Brief of the case
ITAT Ahmedabad In the case of M/s Shiv Associates v DCIT quashed the notice u/s 153C relying on the Judgment of the similar case related to the assessee in which the notices u/s 153C were quashed as no satisfaction was recorded by the AO.
Facts of the case
Assessee is a partnership firm stated to be engaged in construction business. A search action u/s. 132 of the Act was conducted and a Laptop was found and seized in which Rameshbhai Shah had maintained books of accounts in respect of 65 entities including that of Assessee. Accordingly, proceedings u/s. 153C were initiated and notice u/s. 153C r/w 153A(a) were issued. Thereafter assessment was framed u/s. 153C r/w 153A and the total income was determined at Rs. 26,73,280/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 25.11.2011 dismissed the appeal of the Assessee.
Contention of the Assessee
The ld. Counsel for the assessee submitted that the basic condition for issuance of notice u/s. 153C was not satisfied in the case of Assessee. He submitted that no satisfaction was recorded by the A.O of the persons searched and the so called satisfaction was totally vague. Further, it was submitted that the notice u/s. 153A r/w 153C dated 29.08.2008 is identically worded as that of group cases which has already been decided by the Tribunal in Assessee’s favour and in the group cases the Co-ordinate Bench of Tribunal has held that since the notice issued u/s. 153C was invalid, the assessment orders framed u/s. 153C r/w 153A were also quashed.
Contention of the Revenue
The ld. Counsel for the Revenue supported the order of A.O and ld. CIT(A).
Judgment of the Hon’ble Tribunal
The Hon’ble tribunal relied on the Judgment of the Co-ordinate Bench of Tribunal mentioned by the Assessee in which where it was observed that was held that no satisfaction is recorded by the Assessing Officer of person searched. The Assessing Officer of assessee did not record any satisfaction prior to issue of notice u/s 153C. The so-called satisfaction recorded in the notice u/s 153C is totally vague. It has not specified which valuable articles/things/books of accounts/documents were found from Shri Rameshbhai B, Shah which belongs to the assessee. In the assessment order the Assessing Officer has mentioned that in the laptop of Shri Rameshbhai B. Shah the data pertaining to the assessee were found and on that basis notices u/s 153C have been issued. However, in the notice u/s 153C, wherein the Assessing Officer is claimed to have been recorded the satisfaction for issue of the notice, there is no mention about such laptop or the alleged data in such laptop which is claimed to be belonged to the assessee. In view of above, it was held that the basic condition for issue of notice u/s 153C was not satisfied.
By relying upon the above Judgment, the Hon’ble Tribunal allowed the appeals of the assessee.