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Income Tax Appellate Tribunal, BANGALORE BENCH “ A ”
Before: SHRI ARUN KUMAR GARODIA & SHRI VIJAY PAL RAO
Per Shri Vijay Pal Rao, J.M. : This appeal by the assessee is directed against the order dt.12.09.2013 of Commissioner of Income Tax (Appeals) for the Assessment Year 2006-07.
The assessee has raised the following grounds :
3. In Ground Nos.7 & 9, the assessee has challenged the validity of assessment framed under Section 143(3) r.w.s. 153C of the Income Tax Act, 1961 (in short 'the Act') for want of satisfaction recorded by the Assessing Officer. Since this issue is a pure legal issue and goes to the root of the matter therefore we propose to take up and decide this issue first. There was a search under Section 132 conducted on 6.1.2009 in case of one Sri Chandrashekar group who jointly developed the property along with owners Sri Ramappa and Sri Muniramaswamy. During the course of search, certain incriminating documents relating to the sale and purchase of property bearing No.44/1, Doddakalsandra Village, Uttarahalli were found and seized. The assessee
Release Deed dt.28.7.2006 wherein the assessee has released himself for a consideration of Rs.16 lakhs. The assessment in the case of the assessee was framed under Section 143(3) r.w.s. 153C of the Act and the addition was made by the Assessing Officer on protective basis and substantive addition was made in the hand of the parties searched. The assessee challenged the action of the Assessing Officer before the CIT (Appeals). The CIT (Appeals) confirmed the addition in the hand of the assessee on substantive basis as against the protective assessment made by the Assessing Officer and deleted the addition made in the hand of the other party.
Before the Tribunal, the learned Authorised Representative of the assessee has contended that assessment framed under Section 143(3) r.w.s 153C is bad in law as the Assessing Officer has not recorded satisfaction that the document found and seized during the course of search belongs to the assessee and discloses undisclosed income of the assessee which requires assessment under Section 153C. Thus the learned Authorised Representative of the assessee has contended that when the Assessing Officer has not recorded satisfaction before handing over the seized material to the Assessing Officer having jurisdiction over the assessee that the document seized during the search belongs to the assessee and reveals undisclosed income then the assessment framed u/s.153C of the Act is not valid.
On the other hand, the learned Departmental Representative has submitted that the Assessing Officer has duly recorded the satisfaction while issuing the Notice under Section 153C of the Act on 7.12.2010 which is placed at page No.43 of the paper book. Thus the learned Departmental Representative has submitted that once the Assessing Officer has recorded the satisfaction then the validity of assessment cannot be questioned. He has relied upon the orders of the authorities below.
Having considered the rival submissions as well as the material on record, we find that the Assessing Officer having jurisdiction over the assessee has recorded satisfaction as placed at page No.43 of the paper book which reads as under :
“ Please refer to the above. The satisfaction recorded inyour case for the issue ofnotice under Section 153A r.w.s. 153C is as under :
Action under Section 132 of the IT Act, 1961, was conducted in the case of Sri R.V. Devaraj and his group concerns based on 6.1.2009, based on the authorization issued by the DIT (Inv).
During the course of search, the following books / documents were also found and seized. Exhibit 1.D Page Nos. A/MKP/12 Pg.79 to 90.
On a scrutiny of the above documents, it is seen tha the above materials belong to Sri T. Shivaprakash, I am satisfied that action under Section 153C has to be initiated in the case of Sri T. Shivaprakash for the Assessment Year 2003-04. Notice u/s. 153C of the IT Act, 1961 issued.”
The language and contents of the satisfaction clearly indicate that the satisfaction was recorded by the Assessing Officer having jurisdiction over the assessee at the time of issuing Notice under Section 153C of the Act. However, no record has been produced before us to show that any satisfaction was recorded by the Assessing Officer having jurisdiction over the searched person before handing over the seized material to the Assessing Officer having jurisdiction over the assessee. We further note that even the CIT (Appeals) has not given any finding on this aspect whether the satisfaction was recorded by the Assessing Officer of the searched person before handing over the seized material belonging to the assessee. Accordingly in the facts and circumstances of the case, we are of the considered opinion that this issue requires reconsideration after verification of the relevant record at the level of the CIT (Appeals). Accordingly, we set aside this issue to the record of the CIT (Appeals) for deciding the same after considering the relevant record and facts about the recording of satisfaction by the Assessing Officer of searched person. Since the issue of validity of assessment goes to the root of the matter which has been set aside to the record of the CIT (Appeals) therefore we do not propose to decide the other grounds raised in this appeal of the assessee and the same are kept open.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 5th May, 2017.