASSESSMENT U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT ON 29.12.2009 AFTER M AKING VARIOUS ADDITIONS. AGAINST THESE ADDITIONS ASSESSEE GOT PA RT RELIEF FROM LD. CIT(A). NOW THE REVENUE IS IN APPEAL AGAINST THE A DDITIONS DELETED BY LD. CIT(A) AND ASSESSEE HAS FILED CROSS OBJECTIO NS CHALLENGING THE ASSUMPTION OF JURISDICTION BY THE LD. A.O TO FRAME THE ASSESSMENT U/S 153COF THE ACT. 5. WE WILL FIRST TAKE UP THE LEGAL GROUND RAISED IN TH E CROSS OBJECTION FILED BY THE ASSESSEE CHALLENGING THE ASS UMPTION OF JURISDICTION AND VALIDITY OF ASSESSMENT PROCEEDINGS U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT AS THERE WERE NO SATI SFACTION RECORDED BY THE LD.A.O OF THE SEARCHED PERSON IN FAVOUR OF T HE LD.A.O OF THE ASSESSEE. 6. AT THE OUTSET LD. SENIOR COUNSEL FOR THE ASSESSEE R EFERRING TO THE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT V/S MECHMEN (2015) 60 TAXMANN.COM 484 (M.P) AS WELL AS CBDT CIRCULAR NO.24/2015 DATED 31.12.2015 SUBMITTED THAT THE BASIC CONDITION FOR THE ASSESSING OFFICER FOR ASSUMING TH E JURISDICTION U/S YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 7 153C OF THE ACT ARISES ON THE BASIS OF SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON IN FA VOUR OF THE ASSESSING OFFICER OF OTHER PERSON ABOUT MONEY, BULL ION, VALUABLE ARTICLES, BOOKS OF ACCOUNTS OR DOCUMENTS PERTAINING TO A PERSON OTHER THAN THE SEARCHED PERSON WHICH ARE SEIZED DUR ING THE COURSE OF SEARCH. IN THE CASE OF THE ASSESSEE NO SATISFAC TION NOTE HAS BEEN PREPARED BY THE ASSESSING OFFICER OF THE SEARCHED P ERSON AND THEREFORE THE ASSESSMENT PROCEEDINGS IN THE CASE OF THE ASSESSEE U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT ARE NULL AND VOID. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE THOUGH S UPPORTED THE ORDERS OF BOTH THE LOWER AUTHORITIES BUT FAILED TO BRING ANY EVIDENCE/RECORD WHICH COULD SHOW THAT PROPER SATISF ACTION NOTE HAS BEEN PREPARED BY THE ASSESSING OFFICER OF THE SEARC HED PERSON IN FAVOUR OF THE ASSESSING OFFICER OF THE ASSESSEE. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE REC ORDS PLACED BEFORE US. IN THE GROUNDS FILED IN THREE CR OSS OBJECTIONS, ONE COMMON ISSUE HAS BEEN RAISED BY ASSESSEE THEREBY CH ALLENGING THE ASSUMPTION OF JURISDICTION OF THE ASSESSING OFFICER AND THEREAFTER FRAMING THE ASSESSMENT U/S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT. FOR THE ASSUMPTION OF THE JURISDICTION IN THE CASE OF PERSON YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 8 OTHER THAN THE SEARCHED PERSON, PROVISION OF SECTIO N 153C OF THE ACT NEED TO BE COMPLIED AND FOR BETTER UNDERSTANDIN G WE REPRODUCE IT BELOW; ASSESSMENT OF INCOME OF ANY OTHER PERSON. 153C. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , WHERE THE ASSESSING OFFICER IS SATISFIED THAT, ( A ) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR ( B ) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQ UISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED 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 JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A , IF, 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 PERSON 17 [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND] FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A : 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 SECTION 132A IN THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSE TS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON : PROVIDED FURTHER THAT THE CENTRAL GOVERNMENT MAY BY RULES 18 MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE, SPECIFY THE CLASS OR CLASS ES 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 PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE 19 [AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS AS R EFERRED TO IN SUB-SECTION (1) OF SECTION 153A ] EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSM ENT HAS ABATED. (2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS S EIZED OR REQUISITIONED AS REFERRED TO IN SUB-SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNI SHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED 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 O THER PERSON AND NO NOTICE UNDER SUB-SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 9 ( B ) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OT HER PERSON BUT NO NOTICE UNDER SUB- SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTI CE UNDER SUB- SECTION (2) OF SECTION 143 HAS EXPIRED, OR ( C ) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MAD E, BEFORE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT O R DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVID ED IN SECTION 153A . 9. FROM PERUSAL OF THE ABOVE PROVISION OF SECTION 153C (1) OF THE ACT IT IS STATUTORILY REQUIRED THAT THE ASSESSING O FFICER OF THE SEARCHED PERSON HAS TO FIRST SATISFY HIMSELF BY WAY OF PREPARING A SATISFACTION NOTE IN CASE ANY MONEY, BULLION, JEWEL LERY OR OTHER VALUABLE ARTICLE OR THINGS OR BOOKS OF ACCOUNTS OR DOCUMENTS ARE SEIZED OR REQUISITIONED WHICH RELATES TO A PERSON O THER THAN THE SEARCHED PERSON REFERRED IN SECTION 153A OF THE ACT , THEN SUCH BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH PERSON AND ONLY AFTER RECEIVING SUCH SATI SFACTION NOTE THE ASSESSING OFFICER OF THE PERSON OTHER THAN THE SEAR CHED PERSON ASSUMES JURISDICTION. 10. SUBSEQUENT TO THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF M/S. CALCUTTA KNITWEARS (2014) 43 TAXMANN.COM 44 6 (SC), CBDT ISSUED A CIRCULAR NO.24/2015 DATED 31.12.2015 DIREC TING THE YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 10 REVENUE AUTHORITIES THAT IF THE GUIDELINES AS LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF M/S. CALCUTTA KNI TWEARS (SUPRA) ARE NOT MET, THEN PENDING LITIGATION WITH REGARD TO NON RECORDING OF SATISFACTION NOTE U/S 158BD AND 153C OF THE ACT SHO ULD BE WITHDRAWN OR NOT PRESSED. RELEVANT PORTION OF THE CBDT CIRCULAR IS REPRODUCED BELOW:- CIRCULAR NO.24/2015 [F.NO.279/MISC./140/2015/ITJ], DATED 31-12-2015 THE ISSUE OF RECORDING OF SATISFACTION FOR THE PURP OSES OF SECTION 158BD/L53C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HON'BLE SUPREME COURT IN THE CASE OF M/S CAL CUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO. 3958 OF 2 014 DATED 12-3-2014 [2014] 43 TAXMANN.COM 446 (SC) (AVAILABLE IN NJRS A T 2014-LL-0312- 51) HAS LAID DOWN THAT FOR THE PURPOSE OF SECTION 1 58BD OF THE ACT, RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREPARED BY THE AO BEFORE HE TRANSMITS THE RECORD TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S 158BD. THE HON'BLE COURT HELD THAT 'THE SATISFACTION NOTE COULD BE PRE PARED 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 OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS AR E COMPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERSON. ' 3. SEVERAL HIGH COURTS HAVE HELD THAT THE PROVISION S OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILAR/PARI-MATERIA TO T HE PROVISIONS OF SECTION 158BD OF THE ACT AND THEREFORE, THE ABOVE GUIDELINE S OF THE HON'BLE SC, APPLY TO PROCEEDINGS U/S 153C OF THE IT ACT, FOR TH E PURPOSES OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PER SON. THIS VIEW HAS BEEN ACCEPTED BY CBDT. YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 11 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS R EFERRED TO IN PARA 2 ABOVE, WITH REGARD TO RECORDING OF SATISFACTION NOT E, 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 ONE AND THE SAME, THEN ALSO HE IS REQUIRED TO RECORD HIS SATISF ACTION AS HAS BEEN HELD BY THE COURTS. 5. IN VIEW OF THE ABOVE, FILING OF APPEALS ON THE I SSUE OF RECORDING OF SATISFACTION NOTE SHOULD ALSO BE DECIDED IN THE LIG HT OF THE ABOVE JUDGMENT. ACCORDINGLY, THE BOARD HEREBY DIRECTS THA T PENDING LITIGATION WITH REGARD TO RECORDING OF SATISFACTION NOTE UNDER SECTION 158BDIL53C SHOULD BE WITHDRAWN/NOT PRESSED IF IT DOES NOT MEET THE GUIDELINES LAID DOWN BY THE APEX COURT. 11. NOW EXAMINING THE FACTS OF THE INSTANT APPEAL AND T O VERIFY WHETHER THE SATISFACTION NOTE HAS BEEN PREPARED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON, WE OBSERVE THAT DUR ING THE COURSE OF PREVIOUS HEARING BEFORE US, REVENUE AUTHORITIES WER E DIRECTED TO FILE A COPY OF THE SATISFACTION NOTE (IF ANY) PREPARED B Y THE ASSESSING OFFICER OF THE SEARCHED PERSON. ON 4.2.2019 DCIT 1 (1), BHOPAL HAS ISSUED LETTER TO THE COMMISSIONER OF INCOME TAX (DR ) ACCEPTING THE INABILITY TO ASCERTAIN AS TO WHETHER ANY SATISFACTI ON NOTE WAS RECORDED OR NOT RECORDED BY THE ASSESSING OFFICER O F THE SEARCHED PERSON SHRI YOGIRAJ SHARMA. RELEVANT PORTION OF THI S LETTER IS EXTRACTED BELOW:- YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 12 F.NO.DCIT 1(1)/BPL/ITAT/2018-19/1784 DATE: 04.02.2019 TO THE COMMISSIONER OF INCOME TAX (DR), C.G.O. BUILDING, 2 ND FLOOR, A-WING, WHITE CHURCH ROAD, INDORE MADAM, SUB: APPELLATE PROCEEDINGS IN THE CASE OF SHRI YOGE SH PATERIYA, BHOPAL ITA (SS) 86TO 88/IND/2016 & CO-23TO25/IND/20 16 FOR THE A.Y. 2006-07 TO 2008-09-REG. KINDLY REFER TO YOUR LETTER DATED 17.01.2019 ON THE ABOVE SUBJECT. IN THIS REGARD, PROCEEDING U/S 153C IN THE CASE SHR I YOGESH PATERIYA, BHOPAL WHERE INITIATED U/S 153C AND SATISFACTION NO TE WAS DULY ACCORDED. THE SEARCHED PERSON IN THE CASE OF SHRI YOGESH PATERIYA WAS SHRI YOGIRAJ SHARMA. DURING THE COURSE OF SEARCH AT THE RESIDENCE OF SHR I YOGIRAJ SHARMA, LPS-2/30 WAS FOUND WHICH CONTAINED INFORMATION IN R ESPECT OF SHRI YOGESH PATERIYA. FROM THE RECORDS OF SHRI YOGIRAJ SHARMA, SATISFACTION NOTE FOR TRANSFERRING INFORMATION/DOCUMENTS TO THE ASSESSING OFFICER OF SHRI YOGESH PATERIYA FOR INITIATION OF PROCEEDING U /S 153C IS NOT TRACEABLE . THEREFORE, THIS OFFICE IS UNABLE TO ASCERTAIN AS TO WHETHER ANY SATISFACTION NOTE WAS RECORDED/NOT RECORDED BY THE ASSESSING OFF ICER OF THE SEARCHED PERSON SHRI YOGIRAJ SHARMA FOR TRANSFERRING INFORMA TION/DOCUMENT PERTAINING TO SHRI YOGESH PATERIYA FOR INITIATION OF PROCEEDINGS U/S 153C. YOURS FAITHFULLY, SD/- (RAJAT SINGHALI) DEPUTY COMMISSIONER OF INCOME TAX-1(1) BHOPAL YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 13 12. FROM PERUSAL OF THE ABOVE LETTER ISSUED BY THE REVE NUE AUTHORITY NAMELY DCIT 1(1), BHOPAL TO LD. DEPARTMEN TAL REPRESENTATIVE THERE REMAINS NO DISPUTE TO THE FACT THAT VITAL CONDITION WHICH WAS REQUIRED TO BE FULFILLED BY THE ASSESSING AUTHORITY BEFORE FRAMING THE ASSESSMENT U/S 153C R. W.S. 153A OF THE ACT HAS NOT BEEN FULFILLED, AS NO SATISFACTION NOTE WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON MR. YOGIRAJ SHARMA BEFORE TRANSFERRING INFORMATION/DOCUMENTS PERTAININ G TO THE ASSESSEE I.E. SHRI YOGESH PATERIYA FOR INITIATION O F THE PROCEEDINGS U/S 153C OF THE ACT. 13. WE THEREFORE RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE APEX COURT AND ALSO IN VIEW OF THE CBDT GUIDELINES ISSUED VIDE CIRCULAR NO.24/2015 AS WELL AS IN THE GIVEN FACTS A ND CIRCUMSTANCES OF THE CASE ARE OF THE VIEW THAT THE ASSESSMENT PROCEEDINGS COMPLETED IN THE CASE OF THE ASSESSEE U /S 153C R.W.S. 153A R.W.S. 143(3) OF THE ACT FOR THE ASSESSMENT YE ARS 2006-07 TO 2008-09 UNDER APPEAL ARE NULL AND VOID AND LIABLE TO BE QUASHED AS CONDITION PRECEDENT TO INITIATE ASSESSMENT PROCE EDINGS U/S 153C OF THE ACT WERE NOT COMPLIED, AS PROPER SATISFACTIO N NOTE WAS NOT YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 14 RECORDED BY ASSESSING OFFICER OF THE SEARCHED PERSO N BEFORE HANDING OVER THE INCRIMINATING MATERIAL TO THE ASSESSING OF FICER OF THE ASSESSEE FOR INITIATING ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT. WE ACCORDINGLY ALLOW THE CROSS OBJECTION OF THE ASS ESSEE FOR ALL THE THREE YEARS. 14. AS REGARDS REVENUES APPEAL NO.86 TO 88/IND/2016, T HE GROUNDS RAISED BY THE REVENUE AUTHORITIES BECOMES I NFRUCTUOUS IN VIEW OF THE FACT THAT WE HAVE ALREADY QUASHED THE A SSESSMENT PROCEEDINGS U/S 153C R.W.S. 153A R.W.S. 143(3) OF T HE ACT. ACCORDINGLY APPEALS OF THE REVENUE FOR ASSESSMENT Y EAR 2006-07 TO 2008-09 ARE DISMISSED AS INFRUCTUOUS. 15. IN THE RESULT APPEALS OF THE REVENUE ARE DISMISSED AND THE CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 14.02.2019. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 14 FEBRUARY, 2019 /DEV YOGESH PATERIA IT(SS) NO. 86 TO88/IND/2016 &C.O. NO.23 TO25/IND/20 16 15 COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE