Satisfaction note should be recorded separately for assessee searched u/s 132

ACIT Vs Gracious Project Pvt. Ltd. (ITAT Delhi)

The issue under consideration is that department has issued notice u/s 153C to the assessee on the basis of certain documents found from the premises of M/s Excel Infotech Pvt. Ltd. The Assessing officer wrote a satisfaction note, and held that these papers belong to the assessee. The assessee filed an appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee. Hence now revenue filed the appeal against order of CIT(A).

ITAT have perused all the relevant materials available on record including the submissions mentioned in assessment order and the order of the CIT(A) placed before the authorities by the assessee. The CIT(A) while giving the finding observed that the satisfaction note is not recorded in the file of the assessee searched u/s 132 and documents claimed to be owned by the assessee was transferred to the file of the assessee. Therefore, the jurisdiction assumed u/s 153C in the case of the assessee is not in accordance with provisions of section 153C wherein satisfaction note in the searched persons proceeding has to be recorded separately. The Ld. DR from the records has not submitted the proper satisfaction except pointing out that the name of the assessee is mentioned in the satisfaction note.

The Assessing officer without any evidence held that these papers belong to the assessee and issued notice u/s 153C to the assessee. None of the seized documents was prepared by assessee as per the contention of the assessee before the Assessing Officer. Neither the said documents contained any name nor contain authorized person’s signature except the joint venture agreement as per the submissions of the assessee before the CIT(A). Thus, the assessee submitted that these papers did not belong to the assessee. The Assessing Officer, therefore assumed jurisdiction to make assessment u/s 153C as per the contention of the assessee before the CIT(A). In response to notice u/s 153C, the assessee filed return declaring income of Nil. All these contentions were dealt with by the CIT(A) while giving finding to that extent with reasoned order. Therefore, appeal of the Revenue is dismissed.

FULL TEXT OF THE ITAT JUDGEMENT

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