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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Satbeer Singh Godaraand Shri Manoj Kumar Aggarwal
Per: S.S. Godara, J.M.
These assessee’s four appeals arise against the CIT(A)- IV, Kochi’sseparate orders dated 27.12.2016 [AY 2009-10], 28,12,2016 [AY 2010-11] and 29.12.2016 [AY 2011-12 to 2012-13] passed in case Nos. ITA T-52 to 55/CIT(A)-I/2014-15,respectively in proceedings under Section 143(3) r.w.s. 153C of the Income Tax Act, 1961 (in short the Act).
2. Heard both the parties. Case files perused.
It emerges at the outset that we are required upon to decide the assessee’s first and foremost substantial ground challenging the legality of the impugned Section 153C proceedings itself for want of proper satisfaction note. The said satisfaction recorded by the Assessing Officer terms one to be identical in all these four cases as follows: -
“A search &seizure operation u/s. 132 of the IT.Act was carried out at the residence of Sri U. Abdul Nazar, Urathodiyil House, Thrithala, Palakkad District, one of the partners of ITA Nso. 580 to 583/Coch/2017 2 M/s. Avathar Jewellers Avathar Jewellery Group, by the Investigation Wing on 09.06.2011. The materials seized during the course of search &seizure operation and marked as "Annexure CP/A-10" is a bunch of loose sheets containing data of business transactions and other indirect expenses, indicating certain financial transactions entered .into on behalf of AvatharJewellers, Edappal. Thus, the transactions in the seized materials referred to above pertains to AvatharJewellers. Edappal. It is also seen that M/s. AvatharJewellers, Edappal is assigned in this jurisdiction vide CIT, CLT’s order No. 127/CIT/CLT/JURSDN/2011-12 dated 27.10.2011 & Corrigendum dt. 04.11.2013. Therefore, this is a case where the provisions of Section 153C of the I.T. Act are attracted. In view of the above, the income of the assessee, M/s. AvatharJewellers, Edappal has to be assessed as per the provisions of section 153C of the Income tax Act, 1961. Issue Notice u/s. 153C of the I.T. Act, 1961 for the Assessment Year 2010-11.”
Learned DR could hardly dispute that the CBDT itself hasgiven greater emphasis tosuch a satisfaction in its circular No. 24 of 2015 that the same forms a precondition so as to proceed under Section 153C of the Act. Case law HevalNavinbhai Patel vs. ITO (2021) 126 taxmann.com 82 (Guj) holds that such a satisfaction in the case of a search carried out before 01.06.2015, could only be recorded in case the incriminating material in issue “belongs to” the third party other than the searched assessee.
We next note that the Assessing Officer herein had nowhere recorded any satisfaction that the impugned seized material “belongs to” or “belongto” this assessee despite the fact that he had proceeded against way back in the year 2013. We further highlight that the clinching statutory expressions “pertains to” or “pertain to” or “relates to” stood w.e.f. 01.06.2015 only u/s. 153C(1) (a & b) of the Act. That being the case, we adopt stricter construction in view of the Commissioner vs. Dilip Kumar & CO. 2018(9)SCC 1 (SC) (FB) to quash the impugned Section 153C proceedings itself. Ordered accordingly.
All other pleadings on merits stand rendered academic.
ITA Nso. 580 to 583/Coch/2017 3 M/s. Avathar Jewellers 6. This assessee’s four appeals are allowed in above terms. A copy of this common order be placed in the respective case files.
Dictated and pronounced in the open Court on 13th December, 2022.