BAJRANG ENGINEERS PRIVATE LIMITED,ROURKELA vs. ACIT,CENTRAL CIRCLE, SAMBALPUR

आयकर अपीऱीय अधिकरण, कटक न्यायपीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK श्री जाजज माथन, न्याययक सदस्य एवं श्री अरुण खोड़पऩया ऱेखा सदस्य के समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER ITA No.04/CTK/2019 (नििाारण वषा / Assessment Year :2010-2011) Bajrang Engineers Pvt. Ltd. J-3/4, Civil Township, Rourkela-769004 PAN No.AACCA 6655 L …………….. Assessee Versus The ACIT, Central Circle, Sambalpur ………………Revenue

Shri Firoze B.Andhyarjina, Senior Advocate with Shri Shyam Sunder Jangid/Nikhil Jangid, Advocates the assessee Shri M.K.Gautam, CIT-DR for the Revenue Date of Hearing : 07/06/2022 Date of Pronouncement : 07/06/2022 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. CIT(A)-2, Bhubaneswar, dated 28.11.2018 passed in I.T. Appeal No.0496/2016-17 for the assessment year 2010-2011. 2. On 19.10.2019, the assessee has filed additional grounds, which are purely legal issues, as follows :- 1. In the facts and circumstance of the case & in law, the seized documents for the relevant period relate to only AY-2014-15 and hence, no jurisdiction exists with Ld. AO to proceed for subject AY 2010-11 u/s 153-C.

2 ITA No.04/CTK/2019 2. In the facts and circumstance of the case & in law, there is no nexus, linkage, connection or corroboration between the seized Materials / documents and the subject additions of income in the assessment order hence impugned order is not maintainable in law. 3. In the facts and circumstance of the case & in law, the additions in the impugned order is not based on seized documents but is based upon ledger accounts & audited statement of accounts as reflected in the books of accounts. 4. In the facts and circumstance of the case & in law, the seized documents are not incriminating, moreover these are papers of Civil Suit for rendition of account pending before Civil Judge (Sr. Division) Rourkela and matter is still sub-judice. Justification 1. The Appellant had requested the Assessing Officer and the Income Tax Authorities to provide the Satisfaction Note and Seized Materials. The Appellant vide its letter dated December 19, 2016, (Paper Book page no 33 & 34) had requested the Assistant CIT (Central) to provide certified copies of the documents seized from the premises of Shivom Minerals Ltd. In the meantime, the Appellant were supplied with certified copies of the Satisfaction Note on June 12, 2019 and copy of the Order Sheet on March 01,2019. In view of these vital documents supplied after the appeal filed, the Appellant submitted Appeal Memo cum Paper Book before this Hon'ble Tribunal with addition I alteration of earlier grounds with facts of the case. 2. The above mentioned grounds are purely legal issues which goes to the root of the matter and make the assessment order bad in law and void ab initio. The Additional Grounds which are purely based on legal issues be admitted and deliberated by the Hon'ble Tribunal as laid down in various Judicial decisions as duly mentioned herein below: (i) Jute Corporation Of India Ltd vs Commissioner Of Income Tax And Anr 1991 AIR 241, 1990 SCR Sup!. (1) 340 (ii) National Thermal Power Co. Ltd. vs Commissioner Of Income Tax on 1998 (99) ELT 200 SC, 1998229 ITR 383 SC, (1997) 7 SCC 489 (iii) Commissioner of Income Tax-III, Pune Vs Sinhgad Technical Education Society (2018) 11 SCC 490. 3. Ld. Senior Advocate submitted on behalf of the assessee that the crux of the main argument is twofold, the first being that the additions

3 ITA No.04/CTK/2019 made in the assessment order had no relationship to the satisfaction note recorded by the AO in the case of the person searched. In short, his submission is that in the satisfaction note by the AO of the person searched, that AO has intimated the AO of the impugned assessee that certain transactions in respect of the assessment year 2014-2015 have been found during the course of search in the case of Shivom Minerals Ltd. and group cases. It was submitted that clearly the seized material, more so, the incriminating material supplied by the AO of the person searched related specifically to the assessment year 2014-2015 and not to the impugned assessment year 2010-2011. The second limb of argument is the additions and the material found in respect of the assessee in the course of search of Shivom Minerals Ltd., did not pertain to the assessment year 2010-2011 but pertained to the assessment year 2014-2015 and consequently the assessment in the case of the assessee for the assessment year 2010-2011 had no legs to stand on. It was submitted by the ld. Sr. Counsel that there was a search on the premises of the Shivom Minerals Ltd. and group cases at Rourkela on 24th & 25th September, 2014. It was the submission that as a consequence of search a satisfaction note had been issued by the AO in the case of Shivom Minerals Ltd. to the AO of the assessee herein wherein it has been mentioned as follows :-

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5 ITA No.04/CTK/2019

6 ITA No.04/CTK/2019 account ledger of M/s Good Luck Traders in the books of the assessee herein for the period 01.04.2013 to 27.09.2013 showing certain closing credit balance and confirmation of accounts from M/s Good Luck Traders to the assessee herein for the same period i.e. 01.04.2013 to 29.03.2013 showing closing debit balance have been found. The AO therein mentions further that the issue requires to be investigated further and, therefore, he was satisfied that notice u/s.153C of the Act is required to be issued in the present case. On the basis of the said satisfaction note, it was submitted that consequently notice u/s.153C of the Act came to be issued on the assessee dated 31.08.2016. The assessee had filed its e-return in response to the said notice and the assessment came to be completed u/s.153C r.w.s.143(3) of the Act on 31.12.2016, wherein the AO has added following six loan creditors :- i) M/s Bikshu Minerals Pvt. Ltd. ii) M/s Jain Tie Up Pvt. Ltd. iii) M/s Yashomati Barter Pvt. Ltd. iv) M/s Dadudayal Ventures Pvt. Ltd. v) M/s Harsh Vanijya Pvt. Ltd. Vardhaman Enterprises vi) 6. It was submitted that the addition was made on the ground that the assessee could not produce any cogent and corroborative evidence like bank statement of the loan creditors which could have established to the fact as to whether they advanced the large sums of money from their own resources or from outside sources. It was the submission that the addition was also made on the ground that the creditworthiness was not proved and that the said lenders had meagre income and no source of their own

7 ITA No.04/CTK/2019 to advance such huge sums. It was the submission that no details nor evidence much less any information in respect of the said six creditors were found or unearthed in the course of the search of Shivom Minerals Ltd. It was submitted that the primary requirement for applying the provisions of Section 153C of the Act in the case of a person who is not searched but in whose name some information has been obtained or unearthed in the course of search of another is that such evidence must be transferred by the AO of the person searched after recording the necessary satisfaction to the AO of the person in respect of whom the information has been obtained. It was the submission that when such information is passed after recording the satisfaction then the assessment gets opened for such assessment years in respect of which the information is passed. A blanket reopening of six years is impermissible just because there is information in respect of only one year. For this proposition, ld. Sr. Counsel placed reliance on the decision of the Hon’ble Delhi High Court in the case of Nahid Finlease Pvt. Ltd., in ITA No.1483/2018, order dated 13.05.2019, wherein in para 4, the Hon’ble High Court has held as under :- “4. The ITAT has deleted the said addition for the simple reason that the above addition was not based on the satisfaction note prepared for the purposes of initiation of proceedings against the Assessee under Section 153C of the Act. The so-called incriminating material had to have some nexus with the addition ultimately made. That not having been established, the ITAT was justified in upholding the order of CIT(A) deleted the addition. No substantial question of law arises. The appeal is dismissed.”

8 ITA No.04/CTK/2019 7. He also placed reliance upon the decision of the Hon’ble Supreme Court in the case of Sinhgad Technical Education Society, reported in (2018) 11 SCC 490, wherein in para 17, the Hon’ble Apex Court has upheld the action of the Tribunal in admitting the additional ground in respect of the jurisdictional issue and has held as follows :- 17. 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 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, incriminating material which was seized had to pertain to the Assessment Years in question and it is an undisputed fact that the documents which were seized did not establish any co- relation, document-wise, with these four Assessment Years. Since this requirement under Section 153C of the Act is essential for assessment under that provision, it becomes a jurisdictional fact. We find this 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 ITAT had scanned through the Satisfaction Note and the material which was disclosed therein was culled out and it showed that the same belongs to Assessment Year 2004-05 or thereafter. After taking note of 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 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 of the Tribunal. That apart, learned senior counsel appearing for the respondent, argued that notice in respect of Assessment Years 2000-01 and 2001-02 was even time barred. 8. It was submitted that the Hon’ble Supreme Court has upheld the contention that the incriminating material which was seized, had to pertain to the assessment years in question and as the document seized therein did not establish any co-relation, document-wise to four of those assessment years had upheld the action of the Tribunal in quashing the assessment for those four years where no incriminating material was co- related.

9 ITA No.04/CTK/2019 9. He further placed reliance on the decision of the Hon’ble Bombay High Court in the case of R.M. Investment and Trading Co. Pvt. Ltd., ITXA-1193 of 2016 has extracted the order of the Tribunal in para 2 of its order as follows :- 2. The Assessing Officer had initiated assessment proceedings against the respondent under Section 153C of the Income Tax Act, 1961 (“the Act” for short). He also made additions in subject assessment which eventually travelled to the Tribunal. The Tribunal, by the impugned judgment, allowed the assesse’s appeal and deleted the additions making the following observations : “13. We have carefully considered the rival submissions and perused the record. It is not in dispute that during the course of search no incriminating material pertaining to assessment years under consideration, was found. For the purpose of invoking provisions of section 153A of the Act, referable to assessments to be made in the case of an assessee on whom search action was initiated, six years income can be assessed or reassessed, whereas section 153C comes into play only upon proving that during course of search some incriminating material pertaining to a third party is found. In other words section 153A provides for making an assessment in respect of each assessment year falling within six assessment years, upto the date of search, whereas section 153C refers to issuance of notice on such other person only if the Assessing Officer is satisfied that the relevant documents seized or requisitioned have a bearing on determination of total income of such other person for the relevant assessment year/years. 14. Careful perusal of the language employed in section 153C makes it clear that in so far as a third party is concerned, the Legislature has not provided for making the assessments for all six years, in other words, based upon seized material the Assessing Officer has to record his satisfaction that the books of account/documents seized or requisitioned have a bearing on determination of total income of such other person for the relevant assessment year. Further similar view has also been taken by the Tribunal in Trishul Hi-tech Industries Vs. Dy.CIT (in IT(SS) Nos.82,84-86/Kol/2011 dated 24.9.2014), where the years involved were A.Ys.200405 to 2006-07, explaining the amendment to section 153C by Finance (No.2) Act, 2014 to be clarificatory and thus, retrospective.

10 ITA No.04/CTK/2019 10. It was also submitted that the Tribunal therein had held that a careful perusal of the language employed in section 153C makes it clear that in so far as a third party is concerned, the Legislature has not provided for making the assessments for all six years. In other words, based upon seized material the Assessing Officer has to record his satisfaction that the books of account/documents seized or requisitioned have a bearing on determination of total income of such other person for the relevant assessment year. It was the submission that this was absolutely missing in the present assessee’s case. Lastly, the ld. Sr. Advocate relied on the decision of the coordinate bench of the Tribunal in the case of assessee’s sister concern i.e. Unicon Merchants Pvt. Ltd., IT(SS)A Nos.21&22/CTK2019, order dated 21.10.2019, wherein the Tribunal following the decision of the Hon’ble Delhi High Court, Hon’ble Bombay High Court and the Hon’ble Supreme Court (supra), has held as follows :- 10. In view of foregoing discussion, we are inclined to hold that when , undisputedly, seized documents do not belong to the assessee and no incriminating documents/materials have been seized from other persons, which are being assessed u/s.153C r.w.s. 143(3), then no sustainable addition can be made in the hands of other persons in such assessment year. Our view also gets a strong support from the decision of Hon’ble Supreme Court in the case of Sinhgad Technical Education Society (supra), decisions of Hon’ble Delhi High court in the case of Pepsi Indian Holdings Pvt Ltd and Nahid Finlease Pvt Ltd. (supra) ,decisions of Hon’ble Bombay High Court in the case of R.M. Investment & Trading Co. Pvt Ltd. (supra), and Continental Warehousing Corporation (supra)as vehemently relied by ld Sr. counsel for the assessee. Therefore, we have no hesitation to hold that the addition made by the AO and confirmed by the CIT(A) have no legs to stand on the premises of relevant legal provisions of section 153C of the Act and thus, same are not sustainable and, hence, we hold so. Accordingly, additional Ground nos.4 to 6 of additional grounds are allowed.

11 ITA No.04/CTK/2019 11. It was, thus, the submission that the addition made in the assessment order having no bearing on any incriminating material found in the course of search and the same have also not being shown, the assessmet order passed u/s.153C r.w.s.143(3) of the Act dated 31.12.2016 for the assessment year 2010-2011 in the case of assessee is liable to be quashed. 12. Apart from the above arguments, ld. Sr. Counsel has also submitted a written submission wherein he has stated as under :- The additional grounds which goes to the root of the matter is concerning jurisdiction and legal issues. • First Seized documents relate to AY 2014-2015 & not of the subject AY 2010-2011. • Secondly There is no nexus, linkage, connections or collaboration of the seized materials and additions made in the Assessment order. • Third the additions are not based on seized materials but on ledger accounts, audited statements & books of accounts. • Fourth The seized documents are not incriminating but are basically papers of Civil Suit for rendition of account. The additional grounds are purely legal in nature & go to the root of the matter. Reliance is placed on the following judgments: (i) Jute Corporation Of India Ltd vs Commissioner Of Income Tax And Anr 1991 AIR 241, 1990 SCR Supl, (1) 340 (ii) National Thermal Power Co. Ltd. vs Commissioner Of Income Tax on 1998 (99) ELT 200 SC, 1998 229 ITR 383 SC, (1997) 7 SCC 489 (iii) Commissioner of Income Tax _Ill, Pune Vs Sinhgad Technical Education Society (2018) 11 SCC 490. Moreover, these similar additional grounds have been admitted •• adjudicated and appeal allowed in the case of Unicon Merchants Pvt. Ltd.

12 ITA No.04/CTK/2019 Satisfaction Note paper book page 28- 5(b) refers to ledger of Good Luck Traders in the books of Assessee and confirmation from Good Luck Traders. in annexure A on page 29 refers to ledger account of Good Luck Traders for the period 1/04/2013 to 27/09/2013. Thus, the seized material refers" to Good Luck in books of Assessee and confirmation for AY 2014-2015. r/w Assessment order on page 172 at pg. 173 refers to addition of 2.20 Crores of some 6 different parties and in the entire additions and in order, no reference is made to Goodluck. 1. Additions made in assessment order are different from satisfaction note. 2. In the satisfaction note the reference of sized materials pertains to Assessment year 2014-2015 and not subject AY 2010-1l. 3. In the entire assessment order there is no reference of Good Luck traders but different parties thus additions are not based on seized materials and hence jurisdiction to invoke section 153 - C cannot arise. Satisfaction Note u/s 153 C on page 28 refers to 5(e) SMLO - 31. r/w page 3 of paper book which gives list of seized documents. There is no linkage, nexus with the seized materials and the additions - Page. 34, 41,45. Moreover the addictions are not based on seized material but are based on Audited Statement of Account which are not incriminating material. Reliance is placed on the following decisions: • Pr. ClT VS R. M. Investment & Trading Co. Pvt. Ltd. (Bombay high Court) . • ClT Vs Continental Warehousing Corporation (Bombay High Court) • CIT vs. Sinhgad Technical Education Society (Supreme Court) • Pr. ClT vs. Index Securities Pvt. Ltd and Pr. ClT vs. Vidya Shankar Investment Pvt. Ltd (Delhi High Court) • Pr. CIT vs Nahid Finlease Pvt. Ltd (Delhi High Court) • Commissioner Of Income Tax vs. Usha Stud Agricultural Farms Ltd. on 14 March, 2008, Delhi High Court; • Rita Stephen Pinto vs. ITO (lTAT Mumbai); • Unicorn Merchants Pvt. Ltd Vs JCIT/ACIT (ITAT Cuttack) dated 21/10/2019. Thus, based on the jurisdictional condition the assessment order & CIT(A) order cannot survive, is unsustainable and bad in law.

13 ITA No.04/CTK/2019 13. It may be mentioned here that though a paper book consisting of 339 pages has been filed by ld. Sr. Counsel, however, he has only referred to page Nos.28 & 29. No other pages have been referred to. 14. In reply, the ld. CIT-DR submitted that once the search is conducted, it is open to the revenue to issue notice for six assessment years and once the notice has been issued for the six assessment years then the said notice would have to be taken to its logical conclusion being the completion of the assessment. For this proposition, ld. CIT-DR drew our attention to the decision of the Hon’ble Delhi High Court in the case of SSP Aviation Ltd., reported in [2012] 20 taxmann.com 214 (Delhi), wherein in para 15, the Hon’ble High Court has held as follows :- 15. It needs to be appreciated that the satisfaction that is required to be reached by the Assessing Officer having jurisdiction over the searched person is that the valuable article or books of account or documents seized during the search belong to a person other than the searched person. There is no requirement in Section 153C(1) that the Assessing Officer should also be satisfied that such valuable articles or books of account or documents belonging to the other person must be shown to show to conclusively reflect or disclose any undisclosed income. 15. It was submitted that there was no requirement in Section 153C that the AO should also be satisfied that such valuable articles or books of account or documents belonging to the other person must be shown to show conclusively to reflect or disclose any undisclosed income. He further relied upon the decision of the Hon’ble Allahabad High Court in the case of Savesh Kumar Agarwal Vs. Union of India, reported in [2013] 35 taxmann.com 85, at para 22 & 23 to submit that once a satisfaction note has been received by the AO even if he has already examined the

14 ITA No.04/CTK/2019 account book and had not found anything adverse against the assessee, still notice u/s.153C could be issued to the assessee to file return of income for six assessment years. It was the submission that in that case, silver, bullion had been found in the course of search at third party, the same was released as it was found and had been recorded in the books of the assessee, still as to whether the assessee had the source for the acquisition of the said silver and bullion, the AO had very much powers to issue notice u/s.153C of the Act and complete the assessment thereafter. It was, thus, submitted that a perusal of the provision of Section 153C of the Act showed that what was required to be assessed thereunder was the total income and not the undisclosed income of the assssee. It was, thus, his submission that the satisfaction having been issued by the AO and the person searched providing information to the AO of the assessee and evidence in respect of the assessee herein has the information found in the search conducted in the Shivom Minerals Ltd.. The AO of the assessee herein had rightly issued the notice u/s.153C of the Act for all the six years and completed the assessment in accordance with law. Ld. CIT-DR also filed his written submission, which is extracted as follows :- In the additional grounds of appeal filed on 17.10.2019, the assessee has challenged the action of the A.O. in making an addition of Rs.2,20,76,125/- in the assessment order framed u/s.143(3) r.w.s.153C of thee Act on the ground that seized documents did not pertain to AY 2010-11 and were not incriminating in nature. In this regard, the following facts are pertinent: a) Section 153C which is similarly worded to section 158BD of the Act, provides that where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong

15 ITA No.04/CTK/2019 to a person other than the person referred to in Section 153A he shall proceed against each such other p1erson and issue such other person notice and assess or reassess total income (disclosed and undisclosed income) of such other person. However, there is a distinction between the two provisions inasmuch as under section 153C notice can be issued only where the money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to such other person, whereas under Section 158BD if the Assessing Officer is satisfied that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 or whose books of account or other documents or assets were requisitioned under section 132A, he shall proceed against such other person under section 158BC. From the comparison of language of Sections 153C and 158BD, it is crystal clear that the condition for recording satisfaction by the Assessing Officer of the person searched is present in both the cases. In Section 158BD, the Assessing Officer of the person searched is to be satisfied that any undisclosed income belong to any person other than the person searched, while, in the case of Section 153C, the Assessing Officer of the person searched is to be satisfied that any money, bullion, jewellery or other vaIuable article/thing or books of account/documents belongs or belong to a person other than the person searched. Thereafter, the subsequent procedure in both Sections 158BD and 153C is the same. b) There is no law that assessment order u/s.153A can be passed only on the basis of incriminating documents. The Hon'ble Delhi High Court in the case of Anil Kumar Bhatia (24 Taxmann.com 98) held that there is no law that assessment has to be referrable to the incriminating material found during the search. In the case of Anil Bhatia, the Hon'ble Delhi High Court being very conscious that the job of the judiciary is to interpret the law and never to write it, held that restricting the additions u/s 153A/153C only in reference to incriminating material would amount to writing the law, The Hon'ble Delhi High Court further held in para-19 that there is a significant departure from the earlier Block assessment scheme in which the block .assessment roped in only the undisclosed income and the regular assessmernt proceedings were preserved, resulting in multiple assessments. Under section 153A, however, the Assessing Officer has the power to assess or reassess the 'total income' of the six assessment years in question in separate assessment orders. This means that there can be only one assessment order in respect of each of the six assessment years, in which both the disclosed and the undisclosed income would be brought to tax. c) There is no requirement that the A.O. of the searched person at the time of recording of satisfaction note should conclusively prove the quantum of undisclosed income that is likely to be raised in the case of "other person". In the case of SSP Aviation Ltd vs. DCIT (20 taxmann.com 214), the Hon'ble Delhi High Court held that in view of

16 ITA No.04/CTK/2019 provisions of section 153C, satisfaction that is required to be reached by Assessing Officer having jurisdiction over searched person is that valuable article or books of account or documents seized during search belongs to a person other than searched person and, it is not necessary that documents so seized must reflect any undisclosed income. There is no requirement that the A.O. should quantify the undisclosed income in the satisfaction note or the period to which it belongs. d) In the case of Ganpati Fincap Services (P.) Ltd. vs. C IT (82 taxmann.com 408), the Hon'ble Delhi High Court held that where Assessing Officer of searched person recorded that documents seized during search belonged to assessee, merely because he had not categorically stated that documents mentioned therein did not belong to searched person "would not invalidate assumption of jurisdiction under section I53C in re spec it of assessee. Where proceeding under section 153C was initiated against assessee on basis of seized documents which could not be said to be non- incriminating on bare perusal and despite of being given several opportunities no submission on merits of case was made by assessee, assessment order passed under said section to make additions was justified. e) In the case of Rajesh Sunderdas Vaswani vs. ACIT (76 taxmann.com 311), the Hon'ble Gujarat High Court held that where Assessing Officer of search person recorded that document found during search was. copy of a ledger of books of account of assessee company which evidenced certain cheque payments as well as cash payments to a company by asses see, there was prima facie material to suggest that satisfaction as per sect ion lS3C was duly recorded and thus, notice issued to file return to assessee was justified. f) In the case of Savesh Kumar Agarwal vs. Union of India (35 taxmann.com B5), the Hon'ble Allahabad High Court held that even if assessing authority receiving satisfaction note had not found any thing adverse against assessee on examination of account books, and further seized goods had already been released, notice under section 153C could still be issued to assessee to file return of income. Where bullion seized was released to assessee for having been validly entered in stock books, the Assessing Officer on receiving satisfaction note could still proceed under section 153A against assessee to find out source of income. f) The Hon'ble Delhi High Court in the case of PCIT vs. Super Malls (P.) Ltd. (76 taxmann.com 267) held that where Assessing Officer haw issued satisfaction note under section 153C after satisfying himself with contents of documents seized, the Tribunal could not declare it as invalid on by per technical ground of incorrect terminology used in said note.

17 ITA No.04/CTK/2019 g) The Hon'ble Mumbai High Court in the case of Vidharba Irrigation Development Corporation vs. Addl. CIT (278 ITR 521) held that while construing fiscal statute, regard must be had to the strict letter of law and if the court is satisfied that the case falls strictly within the ambit of the relevant provisions of the taxing statute, tax liability under such provisions must be imposed, Therefore while interpreting tax statute, the function of the court of law is not to give words in the statute a strained and unnatural meaning of cover and extend its applicability to the areas not Intended to be covered under the said statute. Similarly, it is well settled that the taxing authorities cannot ignore the legal character of the transactions and are required to impose tax on the basis of substance of the matter. In view of above judicial precedents and facts, these grounds of appeal are required to be dismissed. 16. We have heard rival submissions. 17. Here it would be worthwhile to read the provisions of Section 153C of the Act. The opening words of the Section 153C of the Act is, “Notwithstanding anything contained”. This clearly the Section 153C of the Act has been given its own legs to stand on. A further reading shows that, “where the AO is satisfied that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned, belongs to a person other than the person referred to in section 153A of the Act”. Here, the distinction is drawn insofar as Section 153A of the Act is in respect of person searched, Section 153C of the Act is in respect of transferring of the information found in the course of search of a person but relating to any other person, then that information, documents or assets, seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person in respect of whom the information has been found. It is then that the AO of such person in respect of whom the information has been found will proceed to do the assessment and

18 ITA No.04/CTK/2019 determine the total income of such other person “for six assessment years immediately preceding assessment year relevant to the previous year in which search is conducted or requisition is made”. The distinction here is drawn in respect of Section 153A of the Act, wherein the words used as “issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years.” Thus, under section 153C of the Act it is very much available for the AO to issue notice in respect of such assessment year to which the information pertains but subject to the control being six assessment years immediately the preceding assessment year relevant to the previous year in which search was conducted or requisition was made. Thus, clearly under the provisions of Section 153C of the Act, it is not open to the AO to issue notice for all six assessment years and do any assessment just because information in respect of one assessment year, was found in the course of the search of a third party. When doing an assessment u/s.153C of the Act, the assessment would get restricted to the year to which the information has been provided by the AO of the person searched in the satisfaction note. This view of ours find support from the decision of the Hon’ble Supreme Court in the case of Sinhgad Technical Education Society (supra) and also from the decision of Hon’ble Bombay High Court in the case of R.M. Investment (supra). In the present case, as the information provided by the AO of Shivom Minerals Pvt. Ltd., specifically relates to the assessment year 2014-2015 and has no way any

19 ITA No.04/CTK/2019 relationship to the assessment year 2010-2011, the notice u/s.153C of the Act and also the assessment completed u/s.153C r.w.s.143(3) of the Act does not have any legs to stand on and consequently stands quashed. 18. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 07/06/2022. Sd/- Sd/- (अरुण खोड़पऩया) (जाजज माथन) (ARUN KHODPIA) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 07/06/2022 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीऱाथी / The Appellant- 1.

प्रत्यथी / The Respondent- 2. आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. 4. आयकर आयुक्त / CIT पिभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, 5. ITAT, Cuttack गार्ज पाईऱ / Guard file. 6. सत्यापऩत प्रयत //True Copy// आदेशािुसार/ BY ORDER,

(Assistant Registrar) आयकर अपीऱीय अधिकरण, कटक/ITAT, Cuttack