THE ITO-2 SURENDRANAGAR(REGULAR CHARGE WARD-4(2)(1)), AHMEDABAD V. SHRI PRANAV PRAFULCHANDRA VORA, AHMEDABAD

ITA 183/AHD/2021

AI Insights

The case involves an appeal by the Income Tax Officer against the order of the Commissioner of Income Tax Appeals, which had deleted an addition made to the income of Shri Pranav Prafulchandra Vora, based on alleged undisclosed income from on-money receipts in real estate transactions. The Income Tax Officer had assumed jurisdiction under section 153C of the Income Tax Act following a search operation on a group involved in providing accommodation entries, which included Sarthav Infrastructure Private Limited (SIPL). The Tribunal's decision hinged on the procedural validity of the jurisdiction assumed, particularly the timing of the satisfaction note recorded by the Assessing Officer of the searched person, which was found to be beyond the permissible timeframe as per judicial and administrative guidelines.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315629 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Other Referred Cases: Income Tax Officer v. Vikram Sujit Kumar Bhatia, Commissioner of Income Tax- III v Calcutta Knitwears, Anilkumar Gopikishan Agrawal vs ACIT, HN Safal Group, Hukum Chand Mills Ltd. vs. CIT, New India Life Assurance Co. Ltd. v. CIT, B.R. Bamasi v. CIT, Gilbert and Barkar Mfg. Co.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHINAL SHAH
• Assessee Lawyers: KETAN GAJJAR
• Keywords: Set aside; Unexplained investment; Period of limitation; Principle of natural justice; Loose papers; Reason to believe
• Section: 147; 148; 11; 132; 153A; 69

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE: SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER आयकर अपील सं./I.T.A. No. 183/Ahd/2021 (Ǔनधा[रण वष[ / Assessment Year : 2011-12) The Income Tax Officer Ward -2, Surendranagar बनाम/ Vs. Shri Pranav Prafulchandra Vora 3, Ashapura Park, Behind Vimalnath Society, Near Gokul Park Restaurant, Surendranagar Öथायी लेखा सं./जीआइआर सं./PAN/GIR No. : ACYPV7581R (Appellant) .. (Respondent) अपीलाथȸ ओर से /Appellant by : Shri Dhinal Shah, A.R. Ĥ×यथȸ कȧ ओर से/Respondent by : Shri Ketan Gajjar, Sr. DR Date of Hearing 23/04/2025 Date of Pronouncement 15/05/2025 (आदेश)/ORDER PER SMT. ANNAPURNA GUPTA, AM: The present appeal has been filed by the Revenue against the order passed by Commissioner of Income Tax Appeal (in short ‘CIT(A)’) u/s. 250(6) of the Income Tax Act, 1961 (hereinafter referred to as the Act) dated 30-03-2021 for assessment year 2011- 12. ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 2 – 2. Brief facts of the case are that, search action u/s 132 of the Act was conducted on an alleged accommodation entry provider group on 04-12-2014 in which M/s. Sarthav Infrastructure Private Limited (SIPL) was also covered. SIPL carried out real estate business. During search, MS Excel files were seized from the office of SIPL and the residence of the directors & shareholders of SIPL, i.e Shri Anil Hiralal Shah, Sh. Sanket Jitendrabhai Shah. These sheets were found to allegedly contain records of various receipts and payments in various schemes of SIPL during the period 02-04-2010 to 26-08-2010. Sh Anil Hiralal Shah, when confronted with the same stated the recordings to relate to transactions conducted in the construction activity carried out of Abhishree group which he stated was handled by his brother Sh. Atul Shah. Sh. Atul Shah when confronted with the excel sheets stated the transaction to pertain to the Abhishree group but was unable to confirm whether these were recorded in the books of accounts of the assessee and whether they were in coded form. The sheet was confronted to Sh. Sanjay Mahendrabhai Sutariya, a director & shareholder of SIPL who did not throw much light on the contents of the sheet and was noted by the AO to have evaded giving answers to the questions asked. The AO of the searched entity thereafter went on to interpret the contents of the sheet and finding that some entries therein were reflected in the books/bank accounts of the assessee/SIPL, he decoded the abbreviations in the sheet as also the figures mentioned therein, after matching it with entries recorded in the books of the assessee/SIPL, and interpreted ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 3 – accordingly the sheet to contain data of all receipts and payments in the various real estate projects developed by SIPL. The receipts recorded, he noted, included on- money receipts for the units sold in different projects. Noting the sheet to contain details relating to the assessee before us, Sh Pranav Praful Chandra Vora, he recorded satisfaction and transferred all material to the AO of the assessee, who in turn assumed jurisdiction u/s 153C of the Act to frame assessment on the assessee in terms of section 153A of the Act. Due notices were issued to the assessee, who denied the transaction completely. The AO, however was not convinced with the reply of the assessee and based on the information contained in the excel files as decoded, he held the assessee to have made on money payments of Rs.2,20,35,000/- for investment in Abhishree project of SIPL during the impugned year. Finding the source of the same remaining unexplained, he added the said amount to the income of the assessee. 3. The assessee carried the matter in appeal before the Ld.CIT(A) who held the jurisdiction assumed by the Assessing Officer u/s. 153C of the Act to be invalid and further finding the assessment to have been made in gross violation of principles of natural justice by denying opportunity of cross-examination of the builder or its authorized persons to the assessee, the Ld.CIT(A) also deleted the addition on merits finding that the addition was made merely on the basis of some loose papers which were not ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 4 – even recovered from the premises of the assessee and the addition to be made merely by making presumptions. 4. Against this order of the ld. CIT(A), the Department has come in appeal before us raising the following grounds in its memo of appeal. (a) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,20,35,000/- made on account of undisclosed income u/s 69 of the Act. (b) On the facts and circumstances of the case, Ld CIT(A) ought to have upheld the order of the Assessing Officer. (c) It is, therefore, prayed that the order of Ld CIT(A) may be set aside and that of the Assessing Officer be restored.” 5. Subsequently vide letter dated 31-08-2023, Revised grounds of appeals were filed which read as under: “1. Whether on the facts and the circumstances of the case and in law the Ld CIT(A) has erred in ignoring the fact that incriminating material was seized during the search operations in the form of entries recorded in CCCCC.xls. 2. Whether on the facts and circumstances of the case and in law the Ld CIT(A) has erred by allowing assessee's appeal by holding that AO was not justified in making addition by relying on dumb documents which did not belong to the appellant where the Hon'ble Supreme Court in the case of Income Tax Officer v. Vikram Sujit Kumar Bhatia, 2023 SCC online SC3, the Ld CIT(A) has clearly held that the amendment to section 1530 is retrospective in nature and that the seized material u/s 153C may either belong or pertain to the assessee. 3. Whether on the facts and the circumstances of the case and in law the Ld CIT(A) has erred by deleting an addition made by the AO in assessment order on account of cash payments towards investments in property with M/s Sarthav Infrastructure Pvt Lt, which was not recorded in the books of accounts of the assessee and which is treated as investment out of books and treated as unexplained investment u/s 69 of the Income Tax Act, 1961.” ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 5 – 6. The Ld.Counsel for the assessee was given a copy of the revised grounds and he stated in open court to have no objection to the same. The appeal accordingly was taken up for hearing on the Revised grounds raised by the department. 7. During the course of hearing, the ld. counsel for the assessee invoked Rule 27 of the ITAT Rules, 1963, for raising a legal ground before us in support of the order of the Ld.CIT(A). The ground raised challenged the validity of the jurisdiction assumed by the Assessing Officer in the present case u/s. 153C of the Act. His contention being that the satisfaction recorded by the Assessing Officer of the searched person was not within reasonable time and therefore the jurisdiction assumed u/s 153C of the Act to frame assessment u/s 153A of the Act was not valid. In this regard, he drew our attention to the facts relating to the issue and referred to various judicial decisions in support of his contention, as also to CBDT Circular. Before us, the ld. D.R. however vehemently objected to the entertainment of the grounds raised by the assessee as also to the merits of the contentions raised by the assessee. 8. We shall first deal with this issue. 9. Since the assessee has invoked Rule 27 of the ITAT Rules, 1963 (in short “Rules”) for raising grounds in Department’s appeal, it is pertinent to reproduce Rule 27 of the Rules which reads as under:- “27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him.” ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 6 – 10. As is evident from a bare perusal of the above, if a respondent has not filed an appeal or cross-examination, he is entitled to raise grounds in support of the order appealed against, on any of the grounds which are decided against him. Clearly there is no bar on a respondent to an appeal raising grounds without filing an appeal or cross objection. As per Rule 27 of the ITAT Rules, the only condition is that the ground raised should be:  in support of order of ld. CIT(A),  on an issue decided against him. 11. In the present case, the grounds raised by the ld. counsel for the assessee as a respondent, is vis a vis challenging the validity of the jurisdiction assumed by the AO of the assessee u/s. 153C of the Act on the ground that satisfaction recorded by the Assessing Officer of the searched person was beyond limitation. Admittedly this ground was never raised before the CIT(A) and therefore this issue was not decided against the assessee. Therefore, strictly reading rule 27 of the ITAT rules, the assessee apparently is not entitled to raise this ground. 12. We have however noted that the ITAT Delhi Bench in the case of ITO vs. Gurinder Kaur (2007) 288 ITR 207 (Delhi), had an occasion to deal with an identical situation and held that even dehors Rule 27 of the Income Tax Appellate Tribunal Rules, 1963,it is open to the respondent in an appeal before the Tribunal to raise new grounds in defense of the order appealed against ,noting that the Tribunal has inherent powers u/s. 254(1) of the Act to entertain the argument of the respondent which amounted to a new ground. In the facts of the said case, the ld. CIT(A) had held the order passed by the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 7 – Assessing Officer u/s. 147 of the Act to be invalid noting that the reasons recorded by the Assessing Officer for reopening the case of the assessee was based merely on suspicion and did not fulfil the parameter laid down u/s. 147 of the Act to form a belief of escapement of income. Before the ITAT, the Department come up in appeal against the order of the ld. CIT(A), where the assessee raised grounds in defense of the order of the ld. CIT(A), which were not dealt with by the ld. CIT(A). The assessee raised the ground of the notice u/s. 148 of the Act not being served on the assessee, the approval of the Joint CIT not being taken by the Assessing Officer before issuing notice u/s. 148 of the Act as required by section 151 of the Act and jurisdiction for reopening being invoked for making only fishing or roving inquiries, which as per the assessee were not permitted in law. The ITAT noted that these issues were not adjudicated against the assessee by the ld. CIT(A) and therefore held that strictly speaking the assessee could not raise these grounds in terms of rule 27 of the ITAT Rules, 1963. However, it went on to note that the Hon’ble Apex Court in the case of Hukum Chand Mills Ltd. vs. CIT held that even assuming that Rule 27 of the ITAT Rules, is not strictly applicable, the Tribunal had inherent powers u/s. 254(2) to entertain arguments of the respondent subject to the condition that no new facts are required to be brought on record. Applying the said ratio laid down by the Hon’ble apex court, the ITAT held that the grounds raised by the assessee as respondent in the Department’s appeal, though not permitted to be entertained as per section 27 of the ITAT Rules, could be admitted for adjudication considering the inherent powers of ITAT: “10.. Before we proceed further, it is necessary to clear this point, namely, whether the assessee can raise these points before the Tribunal for the first time as a respondent defending the order of the CIT(A) which was based on the only question whether the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 8 – reasons recorded by the Assessing Officer amounted to reason to believe or reason to suspect. The matter is not res integra. Rule 27 of the Appellate Tribunal Rules, says that the respondent in an appeal can support the order appealed against on any of the grounds decided against him even though he may not have filed an independent appeal or cross-objection. This Rule clearly supports the assessee. In the present case, the assessee has raised the point of non-recording of reason in ground No. 2 before the CIT(A) though this ground is not so categorical as the Ld. Counsel for the assessee wants us to read. Even so, such ground can be inferred from the fact that the assessee has been repeatedly asking for the reasons recorded which were not supplied to her. Even before the Tribunal right from September, 2004, the assessee has been requesting for production of the department's records obviously calling upon the department to show that reasons for reopening have been recorded, but due to some difficulty or the other, the department has not been able to produce the records. The CIT(A) has not recorded any finding on the question whether the reasons were recorded or not, but having regard to the judgment of the Hon'ble Delhi High Court in Rohtak and Hissar Districts Electric Supply Co. (P.) Ltd, v. CIT , it is possible to hold that he found against the assessee on this point. On this reasoning, it is open to the assessee to raise the question of non-recording of reasons for reopening the assessment before the Tribunal for the first time and seek to support the ultimate decision of the CIT(A). Even the non-disclosure of the reasons can be said to be covered by ground No. 2 taken before the CIT(A) and in the absence of any definite decision by the CIT(A), the same conclusion would follow namely, that it is open to the assessee to invoke Rule 27 even in respect of this point. As regards the approval of the JCIT under Section 151(1), it is fairly admitted on behalf of the assessee that this was not specifically taken either before the Assessing Officer or before the CIT(A) and, therefore, we hold that Rule 27 may not be strictly speaking available to the assessee. 11. Even de hors Rule 27 of the Appellate Tribunal Rules, it is open to the respondent in an appeal before the Tribunal to raise a new ground in defence of the order appealed against. It has been so held by the Supreme Court in Hukam Chand Mills Ltd. v. CIT of the report it was held that even assuming that Rule 27 is not strictly applicable, the Tribunal has inherent powers under Section 254(1) to entertain the argument of the respondent which amounted to a new ground. It was further held by the Supreme Court as follows: It is necessary to state that Rules 12 and 27 are not exhaustive and the powers of the Appellate Tribunal. The rules are merely procedural in character and do not, in any way, circumscribe or control the power of the Tribunal under Section 33(4) of the Act. It is significant to note that in the case before the Supreme Court, the department which was the respondent sought to raise a new plea in defence of the order appealed against. Earlier, in New India Life Assurance Co. Ltd. v. CIT , the Bombay High Court while pointing out the difference between an appellant and respondent before the appellate court, observed at page 55 that the respondent \"may support the decision of the trial court, not only on the ground contained in the judgment of the trial court, but on any other ground\". Later, in the case of B.R. Bamasi v. CIT , the Bombay High Court which was dealing with the case of right of the respondent to defend the order appealed against held that the respondent would be entitled to raise a new ground in defence of ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 9 – the order appealed against, provided it is a ground of law and does not necessitate any other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. It was further held that the ground served as a weapon of defence against the appeal and, if accepted should not place the appellant in a worse than he would have been, had he not appealed. In CIT v. Gilbert and Barkar Mfg. Co. , the Bombay High Court made no distinction between the appellant and respondent in an appeal before the Tribunal and held that both were entitled to raise new points or contentions subject only to the condition firstly that no new facts are required to be brought on record is capable of being disposed of on the facts on record and secondly that an opportunity is given to the other side to meet that point which is allowed to be raised for the first time in the appeal. This was also a case of the respondent. To the same effect are the decisions of the Allahabad, Gauhati, Kerala and Gujarat High Courts cited on behalf of the assessee. Therefore, whether it is the appellant or the respondent before the Tribunal, new points or contentions can be raised provided they did not involve investigation into facts (as contrasted with the record) and that an opportunity is given to the other side to meet the contentions. Applying these principles to the present case, we overrule the preliminary objection of the Ld. Sr. DR and permit the assessee to raise the new points before us as a respondent.” 13. Following the said decision, we hold that the grounds raised by the assessee, challenging the validity of jurisdiction assumed u/s. 153C of the Act is maintainable. 14. We shall now proceed to adjudicate the ground raised by the ld. counsel for the assessee. 15. As noted above, the contention of the ld. counsel for the assessee was that for a valid assumption of jurisdiction to frame assessment u/s 153C of the Act in terms of the special procedure provided for search assessments, the AO of the searched person has to record satisfaction of material relating to the said other person being found during search. That thereafter the material is transferred to the AO of the other person who then proceeds to assume jurisdiction u/s 153C of the Act to frame assessment u/s 153A of the Act. ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 10 – 16. Ld.Counsel for the assessee contended that it is settled law that the AO of the searched person has to record satisfaction latest, immediately after completing assessment of the searched person. He drew our attention in this regard to the decision of the Hon’ble apex court laying down guidelines for the acceptable stages at which the satisfaction note could be prepared by the AO of the searched person in the case of M/s Commissioner of Income Tax- III v Calcutta Knitwears (2014) 43 taxamnn.com446 (SC) as under at para 44: “44. In the result, we hold that for the purpose of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person. The satisfaction note could be prepared at either 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; (b) along with the assessment proceedings under Section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under Section 158BC of the Act of the searched person.” 17. He pointed out that the CBDT taking note of the decision of the apex court, issued a Circular No.24/2015[F.No.279/MISC./140/ 2015/ITJ] dated 31-12-2015, directing its officers to strictly follow the guidelines while issuing notice u/s 153C of the Act. Direction was also to not pursue litigation with regard to recording of satisfaction note if it did not meet the guidelines laid down by the apex court. Copy of the Circular was placed before us, the contents of the same are as under: “The issue of recording of satisfaction for the purposes of section 158BD/153C has been subject matter of litigation. 2. The Hon'ble Supreme Court in the case of M/s Calcutta Knitwears in its detailed judgment in Civil Appeal No.3958 of 2014 dated 12.3.2014(available in NJRS at 2014- LL-0312-51) has laid down that for the purpose of Section 158BD 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 ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 11 – person u/s 158BD. The Hon'ble 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 under section 158BC of the Act; or (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person.\" 3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari-materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon'ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, may be brought to the notice of all for strict compliance. It is further 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 satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgement. 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 guidelines laid down by the Apex Court.” 18. Our attention was also drawn to the decision of the jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal vs ACIT (2019) 418 ITR 25 reiterating the guidelines laid down by the apex court in the case of Calcutta Knitwears (supra). It was pointed out that in the said decision the recording of satisfaction by the AO of the searched person after a period of more than 8 months from the completion of assessment was found to be not in conformity with the guidelines laid down by the apex court. Our attention was drawn to para 20.8 of the order as under: “20.8 Insofar as the limitation provided under section 153B of the Act is concerned, akin to section 158BE, this section provides for the limitation for completion of assessment and neither provides for nor imposes any restrictions or conditions on the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 12 – period of limitation for preparation of the satisfaction note under section 153C of the Act and consequent issuance of notice to the other person. The Supreme Court, in the case of Calcutta Knitwears (supra) has in the context of section 158BD of the Act held that the satisfaction note could be prepared at either 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; (b) along with the assessment proceedings under section 158BC of the Act; and (c) immediately after the assessment proceedings are completed under section 158BC of the Act of the searched person. The CBDT has issued Circular No.24/2015 dated 31.12.2015 in the context of the above decision, inter alia stating thus: “3. Several High Courts have held that the provisions of section 153C of the Act are substantially similar/pari materia to the provisions of section 158BD of the Act and therefore, the above guidelines of the Hon’ble SC, apply to proceedings u/s 153C of the IT Act, for the purposes of assessment of income of other than the searched person. This view has been accepted by the CBDT.” Thus, the above decision of the Supreme Court would also be applicable insofar as recording of satisfaction as contemplated under section 153C of the Act by the Assessing Officer of the person searched is concerned. In the facts of the present case admittedly, such satisfaction has not been recorded at the time of or along with the initiation of proceedings against the searched person under section 153A of the Act. In the case of HN Safal Group the searched persons approached the Settlement Commission and hence, there was no assessment under section 153A of the Act. However, the proceedings before the Settlement Commission came to be concluded by an order dated 29.7.2016 under section 245D (4) of the Act. Such order came to be received by the Assessing Officer of the searched person on 2.8.2016, whereafter the said Assessing Officer recorded satisfaction on 25.4.2017, that is, after a period of more than eight months from the date of receipt of the order of the Settlement Commission. In the opinion of this court, such satisfaction can by no stretch of imagination be stated to have been recorded immediately after the assessment proceedings are over in the case of the searched person. Not only that, the Assessing Officer of the searched person handed over the record to the Assessing Officer of the other person on 25.4.2017, however, the said Assessing Officer recorded his satisfaction only on 8.2.2018, that is after a period of more than nine months from the date of receipt of the record. Therefore, the satisfaction note does not appear to have been prepared at any of the stages at which could it have been prepared in terms of the above decision of the Supreme Court. Be that as it may, since on the main issue, viz. on the question of assumption of jurisdiction of the Assessing Officer under section 153C of the Act, this court has held in favour of the petitioners, it is not necessary to dwell on the issue any further. Similarly, this court also refrains from entering into the larger controversy as to whether the proceedings before the Settlement Commission could be said to be assessment proceedings and whether the Assessing Officer of the searched person was justified in waiting for the conclusion of the said proceedings before recording the requisite satisfaction under section 153C of the Act. Insofar as the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 13 – Barter and Venus Group of petitions are concerned, the relevant facts regarding the date of the order of assessment made in the case of the searched person, date of recording of satisfaction by the Assessing Officer of the searched person, etc. do have not appear to have been brought on record. 19. Ld.Counsel for the assessee contended that in the facts of the present case the AO had recorded satisfaction more than 8 months after completion of assessment. That therefore the satisfaction recorded by the AO of the searched person was an invalid satisfaction and all proceedings carried out thereafter, leading to the framing of assessment u/s 153C of the Act in the present case, was invalid. 20. He drew our attention to the facts of the case as under: Search conducted on Sarthak Infrastructure 04-12-2014 Date for completion of assessment 31-03-2017 Date of recording satisfaction by AO of searched person 16-03-2018 21. Referring to the above facts, he contended that the satisfaction recorded in the present case was almost a year after completion of assessment, which in view of the settled position of law noted above was clearly invalid. 22. Ld. DR, on the other hand, contended that this issue had been raised for the first time by the assessee. He, however, stated that the Act doesn’t prescribe any limitation for the recording of satisfaction by the AO of the searched person and even considering the decision of the Hon’ble Apex Court in the case of Calcutta Knitwears (supra) and CBDT Circular referred by the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 14 – Ld. Counsel for the assessee, the recording of satisfaction was AO of the searched person in the present case was within limits and reasonable time. 23. We have heard the contentions of both the parties carefully. 24. The issue for adjudication is regarding validity of the jurisdiction assumed in the present case by the AO u/s.153C of the Act, which has been questioned / challenged on the ground that the AO of the searched person had not recorded his satisfaction, of material pertaining to the assessee found during search conducted on the SIPL Group, within a reasonable period of time as prescribed by the Hon’ble Apex Court in the case of Calcutta Knitwears (supra) and affirmed by the CBDT vide its Circular referred to by the Ld. Counsel for the assessee before us. 25. There is no dispute with regards to the guidelines laid down by the Hon’ble Apex Court in the case of Calcutta Knitwears (supra) for the satisfaction note be prepared by the AO of the searched person to be either at the time of initiation of proceedings against the searched person, during assessment proceedings on the searched person or immediately after the conclusion of assessment of the searched person. In effect, the Hon’ble Apex Court had held that the AO of the searched person should prepare the satisfaction note within a reasonable time of being in possession of all material found during search, which begins with his initiation of proceedings against the searched person, the conducting of assessment of the searched person and concludes with his assessment. Undoubtedly, the CBDT has accepted this view of the Hon’ble Apex court and stated the same to apply the provisions of Section 153C of the Act also. We have also gone through the order of the ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 15 – Hon’ble Jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal (supra), wherein the Hon’ble High Court has categorically noted that satisfaction recorded by the AO of the searched person after 8 months of the completion of assessment (in the facts of the said case the settlement of the dispute by the Settlement Commission and receipt of the order of the Settlement Commission by the AO) was clearly not in accordance with the guidelines issued by the Hon’ble Apex Court in the case of Calcutta Knitwears (supra) .That the court categorically noted the lapse of 8 months from the conclusion of the proceedings in the case of searched person, for recording satisfaction for transferring material in terms of the provision of Section 153C of the Act to be, by no stretch, as being immediately after the conclusion of proceedings against the searched person. 26. Having noted so, in the facts and circumstances of the present case, undoubtedly the AO of the searched person has recorded the satisfaction almost a year after the conclusion of the assessment of the searched person. 27. In the light of guidelines/timelines for recording of satisfaction by the AO of searched person for a valid initiation of proceedings u/s 153C of the Act laid down by the Hon’ble Apex Court in the case of Calcutta Knitwears (supra), adopted by the CBDT and considering the decision of the Hon’ble Jurisdictional High Court in the case of Anilkumar Gopikishan Agrawal (supra) ,the satisfaction recorded in the present case cannot be said to be within the reasonable time limit so prescribed i.e latest immediately after conclusion of proceedings on the person searched. The jurisdiction, therefore, assumed by the AO of the assessee to frame assessment u/s 153C of the Act, basis this satisfaction note of the AO of the searched person, is clearly ITA No. 183/Ahd/2021 [ITO vs. Shri Pranav Prafulchandra Vora] A.Y. 2011-12 - 16 – invalid and the assessment framed as a consequence u/s.153C of the Act in the present case is, therefore, held not sustainable in law. 28. The assessee, therefore, succeeds on the ground raised before us by invoking rule 27 of the ITAT Rules, 1963, before us and we accordingly direct the assessment order passed in the present case to be set aside, finding it to have been passed vide an invalid jurisdiction assumed by the AO. 29. Since, we have set aside the assessment order, we see no reason to deal with the appeal of the Revenue, since, it is only an academic exercise. 30. In terms of the above, the order passed by the AO is directed to be set aside. The appeal of the Revenue is dismissed as infructuous. 31. In the result, appeal filed by the Revenue is dismissed. This Order pronounced on 15/05/2025 Sd/- Sd/- (SUCHITRA KAMBLE) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 15/05/2025 S. K. SINHA True Copy आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आयुÈत / Concerned CIT 4. आयकर आयुÈत(अपील) / The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड[ फाईल / Guard file. आदेशानुसार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलȣय अͬधकरण, अहमदाबाद / ITAT, Ahmedabad "