SHRI.T.RAGHAVENDRA GOWDA,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME-TAX, BANGALORE

This appeal is filed by the assessee which is directed against the order of learned Commissioner of Income-tax (Appeals) – 11, Bangalore dated 30.9.2016 for assessment year 2009-10.

Ground Nos.1 to 4 raised by the assessee are as under:

It was submitted by ld AR of the assessee that as per the provisions of section 153c of the Income-tax Act, the AO of the searched person has to record satisfaction that valuables or books of account and documents etc. seized belongs to or relates to a person other than searched person then he can hand over the documents and valuables to the AO of such other person to proceed against such other person by way of issuing notice u/s 153A of the Income-tax Act. He further submitted that in the impugned order in Para No.10.2 of his order, it is stated by ld CIT(A) that in the assessment order, the AO has reproduced the satisfaction note in the order itself. He has drawn our attention to the assessment order and submitted that no satisfaction note has been reproduced by the AO in the assessment order.

At this juncture, ld DR of the Revenue submitted that assessment records are available with him which contain satisfaction note. Bench enquired as to whether this satisfaction note is of the AO of the assessee or of the A.O. of the searched person. In reply, it was submitted by the DR of the revenue that the note available is of the A.O. of the assessee and about the satisfaction note recorded by the AO that the searched person, he is not aware and for that, the matter may be restored back to the file of A.O. or CIT (A) for a fresh decision after examination of this aspect.

I considered the rival submissions. In my considered opinion, as per requirement of sec. 153C of the Income-tax Act, AO of the searched person has to record requisite satisfaction but in the present case, it is not clear as to whether such satisfaction has been recorded by the AO of the searched person or not. Hence, I feel it proper that this matter should go back to the file of ld CIT(A) for fresh decision after examination of this aspect. Accordingly, I set aside the order of the CIT (A) and restore the entire matter back to the file of CIT(A) to first examine this aspect as to whether requisite satisfaction was recorded by the AO of the searched person or not and after that, he should decide the validity of the proceedings initiated u/s 153A r.w.s 153C of the Income-tax Act. If it is found that requisite satisfaction was recorded by the AO of the searched person, he should decide afresh merit of various additions made by the AO and if it is found that no such satisfaction was recorded by the AO of the searched person then the entire proceedings itself will become bad in law and no fresh adjudication is called for. I am not required to examine and decide the merit of various additions at this stage.

In the result, appeal of the assessee is allowed for statistical purposes.