Case Law Details
Shri Anil Agarwal Vs ACIT (ITAT Indore)
It has been held that even when the Assessing Officer of the person searched and the other person is common, the Assessing Officer of the person searched has to necessarily form a satisfaction that the item referred to in section 153C belongs or belong to a person other than the person searched. Apparently, in the present appeals, no such satisfaction by the Assessing Officer has been found recorded. Before us, the ld. DRs vehemently argued that the appraisal report is prepared by ADIT who is an Assessing Officer and if in the appraisal report, a recording regarding a particular document belonging to a third person other than person searched is given then it should tantamount to recording of the satisfaction by the person searched. The ld. DRs have not controverted the submission of the ld. AR of the assessee that in the case of the persons searched, no satisfaction as regard to the belongingness of any document to the present assessees was recorded. In our considered view, any recording in an appraisal report cannot substitute the legal requirement of recording of satisfaction in the case of persons searched. Such a view was also held by Indore Bench in the case of ACIT vs. Chirchind Hydro Ltd. (2011) 17 ITJ 197 (Indore). We have also taken note of a Circular No.24/2015 dated 31.12.2015, issued by the CBDT, in which, the Board, following the decision of Hon’ble Supreme Court in case of M/s. Calcutta Knitwear’s (Civil Appeal No. 3958 of 2014 dated 12.03.2014), has directed that where the satisfaction by the Assessing Officer of the person searched and other person is not found recorded, the Department should not press that matter in appeal. Thus, keeping in view rival submissions in light of judicial pronouncements and particularly the decision of Hon’ble Jurisdictional High Court of M.P. CIT vs. Mechmen [2015] 60 taxmann.com 484 (MP) and CBDT Circular (supra), assessments in these cases of for the assessment year 1999-2000, 2002-03 and 2004-05 in the case of the present assessees are held as illegal and void-ab-initio.
FULL TEXT OF THE ITAT JUDGMENT
1. The above appeals are filed by the assessee against the common order of ld. Commissioner of Income tax (Appeals)-I, dtd. 22.05.2015 for the assessment year 1999-2000, 2002-03 and 2004-05.
2. The assessee has taken the ground No. 1 and 2 which read as under :- Ground No. 1 and 2 states, that on the facts and in the circumstances of the case and in law, the initiation of proceedings u/s. 153C & the assessment in pursuance to such notice are bad in law and , therefore, the assessment be kindly quashed. Ground no. 2 states that on the facts and in the circumstances of the case and in law, the finding of ld. CIT (A) in para4.5 of his order that the appellant has not requested for satisfaction note and there is no requirement of recording of satisfaction are unlawful & unjustified and, therefore, such finding be quashed and the assessment made be cancelled. These ground are common for the assessment year 1999-2000, 2002-03 and 2004-05.
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