SOUTHERN AGRIFURANE INDUSTRIES PVT. LTD.,CHENNAI vs. ACIT, CENTRAL CIRCLE-2(2),, CHENNAI

It is not in dispute that, the income It is not in dispute that, the income-tax assessments of the assessee for essments of the assessee for the impugned AYs 2014 the impugned AYs 2014-15 to 2017-18 were either completed u/s 143(1)/143(3) of the Act and/or the time limit for issue of the Act and/or the time limit for issue of the Act and/or the time limit for issue of notice u/s 143(2) of the Act had expired. Accordingly, the income 143(2) of the Act had expired. Accordingly, the income-tax tax assessments for AYs 2014-15 to 2017 15 to 2017-18 weren’t pending before AO on the pending before AO on the date of search, therefore, those years didn’t abate consequent to the search, therefore, those years didn’t abate consequent to the search, therefore, those years didn’t abate consequent to the search. Post the issue of notice u/s 153C of the Act for these unabated the issue of notice u/s 153C of the Act for these unabated AYs AYs 2014-15 to 2017-18, the AO is noted to have completed , the AO is noted to have completed all the income the income-tax assessments u/s.153C/143(3) of the Act by orders dated 153C/143(3) of the Act by orders dated 153C/143(3) of the Act by orders dated 28.03.2023 after making addition(s) on account of bo after making addition(s) on account of bogus purchases. Apart from the gus purchases. Apart from the 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt foregoing, the AO is also noted to have made addition(s)/disallowance(s) foregoing, the AO is also noted to have made addition(s)/disallowance(s) foregoing, the AO is also noted to have made addition(s)/disallowance(s) on account of deduction(s) claimed u/s 80G / 80GGB, disallowance u/s on account of deduction(s) claimed u/s 80G / 80GGB, disallowance u/s on account of deduction(s) claimed u/s 80G / 80GGB, disallowance u/s 14A of the Act and disallowance of certain items of expenses. 14A of the Act and disallowance of certain items of expenses. 14A of the Act and disallowance of certain items of expenses.

Taking into account the submissions put forth by the assessee, t Taking into account the submissions put forth by the assessee, t Taking into account the submissions put forth by the assessee, the Ld. CIT(A) observed that, the satisfaction note recorded by the AO for these CIT(A) observed that, the satisfaction note recorded by the AO for these CIT(A) observed that, the satisfaction note recorded by the AO for these AYs only contained reference to AYs only contained reference to existence of incriminating materia existence of incriminating material relating to the AY(s) 2018 relating to the AY(s) 2018-19 & 2019-20 and that the satisfaction note satisfaction note didn’t contain any mention t contain any mention about the existence of any incriminating existence of any incriminating material in relation to in relation to AY(s) 2014-15 to 2017-18. Relying upon the 18. Relying upon the decision of the Hon’ble Apex Court in the case of Hon’ble Apex Court in the case of Sinhgad Technical Sinhgad Technical Education Society (397 ITR 344) Education Society (397 ITR 344), the Ld. CIT(A) therefore held that, , the Ld. CIT(A) therefore held that, there was evidently no nexus made out by the AO between the no nexus made out by the AO between the no nexus made out by the AO between the incriminating material found as a result of search incriminating material found as a result of search with the AYs 2014 with the AYs 2014-15 to 2017-18 prior to issuance of notice u/s 153C of the Act and accordingly 18 prior to issuance of notice u/s 153C of the Act and accordingly 18 prior to issuance of notice u/s 153C of the Act and accordingly the notices issued u/s 153C of the Act for these AYs were held to be the notices issued u/s 153C of the Act for these AYs were held to be the notices issued u/s 153C of the Act for these AYs were held to be bad in law. The Ld. CIT(A) accordingly quashed the orders passed u/s in law. The Ld. CIT(A) accordingly quashed the orders passed u/s in law. The Ld. CIT(A) accordingly quashed the orders passed u/s 143(3)/153C of the Act for 143(3)/153C of the Act for AY(s) 2014-15 to 2017-18 holding it to be 18 holding it to be ab initio void. Additionally, while deciding the appeals for AYs 2014 . Additionally, while deciding the appeals for AYs 2014 . Additionally, while deciding the appeals for AYs 2014-15 to 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 5 ::

2015-16, the Ld. CIT(A) held that 16, the Ld. CIT(A) held that the notices for these AYs these AYs was beyond the period of six (6) assessment the period of six (6) assessment years preceding the year of search, year of search, which was to be deemed to be the year in which the books were handed which was to be deemed to be the year in which the books were handed which was to be deemed to be the year in which the books were handed over by the AO of searched person to the AO of the assessee i.e., 14 over by the AO of searched person to the AO of the assessee i.e., 14 over by the AO of searched person to the AO of the assessee i.e., 14-06- 2021 (AY 2022-23) and therefore the Ld. CIT(A) held that 23) and therefore the Ld. CIT(A) held that 23) and therefore the Ld. CIT(A) held that the AO could have lawfully issued notice u/s 153C of the Act only when he had in his lawfully issued notice u/s 153C of the Act only when he had in his lawfully issued notice u/s 153C of the Act only when he had in his possession, any incriminating material, which revealed that income possession, any incriminating material, which revealed that income possession, any incriminating material, which revealed that income represented in the form of ‘asset’ valued at Rs.50,00,000/ represented in the form of ‘asset’ valued at Rs.50,00,000/ represented in the form of ‘asset’ valued at Rs.50,00,000/- or more had escaped assessment. After analyzing the After analyzing the definition of the term ‘asset’ a definition of the term ‘asset’ as defined in Explanation (2) to Section 153A of the Act, the Ld. CIT(A) defined in Explanation (2) to Section 153A of the Act, the Ld. CIT(A) defined in Explanation (2) to Section 153A of the Act, the Ld. CIT(A) concluded that there was no such unexplained asset identified by the AO there was no such unexplained asset identified by the AO there was no such unexplained asset identified by the AO in the satisfaction note for satisfaction note for him to have validly assumed jurisdiction u/s him to have validly assumed jurisdiction u/s 153C of the Act and accordingly, held the and accordingly, held the initiation of proceedings u/s initiation of proceedings u/s 153C of the Act for AYs 2014 for AYs 2014-15 & 2015-16 to be bad in law on this count 16 to be bad in law on this count as well.

4. Being aggrieved by the above order(s) of the Ld. CIT( Being aggrieved by the above order(s) of the Ld. CIT( Being aggrieved by the above order(s) of the Ld. CIT(A), both the Revenue and the assessee are in appeal before us. Revenue and the assessee are in appeal before us. It is noted that the It is noted that the satisfaction note recorded by the AO and the satisfaction note recorded by the AO and the reasoning given by reasoning given by him for making addition(s) on account of bogus purchases were identical across making addition(s) on account of bogus purchases were identical across making addition(s) on account of bogus purchases were identical across all the AYs 2014-15 to 2017 15 to 2017-18 impugned before us. Both the parties Both the parties have also argued these appeals together. have also argued these appeals together. Hence, for the sake of Hence, for the sake of 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt convenience, and to avoid repetition of facts; we convenience, and to avoid repetition of facts; we deem it fit to adjudicate deem it fit to adjudicate each of the common issues across these of the common issues across these AYs before us together. before us together. Since the legal issue(s) which was adjudicated by the Ld. CIT(A) goes to the root of l issue(s) which was adjudicated by the Ld. CIT(A) goes to the root of l issue(s) which was adjudicated by the Ld. CIT(A) goes to the root of the validity to exercise jurisdiction over the assessee, with the consent of the validity to exercise jurisdiction over the assessee, with the consent of the validity to exercise jurisdiction over the assessee, with the consent of both the parties, we consider it fit to decide the legal issue(s) first. both the parties, we consider it fit to decide the legal issue(s) first. both the parties, we consider it fit to decide the legal issue(s) first.

5. We first take up the Revenue’s We first take up the Revenue’s appeal in 1254/Chny/2025 for AY 2014-15 as the 15 as the lead case. Our decision for AY 2014 . Our decision for AY 2014-15 shall mutatis mutandis apply to other AYs 2015 apply to other AYs 2015-16 to 2017-18 as well. 18 as well.

Finance Act, 2017.In thi Finance Act, 2017.In this regard, she relied on the decision of relied on the decision of CIT v.

Jasjit Singh [2023] SCC Online SC 1265 Jasjit Singh [2023] SCC Online SC 1265.

8. The Ld. AR further The Ld. AR further urged that, AYs 2014-15 & 2015 15 & 2015-16 were actually 7th and 8th year preceding the date of search and that, the AO ually 7th and 8th year preceding the date of search and that, the AO ually 7th and 8th year preceding the date of search and that, the AO had not validly invoked the powers under fourth proviso to Section 153A had not validly invoked the powers under fourth proviso to Section 153A had not validly invoked the powers under fourth proviso to Section 153A read with Section 153C of the Act to cover the extended period. According read with Section 153C of the Act to cover the extended period. According read with Section 153C of the Act to cover the extended period. According to the Ld. AR, the reference to date of s to the Ld. AR, the reference to date of search, for the purposes of Section earch, for the purposes of Section 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 8 ::

153C, ought to be the date of handing over of the seized documents or 153C, ought to be the date of handing over of the seized documents or 153C, ought to be the date of handing over of the seized documents or recording of satisfaction note i.e. recording of satisfaction note i.e. 14-06-2021 and not the original date of and not the original date of search i.e., 06-08-2019 2019;for the purposes of Section 153C of the Act, even ;for the purposes of Section 153C of the Act, even after considering the amendment made by the Finance Act, 2017. fter considering the amendment made by the Finance Act, 2017. fter considering the amendment made by the Finance Act, 2017.The Ld. AR relied upon the decision rendered by the Hon'ble Delhi H AR relied upon the decision rendered by the Hon'ble Delhi H AR relied upon the decision rendered by the Hon'ble Delhi High Court in the case of PCIT Vs v Ojjus Medicare (P) Ltd. (465 ITR 101) PCIT Vs v Ojjus Medicare (P) Ltd. (465 ITR 101) PCIT Vs v Ojjus Medicare (P) Ltd. (465 ITR 101) and this Tribunal in the case of Tribunal in the case of M/s KSJ Infrastructure Pvt Ltd Vs DCIT (ITA Pvt Ltd Vs DCIT (ITA Nos. 797 & 798/Chny/2024) Nos. 797 & 798/Chny/2024) in support of the findings rendered by the findings rendered by the Ld. CIT(A) on this aspect. the Ld. CIT(A) on this aspect.

23 and that the satisfaction note was drawn satisfaction note was drawn out by the AO out by the AO satisfying himself that the assets/documents found in the course of himself that the assets/documents found in the course of himself that the assets/documents found in the course of search belongs/pertains to "the other person" (third party i.e. the belongs/pertains to "the other person" (third party i.e. the belongs/pertains to "the other person" (third party i.e. the assessee in this case) on 24-06-2021. The 2021. The relevant extract of the satisfaction note satisfaction note recorded by the AO on 24 24-06-2021 for AY 2014-15 is extracted is extracted below;

AY 2014-15

Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Agrifurane Industries Pvt. Ltd. has inflated their expenses by means of Industries Pvt. Ltd. has inflated their expenses by means of Industries Pvt. Ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount of bogus purchases is Rs.4,41,70,464/ of bogus purchases is Rs.4,41,70,464/- for the F.Y 2017-18 (From July 18 (From July 2017), Rs. 5,69,70,130/ 2017), Rs. 5,69,70,130/- for the F.Y 2018-19 and Rs. 2,95,16,955/ 95,16,955/- for the F.Y. 2019-20 (up 20 (up to 4.8.2019).

The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the seized materials contain information that relate to the assess seized materials contain information that relate to the assess seized materials contain information that relate to the assessee, M/s Southern Agrifurane Industries Pvt. Ltd. and the information therein has Southern Agrifurane Industries Pvt. Ltd. and the information therein has Southern Agrifurane Industries Pvt. Ltd. and the information therein has got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from 2018-19 to 2020- -21. Hence, in accordance with the provision of income 21. Hence, in accordance with the provision of income Tax Act, 1961 notice u/s 153C is issued fo Tax Act, 1961 notice u/s 153C is issued for AY 2014-15.

10. According to the assessee, by virtue of first proviso t According to the assessee, by virtue of first proviso t According to the assessee, by virtue of first proviso to section 153C of the Act, the date of handover of documents to their AO of handover of documents to their AO i.e. i.e. 18-06-2021 had to be reckoned as the date of search for the purpose of assessment had to be reckoned as the date of search for the purpose of assessment had to be reckoned as the date of search for the purpose of assessment u/s 153C of the Act, for determining the six assessment years which could r determining the six assessment years which could r determining the six assessment years which could be reopened and also to compute the ten (10) year block period for be reopened and also to compute the ten (10) year block period for be reopened and also to compute the ten (10) year block period for ascertaining the 'relevant ascertaining the 'relevant assessment year'. It is observed that the Ld. It is observed that the Ld. CIT(A) had countenanced this plea of the assessee, after consider CIT(A) had countenanced this plea of the assessee, after consider CIT(A) had countenanced this plea of the assessee, after considering the 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt amendment made to Section 153C of the Act by Finance Act, 2017, amendment made to Section 153C of the Act by Finance Act, 2017, amendment made to Section 153C of the Act by Finance Act, 2017, by holding as under:-

6.6.6 The contention of the appellant is that, since the seized The contention of the appellant is that, since the seized The contention of the appellant is that, since the seized materials were handed over to the jurisdictional AO on 18.06.2021, the materials were handed over to the jurisdictional AO on 18.06.2021, the materials were handed over to the jurisdictional AO on 18.06.2021, the same should be taken as the date of search in computing the six same should be taken as the date of search in computing the six same should be taken as the date of search in computing the six assessment years as per the assessment years as per the proviso to section 153C(1) of the A to section 153C(1) of the Act . For the sake of clarity the said proviso is reproduced here as under. the sake of clarity the said proviso is reproduced here as under. the sake of clarity the said proviso is reproduced here as under.

“Provided that in case of such other person, the reference to the date of “Provided that in case of such other person, the reference to the date of “Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under initiation of the search under section 132 or making of requisition under initiation of the search under section 132 or making of requisition under section 132A in the second provi section 132A in the second proviso to [sub-section (1) of] section 153A section (1) of] section 153A shall be construed as reference to the date of receiving the books of shall be construed as reference to the date of receiving the books of shall be construed as reference to the date of receiving the books of account of documents or assets seized or requisitioned by the Assessing account of documents or assets seized or requisitioned by the Assessing account of documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person:]” Officer having jurisdiction over such other person:]”

6.6.7 The undersign The undersigned is of the view that the contention of the ed is of the view that the contention of the appellant aligns with the provision(s) of the Act. therefore, the date of appellant aligns with the provision(s) of the Act. therefore, the date of appellant aligns with the provision(s) of the Act. therefore, the date of search in the case of the appellant can be taken as 18.06.2021 being search in the case of the appellant can be taken as 18.06.2021 being search in the case of the appellant can be taken as 18.06.2021 being the date on which the jurisdictional AO received the seized material the date on which the jurisdictional AO received the seized material the date on which the jurisdictional AO received the seized materials. When once the date of 18.06.2021 is construed as the date of search, When once the date of 18.06.2021 is construed as the date of search, When once the date of 18.06.2021 is construed as the date of search, the period for issue of notice requires to be computed as under. the period for issue of notice requires to be computed as under. the period for issue of notice requires to be computed as under.

AY Sequence of the year Date of Search 18.06.2021 Date of Search 18.06.2021 Search Assessment Year Search Assessment Year AY: 2022 AY: 2022 – 23 1st Year 2021 2021 – 22 2nd Year 2020 2020 – 21 3rd Year 2019 2019 – 20 4th Year 2018 2018 – 19 5th Year 2017 2017 – 18 6th Year 2016 2016 – 17 7th Year 2015 2015 – 16 8th Year 2014 2014 – 15

6.6.8 As per the above computation, the AY 2015 As per the above computation, the AY 2015-16 & 2014 16 & 2014-15 falls as the seventh and eight falls as the seventh and eight year. When the years under consideration year. When the years under consideration happen to be the seventh and eight year being beyond the period of six happen to be the seventh and eight year being beyond the period of six happen to be the seventh and eight year being beyond the period of six , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt assessment years, years, the conditions prescribed under the 4th proviso to the conditions prescribed under the 4th proviso to Section 153A of the Act should be complied with Section 153A of the Act should be complied with…”

“12. Reading of the main provision of Section 153C (as it stood during 12. Reading of the main provision of Section 153C (as it stood during 12. Reading of the main provision of Section 153C (as it stood during the year) along with the first proviso reveals that, the refere the year) along with the first proviso reveals that, the refere the year) along with the first proviso reveals that, the reference point which is spoken of, in section 153A(1) from which the period of six AYs' which is spoken of, in section 153A(1) from which the period of six AYs' which is spoken of, in section 153A(1) from which the period of six AYs' is to be calculated, and which stipulates it to be the date of search or is to be calculated, and which stipulates it to be the date of search or is to be calculated, and which stipulates it to be the date of search or requisition, stands shifted to the date of receipt of books of account, requisition, stands shifted to the date of receipt of books of account, requisition, stands shifted to the date of receipt of books of account, documents or assets seized o documents or assets seized or requisitioned by the AO of the non r requisitioned by the AO of the non- searched person. For this, we gainfully refer to the decision of the searched person. For this, we gainfully refer to the decision of the searched person. For this, we gainfully refer to the decision of the Hon'ble Delhi High Court in the case of CIT v. RRJ Securities Ltd. Hon'ble Delhi High Court in the case of CIT v. RRJ Securities Ltd. Hon'ble Delhi High Court in the case of CIT v. RRJ Securities Ltd. (supra), wherein the Hon'ble Delhi High Court held as under: (supra), wherein the Hon'ble Delhi High Court held as under: (supra), wherein the Hon'ble Delhi High Court held as under:

" As discussed hereinb " As discussed hereinbefore, in terms of proviso to Section 153C of efore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second the Act, a reference to the date of the search under the second the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the dateof proviso to Section 153A of the Act has to be construed as the dateof proviso to Section 153A of the Act has to be construed as the dateof handing over of assets/documents belonging to the Assessee (being handing over of assets/documents belonging to the Assessee (being handing over of assets/documents belonging to the Assessee (being , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt the person other than the one searched) to the AO having jurisdiction other than the one searched) to the AO having jurisdiction other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section to assess the said Assessee. Further proceedings, by virtue of Section to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would have to be in accordance with Section 153C(1) of the Act, would have to be in accordance with Section 153C(1) of the Act, would have to be in accordance with Section 153A of the Act and the reference to the date of search would 153A of the Act and the reference to the date of search would 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. be construed as the reference to the date of recording of satisfaction. be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/ It would follow that the six assessment years for which assessments/ It would follow that the six assessment years for which assessments/ reassessments could be made under Section 153C of the Act would reassessments could be made under Section 153C of the Act would reassessments could be made under Section 153C of the Act would also have to be construed with reference to also have to be construed with reference to the date of handing over the date of handing over of assets/documents to the AO of the Assessee. In this case, it would of assets/documents to the AO of the Assessee. In this case, it would of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the be the date of the recording of satisfaction under Section 153C of the be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made Act, i.e., 8th September, 2010. In this view, the assessments made Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessme in respect of assessment years 2003-04 and 2004-05 would be 05 would be beyond the period of six assessment years as reckoned with beyond the period of six assessment years as reckoned with beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the reference to the date of recording of satisfaction by the AO of the reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six searched person. It is contended by the Revenue that the relevant six searched person. It is contended by the Revenue that the relevant six assessment years woul assessment years would be the assessment years prior to the d be the assessment years prior to the assessment year relevant to the previous year in which the search assessment year relevant to the previous year in which the search assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is was conducted. If this interpretation as canvassed by the Revenue is was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, accepted, it would mean that whereas in case of a person searched, accepted, it would mean that whereas in case of a person searched, assessments in assessments in relation to six previous years preceding the year in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any which the search takes place can be reopened but in case of any which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the other person, who is not searched but his assets are seized from the other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be searched person, the period for which the assessments could be searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so d would be much beyond the period of six years. This is so d would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, because the date of handing over of assets/documents of a person, because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to other than the searched person, to the AO would be subsequent to other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to th the date of the search. This, in our view, would be contrary to th the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of scheme of Section 153C(1) of the Act, which construes the date of scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other receipt of assets and documents by the AO of the Assessee (other receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The than one searched) as the date of the search on the Assessee. The than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a sea rationale appears to be that whereas in the case of a sea rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized the AO of the searched person assumes possession of seized the AO of the searched person assumes possession of seized assets/documents assets/documents assets/documents on on on search search search of of of the the the Assessee; Assessee; Assessee; the the the seized seized seized assets/documents belonging to a person other than a searched assets/documents belonging to a person other than a searched assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the person come into possession of the AO of that person only after the person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do AO of the searched person is satisfied that the assets/documents do AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of not belong to the searched person. Thus, the date on which the AO of not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the person other than the one searched assumes the possession of the person other than the one searched assumes the possession of the seized assets would be the relevant date for apply the seized assets would be the relevant date for apply the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the provisions of Section 153A of the Act. We, therefore, accept the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003 contention that in any view of the matter, assessment for AY 2003 contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act 05 were outside the scope of Section 153C of the Act 05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessm and the AO had no jurisdiction to make an assessm and the AO had no jurisdiction to make an assessment of the Assessee's income for that year." Assessee's income for that year."

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 13 ::

13. It is noted that the Hon'ble Supreme Court in Jasjit Singh (supra) 13. It is noted that the Hon'ble Supreme Court in Jasjit Singh (supra) 13. It is noted that the Hon'ble Supreme Court in Jasjit Singh (supra) has affirmed the above view with the following significant has affirmed the above view with the following significant observations: observations: -

"8. In SSP Aviation (supra) the High Court inter alia reasoned as "8. In SSP Aviation (supra) the High Court inter alia reasoned as "8. In SSP Aviation (supra) the High Court inter alia reasoned as follows:--"14. Now there can be a situation when during the search "14. Now there can be a situation when during the search "14. Now there can be a situation when during the search conducted on one person under section 132, some documents conducted on one person under section 132, some documents conducted on one person under section 132, some documents or valuable assets or books of account belonging to some other person, valuable assets or books of account belonging to some other person, valuable assets or books of account belonging to some other person, in whose case the search is not conducted, may be found. In in whose case the search is not conducted, may be found. In in whose case the search is not conducted, may be found. In such case, the Assessing Officer has to first be satisfied under section case, the Assessing Officer has to first be satisfied under section case, the Assessing Officer has to first be satisfied under section 153C, which provides for the assessment of income of any other 153C, which provides for the assessment of income of any other 153C, which provides for the assessment of income of any other person, i.e., any other person who is not covered by the search, that person, i.e., any other person who is not covered by the search, that person, i.e., any other person who is not covered by the search, that the books of account or other valuable article or the books of account or other valuable article or document belongs to document belongs to the other person (person other than the one searched). He shall hand the other person (person other than the one searched). He shall hand the other person (person other than the one searched). He shall hand over the valuable article or books of account or document to the over the valuable article or books of account or document to the over the valuable article or books of account or document to the Assessing Assessing Assessing Officer Officer Officer having having having jurisdiction jurisdiction jurisdiction over over over the the the other other other person. person. person. Thereafter, the Assessing Officer having Thereafter, the Assessing Officer having jurisdiction over the other jurisdiction over the other person has to proceed against him and issue notice to that person in person has to proceed against him and issue notice to that person in person has to proceed against him and issue notice to that person in order to assess or reassess the income of such other person in the, order to assess or reassess the income of such other person in the, order to assess or reassess the income of such other person in the, manner contemplated by the provisions of section 153A.Now a manner contemplated by the provisions of section 153A.Now a manner contemplated by the provisions of section 153A.Now a question may arise as to the a question may arise as to the applicability of the second proviso to pplicability of the second proviso to section 153A in the case of the other person, in order to examine the section 153A in the case of the other person, in order to examine the section 153A in the case of the other person, in order to examine the question of pending proceedings which have to abate. In the case of question of pending proceedings which have to abate. In the case of question of pending proceedings which have to abate. In the case of the searched person, the date with reference to which the the searched person, the date with reference to which the the searched person, the date with reference to which the proceedings for assess proceedings for assessment or reassessment of any assessment year ment or reassessment of any assessment year within the period of the six assessment years shall abate, is the date within the period of the six assessment years shall abate, is the date within the period of the six assessment years shall abate, is the date of initiation of the search under section 132 or the requisition under of initiation of the search under section 132 or the requisition under of initiation of the search under section 132 or the requisition under section 132A. For instance, in the present case, with reference to the section 132A. For instance, in the present case, with reference to the section 132A. For instance, in the present case, with reference to the Puri Group of Companies, such date will be 5.1.2009.However, in the Puri Group of Companies, such date will be 5.1.2009.However, in the Puri Group of Companies, such date will be 5.1.2009.However, in the case of the other person, which in the present case is the petitioner case of the other person, which in the present case is the petitioner case of the other person, which in the present case is the petitioner herein, such date will be the date of receiving the books of account or herein, such date will be the date of receiving the books of account or herein, such date will be the date of receiving the books of account or documents or assets seized or requisition by documents or assets seized or requisition by the Assessing Officer the Assessing Officer having jurisdiction over such other person. In the case of the other having jurisdiction over such other person. In the case of the other having jurisdiction over such other person. In the case of the other person, the question of pendency and abatement of the proceedings person, the question of pendency and abatement of the proceedings person, the question of pendency and abatement of the proceedings of assessment or reassessment to the six assessment years will be of assessment or reassessment to the six assessment years will be of assessment or reassessment to the six assessment years will be examined with reference to such d examined with reference to such date."

9. It is evident on a plain interpretation of section 153C(1) that the 9. It is evident on a plain interpretation of section 153C(1) that the 9. It is evident on a plain interpretation of section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to Parliamentary intent to enact the proviso was to cater not merely to Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from the question of abatement but also with regard to the date from the question of abatement but also with regard to the date from which the six year period was to be reckoned, which the six year period was to be reckoned, in respect of which the in respect of which the returns were to be filed by the third party(whose premises are not returns were to be filed by the third party(whose premises are not returns were to be filed by the third party(whose premises are not searched and in respect of whom the specific provision under section searched and in respect of whom the specific provision under section searched and in respect of whom the specific provision under section 153-C was enacted. The revenue argued that the proviso [to section C was enacted. The revenue argued that the proviso [to section C was enacted. The revenue argued that the proviso [to section 153(c)(1)] is confined in its 153(c)(1)] is confined in its application to the question of abatement. application to the question of abatement.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 14 ::

14. We further note that, the above proposition that, in the case of 14. We further note that, the above proposition that, in the case of 14. We further note that, the above proposition that, in the case of assessment under Section 153C, the starting po assessment under Section 153C, the starting point is ordained to be the int is ordained to be the handing over of books of account or documents or assets seized and handing over of books of account or documents or assets seized and handing over of books of account or documents or assets seized and that event constituting the point from which the preceding six AYs' or that event constituting the point from which the preceding six AYs' or that event constituting the point from which the preceding six AYs' or the "relevant assessment year" is to be computed stands reiterated by the "relevant assessment year" is to be computed stands reiterated by the "relevant assessment year" is to be computed stands reiterated by the Hon'ble Supreme Co the Hon'ble Supreme Court in Vikram Sujitkumar Bhatia (supra) whose urt in Vikram Sujitkumar Bhatia (supra) whose relevant observations are noted to be as follows: relevant observations are noted to be as follows:-

"41. Thus, as per the proviso to section 153C as inserted vide Finance "41. Thus, as per the proviso to section 153C as inserted vide Finance "41. Thus, as per the proviso to section 153C as inserted vide Finance Act, 2005, and the effect of the said proviso is that it creates a Act, 2005, and the effect of the said proviso is that it creates a Act, 2005, and the effect of the said proviso is that it creates a deeming fiction where deeming fiction wherein any reference made to the date of initiation in any reference made to the date of initiation of search is deemed to be a reference made to the date when the of search is deemed to be a reference made to the date when the of search is deemed to be a reference made to the date when the Assessing Officer of the non Assessing Officer of the non-searched person receives the books of searched person receives the books of account or documents or assets seized etc. Thus, in the present case, account or documents or assets seized etc. Thus, in the present case, account or documents or assets seized etc. Thus, in the present case, even though the search under section 132 was initiated prior to the ough the search under section 132 was initiated prior to the ough the search under section 132 was initiated prior to the amendment to section 153C w.e.f.01.06.2015, the books of account amendment to section 153C w.e.f.01.06.2015, the books of account amendment to section 153C w.e.f.01.06.2015, the books of account or documents or assets were seized by the Assessing Officer of the or documents or assets were seized by the Assessing Officer of the or documents or assets were seized by the Assessing Officer of the non-searched person only on 25.04.2017, which is subsequent to searched person only on 25.04.2017, which is subsequent to searched person only on 25.04.2017, which is subsequent to the amendment, therefore, when the notice under section 153C was amendment, therefore, when the notice under section 153C was amendment, therefore, when the notice under section 153C was issued on 04.05.2018, the provision of the law existing as on that issued on 04.05.2018, the provision of the law existing as on that issued on 04.05.2018, the provision of the law existing as on that date, i.e., the amended section 153C shall be applicable." date, i.e., the amended section 153C shall be applicable." date, i.e., the amended section 153C shall be applicable."

15. In this context, we may also gainfully refer to the following 15. In this context, we may also gainfully refer to the following 15. In this context, we may also gainfully refer to the following findings of the Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare of the Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare of the Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare (P) Ltd (supra) wherein it was held as under: (P) Ltd (supra) wherein it was held as under:-

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 15 ::

"80. The aforesaid discussion thus renders a determinative quietus to "80. The aforesaid discussion thus renders a determinative quietus to "80. The aforesaid discussion thus renders a determinative quietus to the identification of the starting post from which the bl the identification of the starting post from which the block of six AYs' ock of six AYs' or the "relevant assessment year" would have to be calculated. The or the "relevant assessment year" would have to be calculated. The or the "relevant assessment year" would have to be calculated. The contention of the respondents that the said block periods would have contention of the respondents that the said block periods would have contention of the respondents that the said block periods would have to be reckoned with reference to the date of search thus can neither to be reckoned with reference to the date of search thus can neither to be reckoned with reference to the date of search thus can neither be countenanced nor possibly accept be countenanced nor possibly accepted. That submission is clearly ed. That submission is clearly addressed contrary to a long and consistent line of precedents which addressed contrary to a long and consistent line of precedents which addressed contrary to a long and consistent line of precedents which have held to the contrary and which unequivocally accepted the point have held to the contrary and which unequivocally accepted the point have held to the contrary and which unequivocally accepted the point of commencement for the purposes of identifying the six or of commencement for the purposes of identifying the six or of commencement for the purposes of identifying the six or the "relevant assessment yea "relevant assessment year" to be etched from the date of handover of to be etched from the date of handover of documents, assets or things to the AO of the non documents, assets or things to the AO of the non-searched party. searched party.

16. Before us, the Revenue has urged that, subsequent to the 16. Before us, the Revenue has urged that, subsequent to the 16. Before us, the Revenue has urged that, subsequent to the amendment by Finance Act, 2017, the first proviso to Section 153C(1) is amendment by Finance Act, 2017, the first proviso to Section 153C(1) is amendment by Finance Act, 2017, the first proviso to Section 153C(1) is only relevant for the purposes of abatement of pending assessment or for the purposes of abatement of pending assessment or for the purposes of abatement of pending assessment or reassessment proceedings, which is mentioned in Section 153A(1) of the reassessment proceedings, which is mentioned in Section 153A(1) of the reassessment proceedings, which is mentioned in Section 153A(1) of the Act and that it cannot be viewed as the reference point from which the Act and that it cannot be viewed as the reference point from which the Act and that it cannot be viewed as the reference point from which the block of six AYs is to be computed. According to Ld. CIT D block of six AYs is to be computed. According to Ld. CIT D block of six AYs is to be computed. According to Ld. CIT DR therefore, the decisions cited by the the decisions cited by the assessee were of no relevance, post this assessee were of no relevance, post this amendment. We however are unable to countenance this argument of amendment. We however are unable to countenance this argument of amendment. We however are unable to countenance this argument of the Revenue as there is no such indication contained in Section 153C of the Revenue as there is no such indication contained in Section 153C of the Revenue as there is no such indication contained in Section 153C of the Act that, the first proviso is onl the Act that, the first proviso is only concerned with abatement or non y concerned with abatement or non- abatement of assessments and that it does not regulate the date from abatement of assessments and that it does not regulate the date from abatement of assessments and that it does not regulate the date from which the block of six AYs is to be computed. We find that, this identical which the block of six AYs is to be computed. We find that, this identical which the block of six AYs is to be computed. We find that, this identical line of argument was raised by the Revenue before the Hon'ble Delhi line of argument was raised by the Revenue before the Hon'ble Delhi line of argument was raised by the Revenue before the Hon'ble Delhi High Court in the case of Pr. CIT Vs Karina Airlines International Ltd in the case of Pr. CIT Vs Karina Airlines International Ltd in the case of Pr. CIT Vs Karina Airlines International Ltd (165 taxmann.com 421) which was repelled by the Hon'ble High Court, (165 taxmann.com 421) which was repelled by the Hon'ble High Court, (165 taxmann.com 421) which was repelled by the Hon'ble High Court, by observing as follows: by observing as follows:-

"14. It becomes pertinent to recall that Section 153A, as it stood prior "14. It becomes pertinent to recall that Section 153A, as it stood prior "14. It becomes pertinent to recall that Section 153A, as it stood prior to 01 April 2017, envisaged to 01 April 2017, envisaged a search assessment being undertaken a search assessment being undertaken "in respect of each assessment year falling within six assessment "in respect of each assessment year falling within six assessment "in respect of each assessment year falling within six assessment years" referred to in clause (b) thereof. Clause (b) of Section 153A(1) years" referred to in clause (b) thereof. Clause (b) of Section 153A(1) years" referred to in clause (b) thereof. Clause (b) of Section 153A(1) provided for the identification of the six AYs' with reference to the provided for the identification of the six AYs' with reference to the provided for the identification of the six AYs' with reference to the "previous year in which the search is conducted or requisition is ear in which the search is conducted or requisition is ear in which the search is conducted or requisition is made". The block of six AYs' were to be identified commencing from made". The block of six AYs' were to be identified commencing from made". The block of six AYs' were to be identified commencing from the AY "immediately preceding the assessment year relevant to the the AY "immediately preceding the assessment year relevant to the the AY "immediately preceding the assessment year relevant to the previous year" in which the search may have been conducted. The previous year" in which the search may have been conducted. The previous year" in which the search may have been conducted. The Finance Act, 2017 stretched the search assessment to an additional nce Act, 2017 stretched the search assessment to an additional nce Act, 2017 stretched the search assessment to an additional four AYs' with the introduction of the concept of "relevant assessment four AYs' with the introduction of the concept of "relevant assessment four AYs' with the introduction of the concept of "relevant assessment year" and which was defined by Explanation 1 to Section 153A(1) as year" and which was defined by Explanation 1 to Section 153A(1) as year" and which was defined by Explanation 1 to Section 153A(1) as being the period which would fall beyond "six assessmen being the period which would fall beyond "six assessmen being the period which would fall beyond "six assessment years but not later than ten assessment years from the end of the assessment not later than ten assessment years from the end of the assessment not later than ten assessment years from the end of the assessment year relevant to the previous year" in which search was conducted. A year relevant to the previous year" in which search was conducted. A year relevant to the previous year" in which search was conducted. A 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt block period of ten AYs' consequently became liable to assessment in block period of ten AYs' consequently became liable to assessment in block period of ten AYs' consequently became liable to assessment in the case of a search post the enactment the case of a search post the enactment of Finance Act, 2017. of Finance Act, 2017.

17. The First Proviso to Section 153C (1) has been consistently 17. The First Proviso to Section 153C (1) has been consistently 17. The First Proviso to Section 153C (1) has been consistently recognized as not being concerned merely with the aspect of recognized as not being concerned merely with the aspect of recognized as not being concerned merely with the aspect of abatement, which is spoken of in the Second Proviso to Section 153A ement, which is spoken of in the Second Proviso to Section 153A ement, which is spoken of in the Second Proviso to Section 153A (1) of the Act, but also to regulate the date from which the six (1) of the Act, but also to regulate the date from which the six (1) of the Act, but also to regulate the date from which the six-year period or the "relevant assessment year" insofar as the non period or the "relevant assessment year" insofar as the non period or the "relevant assessment year" insofar as the non-searched entity is concerned, is to be reckoned. This position entity is concerned, is to be reckoned. This position entity is concerned, is to be reckoned. This position has been consistently followed not just by this Court but also by the Supreme consistently followed not just by this Court but also by the Supreme consistently followed not just by this Court but also by the Supreme Court in Commissioner of Income Tax 14 v. Jasjit Singh [2023] SCC Court in Commissioner of Income Tax 14 v. Jasjit Singh [2023] SCC Court in Commissioner of Income Tax 14 v. Jasjit Singh [2023] SCC Online SC 1265. The relevant paragraphs of the said decision are Online SC 1265. The relevant paragraphs of the said decision are Online SC 1265. The relevant paragraphs of the said decision are reproduced herein reproduced herein below: -

…..

18. Insofar as 18. Insofar as the present appeal is concerned, on facts we find that the present appeal is concerned, on facts we find that while it is true that AO of the searched person as well as that of the while it is true that AO of the searched person as well as that of the while it is true that AO of the searched person as well as that of the respondent assessee was the same, undisputedly while in the case of respondent assessee was the same, undisputedly while in the case of respondent assessee was the same, undisputedly while in the case of the former, satisfaction was recorded on 29 March 2019, the AO the former, satisfaction was recorded on 29 March 2019, the AO the former, satisfaction was recorded on 29 March 2019, the AO in the case of the respondent assessee drew up a Satisfaction Note on the case of the respondent assessee drew up a Satisfaction Note on the case of the respondent assessee drew up a Satisfaction Note on 15 May 2019.

19. In order to appreciate the essential legislative objective 19. In order to appreciate the essential legislative objective 19. In order to appreciate the essential legislative objective underlying the handover of material and formation of opinion by the underlying the handover of material and formation of opinion by the underlying the handover of material and formation of opinion by the AO of the non AO of the non-searched entity, we would have to bear the following ave to bear the following aspects in mind. We firstly take note of the fact that Section 153C aspects in mind. We firstly take note of the fact that Section 153C aspects in mind. We firstly take note of the fact that Section 153C would get triggered firstly upon the Assessing Authority of the would get triggered firstly upon the Assessing Authority of the would get triggered firstly upon the Assessing Authority of the searched entity identifying documents or material which are found to searched entity identifying documents or material which are found to searched entity identifying documents or material which are found to relate to a person other than relate to a person other than the entity which was subjected to the entity which was subjected to search. In such a contingency, that Assessing Authority is obligated search. In such a contingency, that Assessing Authority is obligated search. In such a contingency, that Assessing Authority is obligated to transmit the relevant material to the AO of the "other person". The to transmit the relevant material to the AO of the "other person". The to transmit the relevant material to the AO of the "other person". The 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 17 ::

AO of the non- -searched entity is thereafter required to scrutinize the searched entity is thereafter required to scrutinize the material so received and evaluate whether the same is likely to have o received and evaluate whether the same is likely to have o received and evaluate whether the same is likely to have an impact "on the determination of the total income of such other an impact "on the determination of the total income of such other an impact "on the determination of the total income of such other person..". This becomes evident from the plain text of Section 153C person..". This becomes evident from the plain text of Section 153C person..". This becomes evident from the plain text of Section 153C requiring the AO of the non requiring the AO of the non-searched party being "satisfied tha searched party being "satisfied that the books of account or documents or assets seized have a bearing on books of account or documents or assets seized have a bearing on books of account or documents or assets seized have a bearing on the determination of total income of such other person..". The the determination of total income of such other person..". The the determination of total income of such other person..". The material and documents unearthed in the course of the search have material and documents unearthed in the course of the search have material and documents unearthed in the course of the search have to be independently evaluated before a reassessment exer to be independently evaluated before a reassessment exer to be independently evaluated before a reassessment exercise can be initiated against a non initiated against a non-searched person. Unless the AO of that "other searched person. Unless the AO of that "other person" is satisfied that the material so gathered is likely to have an person" is satisfied that the material so gathered is likely to have an person" is satisfied that the material so gathered is likely to have an impact "on the determination of the total income of such other impact "on the determination of the total income of such other impact "on the determination of the total income of such other person", the mere receipt of documents person", the mere receipt of documents would not suffice. would not suffice.

20. It thus becomes apparent that it is the satisfaction arrived at 20. It thus becomes apparent that it is the satisfaction arrived at 20. It thus becomes apparent that it is the satisfaction arrived at under Section 153C which constitutes the cornerstone of that under Section 153C which constitutes the cornerstone of that under Section 153C which constitutes the cornerstone of that provision and the primary ingredient for Section 153C being set into provision and the primary ingredient for Section 153C being set into provision and the primary ingredient for Section 153C being set into motion. In our considered opinion, the motion. In our considered opinion, the actual or physical act of actual or physical act of transmission of documents is merely a step in aid of formation of transmission of documents is merely a step in aid of formation of transmission of documents is merely a step in aid of formation of opinion whether an assessment under Section 153C is liable to be opinion whether an assessment under Section 153C is liable to be opinion whether an assessment under Section 153C is liable to be initiated. It is in that sense merely a machinery provision put in place initiated. It is in that sense merely a machinery provision put in place initiated. It is in that sense merely a machinery provision put in place to enable the AO of the no to enable the AO of the non-searched person to examine whether an searched person to examine whether an assessment is liable to be commenced under Section 153C of the Act. assessment is liable to be commenced under Section 153C of the Act. assessment is liable to be commenced under Section 153C of the Act. Thus, even in a case where the AO of the searched and the non Thus, even in a case where the AO of the searched and the non Thus, even in a case where the AO of the searched and the non- searched party be one and the same, it would be the formation of an searched party be one and the same, it would be the formation of an searched party be one and the same, it would be the formation of an opinion that the m opinion that the material is likely to "have a bearing on the aterial is likely to "have a bearing on the determination of the total income.." which would constitute the core determination of the total income.." which would constitute the core determination of the total income.." which would constitute the core and the heart of Section 153C. and the heart of Section 153C.

21. A harmonious interpretation of the main part of Section 153C and 21. A harmonious interpretation of the main part of Section 153C and 21. A harmonious interpretation of the main part of Section 153C and its Proviso lead us to hold that in cases w its Proviso lead us to hold that in cases where the jurisdictional AO is here the jurisdictional AO is common, the commencement point would have to be construed as common, the commencement point would have to be construed as common, the commencement point would have to be construed as the date when the satisfaction is formed by the said AO with respect the date when the satisfaction is formed by the said AO with respect the date when the satisfaction is formed by the said AO with respect to such other person. In our considered view, even though there may to such other person. In our considered view, even though there may to such other person. In our considered view, even though there may not have been an actual exch not have been an actual exchange of material unearthed in the ange of material unearthed in the course of the search between two separate authorities, it would be course of the search between two separate authorities, it would be course of the search between two separate authorities, it would be the date when the AO records its satisfaction with respect to the non the date when the AO records its satisfaction with respect to the non the date when the AO records its satisfaction with respect to the non- searched entity which would be of seminal importance and constitute searched entity which would be of seminal importance and constitute searched entity which would be of seminal importance and constitute the bedrock for c the bedrock for commencement of action under Section 153C. ommencement of action under Section 153C.

17. As far as the reliance placed by Revenue on the decision rendered 17. As far as the reliance placed by Revenue on the decision rendered 17. As far as the reliance placed by Revenue on the decision rendered by Single Judge Bench of Hon'ble Madras High Court in the case of by Single Judge Bench of Hon'ble Madras High Court in the case of by Single Judge Bench of Hon'ble Madras High Court in the case of R.K.M.Powergen (P) Ltd (supra) is concerned, it is noted that the R.K.M.Powergen (P) Ltd (supra) is concerned, it is noted that the R.K.M.Powergen (P) Ltd (supra) is concerned, it is noted that the Hon'ble Single Judge while disagreeing with the view taken in Sarwar le Judge while disagreeing with the view taken in Sarwar le Judge while disagreeing with the view taken in Sarwar Agency (supra) as well as RRJ Securities (supra) didn't take cognizance Agency (supra) as well as RRJ Securities (supra) didn't take cognizance Agency (supra) as well as RRJ Securities (supra) didn't take cognizance , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt of the fact that the aforesaid decisions were rendered following the of the fact that the aforesaid decisions were rendered following the of the fact that the aforesaid decisions were rendered following the decision in the case of SSP Aviation (supra) which has sin decision in the case of SSP Aviation (supra) which has sin decision in the case of SSP Aviation (supra) which has since been affirmed by the Hon'ble Supreme Court in Jasjit Singh (supra) by affirmed by the Hon'ble Supreme Court in Jasjit Singh (supra) by affirmed by the Hon'ble Supreme Court in Jasjit Singh (supra) by holding as under: holding as under:-

"9. It is evident on a plain interpretation of Section 153C(1) that the "9. It is evident on a plain interpretation of Section 153C(1) that the "9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to Parliamentary intent to enact the proviso was to cater not merely to Parliamentary intent to enact the proviso was to cater not merely to the question of abateme the question of abatement but also with regard to the date from nt but also with regard to the date from which the six year period was to be reckoned, in respect of which the which the six year period was to be reckoned, in respect of which the which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not returns were to be filed by the third party (whose premises are not returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section searched and in respect of whom the specific provision under Section searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section s enacted. The revenue argued that the proviso [to Section s enacted. The revenue argued that the proviso [to Section 153(c)(1)] is confined in its application to the question of 153(c)(1)] is confined in its application to the question of 153(c)(1)] is confined in its application to the question of abatement."

19. Moreover, we note that, the Hon'ble Delhi High Court in the case of 19. Moreover, we note that, the Hon'ble Delhi High Court in the case of 19. Moreover, we note that, the Hon'ble Delhi High Court in the case of Pr.CIT Vs Ojjus Medicare (P) Ltd (supra) at Paras 51 to 84 has in detail Pr.CIT Vs Ojjus Medicare (P) Ltd (supra) at Paras 51 to 84 has in detail Pr.CIT Vs Ojjus Medicare (P) Ltd (supra) at Paras 51 to 84 has in detail analyzed the entire statutory framework of Section 153C of the Act fro analyzed the entire statutory framework of Section 153C of the Act fro analyzed the entire statutory framework of Section 153C of the Act from its introduction to the amendment by Finance Act, 2017 and its its introduction to the amendment by Finance Act, 2017 and its its introduction to the amendment by Finance Act, 2017 and its grandfathering by the Finance Act, 2021 and the relevant decisions on grandfathering by the Finance Act, 2021 and the relevant decisions on grandfathering by the Finance Act, 2021 and the relevant decisions on this subject including the decisions of Sarwar Agency Pvt. Ltd. (supra) & this subject including the decisions of Sarwar Agency Pvt. Ltd. (supra) & this subject including the decisions of Sarwar Agency Pvt. Ltd. (supra) & RKM Powergen (P) Ltd. (supra) relied upon by th RKM Powergen (P) Ltd. (supra) relied upon by the Revenue. The Hon'ble e Revenue. The Hon'ble High Court is noted to have accordingly concluded that, even post the High Court is noted to have accordingly concluded that, even post the High Court is noted to have accordingly concluded that, even post the amendment by Finance Act, 2017, the first proviso to section 153C amendment by Finance Act, 2017, the first proviso to section 153C amendment by Finance Act, 2017, the first proviso to section 153C shifts the relevant date from the date of initiation of search or a shifts the relevant date from the date of initiation of search or a shifts the relevant date from the date of initiation of search or a requisition made, to the date requisition made, to the date of hand-over of books of account or over of books of account or documents and assets seized to the AO of the non documents and assets seized to the AO of the non-searched person (or searched person (or in its absence to the date of satisfaction note) and the said date shall be in its absence to the date of satisfaction note) and the said date shall be in its absence to the date of satisfaction note) and the said date shall be commencement point for reckoning the six or the ten AYs'. The relevant commencement point for reckoning the six or the ten AYs'. The relevant commencement point for reckoning the six or the ten AYs'. The relevant findings of the Hon'ble Delhi High Court, in this regard, which is found dings of the Hon'ble Delhi High Court, in this regard, which is found dings of the Hon'ble Delhi High Court, in this regard, which is found applicable in the present case, is noted to be as follows: applicable in the present case, is noted to be as follows:-

"7. .....On 18 October 2019, a search and seizure operation is stated "7. .....On 18 October 2019, a search and seizure operation is stated "7. .....On 18 October 2019, a search and seizure operation is stated to have been carried out in respect of the Alankit Group to have been carried out in respect of the Alankit Group to have been carried out in respect of the Alankit Group of Companies6 . On 22 March 2022, the petitioner was served with a Companies6 . On 22 March 2022, the petitioner was served with a Companies6 . On 22 March 2022, the petitioner was served with a notice purporting to be under Section 153C of the Act requiring it to notice purporting to be under Section 153C of the Act requiring it to notice purporting to be under Section 153C of the Act requiring it to submit a true and correct return of its total income for AY 2011 submit a true and correct return of its total income for AY 2011 submit a true and correct return of its total income for AY 2011-

12. The aforesaid notice was followed by a communica 12. The aforesaid notice was followed by a communication dated 22 tion dated 22 December 2022 under Section 142(1) requiring the petitioner to December 2022 under Section 142(1) requiring the petitioner to December 2022 under Section 142(1) requiring the petitioner to produce accounts and documents as per the annexure appended produce accounts and documents as per the annexure appended produce accounts and documents as per the annexure appended thereto. A follow thereto. A follow-up notice under Section 142(1) of the Act was up notice under Section 142(1) of the Act was thereafter issued on 01 February 2023. It is alleged by thereafter issued on 01 February 2023. It is alleged by thereafter issued on 01 February 2023. It is alleged by the respondents that since the petitioner did not respond to the aforesaid respondents that since the petitioner did not respond to the aforesaid respondents that since the petitioner did not respond to the aforesaid communications, they were constrained to issue notices under communications, they were constrained to issue notices under communications, they were constrained to issue notices under Section 144 of the Act and which were dated 22 February 2023 and Section 144 of the Act and which were dated 22 February 2023 and Section 144 of the Act and which were dated 22 February 2023 and 03 March 2023. In response to the aforesaid, the petit 03 March 2023. In response to the aforesaid, the petitioner submitted ioner submitted its response on 15 March 2023. its response on 15 March 2023.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 20 ::

Computation of the six Computation of the six-year block No. of years No. of years period as provided under section period as provided under section 153C of the Act 1st Year 2021 – 22 2nd Year 2020 – 21 3rd Year 2019 – 20 4th Year 2018 – 19 5th Year 2017 – 18 6th Year 2016 – 17 , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 21 ::

Consequently, AY 2021 Consequently, AY 2021-22 would become the first of the six 22 would become the first of the six preceding AYs' and would as per the table set out hereinabove preceding AYs' and would as per the table set out hereinabove preceding AYs' and would as per the table set out hereinabove terminate at AY 2016 terminate at AY 2016-17."

20. The Hon'ble 20. The Hon'ble Delhi High Court is further noted to have finally Delhi High Court is further noted to have finally concluded with the following observations: concluded with the following observations:-

"D. The First Proviso to section 153C introduces a legal fiction on the "D. The First Proviso to section 153C introduces a legal fiction on the "D. The First Proviso to section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six basis of which the commencement date for computation of the six basis of which the commencement date for computation of the six year or the ten year bloc year or the ten year block is deemed to be the date of receipt of k is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the books of accounts by the jurisdictional AO. The identification of the books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten starting block for the purposes of computation of the six and the ten starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to section 153C, which year period is governed by the First Proviso to section 153C, which year period is governed by the First Proviso to section 153C, which significantly shifts the reference point spoken of in section 153A(1), cantly shifts the reference point spoken of in section 153A(1), cantly shifts the reference point spoken of in section 153A(1), while defining the point from which the period of the "relevant while defining the point from which the period of the "relevant while defining the point from which the period of the "relevant assessment year" is to be calculated, to the date of receipt of the assessment year" is to be calculated, to the date of receipt of the assessment year" is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdi books of accounts, documents or assets seized by the jurisdi books of accounts, documents or assets seized by the jurisdictional AO of the non AO of the non-searched person. The shift of the relevant date in the searched person. The shift of the relevant date in the case of a non- -searched person being regulated by the First Proviso of searched person being regulated by the First Proviso of section 153C(1) is an issue which is no longer res integra and stands section 153C(1) is an issue which is no longer res integra and stands section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of th authoritatively settled by virtue of the decisions of this Court in SSP e decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Aviation and RRJ Securities as well as the decision of the Supreme Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated Court in Jasjit Singh. The aforesaid legal position also stood reiterated Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission by the Supreme Court in Vikram Sujitkumar Bhatia. The submission by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondent of the respondents, therefore, that the block periods would have to s, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be be reckoned with reference to the date of search can neither be be reckoned with reference to the date of search can neither be countenanced nor accepted. countenanced nor accepted.

E. The reckoning of the six AYs' would require one to firstly identify E. The reckoning of the six AYs' would require one to firstly identify E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken a the FY in which the search was undertaken and which would lead to nd which would lead to the ascertainment of the AY relevant to the previous year of search. the ascertainment of the AY relevant to the previous year of search. the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately The block of six AYs' would consequently be those which immediately The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search precede the AY relevant to the year of search. In the case of a search precede the AY relevant to the year of search. In the case of a search assessment undertaken in assessment undertaken in terms of section 153C, the solitary terms of section 153C, the solitary distinction would be that the previous year of search would stand distinction would be that the previous year of search would stand distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or substituted by the date or the year in which the books of accounts or substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO documents and assets seized are handed over to the jurisdictional AO documents and assets seized are handed over to the jurisdictional AO as opposed to t as opposed to the year of search which constitutes the basis for an he year of search which constitutes the basis for an assessment under section 153A." assessment under section 153A."

21. Following the decisions (supra), we hold that the date of receiving 21. Following the decisions (supra), we hold that the date of receiving 21. Following the decisions (supra), we hold that the date of receiving the books of account/documents/assets from the AO of the assessee the books of account/documents/assets from the AO of the assessee the books of account/documents/assets from the AO of the assessee was to be construed as the date o was to be construed as the date of search, in terms of the first proviso f search, in terms of the first proviso to Section 153C of the Act................ to Section 153C of the Act................”

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 22 ::

Accordingly, ordinarily six AYs 2016 rily six AYs 2016-17 to 2021-22 could have been 22 could have been reopened by the AO u/s 153C of the Act. However, reopened by the AO u/s 153C of the Act. However, reopened by the AO u/s 153C of the Act. However, by virtue of Explanation (1) to section 153A of the Act to section 153A of the Act, the AO was also empowered to , the AO was also empowered to reopen the ‘relevant assessment year’ ‘relevant assessment year’ which cannot go beyond which cannot go beyond ten AYs' computed from the end of the AY relevant to the FY in which the search computed from the end of the AY relevant to the FY in which the search computed from the end of the AY relevant to the FY in which the search was conducted or requisition made. In the context of the present case, was conducted or requisition made. In the context of the present case, was conducted or requisition made. In the context of the present case, and as held above, AY 2022 and as held above, AY 2022-23 shall be deemed to be the year of search 23 shall be deemed to be the year of search and therefore AY 2022- -23 would form the first year of the block of ten m the first year of the block of ten AYs' and with the maximum period of ten AYs' terminating in AY 2013 AYs' and with the maximum period of ten AYs' terminating in AY 2013 AYs' and with the maximum period of ten AYs' terminating in AY 2013-14.

We therefore note that, AYs 2014 We therefore note that, AYs 2014-15 & 2015-16 though fell outside the 16 though fell outside the six year block period but was within the period of ten years, in terms of six year block period but was within the period of ten years, in terms of six year block period but was within the period of ten years, in terms of Explanation (1) to Section 153A of the Act. lanation (1) to Section 153A of the Act.

AYs 2014-15 & 2015-16 16 u/s 153C of the Act, which fell beyond the period u/s 153C of the Act, which fell beyond the period of six assessment years. In order to adjudicate this legal issue, let us six assessment years. In order to adjudicate this legal issue, let us six assessment years. In order to adjudicate this legal issue, let us have a look at the law relevant to this issue. It is noted that, the fourth look at the law relevant to this issue. It is noted that, the fourth look at the law relevant to this issue. It is noted that, the fourth proviso of Section 153A of the Ac of Section 153A of the Act which was inserted by the Finance Act, serted by the Finance Act, 2017 with effect from 01.04.2017, enabled an A with effect from 01.04.2017, enabled an AO of a searched person to O of a searched person to issue notices u/s 153A of the Act for “releva notices u/s 153A of the Act for “relevant assessment year or years nt assessment year or years‟ in terms of Explanation 1 of the fourth pro terms of Explanation 1 of the fourth proviso to Section 153A of th viso to Section 153A of the Act i.e. assessment years beyond the six (6) asse i.e. assessment years beyond the six (6) assessment years till tenth (10) ssment years till tenth (10) assessment year preceding the search assessment year preceding the searched assessment year (i.e. 7th to ed assessment year (i.e. 7th to 10th AY's preceding the searched AY) 10th AY's preceding the searched AY), provided the AO satisfies the , provided the AO satisfies the essential conditions specified therein. essential conditions specified therein. The relevant portion of Section The relevant portion of Section 153A of the Act i.e., fourth proviso to Sec 153A of the Act i.e., fourth proviso to Section 153A of the Act, which has tion 153A of the Act, which has a bearing on the controversy in hand, is being reproduced below: a bearing on the controversy in hand, is being reproduced below: a bearing on the controversy in hand, is being reproduced below:-

"Provided also that no notice for assessment or reassessment shall be "Provided also that no notice for assessment or reassessment shall be "Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or Assessing Officer for the relevant assessment year or Assessing Officer for the relevant assessment year or years unless--

(a) the Assessing Officer has in his possession books of account or other (a) the Assessing Officer has in his possession books of account or other (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the documents or evidence which reveal that the income, represented in the documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessme form of asset, which has escaped assessment amounts to or is likely to nt amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or amount to fifty lakh rupees or more in the relevant assessment year or amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; in aggregate in the relevant assessment years;

(b) the income referred to in clause (a) or part thereof has escaped (b) the income referred to in clause (a) or part thereof has escaped (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section (c) the search under section 132 is initiated or requisition under section (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. 132A is made on or after the 1st day of April, 2017.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 24 ::

Explanation 2. For the purposes of the fourth proviso, "asset" shall Explanation 2. For the purposes of the fourth proviso, "asset" shall Explanation 2. For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, include immovable property being land or building or both, include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account." securities, loans and advances, deposits in bank account."

So, the AO, in order to So, the AO, in order to assume jurisdiction for the extended period i.e. assume jurisdiction for the extended period i.e. 7th to 10th AY preceding the searched year, should have in his possession 7th to 10th AY preceding the searched year, should have in his possession 7th to 10th AY preceding the searched year, should have in his possession income represented in the form of income represented in the form of "asset‟ valued Rs. 50 Lakhs or more valued Rs. 50 Lakhs or more which has escaped assessment, which is the which has escaped assessment, which is the "jurisdictional "jurisdictional fact‟, which if present/or in possession of AO will only enable the AO to assume present/or in possession of AO will only enable the AO to assume present/or in possession of AO will only enable the AO to assume jurisdiction u/s. 153A r.w. 153C of the Act to issue notice for these jurisdiction u/s. 153A r.w. 153C of the Act to issue notice for these jurisdiction u/s. 153A r.w. 153C of the Act to issue notice for these extended AYs'. We find that the Ld. CIT(A) had examined the satisfaction We find that the Ld. CIT(A) had examined the satisfaction We find that the Ld. CIT(A) had examined the satisfaction , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt note recorded by the AO and foun note recorded by the AO and found that this jurisdictional fact was absent this jurisdictional fact was absent in the facts of the present case and hence, the action of AO reopening the in the facts of the present case and hence, the action of AO reopening the in the facts of the present case and hence, the action of AO reopening the assessments for AYs 2014 2014-15 & 2015-16 u/s 153C of the Act was u/s 153C of the Act was held to be bad in law for want of jurisdiction. bad in law for want of jurisdiction. The relevant findings of the The relevant findings of the Ld. CIT(A) taken note of by us is as follows: CIT(A) taken note of by us is as follows:-

“6.6.10 At this juncture, it is appropriate to rely upon the decision of At this juncture, it is appropriate to rely upon the decision of At this juncture, it is appropriate to rely upon the decision of the Hon’ble High Court of Bombay in the case of the Hon’ble High Court of Bombay in the case of Ashok Commercial Ashok Commercial enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) enterprises Vs. ACIT in [2023] 154 taxmann.com 144 (Bombay) wherein the Hon’ble high Court held that “ e Hon’ble high Court held that “A plain reading of section 153A(1)(b) A plain reading of section 153A(1)(b) shows that Commissioner having jurisdiction under the said section is shows that Commissioner having jurisdiction under the said section is shows that Commissioner having jurisdiction under the said section is empowered to assess or reassess the total income of six years empowered to assess or reassess the total income of six years empowered to assess or reassess the total income of six years immediately preceding the assessment year relevant to immediately preceding the assessment year relevant to immediately preceding the assessment year relevant to the previous year in which the search was conducted and for the relevant assessment year in which the search was conducted and for the relevant assessment year in which the search was conducted and for the relevant assessment year or years. Explanation 1 below section 153A of the Act defines the year or years. Explanation 1 below section 153A of the Act defines the year or years. Explanation 1 below section 153A of the Act defines the expression relevant assessment. In order to make an assessment for expression relevant assessment. In order to make an assessment for expression relevant assessment. In order to make an assessment for assessment year which falls beyond assessment year which falls beyond six assessment years but not later six assessment years but not later than ten assessment years from the end of the assessment year than ten assessment years from the end of the assessment year than ten assessment years from the end of the assessment year relevant to the previous year, in which the search was conducted, the relevant to the previous year, in which the search was conducted, the relevant to the previous year, in which the search was conducted, the 4th proviso to section 153(A)(1) sets out certain further conditions 4th proviso to section 153(A)(1) sets out certain further conditions 4th proviso to section 153(A)(1) sets out certain further conditions which are required which are required to be fulfilled before a notice can be issued for the to be fulfilled before a notice can be issued for the relevant assessment years. Clause (a) of the4th proviso requires that relevant assessment years. Clause (a) of the4th proviso requires that relevant assessment years. Clause (a) of the4th proviso requires that the Assessing Officer must have in his possession books, documents or the Assessing Officer must have in his possession books, documents or the Assessing Officer must have in his possession books, documents or evidence which reveal reveal that income represented in the form of a that income represented in the form of an asset which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to which has escaped assessment amounts to or is likely to amount to rupees fifty lakhs rupees fifty lakhs or more. Explanation 2 to section 153A(1) sets out an or more. Explanation 2 to section 153A(1) sets out an expanded definition of the word "asset" for the purposes of the 4th expanded definition of the word "asset" for the purposes of the 4th expanded definition of the word "asset" for the purposes of the 4th proviso.

6.6.11 Further, the jurisdiction Further, the jurisdictional tribunal in the case of al tribunal in the case of M/s. KAG India Private Limited Vs. DCIT Central circle India Private Limited Vs. DCIT Central circle-2(1), Chennai in Chennai in No.669/Chny/2023 dated 10.07.2024 dated 10.07.2024 by relying upon the decision by relying upon the decision of the decision of Hon’ble Guwahati High Court in the case of of the decision of Hon’ble Guwahati High Court in the case of of the decision of Hon’ble Guwahati High Court in the case of Goldstone Cements Ltd. (ITA No.10 of 2022 & Ors. Dated 29 d. (ITA No.10 of 2022 & Ors. Dated 29-09-2023) 2023) held that “it is quite clear the impugned AY fall beyond 6 years from relevant is quite clear the impugned AY fall beyond 6 years from relevant is quite clear the impugned AY fall beyond 6 years from relevant assessment year (AY 2021 assessment year (AY 2021-22) from the end of the previous year (2020 22) from the end of the previous year (2020- 21) in which the search was conducted on the assessee (26 21) in which the search was conducted on the assessee (26 21) in which the search was conducted on the assessee (26-02-2021). In such a situation, the Ld. AO would be subjected to further conditions In such a situation, the Ld. AO would be subjected to further conditions In such a situation, the Ld. AO would be subjected to further conditions as stipulated in fourth proviso to Sec.153A(1). These conditions are (a) as stipulated in fourth proviso to Sec.153A(1). These conditions are (a) as stipulated in fourth proviso to Sec.153A(1). These conditions are (a)

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt that certain income has escaped assessment; (b) the fact of income that certain income has escaped assessment; (b) the fact of income that certain income has escaped assessment; (b) the fact of income escaping assessment is evident from escaping assessment is evident from the books of accounts, other the books of accounts, other documents or evidences found in the course of search which are in the documents or evidences found in the course of search which are in the documents or evidences found in the course of search which are in the possession of the assessing officer; (c) that the escaped income pertains possession of the assessing officer; (c) that the escaped income pertains possession of the assessing officer; (c) that the escaped income pertains to the relevant assessment year or years; (d) that the income escaping to the relevant assessment year or years; (d) that the income escaping to the relevant assessment year or years; (d) that the income escaping assessment is represented by undisclosed specified asset; (e) that the s represented by undisclosed specified asset; (e) that the s represented by undisclosed specified asset; (e) that the undisclosed specified asset was acquired with the income of the relevant undisclosed specified asset was acquired with the income of the relevant undisclosed specified asset was acquired with the income of the relevant assessment year or years; (f) that the quantum of income escaping assessment year or years; (f) that the quantum of income escaping assessment year or years; (f) that the quantum of income escaping assessment is Rs.50 Lacs or more in the aggregate for the assessment is Rs.50 Lacs or more in the aggregate for the assessment is Rs.50 Lacs or more in the aggregate for the relevant assessment years. One of the prime condition is that income should be assessment years. One of the prime condition is that income should be assessment years. One of the prime condition is that income should be represented in the form of asset which has escaped assessment. As per represented in the form of asset which has escaped assessment. As per represented in the form of asset which has escaped assessment. As per Explanation-2, asset includes immovable property being land and 2, asset includes immovable property being land and 2, asset includes immovable property being land and building or both, share and securities, loa building or both, share and securities, loans and advances, deposits in ns and advances, deposits in bank accounts.

6.6.12 Further, the Hon’ble ITAT Guwahati Bench in the case of Further, the Hon’ble ITAT Guwahati Bench in the case of Further, the Hon’ble ITAT Guwahati Bench in the case of ACIT, Circle-2, Guwahati Vs, Fortune Vanijya Private Limited in Guwahati Vs, Fortune Vanijya Private Limited in Guwahati Vs, Fortune Vanijya Private Limited in dated 10.12.2021 21/Gau/2021 dated 10.12.2021 has observed upon the recording of observed upon the recording of satisfaction note as under. satisfaction note as under.

“We find that even the contents of the satisfaction note (supra) recorded “We find that even the contents of the satisfaction note (supra) recorded “We find that even the contents of the satisfaction note (supra) recorded by the AO prior to issuance of the notice u/s 153C dated 05 by the AO prior to issuance of the notice u/s 153C dated 05 by the AO prior to issuance of the notice u/s 153C dated 05-12-2019, does not reveal/point out the 'undisclosed/unaccount does not reveal/point out the 'undisclosed/unaccounted asset' which ed asset' which escaped assessment in the relevant AY. It is to be kept in mind that the escaped assessment in the relevant AY. It is to be kept in mind that the escaped assessment in the relevant AY. It is to be kept in mind that the satisfaction note is to be examined on a standalone basis. Nothing can satisfaction note is to be examined on a standalone basis. Nothing can satisfaction note is to be examined on a standalone basis. Nothing can now be added to the satisfaction note, nor anything be deleted from the now be added to the satisfaction note, nor anything be deleted from the now be added to the satisfaction note, nor anything be deleted from the satisfaction note. It is satisfaction note. It is for the AO to disclose and open his mind through for the AO to disclose and open his mind through the satisfaction note as to which seized material revealed existence of the satisfaction note as to which seized material revealed existence of the satisfaction note as to which seized material revealed existence of undisclosed/unaccounted asset valued Rs.50 lacs or more, so as to undisclosed/unaccounted asset valued Rs.50 lacs or more, so as to undisclosed/unaccounted asset valued Rs.50 lacs or more, so as to establish the existence of jurisdictional fact for assuming valid establish the existence of jurisdictional fact for assuming valid establish the existence of jurisdictional fact for assuming valid jurisdiction in terms of the fourth proviso to Section 153A read with risdiction in terms of the fourth proviso to Section 153A read with risdiction in terms of the fourth proviso to Section 153A read with Section 153C of the Act for reopening the assessment for 7th Section 153C of the Act for reopening the assessment for 7th Section 153C of the Act for reopening the assessment for 7th-10th AY. The satisfaction note cannot now be supplemented but it is to be The satisfaction note cannot now be supplemented but it is to be The satisfaction note cannot now be supplemented but it is to be examined only as they were recorded by the AO prior t examined only as they were recorded by the AO prior to the issue of the o the issue of the notice.”

6.6.13 and held that and held that “It is imperative that before issuance of notice u/s 153C [for the “It is imperative that before issuance of notice u/s 153C [for the “It is imperative that before issuance of notice u/s 153C [for the extended period], the AO sets out his objective satisfaction from the extended period], the AO sets out his objective satisfaction from the extended period], the AO sets out his objective satisfaction from the seized material, the details of the specified/undisclosed assets in h seized material, the details of the specified/undisclosed assets in h seized material, the details of the specified/undisclosed assets in his possession qua the assessee for AY 2011 possession qua the assessee for AY 2011-12 valued Rs. 50 lakhs or 12 valued Rs. 50 lakhs or more. If this essential requirement of law is not satisfied, the AO does more. If this essential requirement of law is not satisfied, the AO does more. If this essential requirement of law is not satisfied, the AO does not get the authority of law to invoke the jurisdiction u/s 153A of the Act not get the authority of law to invoke the jurisdiction u/s 153A of the Act not get the authority of law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY. For this, we rely for 7th to 10th AY. For this, we rely upon the dictum of the Privy Council upon the dictum of the Privy Council , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt in Nazir Ahmed Vs. King Emperor AIR 1936 PC 253 Nazir Ahmed Vs. King Emperor AIR 1936 PC 253(which has since (which has since been accepted and later followed by Hon'ble Supreme Court), that when been accepted and later followed by Hon'ble Supreme Court), that when been accepted and later followed by Hon'ble Supreme Court), that when a statute requires a thing to be done in a particular manner, it must be a statute requires a thing to be done in a particular manner, it must be a statute requires a thing to be done in a particular manner, it must be done in that manner or not at all. As discussed at Para 13 (supra), the manner or not at all. As discussed at Para 13 (supra), the manner or not at all. As discussed at Para 13 (supra), the language of the fourth proviso to section 153A of the Act show that language of the fourth proviso to section 153A of the Act show that language of the fourth proviso to section 153A of the Act show that issuance of notice can be resorted to by the AO only after he is in issuance of notice can be resorted to by the AO only after he is in issuance of notice can be resorted to by the AO only after he is in possession of the jurisdictional fact, which is found to be possession of the jurisdictional fact, which is found to be absent in the absent in the present case. Therefore, according to us, the AO only after having in his present case. Therefore, according to us, the AO only after having in his present case. Therefore, according to us, the AO only after having in his possession the jurisdictional fact could have assumed jurisdiction and possession the jurisdictional fact could have assumed jurisdiction and possession the jurisdictional fact could have assumed jurisdiction and issued notice u/s. 153C of the Act or else he could not have issued issued notice u/s. 153C of the Act or else he could not have issued issued notice u/s. 153C of the Act or else he could not have issued notice, as done in this case. notice, as done in this case. For the reasons elaborately discussed by us For the reasons elaborately discussed by us in the foregoing, we thus hold that the notice u/s. 153C dated 05 in the foregoing, we thus hold that the notice u/s. 153C dated 05 in the foregoing, we thus hold that the notice u/s. 153C dated 05-12- 2019 was issued by the AO for AY 2011 2019 was issued by the AO for AY 2011-12 without authority of law and 12 without authority of law and without satisfying the essential jurisdictional fact, and hence the without satisfying the essential jurisdictional fact, and hence the without satisfying the essential jurisdictional fact, and hence the issuance of notice u/s. 153C of the Act is held to be bad in law. ance of notice u/s. 153C of the Act is held to be bad in law. ance of notice u/s. 153C of the Act is held to be bad in law.

6.6.14 Therefore, unless the AO has material in possession to prove Therefore, unless the AO has material in possession to prove Therefore, unless the AO has material in possession to prove that the assessee has ‘assets’, which is not disclosed in the books, the that the assessee has ‘assets’, which is not disclosed in the books, the that the assessee has ‘assets’, which is not disclosed in the books, the income cannot be said to have escaped assessment for income cannot be said to have escaped assessment for the purpose of the purpose of section 153A. Here, the statute specifically mentioned section 153A. Here, the statute specifically mentioned section 153A. Here, the statute specifically mentioned “Asset’ shall include a) Immovable Property being land and building or both Immovable Property being land and building or both b) Shares & Securities Shares & Securities c) Loans and Advances Loans and Advances d) Deposits in Bank accounts Deposits in Bank accounts

Hence, the re-opening beyond a opening beyond a period of six years can be made only if, period of six years can be made only if, where AO possess books of accounts, documents or evidence which where AO possess books of accounts, documents or evidence which where AO possess books of accounts, documents or evidence which reveals that ‘assets’ are found to be undisclosed or unaccounted as reveals that ‘assets’ are found to be undisclosed or unaccounted as reveals that ‘assets’ are found to be undisclosed or unaccounted as specified supra, in the regular books of account maintained by the specified supra, in the regular books of account maintained by the specified supra, in the regular books of account maintained by the assessee, resulting in escapement of income. ing in escapement of income.

6.6.15 The facts of the case are squarely covered by the decision The facts of the case are squarely covered by the decision The facts of the case are squarely covered by the decision rendered by the Hon’ble Guwahati Bench of ITAT in the case of rendered by the Hon’ble Guwahati Bench of ITAT in the case of rendered by the Hon’ble Guwahati Bench of ITAT in the case of Goldstone Cements Ltd, Meghalaya in IT Nos. 126 to 131/Gau/2020 Goldstone Cements Ltd, Meghalaya in IT Nos. 126 to 131/Gau/2020 Goldstone Cements Ltd, Meghalaya in IT Nos. 126 to 131/Gau/2020 dated 10.12.2021 dated 10.12.2021 wherein it was held that the undisclosed asset d that the undisclosed asset exceeding a value of Rs. 50 Lakhs unearthed at the time of search exceeding a value of Rs. 50 Lakhs unearthed at the time of search exceeding a value of Rs. 50 Lakhs unearthed at the time of search should be clearly identifiable. The Hon'ble Bench has observed in para should be clearly identifiable. The Hon'ble Bench has observed in para should be clearly identifiable. The Hon'ble Bench has observed in para 8.22 of its order that : 8.22 of its order that :

"8.22. From our discussion (supra) it is clear that, only if any "8.22. From our discussion (supra) it is clear that, only if any "8.22. From our discussion (supra) it is clear that, only if any of specified 'asset/s' as defined in Explanation (2) is unearthed during the specified 'asset/s' as defined in Explanation (2) is unearthed during the specified 'asset/s' as defined in Explanation (2) is unearthed during the 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt course of search and the acquisition of such an course of search and the acquisition of such an ‘asset' being unexplained asset' being unexplained or undisclosed, which is valued Rs 50 Lakhs or undisclosed, which is valued Rs 50 Lakhs or more, that the AO can be or more, that the AO can be said to be in possession of the jurisdictional fact to initiate proceedings said to be in possession of the jurisdictional fact to initiate proceedings said to be in possession of the jurisdictional fact to initiate proceedings u/s 153A for 7th- -10th AY (AY 2011-12, in the instant case).” 12, in the instant case).”

6.6.16 The above finding of the Hon’ble Tribunal was ratified by the The above finding of the Hon’ble Tribunal was ratified by the The above finding of the Hon’ble Tribunal was ratified by the Hon’ble Guwahati High Hon’ble Guwahati High Court in ITA/7/2022 on 29 September, 2023 ITA/7/2022 on 29 September, 2023 on further appeal by the Revenue u/s 260A of the Act in the case of further appeal by the Revenue u/s 260A of the Act in the case of further appeal by the Revenue u/s 260A of the Act in the case of CIT V. Goldstone Cements Ltd Goldstone Cements Ltd wherein it has been held that “ wherein it has been held that “It was emphasized that an expenditure, irrespective of its character, does not emphasized that an expenditure, irrespective of its character, does not emphasized that an expenditure, irrespective of its character, does not fall within the definition of ‘asset’ defined in Explanation 2 to S.153A and within the definition of ‘asset’ defined in Explanation 2 to S.153A and within the definition of ‘asset’ defined in Explanation 2 to S.153A and therefore the Jurisdiction assumed by the AO is unsustainable” therefore the Jurisdiction assumed by the AO is unsustainable” therefore the Jurisdiction assumed by the AO is unsustainable” .

6.6.17 A jurisdictional fact jurisdictional fact is one on existence or non- -existence of which depends assumption or refusal to assume juri which depends assumption or refusal to assume jurisdiction by a court, sdiction by a court, tribunal or an authority. In 'Black's Legal Dictionary, it is explained as a tribunal or an authority. In 'Black's Legal Dictionary, it is explained as a tribunal or an authority. In 'Black's Legal Dictionary, it is explained as a fact which must exist before a court can properly assume jurisdiction of fact which must exist before a court can properly assume jurisdiction of fact which must exist before a court can properly assume jurisdiction of a particular case. Mistake of fact in relation to jurisdiction a particular case. Mistake of fact in relation to jurisdiction is an error of is an error of jurisdictional fact ctional fact. No statutory authority or tribunal can assume . No statutory authority or tribunal can assume jurisdiction in respect of subject matter which the statute does not jurisdiction in respect of subject matter which the statute does not jurisdiction in respect of subject matter which the statute does not confer on it and if by deciding erroneously the fact on which jurisdiction confer on it and if by deciding erroneously the fact on which jurisdiction confer on it and if by deciding erroneously the fact on which jurisdiction depends the court or tribunal exercises the jurisdic depends the court or tribunal exercises the jurisdiction, then the order is tion, then the order is vitiated.

6.6.18 In 'Halsbury's Laws of England' it has been stated that where In 'Halsbury's Laws of England' it has been stated that where In 'Halsbury's Laws of England' it has been stated that where the jurisdiction of a tribunal is dependent on the existence of a particular the jurisdiction of a tribunal is dependent on the existence of a particular the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, state of affairs, that state of affairs may be described as preliminary to, state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of the issue. If, at the inception of an inquiry or collateral to the merits of the issue. If, at the inception of an inquiry or collateral to the merits of the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the by an inferior tribunal, a challenge is made to its jurisdiction, the by an inferior tribunal, a challenge is made to its jurisdiction, the Tribunal has to make up its mind whether to Act or not and can give a Tribunal has to make up its mind whether to Act or not and can give a Tribunal has to make up its mind whether to Act or not and can give a ruling on the preliminary or collateral ruling on the preliminary or collateral issue; but that ruling is not issue; but that ruling is not conclusive.

6.6.19 In the case of In the case of Arun Kumar & Ors. vs. Union of India & Ors. Arun Kumar & Ors. vs. Union of India & Ors. (2006) 205 CTR (SC) 193: (2006) 286 ITR 89 (SC) (2006) 205 CTR (SC) 193: (2006) 286 ITR 89 (SC) it has been held: it has been held:-

"A "jurisdictional fact" is a fact which must exist before a Court, Tribunal "A "jurisdictional fact" is a fact which must exist before a Court, Tribunal "A "jurisdictional fact" is a fact which must exist before a Court, Tribunal or an assumes jurisdiction over a particular matter. A jurisdictional fact an assumes jurisdiction over a particular matter. A jurisdictional fact an assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non is one on existence or non-existence of which depends jurisdiction of a existence of which depends jurisdiction of a court, a tribunal or an authority. It is the fact upon which an court, a tribunal or an authority. It is the fact upon which an court, a tribunal or an authority. It is the fact upon which an administrative agency's power to act depends If administrative agency's power to act depends If the jurisdictional fact the jurisdictional fact does not exist, the court, authority or officer cannot act. If a Court or does not exist, the court, authority or officer cannot act. If a Court or does not exist, the court, authority or officer cannot act. If a Court or authority wrongly assumes the existence of such fact, the order can be authority wrongly assumes the existence of such fact, the order can be authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by questioned by a writ of certiorari. The underlying principle is that by questioned by a writ of certiorari. The underlying principle is that by 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt erroneously assuming existence of such jurisdictional fact, no authority uming existence of such jurisdictional fact, no authority uming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not posses can confer upon itself jurisdiction which it otherwise does not posses can confer upon itself jurisdiction which it otherwise does not posses

6.6.20 The existence of a 'jurisdictional fact' is the The existence of a 'jurisdictional fact' is the sine qua non sine qua non for the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised lawfully. When the jurisdictional fact is established, the AO is lawfully. When the jurisdictional fact is established, the AO is lawfully. When the jurisdictional fact is established, the AO is empowered to proceed with the case and make decisions in accordance empowered to proceed with the case and make decisions in accordance empowered to proceed with the case and make decisions in accordance with the provisions of law. In this context, the with the provisions of law. In this context, the fulfilment of the fulfilment of the preconditions set forth u/s 153C r.w.s 153A of the Act is considered a preconditions set forth u/s 153C r.w.s 153A of the Act is considered a preconditions set forth u/s 153C r.w.s 153A of the Act is considered a 'jurisdictional fact 'jurisdictional fact.' The AO is required to carefully examine and .' The AO is required to carefully examine and ascertain whether these specific conditions are satisfied before ascertain whether these specific conditions are satisfied before ascertain whether these specific conditions are satisfied before proceeding. Only after deciding on proceeding. Only after deciding on this issue, and recording a clear this issue, and recording a clear finding regarding the presence or absence of these conditions, can the finding regarding the presence or absence of these conditions, can the finding regarding the presence or absence of these conditions, can the AO issue a notice u/s 153C for the relevant assessment year. Only upon AO issue a notice u/s 153C for the relevant assessment year. Only upon AO issue a notice u/s 153C for the relevant assessment year. Only upon satisfying this crucial prerequisite can the AO lawfully proceed to assess satisfying this crucial prerequisite can the AO lawfully proceed to assess satisfying this crucial prerequisite can the AO lawfully proceed to assess the income of the assessee for the relevant year, ncome of the assessee for the relevant year, as the presence of the as the presence of the jurisdictional fact is indispensable for validly initiating the assessment jurisdictional fact is indispensable for validly initiating the assessment jurisdictional fact is indispensable for validly initiating the assessment process u/s 153C of the Act process u/s 153C of the Act

6.6.21 In the present case of the appellant company, the assessment In the present case of the appellant company, the assessment In the present case of the appellant company, the assessment order(s) reveals no information suggesting that income in the form of an no information suggesting that income in the form of an no information suggesting that income in the form of an asset found or seized during the course of search at M/s SNJ Distilleries asset found or seized during the course of search at M/s SNJ Distilleries asset found or seized during the course of search at M/s SNJ Distilleries on on on 06.08.2019 06.08.2019 06.08.2019 has has has escaped escaped escaped assessment assessment assessment for for for the the the years years years under under under consideration. Furthermore, it is also significant to bring on record consideration. Furthermore, it is also significant to bring on record consideration. Furthermore, it is also significant to bring on record that the appellant’s premises were subjected to search u/s 132 of the Act on the appellant’s premises were subjected to search u/s 132 of the Act on the appellant’s premises were subjected to search u/s 132 of the Act on 15.06.2022. During the course of the search at the appellant’s own 15.06.2022. During the course of the search at the appellant’s own 15.06.2022. During the course of the search at the appellant’s own premises, no incriminating materials were uncovered to indicate the premises, no incriminating materials were uncovered to indicate the premises, no incriminating materials were uncovered to indicate the alleged escapement of income in the form o alleged escapement of income in the form of an “asset” of value of fifty f an “asset” of value of fifty lakh rupees or more for the AY(s) 2014 lakh rupees or more for the AY(s) 2014-15 & 2015-16, even though the 16, even though the assessment proceeding (s) u/s 153C of the Act was completed by assessment proceeding (s) u/s 153C of the Act was completed by assessment proceeding (s) u/s 153C of the Act was completed by making addition(s) & disallowances on the basis of the incriminating making addition(s) & disallowances on the basis of the incriminating making addition(s) & disallowances on the basis of the incriminating materials seized during materials seized during the course of search at the appellant’s premises the course of search at the appellant’s premises as well as the materials seized during the course of search at M/s. SNJ as well as the materials seized during the course of search at M/s. SNJ as well as the materials seized during the course of search at M/s. SNJ Group of concerns. Therefore, in the absence of such findings, the Group of concerns. Therefore, in the absence of such findings, the Group of concerns. Therefore, in the absence of such findings, the initiation of proceedings u/s 153C of the Act for AYs 2014 initiation of proceedings u/s 153C of the Act for AYs 2014-15 and 2 15 and 2015- 16 by the AO is not 16 by the AO is not legally sustainable.”

15. We find that, while holding that the We find that, while holding that the ‘jurisdictional fact’ ‘jurisdictional fact’ viz., existence of income represented in the form of existence of income represented in the form of ‘asset’, was absent in the , was absent in the satisfaction note recorded by the AO, the Ld. CIT(A) had rightly re satisfaction note recorded by the AO, the Ld. CIT(A) had rightly re satisfaction note recorded by the AO, the Ld. CIT(A) had rightly relied on decision of this Tribunal at Guwahati in the case of decision of this Tribunal at Guwahati in the case of ACIT Vs Fortune ACIT Vs Fortune , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 30 ::

Vanijya Pvt Ltd (supra) supra) wherein the facts involved are noted to be wherein the facts involved are noted to be similar to the present case. In the decided case, similar to the present case. In the decided case, [Fortune Vanijya Pvt Ltd [Fortune Vanijya Pvt Ltd supra] the AO had seized regular book the AO had seized regular books and ledgers of the assessee from s and ledgers of the assessee from the premises of third person the premises of third person (searched person) and referring to these and referring to these ledgers, the AO recorded his satisfaction note that, it had a bearing on the ledgers, the AO recorded his satisfaction note that, it had a bearing on the ledgers, the AO recorded his satisfaction note that, it had a bearing on the determination of total income of the assessee for the 7th AY (relevant determination of total income of the assessee for the 7th AY (relevant determination of total income of the assessee for the 7th AY (relevant assessment year) and therefore reopened the same u/s 153C read with assessment year) and therefore reopened the same u/s 153C read with assessment year) and therefore reopened the same u/s 153C read with fourth proviso to Section 153A of the Act. The AO completed the o Section 153A of the Act. The AO completed the o Section 153A of the Act. The AO completed the assessment u/s 153C/143(3) wherein the bank credits out of which loans assessment u/s 153C/143(3) wherein the bank credits out of which loans assessment u/s 153C/143(3) wherein the bank credits out of which loans were advanced in the regular books of accounts was added to the total were advanced in the regular books of accounts was added to the total were advanced in the regular books of accounts was added to the total income. On appeal, Tribunal explained the meaning of the term 'asse income. On appeal, Tribunal explained the meaning of the term 'asse income. On appeal, Tribunal explained the meaning of the term 'asset' as defined in Explanation (2) to Section 153A of the Act and the condition defined in Explanation (2) to Section 153A of the Act and the condition defined in Explanation (2) to Section 153A of the Act and the condition precedent set out in fourth proviso to Section 153A, which was required precedent set out in fourth proviso to Section 153A, which was required precedent set out in fourth proviso to Section 153A, which was required to be met prior to issuance to be met prior to issuance of notice u/s 153C of the Act. of notice u/s 153C of the Act. The Tribunal held that the contents of seized m held that the contents of seized material viz., regular books of accounts, aterial viz., regular books of accounts, were neither incriminating in nature nor in any manner revealed income were neither incriminating in nature nor in any manner revealed income were neither incriminating in nature nor in any manner revealed income represented in form of 'asset' which had escaped assessment and represented in form of 'asset' which had escaped assessment and represented in form of 'asset' which had escaped assessment and therefore in absence of this 'jurisdictional fact' quashed the notice issued therefore in absence of this 'jurisdictional fact' quashed the notice issued therefore in absence of this 'jurisdictional fact' quashed the notice issued u/s 153C and the con 153C and the consequent order passed by the AO. sequent order passed by the AO. The relevant findings taken note of by Tribunal are as follows: findings taken note of by Tribunal are as follows:-

"On a reading of the fourth proviso to Section 153A of the Act along with "On a reading of the fourth proviso to Section 153A of the Act along with "On a reading of the fourth proviso to Section 153A of the Act along with Explanation 2 to it which defines 'Asset', we find considerable meri Explanation 2 to it which defines 'Asset', we find considerable meri Explanation 2 to it which defines 'Asset', we find considerable merit in 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt the contention of Shri Dudhwewala that in order to invoke jurisdiction the contention of Shri Dudhwewala that in order to invoke jurisdiction the contention of Shri Dudhwewala that in order to invoke jurisdiction u/s 153A of the Act for the seventh to tenth AY preceding the searched u/s 153A of the Act for the seventh to tenth AY preceding the searched u/s 153A of the Act for the seventh to tenth AY preceding the searched year, the AO should have in his possession the jurisdictional fact i.e. year, the AO should have in his possession the jurisdictional fact i.e. year, the AO should have in his possession the jurisdictional fact i.e. existence/possession of undisclosed/u existence/possession of undisclosed/unaccounted assets valued at Rs. naccounted assets valued at Rs. 50 lakhs or more as defined in Explanation 2 to fourth proviso of Section 50 lakhs or more as defined in Explanation 2 to fourth proviso of Section 50 lakhs or more as defined in Explanation 2 to fourth proviso of Section 153A qua the assessee qua the 7th to 10th AY un 153A qua the assessee qua the 7th to 10th AY un-earthed from search, earthed from search, without which the AO cannot issue notice u/s 153A/153C of the Act for without which the AO cannot issue notice u/s 153A/153C of the Act for without which the AO cannot issue notice u/s 153A/153C of the Act for these extended AY's. It is only when there exists this jurisdictional fact ded AY's. It is only when there exists this jurisdictional fact ded AY's. It is only when there exists this jurisdictional fact the AO can validly reopen those extended AYs; and then only AO can the AO can validly reopen those extended AYs; and then only AO can the AO can validly reopen those extended AYs; and then only AO can validly assume jurisdiction and then only he is empowered to issue validly assume jurisdiction and then only he is empowered to issue validly assume jurisdiction and then only he is empowered to issue notice. In other words, unaccounted asset valued at Rs. 50 notice. In other words, unaccounted asset valued at Rs. 50 notice. In other words, unaccounted asset valued at Rs. 50 lakhs or more which were discovered during search qua the assessee qua the more which were discovered during search qua the assessee qua the more which were discovered during search qua the assessee qua the assessment year (7th 10th years) preceding the searched assessment assessment year (7th 10th years) preceding the searched assessment assessment year (7th 10th years) preceding the searched assessment year is the jurisdictional fact; and if the jurisdictional fact is in the year is the jurisdictional fact; and if the jurisdictional fact is in the year is the jurisdictional fact; and if the jurisdictional fact is in the possession of the AO, [and possession m possession of the AO, [and possession means physical possession; or eans physical possession; or personal knowledge of the existence of the undisclosed asset which need personal knowledge of the existence of the undisclosed asset which need personal knowledge of the existence of the undisclosed asset which need to be spelled out in clear terms (not vaguely) qua assessee qua AY to be spelled out in clear terms (not vaguely) qua assessee qua AY to be spelled out in clear terms (not vaguely) qua assessee qua AY 2011-12 discovered during search.] then he can assume jurisdiction u/s. 12 discovered during search.] then he can assume jurisdiction u/s. 12 discovered during search.] then he can assume jurisdiction u/s. 153C/153A of the 153C/153A of the Act and issue notice to assess the assessment of the Act and issue notice to assess the assessment of the escaped income for these assessment year's (7th to 10th year) which is escaped income for these assessment year's (7th to 10th year) which is escaped income for these assessment year's (7th to 10th year) which is the 'fact in issue' or 'adjudicatory fact'. On the other hand if the AO did the 'fact in issue' or 'adjudicatory fact'. On the other hand if the AO did the 'fact in issue' or 'adjudicatory fact'. On the other hand if the AO did not have in his possession the jurisdictional fact, the not have in his possession the jurisdictional fact, then he is debarred n he is debarred from invoking/issuance of notice u/s 153C/153A of the Act for the 7th from invoking/issuance of notice u/s 153C/153A of the Act for the 7th from invoking/issuance of notice u/s 153C/153A of the Act for the 7th- 10th AY preceding the search. 10th AY preceding the search.

19. Having held so, let us examine the next argument of Shri 19. Having held so, let us examine the next argument of Shri 19. Having held so, let us examine the next argument of Shri Dudhwewala that, the Parliament by specifying the jurisdictional fact as Dudhwewala that, the Parliament by specifying the jurisdictional fact as Dudhwewala that, the Parliament by specifying the jurisdictional fact as 'undisclosed asset' valued Rs. 50 Lakhs or more, has impliedly excluded isclosed asset' valued Rs. 50 Lakhs or more, has impliedly excluded isclosed asset' valued Rs. 50 Lakhs or more, has impliedly excluded other items of income viz., liabilities/credit, unexplained expenditure other items of income viz., liabilities/credit, unexplained expenditure other items of income viz., liabilities/credit, unexplained expenditure etc. A reading of the fourth proviso to section 153A of the Act and etc. A reading of the fourth proviso to section 153A of the Act and etc. A reading of the fourth proviso to section 153A of the Act and Explanation (2) to fourth proviso to section 153 Explanation (2) to fourth proviso to section 153A of the Act which A of the Act which defines 'Asset' for the purpose of fourth proviso to section 153A of the defines 'Asset' for the purpose of fourth proviso to section 153A of the defines 'Asset' for the purpose of fourth proviso to section 153A of the Act, clarify the intention of the Parliament to permit the AO to enlarge Act, clarify the intention of the Parliament to permit the AO to enlarge Act, clarify the intention of the Parliament to permit the AO to enlarge the assessment u/s. 153A after search u/s. 132 of the Act beyond six the assessment u/s. 153A after search u/s. 132 of the Act beyond six the assessment u/s. 153A after search u/s. 132 of the Act beyond six assessment years to te assessment years to ten assessment years preceding the searched n assessment years preceding the searched assessment year, provided the AO has in his possession the essential assessment year, provided the AO has in his possession the essential assessment year, provided the AO has in his possession the essential jurisdictional fact i.e. "undisclosed/unaccounted asset" valued Rs 50 jurisdictional fact i.e. "undisclosed/unaccounted asset" valued Rs 50 jurisdictional fact i.e. "undisclosed/unaccounted asset" valued Rs 50 lakhs or more of the assessee discovered during search pertaining to 7th lakhs or more of the assessee discovered during search pertaining to 7th lakhs or more of the assessee discovered during search pertaining to 7th to 10th Assessment Year preceding the searched assessment year. 10th Assessment Year preceding the searched assessment year. 10th Assessment Year preceding the searched assessment year. Since the Parliament has used the expression 'income in the form of Since the Parliament has used the expression 'income in the form of Since the Parliament has used the expression 'income in the form of asset' and the definition of asset has been spelled out in the fourth asset' and the definition of asset has been spelled out in the fourth asset' and the definition of asset has been spelled out in the fourth proviso, this itself necessarily implies the liability/i proviso, this itself necessarily implies the liability/items falling in the left tems falling in the left side of the Balance Sheet stands excluded. For this view of ours, we rely side of the Balance Sheet stands excluded. For this view of ours, we rely side of the Balance Sheet stands excluded. For this view of ours, we rely on the legal Maxim for interpretation "Expressio Unius Est Exlcusio on the legal Maxim for interpretation "Expressio Unius Est Exlcusio on the legal Maxim for interpretation "Expressio Unius Est Exlcusio Alterius" which principle states that, express mention of one is the Alterius" which principle states that, express mention of one is the Alterius" which principle states that, express mention of one is the 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 32 ::

exclusion of other a exclusion of other and this maxim has been accepted by the Hon'ble nd this maxim has been accepted by the Hon'ble Supreme Court in GVK Industries Ltd. Vs. ITO [197 Taxman 337] Supreme Court in GVK Industries Ltd. Vs. ITO [197 Taxman 337] Supreme Court in GVK Industries Ltd. Vs. ITO [197 Taxman 337] (Constitution bench of 5 Supreme Court Judges). By express mention of (Constitution bench of 5 Supreme Court Judges). By express mention of (Constitution bench of 5 Supreme Court Judges). By express mention of 'Assets' and definition given to it specifically, it is implied that the 'Assets' and definition given to it specifically, it is implied that the 'Assets' and definition given to it specifically, it is implied that the Parliament silently excluded the items of 'revenue', 'expenditure' & iament silently excluded the items of 'revenue', 'expenditure' & iament silently excluded the items of 'revenue', 'expenditure' & 'liabilities' from its jurisdictional fact for invoking/assumption/usurpation 'liabilities' from its jurisdictional fact for invoking/assumption/usurpation 'liabilities' from its jurisdictional fact for invoking/assumption/usurpation of jurisdiction u/s. 153C/153A of the Act for the seventh to tenth of jurisdiction u/s. 153C/153A of the Act for the seventh to tenth of jurisdiction u/s. 153C/153A of the Act for the seventh to tenth assessment year preceding the searched assessm assessment year preceding the searched assessment year

20. It is a rudimentary accounting concept, that "debit" denotes "asset" 20. It is a rudimentary accounting concept, that "debit" denotes "asset" 20. It is a rudimentary accounting concept, that "debit" denotes "asset" and "credit" denotes "liability". An asset represents an economic and "credit" denotes "liability". An asset represents an economic and "credit" denotes "liability". An asset represents an economic resource, either immovable or movable, having value, such as resource, either immovable or movable, having value, such as resource, either immovable or movable, having value, such as immovable property viz., land or building, inve immovable property viz., land or building, investment held in shares and stment held in shares and securities, loans & advances given and deposits in bank account. On the securities, loans & advances given and deposits in bank account. On the securities, loans & advances given and deposits in bank account. On the other hand, 'Liability' includes items such as share capital, reserves, other hand, 'Liability' includes items such as share capital, reserves, other hand, 'Liability' includes items such as share capital, reserves, loans obtained (secured as well as unsecured) etc. which cannot be loans obtained (secured as well as unsecured) etc. which cannot be loans obtained (secured as well as unsecured) etc. which cannot be characterized or cl characterized or classified as 'Asset'. Similarly, items of 'expenses' or assified as 'Asset'. Similarly, items of 'expenses' or revenues in form of 'sales' / 'turnover' does not constitute 'asset'. revenues in form of 'sales' / 'turnover' does not constitute 'asset'. revenues in form of 'sales' / 'turnover' does not constitute 'asset'.

Profit and Loss Account Particulars (Debit) Particulars (Debit) Particulars (Credit) Particulars (Credit) Revenue Revenue

Balance Sheet Liabilities (Credit) Liabilities (Credit) Liabilities (Credit) Liabilities (Credit) Share Capital/ Reserves/Loan/ Share Capital/ Reserves/Loan/ Immoveable Property/ Loans & Immoveable Property/ Loans & Current Liabilities Current Liabilities Advances/ Shares/ Bank Balance Advances/ Shares/ Bank Balance

21. The above view of ours get bolstered from reading of Explanation 2 21. The above view of ours get bolstered from reading of Explanation 2 21. The above view of ours get bolstered from reading of Explanation 2 appended to the fourth proviso, which defines 'asset', for the purpose of appended to the fourth proviso, which defines 'asset', for the purpose of appended to the fourth proviso, which defines 'asset', for the purpose of fourth proviso to Section 153A, to include i) immovable property, ii) fourth proviso to Section 153A, to include i) immovable property, ii) fourth proviso to Section 153A, to include i) immovable property, ii) shares and securities , iii) loans and shares and securities , iii) loans and advances & iv) Deposit in bank. vances & iv) Deposit in bank. Hence, where search action u/s 132 of the Act reveals that, (i) the Hence, where search action u/s 132 of the Act reveals that, (i) the Hence, where search action u/s 132 of the Act reveals that, (i) the assessee owns an undisclosed immovable property, or (ii) information assessee owns an undisclosed immovable property, or (ii) information assessee owns an undisclosed immovable property, or (ii) information has been gathered which shows that the assessee had given loans or has been gathered which shows that the assessee had given loans or has been gathered which shows that the assessee had given loans or advances outside the r advances outside the regular books or (iii) search has revealed egular books or (iii) search has revealed unaccounted investments held by assessee in shares & securities, which unaccounted investments held by assessee in shares & securities, which unaccounted investments held by assessee in shares & securities, which do not form part of regular books of accounts or (iv) if undisclosed bank do not form part of regular books of accounts or (iv) if undisclosed bank do not form part of regular books of accounts or (iv) if undisclosed bank accounts having deposits, have been found in the course of search, accounts having deposits, have been found in the course of search, accounts having deposits, have been found in the course of search, pertaining to the 7th rtaining to the 7th-10th AY preceding the search; then having in his 10th AY preceding the search; then having in his possession this jurisdictional fact, the AO may assume jurisdiction under possession this jurisdictional fact, the AO may assume jurisdiction under possession this jurisdictional fact, the AO may assume jurisdiction under the fourth proviso to Section 153A of the Act for the relevant seventh to the fourth proviso to Section 153A of the Act for the relevant seventh to the fourth proviso to Section 153A of the Act for the relevant seventh to 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 33 ::

tenth assessment year preceding the sea tenth assessment year preceding the searched assessment year. Hence, rched assessment year. Hence, the most important aspect is that, these 'assets' must have been found the most important aspect is that, these 'assets' must have been found the most important aspect is that, these 'assets' must have been found to be undisclosed or unaccounted, in the regular books of account to be undisclosed or unaccounted, in the regular books of account to be undisclosed or unaccounted, in the regular books of account maintained by the assessee, and discovered during the course of search, maintained by the assessee, and discovered during the course of search, maintained by the assessee, and discovered during the course of search, which otherwise w which otherwise would not have seen the light of the day but for the ould not have seen the light of the day but for the search, resulting in escapement of income. search, resulting in escapement of income.

22. It is to be kept in mind that, the term 'investment held in shares & 22. It is to be kept in mind that, the term 'investment held in shares & 22. It is to be kept in mind that, the term 'investment held in shares & securities' has to be considered with the term 'asset'. The term securities' has to be considered with the term 'asset'. The term securities' has to be considered with the term 'asset'. The term 'investment held in sha 'investment held in shares & securities' and 'asset' are to be understood res & securities' and 'asset' are to be understood in their cognate sense, as it takes their colour from each other, i.e., the in their cognate sense, as it takes their colour from each other, i.e., the in their cognate sense, as it takes their colour from each other, i.e., the more general is restricted to a sense analogous to the less general. more general is restricted to a sense analogous to the less general. more general is restricted to a sense analogous to the less general. Hence, the term 'investment held in shares & securities' den Hence, the term 'investment held in shares & securities' den Hence, the term 'investment held in shares & securities' denotes discovery of an 'asset' in the form shares or securities, which is not discovery of an 'asset' in the form shares or securities, which is not discovery of an 'asset' in the form shares or securities, which is not found disclosed in the books of accounts or whose source of acquisition found disclosed in the books of accounts or whose source of acquisition found disclosed in the books of accounts or whose source of acquisition is unexplained and is thus found to have escaped assessment in the 7th is unexplained and is thus found to have escaped assessment in the 7th is unexplained and is thus found to have escaped assessment in the 7th- 10th AY preceding the search. It doe 10th AY preceding the search. It does not suggest or include the s not suggest or include the proceeds received by an assessee upon sale of regular/disclosed proceeds received by an assessee upon sale of regular/disclosed proceeds received by an assessee upon sale of regular/disclosed investments. To say, if any credits in a regular bank account, like sale investments. To say, if any credits in a regular bank account, like sale investments. To say, if any credits in a regular bank account, like sale proceeds/ credit etc. is found to be unexplained, then it may be a case proceeds/ credit etc. is found to be unexplained, then it may be a case proceeds/ credit etc. is found to be unexplained, then it may be a case of discovery of un of discovery of undisclosed 'income' / 'cash credit' but it does not disclosed 'income' / 'cash credit' but it does not suggest discovery of an undisclosed 'asset' by the Revenue so as to suggest discovery of an undisclosed 'asset' by the Revenue so as to suggest discovery of an undisclosed 'asset' by the Revenue so as to bring it within the teeth of the fourth proviso to Section 153A of the Act bring it within the teeth of the fourth proviso to Section 153A of the Act bring it within the teeth of the fourth proviso to Section 153A of the Act for invoking jurisdiction u/s 153A for the extended period. for invoking jurisdiction u/s 153A for the extended period.

23. Hence, from the above discussion, it is thus clear that Section 153A . Hence, from the above discussion, it is thus clear that Section 153A . Hence, from the above discussion, it is thus clear that Section 153A of the Act can be invoked only if the AO comes to a positive conclusion of the Act can be invoked only if the AO comes to a positive conclusion of the Act can be invoked only if the AO comes to a positive conclusion that he has in his possession documents or information revealing an that he has in his possession documents or information revealing an that he has in his possession documents or information revealing an undisclosed asset of the assessee qua the ass undisclosed asset of the assessee qua the assessment year (7th to 10th) essment year (7th to 10th) which is valued Rs. 50 lakhs or more. This, in our judgment is a which is valued Rs. 50 lakhs or more. This, in our judgment is a which is valued Rs. 50 lakhs or more. This, in our judgment is a foundational, fundamental or jurisdictional fact. ...... foundational, fundamental or jurisdictional fact. ......

27. In the present case, perusal of the satisfaction note shows that, the 27. In the present case, perusal of the satisfaction note shows that, the 27. In the present case, perusal of the satisfaction note shows that, the AO had referred to Pages 61 to 69 AO had referred to Pages 61 to 69 of seized material bearing of seized material bearing identification mark SST identification mark SST-01 for assuming jurisdiction u/s 153C read with 01 for assuming jurisdiction u/s 153C read with the fourth proviso to Section 153A of the Act. The satisfaction note the fourth proviso to Section 153A of the Act. The satisfaction note the fourth proviso to Section 153A of the Act. The satisfaction note however does not reveal the 'asset' which escaped assessment, and however does not reveal the 'asset' which escaped assessment, and however does not reveal the 'asset' which escaped assessment, and which was discovered which was discovered from the aforementioned seized material. We find from the aforementioned seized material. We find that, the AO himself has observed that these pages comprise journal that, the AO himself has observed that these pages comprise journal that, the AO himself has observed that these pages comprise journal ledger and bank ledger which evidenced that the assessee had ledger and bank ledger which evidenced that the assessee had ledger and bank ledger which evidenced that the assessee had liquidated its investments in shares and proceeds were received in bank. liquidated its investments in shares and proceeds were received in bank. liquidated its investments in shares and proceeds were received in bank. The Ld. AR, Shri Dudhwewala, has shown us that these ledgers were d. AR, Shri Dudhwewala, has shown us that these ledgers were d. AR, Shri Dudhwewala, has shown us that these ledgers were print outs from the regular books of accounts of the assessee print outs from the regular books of accounts of the assessee print outs from the regular books of accounts of the assessee maintained in computerised system and all the entries mentioned maintained in computerised system and all the entries mentioned maintained in computerised system and all the entries mentioned therein formed part of regular books of accounts. We find ourselves i therein formed part of regular books of accounts. We find ourselves i therein formed part of regular books of accounts. We find ourselves in 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 34 ::

agreement with him, that the contents of these seized material were agreement with him, that the contents of these seized material were agreement with him, that the contents of these seized material were neither incriminating in nature nor did it in any manner reveal income neither incriminating in nature nor did it in any manner reveal income neither incriminating in nature nor did it in any manner reveal income represented in form of 'asset' which had escaped assessment. represented in form of 'asset' which had escaped assessment. represented in form of 'asset' which had escaped assessment.

28. It is also not the AO's case that these investment 28. It is also not the AO's case that these investments in shares found s in shares found mentioned in the seized material, were unaccounted or their source of mentioned in the seized material, were unaccounted or their source of mentioned in the seized material, were unaccounted or their source of acquisition was unexplained so as to constitute 'asset' escaping acquisition was unexplained so as to constitute 'asset' escaping acquisition was unexplained so as to constitute 'asset' escaping assessment. Rather the AO stated that these documents have a bearing assessment. Rather the AO stated that these documents have a bearing assessment. Rather the AO stated that these documents have a bearing on the total 'income' of the asses on the total 'income' of the assessee for assuming jurisdiction u/s 153C see for assuming jurisdiction u/s 153C of the Act, which clearly does not meet the essential condition precedent of the Act, which clearly does not meet the essential condition precedent of the Act, which clearly does not meet the essential condition precedent in the fourth proviso to Section 153A of the Act. From this in the fourth proviso to Section 153A of the Act. From this in the fourth proviso to Section 153A of the Act. From this assertion/averment/admission, it is clear that AO did not have in his assertion/averment/admission, it is clear that AO did not have in his assertion/averment/admission, it is clear that AO did not have in his possession the jurisdictional fact [on or prior 05.12.2019] to invoke and e jurisdictional fact [on or prior 05.12.2019] to invoke and e jurisdictional fact [on or prior 05.12.2019] to invoke and issue notice u/s. 153C of the Act. The extended jurisdiction to issue notice u/s. 153C of the Act. The extended jurisdiction to issue notice u/s. 153C of the Act. The extended jurisdiction to invoke/assess 7 th invoke/assess 7 th - 10th AY is conferred on the AO by authority of law 10th AY is conferred on the AO by authority of law and the AO cannot confer to himself the jurisdiction in a c and the AO cannot confer to himself the jurisdiction in a casual manner asual manner by stating/substituting the specific jurisdictional fact. It is imperative by stating/substituting the specific jurisdictional fact. It is imperative by stating/substituting the specific jurisdictional fact. It is imperative that before issuance of notice u/s 153C [for the extended period], the that before issuance of notice u/s 153C [for the extended period], the that before issuance of notice u/s 153C [for the extended period], the AO sets out his objective satisfaction from the seized material, the AO sets out his objective satisfaction from the seized material, the AO sets out his objective satisfaction from the seized material, the details of the specified/und details of the specified/undisclosed assets in his possession qua the isclosed assets in his possession qua the assessee for AY 2011 assessee for AY 2011-12 valued Rs. 50 lakhs or more. If this essential 12 valued Rs. 50 lakhs or more. If this essential requirement of law is not satisfied, the AO does not get the authority of requirement of law is not satisfied, the AO does not get the authority of requirement of law is not satisfied, the AO does not get the authority of law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY. For this, we rely upon the dictum of the Privy Council in Nazir Ahmed Vs. this, we rely upon the dictum of the Privy Council in Nazir Ahmed Vs. this, we rely upon the dictum of the Privy Council in Nazir Ahmed Vs. King Emperor AIR 1936 PC 253(which has since been accepted and later King Emperor AIR 1936 PC 253(which has since been accepted and later King Emperor AIR 1936 PC 253(which has since been accepted and later followed by Hon'ble Supreme Court), that when a statute requires a followed by Hon'ble Supreme Court), that when a statute requires a followed by Hon'ble Supreme Court), that when a statute requires a thing to be done in a particular manner, it thing to be done in a particular manner, it must be done in that manner must be done in that manner or not at all. As discussed at Para 13 (supra), the language of the fourth or not at all. As discussed at Para 13 (supra), the language of the fourth or not at all. As discussed at Para 13 (supra), the language of the fourth proviso to section 153A of the Act show that issuance of notice can be proviso to section 153A of the Act show that issuance of notice can be proviso to section 153A of the Act show that issuance of notice can be resorted to by the AO only after he is in possession of the jurisdictional resorted to by the AO only after he is in possession of the jurisdictional resorted to by the AO only after he is in possession of the jurisdictional fact, which is found to be absent in the present case. Therefore hich is found to be absent in the present case. Therefore hich is found to be absent in the present case. Therefore according to us, the AO only after having in his possession the according to us, the AO only after having in his possession the according to us, the AO only after having in his possession the jurisdictional fact could have assumed jurisdiction and issued notice u/s. jurisdictional fact could have assumed jurisdiction and issued notice u/s. jurisdictional fact could have assumed jurisdiction and issued notice u/s. 153C of the Act or else he could not have issued notice, as 153C of the Act or else he could not have issued notice, as 153C of the Act or else he could not have issued notice, as done in this case. For the reasons elaborately discussed by us in the foregoing, we case. For the reasons elaborately discussed by us in the foregoing, we case. For the reasons elaborately discussed by us in the foregoing, we thus hold that the notice u/s. 153C dated 05 thus hold that the notice u/s. 153C dated 05-12-2019 was issued by the 2019 was issued by the AO for AY 2011-12 without authority of law and without satisfying the 12 without authority of law and without satisfying the 12 without authority of law and without satisfying the essential jurisdictional fact, essential jurisdictional fact, and hence the issuance of notice u/s. 153C and hence the issuance of notice u/s. 153C of the Act is held to be bad in law." of the Act is held to be bad in law."

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 35 ::

"16. From the rival contentions, we note that, the assessee had "16. From the rival contentions, we note that, the assessee had "16. From the rival contentions, we note that, the assessee had specifically objected to the AO's action of reopening the unabated specifically objected to the AO's action of reopening the unabated specifically objected to the AO's action of reopening the unabated assessment for AY 2011 assessment for AY 2011-12 u/s 153C of the Act and had requested the 12 u/s 153C of the Act and had requested the AO to give details of the purported 'assets' which had es AO to give details of the purported 'assets' which had es AO to give details of the purported 'assets' which had escaped assessment. The AO however did not provide the details of the assessment. The AO however did not provide the details of the assessment. The AO however did not provide the details of the undisclosed/unaccounted assets of the assessee, which he claims were undisclosed/unaccounted assets of the assessee, which he claims were undisclosed/unaccounted assets of the assessee, which he claims were in his possession before the issuance of notice u/s 153C of the Act for in his possession before the issuance of notice u/s 153C of the Act for in his possession before the issuance of notice u/s 153C of the Act for AY 2011-12. The AO was however duty bound to de 12. The AO was however duty bound to decide the said cide the said question as to his jurisdiction, and record finding as to whether he had question as to his jurisdiction, and record finding as to whether he had question as to his jurisdiction, and record finding as to whether he had in his possession, details of any undisclosed/unaccounted assets valued in his possession, details of any undisclosed/unaccounted assets valued in his possession, details of any undisclosed/unaccounted assets valued as Rs. 50 lacs and more, qua the assessee qua the assessment year as Rs. 50 lacs and more, qua the assessee qua the assessment year as Rs. 50 lacs and more, qua the assessee qua the assessment year (7th to 10th year) preceding th (7th to 10th year) preceding the searched assessment year, and thereby e searched assessment year, and thereby state clearly as to how the case of assessee was being brought under state clearly as to how the case of assessee was being brought under state clearly as to how the case of assessee was being brought under the 4th proviso of section 153A read with explanation 2. Only upon valid the 4th proviso of section 153A read with explanation 2. Only upon valid the 4th proviso of section 153A read with explanation 2. Only upon valid assumption of jurisdiction, the AO could have proceeded against the assumption of jurisdiction, the AO could have proceeded against the assumption of jurisdiction, the AO could have proceeded against the assessee for assessment of escaped/undisclosed assets. ee for assessment of escaped/undisclosed assets.

19. As a consequence, we have no hesitation in holding that the AO did 19. As a consequence, we have no hesitation in holding that the AO did 19. As a consequence, we have no hesitation in holding that the AO did not have in his charge, any "Jurisdictional fact "(on or prior to 5 not have in his charge, any "Jurisdictional fact "(on or prior to 5 not have in his charge, any "Jurisdictional fact "(on or prior to 5-12- 2019) to invoke and issue notice u/s 153C of the Act to the 2019) to invoke and issue notice u/s 153C of the Act to the 2019) to invoke and issue notice u/s 153C of the Act to the respondent assessee. The extended jurisdiction to invoke/assess 7th to 10th AY is assessee. The extended jurisdiction to invoke/assess 7th to 10th AY is assessee. The extended jurisdiction to invoke/assess 7th to 10th AY is conferred on the AO by authority of law and the AO cannot confer to conferred on the AO by authority of law and the AO cannot confer to conferred on the AO by authority of law and the AO cannot confer to himself the jurisdiction in a casual manner by stating/substituting the himself the jurisdiction in a casual manner by stating/substituting the himself the jurisdiction in a casual manner by stating/substituting the specific jurisdictional fact. It specific jurisdictional fact. It is imperative that before issuance of notice is imperative that before issuance of notice u/s 153C (for the extended period) the AO sets out his objective u/s 153C (for the extended period) the AO sets out his objective u/s 153C (for the extended period) the AO sets out his objective satisfaction satisfaction satisfaction from from from the the the seized seized seized material, material, material, the the the details details details of of of the the the specified/undisclosed assets in possession qua the assessee for AY specified/undisclosed assets in possession qua the assessee for AY specified/undisclosed assets in possession qua the assessee for AY 2011-12 valued at Rs. 12 valued at Rs. 50 lacs or more. If this essential requirement of 50 lacs or more. If this essential requirement of law is not satisfied, the AO does not get the authority of law to invoke law is not satisfied, the AO does not get the authority of law to invoke law is not satisfied, the AO does not get the authority of law to invoke the jurisdiction u/s 153A of the Act for 7th to 10th AY. At the cost of the jurisdiction u/s 153A of the Act for 7th to 10th AY. At the cost of the jurisdiction u/s 153A of the Act for 7th to 10th AY. At the cost of repetition, it is pertinent to mention that the assessee had repetition, it is pertinent to mention that the assessee had disclosed the sale transactions and liquidation of shares in his regular books of sale transactions and liquidation of shares in his regular books of sale transactions and liquidation of shares in his regular books of accounts and the liquidation of shares were received in bank. Thus the accounts and the liquidation of shares were received in bank. Thus the accounts and the liquidation of shares were received in bank. Thus the aforementioned assets cannot be termed as undisclosed assets. It has aforementioned assets cannot be termed as undisclosed assets. It has aforementioned assets cannot be termed as undisclosed assets. It has been appositely concluded in the been appositely concluded in the concurrent decisions of the CITA and concurrent decisions of the CITA and ITAT that it cannot be held that the allegedly undisclosed assets have ITAT that it cannot be held that the allegedly undisclosed assets have ITAT that it cannot be held that the allegedly undisclosed assets have escaped assessment." escaped assessment."

16. It is noted that, the satisfaction note does not reveal . It is noted that, the satisfaction note does not reveal or point out the or point out the ‘undisclosed/unaccounted asset’ which had escaped ccounted asset’ which had escaped assessment in the assessment in the relevant AYs 2014-15 & 2015 15 & 2015-16. As held in the basis and nothing can be basis and nothing can be added to the satisfaction note, nor anything be added to the satisfaction note, nor anything be deleted from the deleted from the satisfaction note. Reading of the note shows that, the satisfaction note. Reading of the note shows that, the AO has AO has neither mentioned the specific seized material found from the premises of the mentioned the specific seized material found from the premises of the mentioned the specific seized material found from the premises of the searched person (M/s Crystal Bottles) which related to the assessee searched person (M/s Crystal Bottles) which related to the assessee searched person (M/s Crystal Bottles) which related to the assessee nor quantified any income, leave alone income represented in form of ‘asset’, quantified any income, leave alone income represented in form of ‘asset’, quantified any income, leave alone income represented in form of ‘asset’, which had escaped assessment in AYs 2 which had escaped assessment in AYs 2014-15 & 2015-16. 16. There is no whisper of any unaccounted or undisclosed asset which was unearthed whisper of any unaccounted or undisclosed asset which was unearthed whisper of any unaccounted or undisclosed asset which was unearthed from the aforementioned seized material, in the satisfaction note. from the aforementioned seized material, in the satisfaction note. from the aforementioned seized material, in the satisfaction note. Rather, the AO had quantified the purchases made by the assessee from M/s the AO had quantified the purchases made by the assessee from M/s the AO had quantified the purchases made by the assessee from M/s Crystal Bottles in AYs 2018 n AYs 2018-19 & 2019-20 and alleged these purchases to 20 and alleged these purchases to be bogus. Having carefully carefully examined the satisfaction note, we find that the satisfaction note, we find that there is no mention of any item of income represented in form of asset re is no mention of any item of income represented in form of asset re is no mention of any item of income represented in form of asset which had escaped assessment. Even at the time of hearing, escaped assessment. Even at the time of hearing, escaped assessment. Even at the time of hearing, the Ld. CIT, DR was unable to point out to us the relevant material or evidence unable to point out to us the relevant material or evidence unable to point out to us the relevant material or evidence unearthed in the course of search basis which the AO stated that the unearthed in the course of search basis which the AO stated that the unearthed in the course of search basis which the AO stated that the income represented in the form of asset had escaped assessment. income represented in the form of asset had escaped assessment. income represented in the form of asset had escaped assessment. We thus countenance the Ld. CIT(A)’s findi thus countenance the Ld. CIT(A)’s findings that the AO had ngs that the AO had nowhere expressed his satisfaction that any income represented in the form of expressed his satisfaction that any income represented in the form of expressed his satisfaction that any income represented in the form of 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 37 ::

'asset' had escaped assessment qua AYs 'asset' had escaped assessment qua AYs 2014-15 & 2015 15 & 2015-16 and therefore we are in agreement with the Ld. CIT(A) that, therefore we are in agreement with the Ld. CIT(A) that, the 'jurisdictional the 'jurisdictional fact' as prescribed under the fourth proviso to nder the fourth proviso to Section 153A of the Act is Section 153A of the Act is found to be absent and the AO is noted to have usurped jurisdiction u/s found to be absent and the AO is noted to have usurped jurisdiction u/s found to be absent and the AO is noted to have usurped jurisdiction u/s 153C r.w.s 153A of the Act on wrong assumption of jurisdictional fact. As 153C r.w.s 153A of the Act on wrong assumption of jurisdictional fact. As 153C r.w.s 153A of the Act on wrong assumption of jurisdictional fact. As a consequence, we uphold hold the Ld. CIT(A)’s order that, the AO could not e AO could not have legally proceeded further with the reassessment for AYs have legally proceeded further with the reassessment for AYs have legally proceeded further with the reassessment for AYs 2014-15 & 2015-16 u/s 153C of the Act 16 u/s 153C of the Act. Accordingly, the impugned orders passed . Accordingly, the impugned orders passed u/s 153C/143(3) of the Act for AYs u/s 153C/143(3) of the Act for AYs 2014-15 & 2015-16 are held to be ab are held to be ab initio void and bad in law for initio void and bad in law for want of jurisdiction and want of jurisdiction and is therefore quashed. Hence, the grounds raised by the Revenue on this issue is Hence, the grounds raised by the Revenue on this issue is Hence, the grounds raised by the Revenue on this issue is accordingly dismissed.

18. We now take up the next legal challenge assailed by the Revenue in We now take up the next legal challenge assailed by the Revenue in We now take up the next legal challenge assailed by the Revenue in their grounds is against the Ld. CIT(A)’s action of hol their grounds is against the Ld. CIT(A)’s action of holding the satisfaction ding the satisfaction note recorded by the AO for AYs 2014 note recorded by the AO for AYs 2014-15 to 2017-18 to be invalid, due to 18 to be invalid, due to absence of correlation between the existence of incriminating material correlation between the existence of incriminating material correlation between the existence of incriminating material and the impugned AYs 2014 the impugned AYs 2014-15 to 2017-18. The relevant findings of the The relevant findings of the Ld. CIT(A) [AY 2016-17] taken note of by us, is as follows: 17] taken note of by us, is as follows:- -

“6.3.8 The undersigned has carefully examined the issue raised by The undersigned has carefully examined the issue raised by The undersigned has carefully examined the issue raised by the appellant and the detailed submission made to substantiate this the appellant and the detailed submission made to substantiate this the appellant and the detailed submission made to substantiate this issue. On examination of the above submission, it can be seen that the issue. On examination of the above submission, it can be seen that the issue. On examination of the above submission, it can be seen that the core contention of the appellant is that the AO has initiated assessment ntion of the appellant is that the AO has initiated assessment ntion of the appellant is that the AO has initiated assessment proceedings u/s 153C of the Act without there being any incriminating proceedings u/s 153C of the Act without there being any incriminating proceedings u/s 153C of the Act without there being any incriminating material for the AY(s) 2016 material for the AY(s) 2016-17 & 2017-18. As evident in the 18. As evident in the 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt assessment order(s) passed the AO contemplated the addition in assessment order(s) passed the AO contemplated the addition in assessment order(s) passed the AO contemplated the addition in respect of Bogus old bottle purchases for both the years under consideration. of Bogus old bottle purchases for both the years under consideration. of Bogus old bottle purchases for both the years under consideration. 6.3.9 On examination of the satisfaction note, it can be seen that On examination of the satisfaction note, it can be seen that On examination of the satisfaction note, it can be seen that the AO has clearly brought out from the seized materials that M/s. the AO has clearly brought out from the seized materials that M/s. the AO has clearly brought out from the seized materials that M/s. Southern Agrifurane Industries Pvt Ltd has Southern Agrifurane Industries Pvt Ltd has inflated their expenses by inflated their expenses by means of bogus purchase of empty bottles from M/s. Crystal bottles for means of bogus purchase of empty bottles from M/s. Crystal bottles for means of bogus purchase of empty bottles from M/s. Crystal bottles for the AY(s) 2018-19 & 2019 19 & 2019-20 & 2020-21. The relevant extract of the 21. The relevant extract of the satisfaction note(s) prepared for AY 2016 satisfaction note(s) prepared for AY 2016-17 & 2017-18 is appended 18 is appended here as under.

AY 2016-17 17

Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Agrifurane Industries Pvt. Ltd. has inflated their expenses by Industries Pvt. Ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal means of bogus purchase of empty bottles from M/s Crystal means of bogus purchase of empty bottles from M/s Crystal bottles. The amount of bogus purchases is Rs.4,41,70,464/ bottles. The amount of bogus purchases is Rs.4,41,70,464/ bottles. The amount of bogus purchases is Rs.4,41,70,464/- for the F.Y 2017 the F.Y 2017-18 (From July 2017), Rs. 5,69,70,130/ 18 (From July 2017), Rs. 5,69,70,130/- for the F.Y 2018-19 and Rs. 2, 19 and Rs. 2,95,16,955/- for the F.Y. 2019 for the F.Y. 2019-20 (up to 4.8.2019).

The above seized materials were handed over to the undersigned The above seized materials were handed over to the undersigned The above seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized material I am satisfied on 18.06.2021. On perusal of the seized material I am satisfied on 18.06.2021. On perusal of the seized material I am satisfied that the seized materials contain information that relate to the that the seized materials contain information that relate to the that the seized materials contain information that relate to the assessee, M/s , M/s Southern Agrifurane Industries Pvt. Ltd. and the Southern Agrifurane Industries Pvt. Ltd. and the information therein has got a bearing on the determination of total information therein has got a bearing on the determination of total information therein has got a bearing on the determination of total income for the A.Ys. from 2018 income for the A.Ys. from 2018-19 to 2020-21. Hence, in 21. Hence, in accordance with the provision of income Tax Act, 1961 notice u/s accordance with the provision of income Tax Act, 1961 notice u/s accordance with the provision of income Tax Act, 1961 notice u/s 153C is issued fo 153C is issued for AY 2016-17.

AY 2017-18 18

Thus it is evident from the seized materials that M/s. Southern Thus it is evident from the seized materials that M/s. Southern Thus it is evident from the seized materials that M/s. Southern Agrifurane Industries Pvt ltd. has inflated their expenses by means Agrifurane Industries Pvt ltd. has inflated their expenses by means Agrifurane Industries Pvt ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal Bottles. The of bogus purchase of empty bottles from M/s Crystal Bottles. The of bogus purchase of empty bottles from M/s Crystal Bottles. The amount of bogus purchases is Rs. 4 amount of bogus purchases is Rs. 4,41,70,464/- for the F.Y 2017 for the F.Y 2017- 18 (From July 2017), Rs. 5,69,70,130/ 18 (From July 2017), Rs. 5,69,70,130/- for the F.Y 2018 for the F.Y 2018-19 and Rs. 2,95,16,955/ Rs. 2,95,16,955/- for the F.Y. 2019-20 (up to 4.8.2019) to 4.8.2019)

The above seized materials were handed over to the undersigned The above seized materials were handed over to the undersigned The above seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized mate on 18.06.2021. On perusal of the seized material I am satisfied rial I am satisfied that the seized materials contain information that relate to the that the seized materials contain information that relate to the that the seized materials contain information that relate to the assessee, M/s. Southern Agrifurane Industries Pvt ltd. and the assessee, M/s. Southern Agrifurane Industries Pvt ltd. and the assessee, M/s. Southern Agrifurane Industries Pvt ltd. and the information therein has got a bearing on the determination of total information therein has got a bearing on the determination of total information therein has got a bearing on the determination of total income for the A.Ys. from 2018 income for the A.Ys. from 2018-19 to 2020-21. Hence, in 21. Hence, in 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt accordance with the provision of Income Tax act, 1961 notice u/s accordance with the provision of Income Tax act, 1961 notice u/s accordance with the provision of Income Tax act, 1961 notice u/s 153C is issued for AY 2017-18. 153C is issued for AY

6.3.10 From the above, one can very well infer that there exists no From the above, one can very well infer that there exists no From the above, one can very well infer that there exists no incriminating material to initiate assessment proceedings u/s 153C of incriminating material to initiate assessment proceedings u/s 153C of incriminating material to initiate assessment proceedings u/s 153C of the Act for the AY(s) 2016 ct for the AY(s) 2016-17 & 2017-18. 6.4 Now the issue before the undersigned is whether the AO is Now the issue before the undersigned is whether the AO is Now the issue before the undersigned is whether the AO is right in initiating assessment proceedings u/s 153C of the Act for the right in initiating assessment proceedings u/s 153C of the Act for the right in initiating assessment proceedings u/s 153C of the Act for the AY(s) 2016-17 & 2017 17 & 2017-18 without there being any incriminating 18 without there being any incriminating material. 6.4.1 At the o At the outset, the proceedings u/s 153C of the Act are very utset, the proceedings u/s 153C of the Act are very specific and clearly explained in the Act. For the sake of clarity, the specific and clearly explained in the Act. For the sake of clarity, the specific and clearly explained in the Act. For the sake of clarity, the relevant provision of Act is reproduced as under: relevant provision of Act is reproduced as under:- “153C “((1))” (Notwithstanding anything contained in section 139, “((1))” (Notwithstanding anything contained in section 139, “((1))” (Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, section 147, section 148, section 149, section 151 and section 153, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that where the Assessing Officer is satisfied that - (a) any money, bullion, Jewellery or other valuable article or thing (a) any money, bullion, Jewellery or other valuable article or thing (a) any money, bullion, Jewellery or other valuable article or thing seized or requisitioned, “belongs to, or requisitioned, “belongs to, or (b) any books of account or documents, seized or requisitioned, pertains (b) any books of account or documents, seized or requisitioned, pertains (b) any books of account or documents, seized or requisitioned, pertains or pertain to, or any information contained therein, relates to,” or pertain to, or any information contained therein, relates to,” or pertain to, or any information contained therein, relates to,” a person other than the person referred to in section 153A, then, the a person other than the person referred to in section 153A, then, the a person other than the person referred to in section 153A, then, the books of account or documents or assets, seized or requisitioned shall nt or documents or assets, seized or requisitioned shall nt or documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such be handed over to the Assessing Officer having jurisdiction over such be handed over to the Assessing Officer having jurisdiction over such other person] (and that Assessing Officer shall proceed against each other person] (and that Assessing Officer shall proceed against each other person] (and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess th such other person and issue notice and assess or reassess th such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, that the other person in accordance with the provisions of section 153A, that the other person in accordance with the provisions of section 153A, that Assessing Officer is satisfied that the books of account or documents or Assessing Officer is satisfied that the books of account or documents or Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of assets seized or requisitioned have a bearing on the determination of assets seized or requisitioned have a bearing on the determination of the total income of such oth the total income of such other person for the relevant assessment year er person for the relevant assessment year or years referred to in sub or years referred to in sub-section (1) of section 153A): 6.4.2 A plain reading of provision u/s 153C makes it abundantly A plain reading of provision u/s 153C makes it abundantly A plain reading of provision u/s 153C makes it abundantly clear that some imperative condition needs to be satisfied by the AO, clear that some imperative condition needs to be satisfied by the AO, clear that some imperative condition needs to be satisfied by the AO, prior to the issue n prior to the issue notice u/s 153C of the Act. This pre-condition includes: condition includes: (i) Existence of undisclosed/unexplained asset or incriminating seized (i) Existence of undisclosed/unexplained asset or incriminating seized (i) Existence of undisclosed/unexplained asset or incriminating seized documents against the appellant, as a result of search. documents against the appellant, as a result of search. (ii) Recording of satisfaction by the AO of the person searched that, th (ii) Recording of satisfaction by the AO of the person searched that, th (ii) Recording of satisfaction by the AO of the person searched that, the undisclosed assets or incriminating document found as a result of search undisclosed assets or incriminating document found as a result of search undisclosed assets or incriminating document found as a result of search should “belongs to the appellant, should “belongs to the appellant, for relevant assessment year. for relevant assessment year. iii) Proper satisfaction is to be recorded by the AO for the relevant iii) Proper satisfaction is to be recorded by the AO for the relevant iii) Proper satisfaction is to be recorded by the AO for the relevant assessment year for issuance of notice u/s 153 assessment year for issuance of notice u/s 153C.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 40 ::

6.4.3 All the above three conditions are to be satisfied cumulatively All the above three conditions are to be satisfied cumulatively All the above three conditions are to be satisfied cumulatively and simultaneously as per provisions of section 153C of the Act. Non and simultaneously as per provisions of section 153C of the Act. Non and simultaneously as per provisions of section 153C of the Act. Non- satisfaction of any of the pre satisfaction of any of the pre-conditions mentioned here in above, would conditions mentioned here in above, would result in notice u/s 153C of the Act leg result in notice u/s 153C of the Act legally unsustainable or invalid. In ally unsustainable or invalid. In the present facts of the case of the appellant company, the AO himself the present facts of the case of the appellant company, the AO himself the present facts of the case of the appellant company, the AO himself has stated that the incriminating material seized relates to the FY 2017 has stated that the incriminating material seized relates to the FY 2017 has stated that the incriminating material seized relates to the FY 2017- 18 relevant to AY 2018 18 relevant to AY 2018-19 onward only. Hence, the imperative 19 onward only. Hence, the imperative jurisdictional condition for issue of notice 153C of the Act is not satisfied. ndition for issue of notice 153C of the Act is not satisfied. ndition for issue of notice 153C of the Act is not satisfied. 6.4.4 The Hon’ble Apex Court in the case of The Hon’ble Apex Court in the case of PCIT PCIT-3, Pune Vs Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) Sinhgad Technical Education Society (2017) 397 ITR 344 (SC) has held that the nexus between issue of notice u/s 153C and the incrimina the nexus between issue of notice u/s 153C and the incrimina the nexus between issue of notice u/s 153C and the incriminating material found as a result of search must exist material found as a result of search must exist. The Hon’ble Apex Court . The Hon’ble Apex Court in para 13 of the order has observed that one of the jurisdictional in para 13 of the order has observed that one of the jurisdictional in para 13 of the order has observed that one of the jurisdictional conditions precedent to the issue of a notice u/s 153C of the Act is that conditions precedent to the issue of a notice u/s 153C of the Act is that conditions precedent to the issue of a notice u/s 153C of the Act is that “money, bullion, Jewellery or other “money, bullion, Jewellery or other- valuable article or thing” or any valuable article or thing” or any “books of account or document must be seized or requisitioned for the “books of account or document must be seized or requisitioned for the “books of account or document must be seized or requisitioned for the relevant assessment year for issue of notice u/s 153C of the Act.” relevant assessment year for issue of notice u/s 153C of the Act.” relevant assessment year for issue of notice u/s 153C of the Act.” 6.4.5 The observation of the Hon’ble Apex Court in para 18 of the The observation of the Hon’ble Apex Court in para 18 of the The observation of the Hon’ble Apex Court in para 18 of the order mentioned he order mentioned here in above is reproduced below: “The ITAT permitted this additional ground by giving a reason that it “The ITAT permitted this additional ground by giving a reason that it “The ITAT permitted this additional ground by giving a reason that it was a Jurisdictional issue taken up on the basis of facts already on the was a Jurisdictional issue taken up on the basis of facts already on the was a Jurisdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. In this behalf, it was noted by record and, therefore, could be raised. In this behalf, it was noted by record and, therefore, could be raised. In this behalf, it was noted by the ITAT that as per the provisions of Section 153C of the Act, T that as per the provisions of Section 153C of the Act, T that as per the provisions of Section 153C of the Act, incriminating material which was seized had to pertain to the incriminating material which was seized had to pertain to the incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the Assessment Years in question and it is an undisputed fact that the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co documents which were seized did not establish any co documents which were seized did not establish any co-relation, document- wise, with these four Assessment Years. Since this wise, with these four Assessment Years. Since this wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment requirement under Section 153C of the Act is essential for assessment requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this under that provision, it becomes a jurisdictional fact. We find this under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisi reasoning to be logical and valid, having regard to the provisi reasoning to be logical and valid, having regard to the provisions of Section 153C of the Act. Para 9 of the order of the ITAT reveals that the Section 153C of the Act. Para 9 of the order of the ITAT reveals that the Section 153C of the Act. Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satisfaction Note and the material which ITAT had scanned through the Satisfaction Note and the material which ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same was disclosed therein was culled out and it showed that the same was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004 belongs to Assessment Year 2004-05 or thereafter. After taking note of ereafter. After taking note of the material in para 9 of the order, the position that emerges there the material in para 9 of the order, the position that emerges there the material in para 9 of the order, the position that emerges there from is discussed in para 10. It was specifically recorded that the counsel for is discussed in para 10. It was specifically recorded that the counsel for is discussed in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the Department could not point out to the contrary. It is for this reason the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach e High Court has also given its imprimatur to the aforesaid approach e High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior counsel appearing for the of the Tribunal. That apart, learned senior counsel appearing for the of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000 respondent, argued that notice in respect of Assessment Years 2000 respondent, argued that notice in respect of Assessment Years 2000-01 and 200 1-02 was even time barred.” 02 was even time barred.” Thus, the facts of the instant case are squarely covered by the ratio of acts of the instant case are squarely covered by the ratio of acts of the instant case are squarely covered by the ratio of the judgment mentioned here the judgment mentioned here-in-above.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 41 ::

6.4.6 Further, the Hon’ble Delhi High Court in para 31 has held in Further, the Hon’ble Delhi High Court in para 31 has held in Further, the Hon’ble Delhi High Court in para 31 has held in the case of Index Security Pvt. Ltd [86 taxmann.com 84 (Del)] of Index Security Pvt. Ltd [86 taxmann.com 84 (Del)] of Index Security Pvt. Ltd [86 taxmann.com 84 (Del)] as under- “As regards the section Jurisdictional requirement viz, that the seized As regards the section Jurisdictional requirement viz, that the seized As regards the section Jurisdictional requirement viz, that the seized documents must be incriminating and must relate to the A. Ys. whose documents must be incriminating and must relate to the A. Ys. whose documents must be incriminating and must relate to the A. Ys. whose assessments are sought to be reopened, the decision of the Supreme assessments are sought to be reopened, the decision of the Supreme assessments are sought to be reopened, the decision of the Supreme Court in Commissioner of Income Tax Court in Commissioner of Income Tax-III, Pune Vs. Sinhgad Technical Sinhgad Technical Education Society (Supra) settles the issue and holds this to be an Education Society (Supra) settles the issue and holds this to be an Education Society (Supra) settles the issue and holds this to be an essential requirement. The decision of thi essential requirement. The decision of this Court in CIT s Court in CIT-7 Vs RRJ Securities (2016) 380 ITR 612 (Del) and ARN Infrastructure India Ltd. es (2016) 380 ITR 612 (Del) and ARN Infrastructure India Ltd. es (2016) 380 ITR 612 (Del) and ARN Infrastructure India Ltd. Vs ACIT [2017] 394 ITR 569 (Del) a Vs ACIT [2017] 394 ITR 569 (Del) also held that in order to justify the lso held that in order to justify the assumption of Jurisdiction under section 153C of the Act the documents assumption of Jurisdiction under section 153C of the Act the documents assumption of Jurisdiction under section 153C of the Act the documents settled must be incriminating and must relate to each of the AYs whose settled must be incriminating and must relate to each of the AYs whose settled must be incriminating and must relate to each of the AYs whose assessments are sought to be reopened. assessments are sought to be reopened.” 6.4.7 At this juncture, it is appro At this juncture, it is appropriate to bring on record the priate to bring on record the observation of the jurisdictional tribunal in the case of observation of the jurisdictional tribunal in the case of ACIT Central Circle-1, Trichy Vs Arunachalam Srinivasan in 1, Trichy Vs Arunachalam Srinivasan in 1, Trichy Vs Arunachalam Srinivasan in dated 31.05.2024 dated 31.05.2024 by relying the decision of the Hon’ble Apex Court in by relying the decision of the Hon’ble Apex Court in the case of Sinh Sinhgad Technical Education Society (2017) 397 ITR 344 gad Technical Education Society (2017) 397 ITR 344 (SC) has held that has held that “In the light of the binding judicial precedent of Hon'ble “In the light of the binding judicial precedent of Hon'ble “In the light of the binding judicial precedent of Hon'ble Apex Court (supra), and having found that 'Satisfaction Note' prepared by the AD to (supra), and having found that 'Satisfaction Note' prepared by the AD to (supra), and having found that 'Satisfaction Note' prepared by the AD to invoke jurisdiction u/s 153C of the Act for AY 2014 invoke jurisdiction u/s 153C of the Act for AY 2014-15 does not satisfy 15 does not satisfy the requirement of law as stipulated u/s. 153C of the Act, the very the requirement of law as stipulated u/s. 153C of the Act, the very the requirement of law as stipulated u/s. 153C of the Act, the very assumption of the jurisdiction assumption of the jurisdiction u/s 153C of the Act for assessment of AY u/s 153C of the Act for assessment of AY 2014-15 is held to be bad in the eyes of law as rightly held by the Ld 15 is held to be bad in the eyes of law as rightly held by the Ld 15 is held to be bad in the eyes of law as rightly held by the Ld CIT(A), which impugned action is confirmed and Revenue Appeal stands CIT(A), which impugned action is confirmed and Revenue Appeal stands CIT(A), which impugned action is confirmed and Revenue Appeal stands dismissed. And since we have concurred with the impugned action of Ld dismissed. And since we have concurred with the impugned action of Ld dismissed. And since we have concurred with the impugned action of Ld CIT(A) on the legal issue (supra), the other grounds raised by Revenue ) on the legal issue (supra), the other grounds raised by Revenue ) on the legal issue (supra), the other grounds raised by Revenue on to merits are academic and doesn't deserve adjudication” on to merits are academic and doesn't deserve adjudication” on to merits are academic and doesn't deserve adjudication” 6.4.8 Further, the Further, the Hon’ble Delhi High Court in the case of Saksham Hon’ble Delhi High Court in the case of Saksham commodities Limited Vs ITO [2024]161 taxmann.com 485 (Delhi) commodities Limited Vs ITO [2024]161 taxmann.com 485 (Delhi) commodities Limited Vs ITO [2024]161 taxmann.com 485 (Delhi) upon the issue of assumption of jurisdiction u/s 153C of the Act has observed the issue of assumption of jurisdiction u/s 153C of the Act has observed the issue of assumption of jurisdiction u/s 153C of the Act has observed as under. “The jurisdictional AO would have to firstly be satisfied that the material “The jurisdictional AO would have to firstly be satisfied that the material “The jurisdictional AO would have to firstly be satisfied that the material received is likely to have a bearing on or impact the total income of received is likely to have a bearing on or impact the total income of received is likely to have a bearing on or impact the total income of years or years which ma years or years which may form part of the block of six or ten AYs and y form part of the block of six or ten AYs and thereafter proceed to place the assessee on notice under Section 153C. thereafter proceed to place the assessee on notice under Section 153C. thereafter proceed to place the assessee on notice under Section 153C. The power to undertake such an assessment would stand confined to The power to undertake such an assessment would stand confined to The power to undertake such an assessment would stand confined to those years to which the material may relate or is likely to influence. those years to which the material may relate or is likely to influence. those years to which the material may relate or is likely to influence. Absent any material that may either cast a doubt on the estimation of Absent any material that may either cast a doubt on the estimation of Absent any material that may either cast a doubt on the estimation of total income for a particular year or years, the AO would not be justified total income for a particular year or years, the AO would not be justified total income for a particular year or years, the AO would not be justified , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt in invoking its powers conferred by Section 153C. It would only be in invoking its powers conferred by Section 153C. It would only be in invoking its powers conferred by Section 153C. It would only be consequent to such satisfaction being reache consequent to such satisfaction being reached that a notice would be d that a notice would be liable to be issued and thus resulting in the abatement of pending liable to be issued and thus resulting in the abatement of pending liable to be issued and thus resulting in the abatement of pending proceedings and reopening of concluded assessments” proceedings and reopening of concluded assessments” 6.4.9 Further the Hon’ble High Court in the said case has observed Further the Hon’ble High Court in the said case has observed Further the Hon’ble High Court in the said case has observed that “the invocation of Section 153C in resp “the invocation of Section 153C in respect of AYs' for which no ect of AYs' for which no incriminating material had been gathered or obtained. The Satisfaction incriminating material had been gathered or obtained. The Satisfaction incriminating material had been gathered or obtained. The Satisfaction Notes also fail to record any reasons as to how the material discovered Notes also fail to record any reasons as to how the material discovered Notes also fail to record any reasons as to how the material discovered and pertaining to a particular AY is likely to "have a bearing on the and pertaining to a particular AY is likely to "have a bearing on the and pertaining to a particular AY is likely to "have a bearing on the determination of t determination of the total income" for the year which is sought to be he total income" for the year which is sought to be abated or reopened in terms of the impugned notices. The respondents abated or reopened in terms of the impugned notices. The respondents abated or reopened in terms of the impugned notices. The respondents have erroneously proceeded on the assumption that the moment any have erroneously proceeded on the assumption that the moment any have erroneously proceeded on the assumption that the moment any material is recovered in the course of a search or on the basis of a material is recovered in the course of a search or on the basis of a material is recovered in the course of a search or on the basis of a requisition made, they become empowered in law to assess or reassess equisition made, they become empowered in law to assess or reassess equisition made, they become empowered in law to assess or reassess all the six AYs' years immediately preceding the assessment correlatable all the six AYs' years immediately preceding the assessment correlatable all the six AYs' years immediately preceding the assessment correlatable to the search year or the "relevant assessment year" as defined in terms to the search year or the "relevant assessment year" as defined in terms to the search year or the "relevant assessment year" as defined in terms of Explanation 1 of Section 153A. The said of Explanation 1 of Section 153A. The said approach is clearly approach is clearly unsustainable and contrary to the consistent line struck by the unsustainable and contrary to the consistent line struck by the unsustainable and contrary to the consistent line struck by the precedents noticed above.” precedents noticed above.” 6.4.10 Further, the SLP filed by the revenue against the above Further, the SLP filed by the revenue against the above Further, the SLP filed by the revenue against the above decision of the decision of the Hon’ble Delhi High Court in the case of Saksham Hon’ble Delhi High Court in the case of Saksham commodities Limit commodities Limited was dismissed, both on the ground of delay and as dismissed, both on the ground of delay and merits. The findings of the merits. The findings of the Hon’ble Apex Court vide [2025]171 Hon’ble Apex Court vide [2025]171 taxmann.com 185(SC) [24.01.2025] taxmann.com 185(SC) [24.01.2025] is as under. “Section 153C, read with section 153A, of the Income “Section 153C, read with section 153A, of the Income-tax Act, 1961 tax Act, 1961 Search and seizure. Assessment Search and seizure. Assessment of any other person (Incriminating of any other person (Incriminating material) Assessment year 2015 material) Assessment year 2015-16 High Court by impugned order held 16 High Court by impugned order held that section 153C would apply only to such Assessment Years where that section 153C would apply only to such Assessment Years where that section 153C would apply only to such Assessment Years where jurisdictional Assessing Officer is satisfied and has incriminating material jurisdictional Assessing Officer is satisfied and has incriminating material jurisdictional Assessing Officer is satisfied and has incriminating material for those Assessment Years and which may be concerned with disclosed Assessment Years and which may be concerned with disclosed Assessment Years and which may be concerned with disclosed and undisclosed income High Court also held that unless Assessing and undisclosed income High Court also held that unless Assessing and undisclosed income High Court also held that unless Assessing Officer is satisfied that material gathered could potentially impact Officer is satisfied that material gathered could potentially impact Officer is satisfied that material gathered could potentially impact determination of total income, it would be unjustified in mech determination of total income, it would be unjustified in mech determination of total income, it would be unjustified in mechanically reopening or assessing all over again all ten Assessment Years that reopening or assessing all over again all ten Assessment Years that reopening or assessing all over again all ten Assessment Years that could possibly form part of block of ten years High Court further held could possibly form part of block of ten years High Court further held could possibly form part of block of ten years High Court further held that since in instant case section 153C was invoked in respect of that since in instant case section 153C was invoked in respect of that since in instant case section 153C was invoked in respect of Assessment Years for which no incriminatin Assessment Years for which no incriminating material had been gathered g material had been gathered or obtained and satisfaction notes also failed to record any reasons as to or obtained and satisfaction notes also failed to record any reasons as to or obtained and satisfaction notes also failed to record any reasons as to how material discovered and pertaining to a particular Assessment Year how material discovered and pertaining to a particular Assessment Year how material discovered and pertaining to a particular Assessment Year was likely to "have a bearing on determination of total income" for year was likely to "have a bearing on determination of total income" for year was likely to "have a bearing on determination of total income" for year which was sought to be abated or reopened in terms of impugned s sought to be abated or reopened in terms of impugned s sought to be abated or reopened in terms of impugned notices, in such circumstances, proceedings initiated under section 153C notices, in such circumstances, proceedings initiated under section 153C notices, in such circumstances, proceedings initiated under section 153C , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt would not sustain and impugned notice was to be quashed would not sustain and impugned notice was to be quashed would not sustain and impugned notice was to be quashed - Whether SLP filed by revenue against impugned order of High Court was SLP filed by revenue against impugned order of High Court was SLP filed by revenue against impugned order of High Court was to be dismissed - Held, yes Held, yes [Para 4] [In favour of assessee]” SLP dismissed against SLP dismissed against Saksham Commodities Ltd V. Income Tax Officer Saksham Commodities Ltd V. Income Tax Officer [2024] 161 taxmann.com 485 (Delhi) / [2024] 464 ITR 1 (Delhi) [para [2024] 161 taxmann.com 485 (Delhi) / [2024] 464 ITR 1 (Delhi) [para [2024] 161 taxmann.com 485 (Delhi) / [2024] 464 ITR 1 (Delhi) [para 4]

1. Heard the learned Additional Solicitor General appea

1. Heard the learned Additional Solicitor General appea

1. Heard the learned Additional Solicitor General appearing for the petitioners - Revenue. Revenue.

2. There is a gross delay of 162 and 145 days respectively in filing the 2. There is a gross delay of 162 and 145 days respectively in filing the 2. There is a gross delay of 162 and 145 days respectively in filing the Special Leave Petitions which has not been satisfactorily explained by Special Leave Petitions which has not been satisfactorily explained by Special Leave Petitions which has not been satisfactorily explained by the petitioners- Revenue Revenue 3. Even otherwise, we see no reason to interfere w 3. Even otherwise, we see no reason to interfere with the impugned ith the impugned order passed by the High Court. order passed by the High Court.

5. Pending applications, if any, shall also stand disposed of.

6.4.11 Thus, as per the detailed discuss Thus, as per the detailed discussions made supra and the ions made supra and the judicial precedence(s) relied upon, it is a settled law that notices u/s judicial precedence(s) relied upon, it is a settled law that notices u/s judicial precedence(s) relied upon, it is a settled law that notices u/s 153C of the Act is 153C of the Act is ab- initiovoid in absence of incriminating seized in absence of incriminating seized material. From the plain reading of language of section 153C of the Act material. From the plain reading of language of section 153C of the Act material. From the plain reading of language of section 153C of the Act and various judici and various judicial pronouncement cited here-in-above, it is abundantly above, it is abundantly clear that in order to reopen the assessment of other person u/s. 153C clear that in order to reopen the assessment of other person u/s. 153C clear that in order to reopen the assessment of other person u/s. 153C of the Act for the assessment year earlier to the year of search, of the Act for the assessment year earlier to the year of search, of the Act for the assessment year earlier to the year of search, direct correlation must exist between the existence of incrimina correlation must exist between the existence of incrimina correlation must exist between the existence of incriminating material and relevant assessment year(s). and relevant assessment year(s). The AO cannot indiscriminately initiate The AO cannot indiscriminately initiate proceedings u/s 153C of the Act for having found incriminating material proceedings u/s 153C of the Act for having found incriminating material proceedings u/s 153C of the Act for having found incriminating material for other year(s). In the instance case, admittedly, the AO has for other year(s). In the instance case, admittedly, the AO has for other year(s). In the instance case, admittedly, the AO has not brought on record brought on record the satisfaction note about the existence of any ction note about the existence of any incriminating material relation to the AY(s) 2016 incriminating material relation to the AY(s) 2016-17 & 2017 17 & 2017-18. As evident in the satisfaction note, the AO has admitted the existence of evident in the satisfaction note, the AO has admitted the existence of evident in the satisfaction note, the AO has admitted the existence of incriminating material relating to the AY(s) 2018 incriminating material relating to the AY(s) 2018-19, 2019 19, 2019-20 & 2020- 21. 6.4.12 Therefore, the undersigned is of the considered view that the Therefore, the undersigned is of the considered view that the Therefore, the undersigned is of the considered view that the AO is not right in initiating assessment proceedings u/s 153C of the Act AO is not right in initiating assessment proceedings u/s 153C of the Act AO is not right in initiating assessment proceedings u/s 153C of the Act for the AY(s) 2016 for the AY(s) 2016-17 & 2017-18 without there being any incriminating 18 without there being any incriminating material relating to the AY(s) 2016 material relating to the AY(s) 2016-17 & 2017-18. Therefore, the Therefore, the assumption of jurisdiction assumption of jurisdiction u/s 153C of the act based upon such u/s 153C of the act based upon such erroneous satisfaction is not legally correct. erroneous satisfaction is not legally correct. A jurisdictional fact jurisdictional fact is one on existence or non on existence or non-existence of which depends assumption or refusal to existence of which depends assumption or refusal to assume jurisdiction by a court, tribunal or an authority. In 'Black's Legal assume jurisdiction by a court, tribunal or an authority. In 'Black's Legal assume jurisdiction by a court, tribunal or an authority. In 'Black's Legal Dictionary, it is explained as a fact which must exist before a court can Dictionary, it is explained as a fact which must exist before a court can Dictionary, it is explained as a fact which must exist before a court can properly assume jurisdicti properly assume jurisdiction of a particular case. Mistake of fact in on of a particular case. Mistake of fact in 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt relation to jurisdiction relation to jurisdiction is an error of jurisdictional fact. No statutory . No statutory authority or tribunal can assume jurisdiction in respect of subject matter authority or tribunal can assume jurisdiction in respect of subject matter authority or tribunal can assume jurisdiction in respect of subject matter which the statute does not confer on it and if by deciding erro which the statute does not confer on it and if by deciding erro which the statute does not confer on it and if by deciding erroneously the fact on which jurisdiction depends the court or tribunal exercises the the fact on which jurisdiction depends the court or tribunal exercises the the fact on which jurisdiction depends the court or tribunal exercises the jurisdiction, then the order is vitiated. jurisdiction, then the order is vitiated. 6.4.13 In 'Halsbury's Laws of England' it has been stated that where In 'Halsbury's Laws of England' it has been stated that where In 'Halsbury's Laws of England' it has been stated that where the jurisdiction of a tribunal is dependent on the existence o the jurisdiction of a tribunal is dependent on the existence o the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may be described as preliminary to, state of affairs, that state of affairs may be described as preliminary to, state of affairs, that state of affairs may be described as preliminary to, or collateral to the merits of the issue. If, at the inception of an inquiry or collateral to the merits of the issue. If, at the inception of an inquiry or collateral to the merits of the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the by an inferior tribunal, a challenge is made to its jurisdiction, the by an inferior tribunal, a challenge is made to its jurisdiction, the Tribunal has to ma Tribunal has to make up its mind whether to Act or not and can give a ke up its mind whether to Act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not ruling on the preliminary or collateral issue; but that ruling is not ruling on the preliminary or collateral issue; but that ruling is not conclusive. 6.4.14 In the case of In the case of Arun Kumar & Ors. vs. Union of India & Ors. Arun Kumar & Ors. vs. Union of India & Ors. (2006) 205 CTR (SC) 193: (2006) 286 ITR 89 (SC) (2006) 205 CTR (SC) 193: (2006) 286 ITR 89 (SC) it has been held: een held:- "A "jurisdictional fact" is a fact which must exist before a Court, Tribunal "A "jurisdictional fact" is a fact which must exist before a Court, Tribunal "A "jurisdictional fact" is a fact which must exist before a Court, Tribunal or an assumes jurisdiction over a particular matter. A jurisdictional fact or an assumes jurisdiction over a particular matter. A jurisdictional fact or an assumes jurisdiction over a particular matter. A jurisdictional fact is one on existence or non is one on existence or non-existence of which depends jurisdiction of a existence of which depends jurisdiction of a court, a tribunal or court, a tribunal or an authority. It is the fact upon which an an authority. It is the fact upon which an administrative agency's power to act depends If the jurisdictional fact administrative agency's power to act depends If the jurisdictional fact administrative agency's power to act depends If the jurisdictional fact does not exist, the court, authority or officer cannot act. If a Court or does not exist, the court, authority or officer cannot act. If a Court or does not exist, the court, authority or officer cannot act. If a Court or authority wrongly assumes the existence of such fact, the order can authority wrongly assumes the existence of such fact, the order can authority wrongly assumes the existence of such fact, the order can be questioned by a writ of certiorari. The underlying principle is that by questioned by a writ of certiorari. The underlying principle is that by questioned by a writ of certiorari. The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority erroneously assuming existence of such jurisdictional fact, no authority erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not posses can confer upon itself jurisdiction which it otherwise does not posses can confer upon itself jurisdiction which it otherwise does not posses 6.4.15 The existence of a 'jurisdict The existence of a 'jurisdictional fact' is the sine qua non sine qua non for the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised the exercise of power. In its absence, the power cannot be exercised lawfully. When the jurisdictional fact is established, the AO is lawfully. When the jurisdictional fact is established, the AO is lawfully. When the jurisdictional fact is established, the AO is empowered to proceed with the case and make decisions in accordance empowered to proceed with the case and make decisions in accordance empowered to proceed with the case and make decisions in accordance with the provision with the provisions of law. In this context, the fulfilment of the s of law. In this context, the fulfilment of the preconditions set forth u/s 153C r.w.s 153A of the Act is considered a preconditions set forth u/s 153C r.w.s 153A of the Act is considered a preconditions set forth u/s 153C r.w.s 153A of the Act is considered a 'jurisdictional fact 'jurisdictional fact.' The AO is required to carefully examine and .' The AO is required to carefully examine and ascertain whether these specific conditions are satisfied before ascertain whether these specific conditions are satisfied before ascertain whether these specific conditions are satisfied before proceeding. Only after deciding on this issue, and recording a clear eeding. Only after deciding on this issue, and recording a clear eeding. Only after deciding on this issue, and recording a clear finding regarding the presence or absence of these conditions, can the finding regarding the presence or absence of these conditions, can the finding regarding the presence or absence of these conditions, can the AO issue a notice u/s 153C for the relevant assessment year. Only upon AO issue a notice u/s 153C for the relevant assessment year. Only upon AO issue a notice u/s 153C for the relevant assessment year. Only upon satisfying this crucial prerequisite can the AO l satisfying this crucial prerequisite can the AO lawfully proceed to assess awfully proceed to assess the income of the assessee for the relevant year, the income of the assessee for the relevant year, as the presence of the as the presence of the jurisdictional fact is indispensable for validly initiating the assessment jurisdictional fact is indispensable for validly initiating the assessment jurisdictional fact is indispensable for validly initiating the assessment process u/s 153C of the Act process u/s 153C of the Act

6.4.16 In the present case of the appellant company, the assessment the present case of the appellant company, the assessment the present case of the appellant company, the assessment order(s) reveals that no information suggesting the existence of order(s) reveals that no information suggesting the existence of order(s) reveals that no information suggesting the existence of incriminating material found or seized during the course of search at M/s incriminating material found or seized during the course of search at M/s incriminating material found or seized during the course of search at M/s SNJ Distilleries on 06.08.2019 has escaped assessment for SNJ Distilleries on 06.08.2019 has escaped assessment for SNJ Distilleries on 06.08.2019 has escaped assessment for the years , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt under consideration. Furthermore, it is also significant to bring on record under consideration. Furthermore, it is also significant to bring on record under consideration. Furthermore, it is also significant to bring on record that the appellant’s premises were subjected to search u/s 132 of the that the appellant’s premises were subjected to search u/s 132 of the that the appellant’s premises were subjected to search u/s 132 of the Act on 15.06.2022. Therefore, in the absence of such findings, the Act on 15.06.2022. Therefore, in the absence of such findings, the Act on 15.06.2022. Therefore, in the absence of such findings, the initiation of proceedings u/s 15 initiation of proceedings u/s 153C of the Act for AYs 2016-17 and 2017 17 and 2017- 18 by the AO is not 18 by the AO is not legally sustainable. Accordingly, the order(s) passed Accordingly, the order(s) passed u/s 143(3) r.w.s 153C of the Act dated 28.03.2023 u/s 143(3) r.w.s 153C of the Act dated 28.03.2023 for AYs 2016 for AYs 2016-17 and 2017-18 is void ab void ab-initio and all the grounds raised by the appellant and all the grounds raised by the appellant upon the issue of n the issue of defective satisfaction are hereby treated as are hereby treated as allowed.”

19. Before we adjudicate the issue as to whether the above findings Before we adjudicate the issue as to whether the above findings Before we adjudicate the issue as to whether the above findings rendered by the Ld. CIT(A) are sustainable in law or not, it would first be rendered by the Ld. CIT(A) are sustainable in law or not, it would first be rendered by the Ld. CIT(A) are sustainable in law or not, it would first be necessary to take note of the legislation of Section 153C itself. necessary to take note of the legislation of Section 153C itself. necessary to take note of the legislation of Section 153C itself. We note that Section 153A/153C of the Act was intr that Section 153A/153C of the Act was introduced by the the Finance Act, 2003 w.e.f. 01.06.2003. It replaced the provisions relating to block 2003. It replaced the provisions relating to block 2003. It replaced the provisions relating to block assessment contained in Chapter XIV assessment contained in Chapter XIV-B and introduced an altogether an altogether new procedure for making assessment u/s. 153 assessment u/s. 153A/153C of the Act. of the Act. The Scheme of assessment u/s 153A 53A/153C is available to the department in addition /153C is available to the department in addition to all other methods of assessments, revisions and reassessments and to all other methods of assessments, revisions and reassessments and to all other methods of assessments, revisions and reassessments and each scheme has its distinct set of conditions and stipulations that must each scheme has its distinct set of conditions and stipulations that must each scheme has its distinct set of conditions and stipulations that must be strictly adhered to. The sub be strictly adhered to. The sub-heading of Section 153A of Section 153A of the Act is "Assessment in case of Search or requisition Assessment in case of Search or requisition" which is a special provision " which is a special provision for assessment in case of an assessee against whom search u/s. 132 or for assessment in case of an assessee against whom search u/s. 132 or for assessment in case of an assessee against whom search u/s. 132 or requisition under section 132A of the Act i requisition under section 132A of the Act is carried out by the s carried out by the department. Section 153B of the Act pr Section 153B of the Act prescribes the time limit for escribes the time limit for completion of assessment completion of assessment u/s 153A and 153C of the Act. Section 153C of Section 153C of the Act bears the heading the heading "Assessment of income of any other person" "Assessment of income of any other person"

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt which is a special provision in respect of assessment of income of is a special provision in respect of assessment of income of is a special provision in respect of assessment of income of "any other person" (third party) against whom no search u/s. 132 or hird party) against whom no search u/s. 132 or hird party) against whom no search u/s. 132 or requisition u/s. 132A of the Act was carried out requisition u/s. 132A of the Act was carried out, provided certain provided certain conditions precedents are satisfied as envisaged under precedents are satisfied as envisaged under S Section 153C of the Act; and Section 153D of the Act is the provision regarding approva ection 153D of the Act is the provision regarding approva ection 153D of the Act is the provision regarding approvals if necessary for assessment in case of search or requisition. if necessary for assessment in case of search or requisition. if necessary for assessment in case of search or requisition.

“77. The ingredients of Section 153 C are: 77. The ingredients of Section 153 C are:

(i) Satisfaction of the Assessing Officer who is Assessing Off Satisfaction of the Assessing Officer who is Assessing Off Satisfaction of the Assessing Officer who is Assessing Officer of the section 153A notice section 153A notice that money/bullion/jewellery/other valuable article valuable article or thing/books of account or documents (incriminating materials) or thing/books of account or documents (incriminating materials) or thing/books of account or documents (incriminating materials) seized/requisitioned belongs to/pertain to or any information contained, seized/requisitioned belongs to/pertain to or any information contained, seized/requisitioned belongs to/pertain to or any information contained, relates to, a third party. relates to, a third party.

(ii) Recording of satisfaction as above. Recording of satisfaction as above.

(iii)Handing over of the incrimin Handing over of the incriminating material to the Assessing Officer ating material to the Assessing Officer having jurisdiction over the third party. having jurisdiction over the third party.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 50 ::

(iv) Recording of satisfaction by the Assessing Officer of the third party Recording of satisfaction by the Assessing Officer of the third party Recording of satisfaction by the Assessing Officer of the third party that the incriminating material has a bearing on the determination of that the incriminating material has a bearing on the determination of that the incriminating material has a bearing on the determination of total income of the third par total income of the third party.

(v) Upon condition of recording of the satisfaction of both officers as Upon condition of recording of the satisfaction of both officers as Upon condition of recording of the satisfaction of both officers as above, notices be issued to assess/reassess the income of the third above, notices be issued to assess/reassess the income of the third above, notices be issued to assess/reassess the income of the third party in accordance with the procedure stipulated under Section 153A. party in accordance with the procedure stipulated under Section 153A. party in accordance with the procedure stipulated under Section 153A.

(i) Recording of satisfaction by the Assessing Officer of the searched Recording of satisfaction by the Assessing Officer of the searched Recording of satisfaction by the Assessing Officer of the searched entities that some of the i entities that some of the incriminating materials relate to a third party. ncriminating materials relate to a third party.

(ii) Recording of satisfaction by the Assessing Officer of the third party Recording of satisfaction by the Assessing Officer of the third party Recording of satisfaction by the Assessing Officer of the third party that the incriminating materials have a bearing on the determination of that the incriminating materials have a bearing on the determination of that the incriminating materials have a bearing on the determination of the total income of that third party. the total income of that third party.

The contention of the reven The contention of the revenue that a mandate is cast upon the ue that a mandate is cast upon the Assessing Officer of the third party to issue notice under Section 153C Assessing Officer of the third party to issue notice under Section 153C Assessing Officer of the third party to issue notice under Section 153C for all the years comprising the block, mechanically and automatically, is for all the years comprising the block, mechanically and automatically, is for all the years comprising the block, mechanically and automatically, is thus rejected.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 51 ::

(emphasis supplied) (emphasis supplied)

"6. The tribunal has found that incriminating material seized and stated "6. The tribunal has found that incriminating material seized and stated "6. The tribunal has found that incriminating material seized and stated to be pertaining to all six assessment years did not establish any co to be pertaining to all six assessment years did not establish any co to be pertaining to all six assessment years did not establish any co- relation document relation document-wise with the assessment year in question. In other estion. In other words, the tribunal concluded that the present matter indicates that the words, the tribunal concluded that the present matter indicates that the words, the tribunal concluded that the present matter indicates that the issue of notice could be on the basis that there is specific incriminating issue of notice could be on the basis that there is specific incriminating issue of notice could be on the basis that there is specific incriminating information in possession of the Assessing Officer. It is in these information in possession of the Assessing Officer. It is in these information in possession of the Assessing Officer. It is in these circumstances that the t circumstances that the tribunal found and as indicated in paragraph 8 of ribunal found and as indicated in paragraph 8 of the impugned order that the revenue's assertion that the Assessing the impugned order that the revenue's assertion that the Assessing the impugned order that the revenue's assertion that the Assessing Officer is empowered under the statute to assess or reassess the total Officer is empowered under the statute to assess or reassess the total Officer is empowered under the statute to assess or reassess the total income of six assessment years immediately preceding the assessment income of six assessment years immediately preceding the assessment income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted and ear relevant to the previous year in which such search is conducted and ear relevant to the previous year in which such search is conducted and therefore the satisfaction which is recorded in the satisfaction note is therefore the satisfaction which is recorded in the satisfaction note is therefore the satisfaction which is recorded in the satisfaction note is enough, is erroneous. Therefore, the notice cannot be upheld and such enough, is erroneous. Therefore, the notice cannot be upheld and such enough, is erroneous. Therefore, the notice cannot be upheld and such stand of the revenue cannot be accepted. stand of the revenue cannot be accepted. The reasons, therefor are to The reasons, therefor are to be found in paragraph 9 and 10 of the impugned order. If certain items be found in paragraph 9 and 10 of the impugned order. If certain items be found in paragraph 9 and 10 of the impugned order. If certain items pertain to assessment year 2004 pertain to assessment year 2004-05 or thereafter then it cannot be 05 or thereafter then it cannot be assumed, that the documents seized or incriminating material giving assumed, that the documents seized or incriminating material giving assumed, that the documents seized or incriminating material giving information are speci information are specific and to all assessment years. The tribunal found fic and to all assessment years. The tribunal found that they were concluded assessments. They could not have been that they were concluded assessments. They could not have been that they were concluded assessments. They could not have been 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt disturbed. The documents in question are neither incriminating ones nor disturbed. The documents in question are neither incriminating ones nor disturbed. The documents in question are neither incriminating ones nor unaccounted transactions of the assessee. They also did not relate to unaccounted transactions of the assessee. They also did not relate to unaccounted transactions of the assessee. They also did not relate to the four assessment years. It is in these circumstances that the tribunal the four assessment years. It is in these circumstances that the tribunal the four assessment years. It is in these circumstances that the tribunal found that it will not be possible to uphold the stand of the revenue that found that it will not be possible to uphold the stand of the revenue that found that it will not be possible to uphold the stand of the revenue that overall approach in matters of concealment by the group assessee and overall approach in matters of concealment by the group assessee and overall approach in matters of concealment by the group assessee and all the discoveries of the search on all the discoveries of the search on Shri Navale and it concerns, will have Shri Navale and it concerns, will have to be taken into account while forming the satisfaction. The satisfaction to be taken into account while forming the satisfaction. The satisfaction to be taken into account while forming the satisfaction. The satisfaction note was very closely examined and the reasons assigned by the note was very closely examined and the reasons assigned by the note was very closely examined and the reasons assigned by the Assessing Officer were found to be silent about the assessment year in Assessing Officer were found to be silent about the assessment year in Assessing Officer were found to be silent about the assessment year in which specific incriminating information or unaccounted or undisclosed cific incriminating information or unaccounted or undisclosed cific incriminating information or unaccounted or undisclosed hidden information was discovered or seized by the revenue from the hidden information was discovered or seized by the revenue from the hidden information was discovered or seized by the revenue from the assessee. In the circumstances, the general satisfaction and as recorded assessee. In the circumstances, the general satisfaction and as recorded assessee. In the circumstances, the general satisfaction and as recorded in the note is not enough. The tribunal has found tha in the note is not enough. The tribunal has found that with regard to t with regard to cash and jewellery, the explanation of the assessee was that he had cash and jewellery, the explanation of the assessee was that he had cash and jewellery, the explanation of the assessee was that he had agricultural properties and derived agricultural income. That income was agricultural properties and derived agricultural income. That income was agricultural properties and derived agricultural income. That income was utilised to acquire jewellery that was belonging to him and his family. utilised to acquire jewellery that was belonging to him and his family. utilised to acquire jewellery that was belonging to him and his family. With regard to cash and st With regard to cash and stated to be recovered from the students for ated to be recovered from the students for granting admissions, we do not find that any inquiries were made. There granting admissions, we do not find that any inquiries were made. There granting admissions, we do not find that any inquiries were made. There is absolutely nothing to indicate as to in which educational courses, the is absolutely nothing to indicate as to in which educational courses, the is absolutely nothing to indicate as to in which educational courses, the education is imparted and institution education is imparted and institution-wise. Whether the admissions wise. Whether the admissions are granted to the technical courses merit granted to the technical courses merit-wise or on the basis of marks wise or on the basis of marks obtained in XIIth standard HSC exam. If any fee structure is approved obtained in XIIth standard HSC exam. If any fee structure is approved obtained in XIIth standard HSC exam. If any fee structure is approved and cash component is therefore collected over and above the and cash component is therefore collected over and above the and cash component is therefore collected over and above the sanctioned fees are matters which ought to have been sanctioned fees are matters which ought to have been gone into and gone into and there cannot be a general or vague satisfaction as is relied upon. there cannot be a general or vague satisfaction as is relied upon. there cannot be a general or vague satisfaction as is relied upon.

9. We are of the opinion that the tribunal's conclusion cannot be termed 9. We are of the opinion that the tribunal's conclusion cannot be termed 9. We are of the opinion that the tribunal's conclusion cannot be termed as perverse and given the above as perverse and given the above-noted factual background. None of noted factual background. None of these appeals raises any substantia these appeals raises any substantial question of law. They are l question of law. They are accordingly dismissed. No costs." accordingly dismissed. No costs."

"18. The ITAT permitted this additional ground by giving a reason that it "18. The ITAT permitted this additional ground by giving a reason that it "18. The ITAT permitted this additional ground by giving a reason that it was a jurisdictional issue taken up on the basis of facts already on the sdictional issue taken up on the basis of facts already on the sdictional issue taken up on the basis of facts already on the record and, therefore, could be raised. record and, therefore, could be raised. In this behalf, it was noted by In this behalf, it was noted by the ITAT that as per the provisions of section 153C of the Act, the ITAT that as per the provisions of section 153C of the Act, the ITAT that as per the provisions of section 153C of the Act, incriminating material which was seized had to pertain to incriminating material which was seized had to pertain to incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the Assessment Years in question and it is an undisputed fact that the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co documents which were seized did not establish any co documents which were seized did not establish any co-relation, document-wise, wise, wise, with with with these these these four four four Assessment Assessment Assessment Years. Years. Years. Since Since Since this this this requirement under section 153C of the Act is essential for as requirement under section 153C of the Act is essential for as requirement under section 153C of the Act is essential for assessment , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt under that provision, it becomes a jurisdictional fact. We find this under that provision, it becomes a jurisdictional fact. We find this under that provision, it becomes a jurisdictional fact. We find this reasoning to be logical and valid, having regard to the provisions of reasoning to be logical and valid, having regard to the provisions of reasoning to be logical and valid, having regard to the provisions of section 153C of the Act. section 153C of the Act. Para 9 of the order of the ITAT reveals that the Para 9 of the order of the ITAT reveals that the ITAT had scanned through the Satis ITAT had scanned through the Satisfaction Note and the material which faction Note and the material which was disclosed therein was culled out and it showed that the same was disclosed therein was culled out and it showed that the same was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004 belongs to Assessment Year 2004-05 or thereafter. After taking note of 05 or thereafter. After taking note of the material in para 9 of the order, the position that emerges therefrom the material in para 9 of the order, the position that emerges therefrom the material in para 9 of the order, the position that emerges therefrom is discussed in para 10. It was specifically recorded that the counsel for d in para 10. It was specifically recorded that the counsel for d in para 10. It was specifically recorded that the counsel for the Department could not point out to the contrary. It is for this reason the Department could not point out to the contrary. It is for this reason the Department could not point out to the contrary. It is for this reason the High Court has also given its imprimatur to the aforesaid approach the High Court has also given its imprimatur to the aforesaid approach the High Court has also given its imprimatur to the aforesaid approach of the Tribunal. That apart, learned senior cou of the Tribunal. That apart, learned senior counsel appearing for the nsel appearing for the respondent, argued that notice in respect of Assessment Years 2000 respondent, argued that notice in respect of Assessment Years 2000 respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 02 was even time barred.

emphasis supplied) (emphasis supplied

requisitioned having a bearing on the determination of the to a bearing on the determination of the to a bearing on the determination of the total income of such other person. This is manifest from the provision employing the This is manifest from the provision employing the This is manifest from the provision employing the expression "if, that Assessing Officer is satisfied" "if, that Assessing Officer is satisfied". It would therefore . It would therefore necessarily follow that the necessarily follow that the issuance of a notice under Section 153C is issuance of a notice under Section 153C is clearly not intended to be an inevitable consequence clearly not intended to be an inevitable consequence to the receipt of to the receipt of material by the jurisdictional AO and t erial by the jurisdictional AO and that the AO before commencement hat the AO before commencement of action under Section 153C is also obliged to of action under Section 153C is also obliged to record a valid satisfaction record a valid satisfaction note that the material so received would that the material so received would have a bearing on the have a bearing on the determination of the total tal income of such other person. There has to be a There has to be a contemporaneous recording of satisfaction by the AO linking the seized contemporaneous recording of satisfaction by the AO linking the seized contemporaneous recording of satisfaction by the AO linking the seized material to the assessee. material to the assessee. The satisfaction note should demonstrate the The satisfaction note should demonstrate the live nexus ascertained upon examination of the seized material whic live nexus ascertained upon examination of the seized material whic live nexus ascertained upon examination of the seized material which contained information relating to the assessee which has a bearing on its contained information relating to the assessee which has a bearing on its contained information relating to the assessee which has a bearing on its total income. This in our considered view total income. This in our considered view is an aspect of significance and is an aspect of significance and constitutes a jurisdictional fact jurisdictional fact. This leads us to the inevitable conclusion This leads us to the inevitable conclusion that the initiation of acti that the initiation of action u/s 153C of the Act would have to be founded would have to be founded on a formation of satisfaction satisfaction by the AO of the ‘other person other person’ that the material handed over and received pursuant to a search material handed over and received pursuant to a search material handed over and received pursuant to a search relates to such ‘other person’ and is likely to influence the is likely to influence the "determination of t "determination of the total income" which would be of relevancy for the purposes of assessment or would be of relevancy for the purposes of assessment or would be of relevancy for the purposes of assessment or reassessment.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 56 ::

Section 153C enables and empowers the jurisdictional AO to assess or les and empowers the jurisdictional AO to assess or les and empowers the jurisdictional AO to assess or reassess the six AYs' or the reassess the six AYs' or the ‘relevant assessment year’. The Act thus ‘relevant assessment year’. The Act thus sanctions and confers an authority upon the AO to exercise the power sanctions and confers an authority upon the AO to exercise the power sanctions and confers an authority upon the AO to exercise the power placed in its hands for up to a maximum of ten AYs for up to a maximum of ten AYs. Despite the c . Despite the conferral of that power, the question which would remain is whether the facts and of that power, the question which would remain is whether the facts and of that power, the question which would remain is whether the facts and circumstances of a particular case warrant or justify the invocation of that circumstances of a particular case warrant or justify the invocation of that circumstances of a particular case warrant or justify the invocation of that power. Ultimately, Section 153C is concerned with books, documents or Section 153C is concerned with books, documents or Section 153C is concerned with books, documents or articles seized in the cours articles seized in the course of a search and which are found to have the e of a search and which are found to have the potential to impact or have a bearing on an assessment. Therefore, and potential to impact or have a bearing on an assessment. Therefore, and potential to impact or have a bearing on an assessment. Therefore, and unless the AO is objectively objectively satisfied that the material gathered satisfied that the material gathered relates or pertains to the ‘other person’ and pertains to the ‘other person’ and could potentially impact the could potentially impact the determination of total income, it would be unjustified in mechanically determination of total income, it would be unjustified in mechanically determination of total income, it would be unjustified in mechanically reopening or assessing all the all the AYs in question.

“33. The record slip belongs to the assessee and, therefore, the action of 33. The record slip belongs to the assessee and, therefore, the action of 33. The record slip belongs to the assessee and, therefore, the action of the Assessing Officer of the searched persons recording that the same the Assessing Officer of the searched persons recording that the same the Assessing Officer of the searched persons recording that the same belongs to the assessee cannot be faulted. H belongs to the assessee cannot be faulted. However, the question then owever, the question then arises is whether the Assessing Officer of the assessee was justified in arises is whether the Assessing Officer of the assessee was justified in arises is whether the Assessing Officer of the assessee was justified in taking further steps for reassessing the income of the assessee in taking further steps for reassessing the income of the assessee in taking further steps for reassessing the income of the assessee in respect of the assessment years for which the assessments were respect of the assessment years for which the assessments were respect of the assessment years for which the assessments were concluded and in respect of concluded and in respect of which the seized document had no bearing. which the seized document had no bearing. In our view, the same would be clearly impermissible as the seized In our view, the same would be clearly impermissible as the seized In our view, the same would be clearly impermissible as the seized material now available with the Assessing Officer, admittedly, had no material now available with the Assessing Officer, admittedly, had no material now available with the Assessing Officer, admittedly, had no nexus with those assessments and was wholly irrelevant for the purpose nexus with those assessments and was wholly irrelevant for the purpose nexus with those assessments and was wholly irrelevant for the purpose of assessing the income of the assessee for the years in question. sessing the income of the assessee for the years in question. sessing the income of the assessee for the years in question. Merely because a valuable article or document belonging to an assessee Merely because a valuable article or document belonging to an assessee Merely because a valuable article or document belonging to an assessee is seized from the possession of a person searched under section 132 of is seized from the possession of a person searched under section 132 of is seized from the possession of a person searched under section 132 of the Act does not mean that the concluded assessment the Act does not mean that the concluded assessments of the assessee s of the assessee are necessarily to be reopened under section 153C of the Act. In our are necessarily to be reopened under section 153C of the Act. In our are necessarily to be reopened under section 153C of the Act. In our view, the concluded assessments cannot be interfered with mechanically view, the concluded assessments cannot be interfered with mechanically view, the concluded assessments cannot be interfered with mechanically and solely for the reason that a document belonging to the assessee, and solely for the reason that a document belonging to the assessee, and solely for the reason that a document belonging to the assessee, which has no bearing on the a which has no bearing on the assessments of the assessee for the years ssessments of the assessee for the years preceding the search, was seized from the possession of the searched preceding the search, was seized from the possession of the searched preceding the search, was seized from the possession of the searched persons.

….

36. The decision in SSP Aviation (supra) cannot be understood to mean 36. The decision in SSP Aviation (supra) cannot be understood to mean 36. The decision in SSP Aviation (supra) cannot be understood to mean that the Assessing Officer has the jurisdiction to make a reasse that the Assessing Officer has the jurisdiction to make a reasse that the Assessing Officer has the jurisdiction to make a reassessment in every case, where seized assets or documents are handed over to the every case, where seized assets or documents are handed over to the every case, where seized assets or documents are handed over to the Assessing Officer. The question whether the documents/assets seized Assessing Officer. The question whether the documents/assets seized Assessing Officer. The question whether the documents/assets seized could possibly reflect any undisclosed income has to be considered by could possibly reflect any undisclosed income has to be considered by could possibly reflect any undisclosed income has to be considered by the Assessing Officer after examining th the Assessing Officer after examining the seized assets/documents e seized assets/documents handed over to him. It is only in cases where the seized handed over to him. It is only in cases where the seized handed over to him. It is only in cases where the seized documents/assets could possibly reflect any undisclosed income of the documents/assets could possibly reflect any undisclosed income of the documents/assets could possibly reflect any undisclosed income of the assessee for the relevant assessment years, that further enquiry would assessee for the relevant assessment years, that further enquiry would assessee for the relevant assessment years, that further enquiry would be warranted in respect of those be warranted in respect of those years. Whilst, it is not necessary for years. Whilst, it is not necessary for the Assessing Officer to be satisfied that the assets/documents seized the Assessing Officer to be satisfied that the assets/documents seized the Assessing Officer to be satisfied that the assets/documents seized during search of another person reflect undisclosed income of an during search of another person reflect undisclosed income of an during search of another person reflect undisclosed income of an assessee before commencing an enquiry under section 153C of the Act, assessee before commencing an enquiry under section 153C of the Act, assessee before commencing an enquiry under section 153C of the Act, , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt it would be impermissible for him to commence such enquiry if it is impermissible for him to commence such enquiry if it is impermissible for him to commence such enquiry if it is apparent that the documents/assets in question have no bearing on the apparent that the documents/assets in question have no bearing on the apparent that the documents/assets in question have no bearing on the income of the assessee for the relevant assessment years. income of the assessee for the relevant assessment years.”

Here too, the AO is mandated is mandated to firstly identify the AYs' to which the to firstly identify the AYs' to which the material gathered in the course of the search may relate material gathered in the course of the search may relate material gathered in the course of the search may relate to and consequently those assessments would face the spectre of consequently those assessments would face the spectre of consequently those assessments would face the spectre of Section 153C of the Act. The additions here too would have to be based on material dditions here too would have to be based on material dditions here too would have to be based on material that may have been unearthed in the course of the search or on the basis that may have been unearthed in the course of the search or on the basis that may have been unearthed in the course of the search or on the basis of material requisitioned. The statute thus creates a persistent and of material requisitioned. The statute thus creates a persistent and of material requisitioned. The statute thus creates a persistent and enduring connect between the material discovered and the asse enduring connect between the material discovered and the asse enduring connect between the material discovered and the assessment that may be ultimately made. All the that may be ultimately made. All the above discussed judgments thus judgments thus reinforce the requirement of incriminating material having an ineradicable reinforce the requirement of incriminating material having an ineradicable reinforce the requirement of incriminating material having an ineradicable link to the estimation of income for link to the estimation of income for a particular AY in as much as it a particular AY in as much as it reinforces our view that reinforces our view that notice u/s 153C can be validly issued only when can be validly issued only when the AO records his objective objective satisfaction that he has incriminating has incriminating material pertaining to or relating to the ‘other person’ pertaining to or relating to the ‘other person’ for th for the relevant AYs and which may be concerned with and which may be concerned with their disclosed and undisclosed income disclosed and undisclosed income.

Absent any material qua the qua the ‘other person’ that may either cast a doubt that may either cast a doubt , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt on the estimation of total income for a particular year or years, the AO on the estimation of total income for a particular year or years, the AO on the estimation of total income for a particular year or years, the AO would not be justified in invoking its powers conferred by Section 153C would not be justified in invoking its powers conferred by Section 153C would not be justified in invoking its powers conferred by Section 153C of the Act. It would only be consequent . It would only be consequent to such satisfaction being reached to such satisfaction being reached that a notice u/s 153C of the Act would be liable to be issued. ce u/s 153C of the Act would be liable to be issued. ce u/s 153C of the Act would be liable to be issued.

Neither anything can be added to the reaso thing can be added to the reasons so recorded nor any ns so recorded nor anything can be deleted from the reasons so recorded. The Hon'ble Bombay High can be deleted from the reasons so recorded. The Hon'ble Bombay High can be deleted from the reasons so recorded. The Hon'ble Bombay High Court in the case of Hindustan Lever Ltd. v. R.B. Wadkar [2004] 137 Hindustan Lever Ltd. v. R.B. Wadkar [2004] 137 Hindustan Lever Ltd. v. R.B. Wadkar [2004] 137 Taxman 479/268 ITR 332 8 ITR 332 inter alia, held "it is needless to mention it is needless to mention that the reasons are required to be read as they were recorded by the that the reasons are required to be read as they were recorded by the that the reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No addition can be made to AO. No substitution or deletion is permissible. No addition can be made to AO. No substitution or deletion is permissible. No addition can be made to those reasons. No inference can be allowed to be drawn on those reasons. No inference can be allowed to be drawn on those reasons. No inference can be allowed to be drawn on the basis of 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt reasons not recorded by him. He has to speak through the reasons." reasons not recorded by him. He has to speak through the reasons." reasons not recorded by him. He has to speak through the reasons." Their Lordships added that "the reason recorded should be self explanatory and "the reason recorded should be self explanatory and "the reason recorded should be self explanatory and should not keep the assessee guessing for reasons. Reasons provided the should not keep the assessee guessing for reasons. Reasons provided the should not keep the assessee guessing for reasons. Reasons provided the link between the conclus link between the conclusion and the evidence…..". In our considered In our considered view, this ratio decidendi of the Hon'ble High court is applicable his ratio decidendi of the Hon'ble High court is applicable his ratio decidendi of the Hon'ble High court is applicable with equal force to the satisfaction note force to the satisfaction note prepared by the AO for assuming jurisdiction for assuming jurisdiction to issue notice under section 153C of the Act. notice under section 153C of the Act.

It is noted that, the issuance of the notice was preceded by he issuance of the notice was preceded by he issuance of the notice was preceded by satisfaction note(s) drawn up by the AO by the AO and since the same would have a material and since the same would have a material bearing on the legal challenge raised before us, legal challenge raised before us, the relevant portion of relevant portion of satisfaction note(s) recorded for AYs 2014 satisfaction note(s) recorded for AYs 2014-15 to 2017-18, which has a 18, which has a material bearing on the issue impugned before us, material bearing on the issue impugned before us, is reproduce is reproduced herein below:

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 61 ::

AY 2014-15

…Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Agrifurane Industries Pvt. Ltd. has inflated their expenses by means of Industries Pvt. Ltd. has inflated their expenses by means of Industries Pvt. Ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount of bogus purchases is Rs.4,41,70,464/ of bogus purchases is Rs.4,41,70,464/- for the F.Y 2017-18 (From July 18 (From July 2017), Rs. 5,69,70,130/ 2017), Rs. 5,69,70,130/- for the F.Y 2018-19 and Rs. 2,95,16,955/ 95,16,955/- for the F.Y. 2019-20 (up 20 (up to 4.8.2019).

The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the seized materials contain information that relate to the assess seized materials contain information that relate to the assess seized materials contain information that relate to the assessee, M/s Southern Agrifurane Industries Pvt. Ltd. and the information therein has Southern Agrifurane Industries Pvt. Ltd. and the information therein has Southern Agrifurane Industries Pvt. Ltd. and the information therein has got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from 2018-19 to 2020- -21. Hence, in accordance with the provision of income 21. Hence, in accordance with the provision of income Tax Act, 1961 notice u/s 153C is issued fo Tax Act, 1961 notice u/s 153C is issued for AY 2014-15.

AY 2015-16

…Thus it is evident from the seized materials that M/s. Southern Thus it is evident from the seized materials that M/s. Southern Thus it is evident from the seized materials that M/s. Southern Agrifurane Industries Pvt ltd. has inflated their expenses by means of Agrifurane Industries Pvt ltd. has inflated their expenses by means of Agrifurane Industries Pvt ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal Bottles. The amount bogus purchase of empty bottles from M/s Crystal Bottles. The amount bogus purchase of empty bottles from M/s Crystal Bottles. The amount of bogus purchases is Rs. of bogus purchases is Rs. 4,41,70,464/- for the F.Y 2017-18 (From July 18 (From July 2017), Rs. 5,69,70,130/ 2017), Rs. 5,69,70,130/- for the F.Y 2018-19 and Rs. 2,95,16,955/ 19 and Rs. 2,95,16,955/- for the F.Y. 2019-20 (up 20 (up to 4.8.2019)

The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on The above seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized mat 18.06.2021. On perusal of the seized material I am satisfied that the erial I am satisfied that the seized materials contain information that relate to the assessee, M/s. seized materials contain information that relate to the assessee, M/s. seized materials contain information that relate to the assessee, M/s. Southern Agrifurane Industries Pvt ltd. and the information therein has Southern Agrifurane Industries Pvt ltd. and the information therein has Southern Agrifurane Industries Pvt ltd. and the information therein has got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from 2018-19 to 2020- -21. Hence, in accordance with the provision of Income 21. Hence, in accordance with the provision of Income Tax act, 1961 notice u/s 153C is issued for AY 2015-16. Tax act, 1961 notice u/s 153C is issued for AY 2015

AY 2016-17

…Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Thus it is evident from the seized materials that M/s Southern Agrifurane Industries Pvt. Ltd. has inflated their expenses by means Agrifurane Industries Pvt. Ltd. has inflated their expenses by means Agrifurane Industries Pvt. Ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount bogus purchase of empty bottles from M/s Crystal bottles. The amount of bogus purchases is Rs.4,41,70,464/ of bogus purchases is Rs.4,41,70,464/- for the F.Y 2017-18 (From July 18 (From July 2017), Rs. 5,69,70,130/ 2017), Rs. 5,69,70,130/- for the F.Y 2018-19 and Rs. 2,95,16,955/ 19 and Rs. 2,95,16,955/- for the F.Y. 2019-20 (up 20 (up to 4.8.2019).

The above seized materials were handed over to the undersigned on ve seized materials were handed over to the undersigned on ve seized materials were handed over to the undersigned on 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the 18.06.2021. On perusal of the seized material I am satisfied that the seized materials contain information that relate to the assess seized materials contain information that relate to the assess seized materials contain information that relate to the assessee, M/s , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 62 ::

Southern Agrifurane Industries Pvt. Ltd. and the informat Southern Agrifurane Industries Pvt. Ltd. and the information therein has ion therein has got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from got a bearing on the determination of total income for the A.Ys. from 2018-19 to 2020- -21. Hence, in accordance with the provision of income 21. Hence, in accordance with the provision of income Tax Act, 1961 notice u/s 153C is issued for AY Tax Act, 1961 notice u/s 153C is issued for AY 2016-17.

AY 2017-18

…Thus it is evident from the seiz Thus it is evident from the seized materials that M/s. Southern ed materials that M/s. Southern Agrifurane Industries Pvt ltd. has inflated their expenses by means of Agrifurane Industries Pvt ltd. has inflated their expenses by means of Agrifurane Industries Pvt ltd. has inflated their expenses by means of bogus purchase of empty bottles from M/s Crystal Bottles. The amount bogus purchase of empty bottles from M/s Crystal Bottles. The amount bogus purchase of empty bottles from M/s Crystal Bottles. The amount of bogus purchases is Rs. 4,41,70,464/ of bogus purchases is Rs. 4,41,70,464/- for the F.Y 2017-18 (From July 18 (From July 2017), Rs. 5,69,70,130/ 69,70,130/- for the F.Y 2018-19 and Rs. 2,95,16,955/ 19 and Rs. 2,95,16,955/- for the F.Y. 2019-20 (up 20 (up to 4.8.2019). Hence, in accordance with the Hence, in accordance with the provision of income Tax Act, 1961 notice u/s 153C is issued for AY provision of income Tax Act, 1961 notice u/s 153C is issued for AY provision of income Tax Act, 1961 notice u/s 153C is issued for AY 2017-18.

The existence of this jurisdictional fact is of vital importance. There has to The existence of this jurisdictional fact is of vital importance. There has to The existence of this jurisdictional fact is of vital importance. There has to be existence of material relating or pertaining to the unabated AY which is be existence of material relating or pertaining to the unabated AY which is be existence of material relating or pertaining to the unabated AY which is being sought to be reopene being sought to be reopened u/s 153C of the Act and such existence is the Act and such existence is required to be demonstrated through the satisfaction recorded by the AO. required to be demonstrated through the satisfaction recorded by the AO. required to be demonstrated through the satisfaction recorded by the AO.

In our considered opinion, the AO cannot overlook the same or deal with In our considered opinion, the AO cannot overlook the same or deal with In our considered opinion, the AO cannot overlook the same or deal with its existence in a casual manner. It is imperative for the AO to sp its existence in a casual manner. It is imperative for the AO to sp its existence in a casual manner. It is imperative for the AO to speak through his ‘satisfaction note’ ‘satisfaction note’ and identify the specific material which was and identify the specific material which was seized from the premise of the seized from the premise of the ‘searched person’, which according to him , which according to him not only pertains to or relates to the not only pertains to or relates to the ‘other person’ viz., the assessee, but viz., the assessee, but also has a bearing on hi also has a bearing on his total income for such relevant year sought to be s total income for such relevant year sought to be reopened u/s 153C of the Act. As held earlier, the contents of the reopened u/s 153C of the Act. As held earlier, the contents of the reopened u/s 153C of the Act. As held earlier, the contents of the satisfaction note are to be examined on a stand satisfaction note are to be examined on a stand-alone basis and no new alone basis and no new words can be imported into the same nor can the Revenue seek to words can be imported into the same nor can the Revenue seek to words can be imported into the same nor can the Revenue seek to amplify their reasons later on. From the given facts before us, it is prima lify their reasons later on. From the given facts before us, it is prima lify their reasons later on. From the given facts before us, it is prima facie evident that, there is no case made out by the AO in his recorded facie evident that, there is no case made out by the AO in his recorded facie evident that, there is no case made out by the AO in his recorded , 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt satisfaction that he had in his possession any ‘asset’ or ‘document’ or satisfaction that he had in his possession any ‘asset’ or ‘document’ or satisfaction that he had in his possession any ‘asset’ or ‘document’ or ‘books of accounts’ which related or pe ‘books of accounts’ which related or pertained to the assessee or rtained to the assessee or contained any information which ‘related to’ or ‘pertained to’ the contained any information which ‘related to’ or ‘pertained to’ the contained any information which ‘related to’ or ‘pertained to’ the assessee, for the relevant AYs 2014 assessee, for the relevant AYs 2014-15 to 2017-18 in question. 18 in question.

When confronted with this contemporaneous fact, the Ld. CIT, DR was When confronted with this contemporaneous fact, the Ld. CIT, DR was When confronted with this contemporaneous fact, the Ld. CIT, DR was also unable to point out any particular seized material which contained also unable to point out any particular seized material which contained also unable to point out any particular seized material which contained any incriminating evidence or informati any incriminating evidence or information concerning the assessee having on concerning the assessee having bearing on their total income for the impugned AYs 2014 bearing on their total income for the impugned AYs 2014-15 to 2017 15 to 2017-18.

, 1255, 1258, 1260 1254, 1255, 1258, 1260/Chny/2025 & 1235, 1237, 1238 1233, 1235, 1237, 1238/Chny/2025 (AYs 2014 s 2014-15 to 2017-18) Southern Agrifurane Industries Pvt. Ltd. M/s. Southern Agrifurane Industries Pvt :: 65 ::

Hence, we find that there was complete absence of existence of any Hence, we find that there was complete absence of existence of any Hence, we find that there was complete absence of existence of any incriminating material qua the qua the ‘other person’ [assessee, in this case] for [assessee, in this case] for the impugned AYs 2014 ned AYs 2014-15 to 2017-18. In our considered view therefore, 18. In our considered view therefore, the Ld. CIT(A) had rightly held that, the AO had invalidly usurped the Ld. CIT(A) had rightly held that, the AO had invalidly usurped the Ld. CIT(A) had rightly held that, the AO had invalidly usurped jurisdiction to reassess the total income of AYs 2014 jurisdiction to reassess the total income of AYs 2014-15 to 2017 15 to 2017-18 u/s 153C of the Act.

Order pronounced on the 21st day of November, 2025 Order pronounced on the 25, in Chennai.