The order of the Bench was delivered by
This bunch of appeals by different assessees have been filed against different orders of the learned Commissioner of Income-tax (Appeals)-IV, Ahmedabad. Since these appeals involve common issues, these were heard together and are being disposed of by this consolidated order for the sake of convenience.
IT(SS)A Nos. 68 to 73/Ahd/2012 – Assessee’s Appeals for Assessment Years 2003-04 to 2008-09 : Assessee - Parshwa Corporation
2. The Ground No.1 of the assessee’s appeals reads as under:-
1. In law and in the facts and circumstances of the appellant’s case, the learned CIT(A) has grossly erred in rejecting Grounds No. 1 and 2 of the appellant’s appeal before him challenging the validity of the assessment order passed u/s 153C read with Section 153A and 143(3) of the Income-tax Act, 1961.
3. At the time of hearing before us, it was stated by the ld. Counsel for the assessee that a search action u/s 132 of the Income-tax Act was conducted in the case of Shri Rameshbhai Babulal Shah on 03.04.2008. During the course of search, a laptop which was found from him was seized. In the laptop, Shri Rameshbhai B. Shah maintained books of accounts in Tally Software in respect of 65 companies, including the assessee. The Assessing Officer issued notice u/s 153C r.w.s. 153A of the Income-tax Act to the assessee for all the six Assessment Years, i.e., AYs 2003-04 to AY 2008-09. He referred to the copy of the notice issued u/s 153C which is placed on record by the Revenue. From such notice, he pointed out that (i) no satisfaction was recorded by the Assessing Officer of person searched, (ii) no satisfaction was recorded by the Assessing Officer of the assessee before the issuance of the notice u/s 153C and (iii) in the notice u/s 153C the Assessing Officer mentioned about his satisfaction; and from the so-called satisfaction, it is clear that it is totally vague and has not specified whether any money, bullion, jewellery or other valuable article/thing or books of account/documents belonging to the assessee was seized from Shri Rameshbhai B. Shah. Such a vague satisfaction is no satisfaction in the eye of law. He further pointed out that in the assessment order the Assessing Officer has mentioned that from the laptop of Shri Rameshbhai B. Shah, the books of accounts of the assessee and other 65 entities were found. Therefore, on that basis the Assessing Officer has taken action u/s 153C in the case of the assessee. He referred to section 153C and pointed out that Section 153C would be applicable if any money, bullion, jewellery or other valuable article/thing or books of account/documents seized from the person searched belongs to the assessee. He submitted that, admittedly, the laptop was belonging to Shri Rameshbhai B. Shah. Therefore, any data recorded in such laptop also belongs to Shri Rameshbhai B. Shah and not to the assessee. Such data may be relating to different persons, but it cannot be said to belonging to various different persons. He also referred to the reply of the Departmental Representative dated 06.07.2015 alongwith which the Departmental Representative has enclosed the reply of the Assessing Officer dated 06.07.2015. In such reply, the Assessing Officer has referred an affidavit of Shri Rameshbhai B. Shah in support of his contention that the material seized from him was pertaining to various entities and he has also offered the additional income of Rs. 6.5 crores on behalf of the entire Group. He pointed out from the affidavit, especially paragraph Nos. 5.1 and 5.2; and stated that in the affidavit Shri Rameshbhai B. Shah has clearly mentioned that the digital data of total 65 entities found from his laptop were in respect of cash management done by him and the entire digital notings in the form of capital/loan account belongs to him. He clearly mentioned that the other group cases have nothing to do with the said cash movement of the funds recorded in the laptop. He also mentioned in paragraph no.5.2 that the persons whose names are recorded in the laptop have no role/obligation towards the said circulation of funds. Therefore, he has offered the income of Rs. 6.5 crores in his name before the Settlement Commission; and not for and on behalf of 65 entities. He, therefore, submitted that the affidavit supports the case of the assessee that the data, if any, in the computer of Shri Rameshbhai B. Shah were neither belonging to the assessee nor even relating to the assessee in view of the affidavit of Shri Rameshbhai B. Shah.
4. It is further stated by the ld. Counsel for the assessee that it is a settled position that, u/s 153C, the Assessing Officer of the person searched has to record the satisfaction that any money, bullion, jewellery or other valuable article/thing or books of account/documents belong to the person other than the person searched. After recording such satisfaction, he has to handover such valuable article/thing or books of accounts / documents to the Assessing Officer of such other person to whom such valuable article/thing or books of account/document belongs. Thereafter, the Assessing Officer of such other person has to issue notice u/s 153C. Admittedly, no satisfaction has been recorded by the Assessing Officer of the person searched. No valuable article/thing or books of accounts/documents belonging to the assessee was found from the person searched. Therefore, the basic condition for issuance of notice u/s 153C was not satisfied. He, therefore, submitted that the notice issued u/s 153C is invalid and the same may be quashed. In support of his contention he relied upon the following decisions:-
a) Manish Maheshwari vs. ACIT and another, (2007) 289 ITR 341 (SC)
b) DCIT vs. Lalitkumar M. Patel, [2013] 36 taxmann.com 554 (Gujarat)
c) Smt. Rekhaben Thakkar vs. ACIT - ITAT Ahmedabad Bench, order dated 12.06.2015 in ITA Nos. 3088 to 3093/Ahd/2008.
d) ACIT vs. Inlay Marketing Pvt Ltd - ITAT Delhi Bench, order dated 14.11.2014 in ITA Nos. 4200 to 4202/Del/2012.
e) Shri Lalitkumar M. Patel vs. DCIT - ITAT Ahmedabad Bench order dated 30.09.2011 in IT(SS)A No. 61/Ahd/2007.
f) DSL Properties (P) Ltd vs. DCIT, (2013) 60 SOT 088 (Delhi)
5. The ld. Departmental Representative, on the other hand, relied upon the orders of the authorities below. He filed written submissions dated 06.07.2015 accompanied by the written submissions of the Assessing Officer, copy of the notice issued u/s 153C and affidavit of Shri Rameshbhai B. Shah. He again filed another written submissions in which he has contended that the satisfaction has duly been recorded by the Assessing Officer in the notice issued u/s 153C. He referred to the notice and pointed out that in the notice the Assessing Officer has duly mentioned that “I am satisfied that money/bullion/jewellery/other valuable articles or things / books of accounts / documents seized belong(s) to you. Therefore, your income of six assessment years immediately preceding the assessment year relevant to previous year in which the aforesaid search was conducted was made i.e. from A.Ys. 2003-04 to 2008-09 is required to be assessed / re-assessed, in accordance with the provisions of section 153A r.w.s. 153C of the Act.”
6. He further submitted that even if there are some procedural irregularities, the same is curable, in view of the provision of Section 292B of the Income-tax Act. He also relied upon the following decisions:-
a) Bharat Ginning & Pressing Factory vs. ITO, [2013] 32 taxmann.com 322 (Ahmedabad –Trib.)
b) CIT vs. Panchajanyam Management Agencies and Services, [2011] 333 ITR 281.
c) CIT vs. Bimbis Creams & Bakes, [2012] 24 taxmann.com 143 (Kerala)
On the strength of the above decisions, it was pointed out by the ld. CIT-DR that there is no requirement of recording of any formal satisfaction by the Assessing Officer of the person searched. He also submitted that in the case under appeal, since the Assessing Officer of the person searched and the Assessing Officer of the assessee under appeal was the same, there was no necessity of recording of the satisfaction and handing over of the seized material. He, therefore, submitted that the order of the CIT(A) wherein he has considered all the issues raised by the assessee in this regard should be upheld.
7. In the rejoinder, it was pointed out by the ld. Counsel for the assessee that the assessee has relied upon the decisions of Hon’ble Kerala High Court in the case of CIT vs. Panchajanyam Management Agencies and Services, [2011] 333 ITR 281, which is followed by their Lordship in the second decision in the case of CIT vs. Bimbis Creams & Bakes, [2012] 24 taxmann.com 143, relied upon by the ld. Departmental Representative. He pointed out that subsequently the Hon’ble Kerala High Court in the case of Dr. T.M. Kuriachan, [2012] 23 taxmann.com 28 (Kerala), did not agree with the earlier decision of Kerala High Court in the case of Panchajanyam Management Agencies and Services (supra). He, therefore, submitted that in the subsequent decision the Hon’ble Kerala High Court relied upon the decision of Hon’ble Apex Court in the case of Manish Maheshwari vs. ACIT and another, (2007) 289 ITR 341 (SC), and held that in the absence of satisfaction recorded u/s 158BD, the issuance of notice u/s 158BC is invalid. The ld. Counsel also pointed out that the decision of ITAT, Ahmedabad Bench, relied upon by the ld. Departmental Representative, is prior to the decision of Hon’ble Jurisdictional High Court in the case of DCIT vs. Lalitkumar M. Patel, [2013] 36 taxmann.com 554 (Gujarat). He further submitted that the ITAT, Ahmedabad Bench also failed to take note of the decision of Hon’ble Apex Court in the case Manish Maheshwari (supra). The ITAT, Ahmedabad Bench mainly followed the decision of Hon’ble Kerala High Court in the case of Panchajanyam Management Agencies and Services (supra) which is subsequently not accepted by Kerala High Court itself. He, therefore, reiterated that the notice issued u/s 153C for all the years may be quashed.
8. We have carefully considered the arguments of both the sides and perused the material placed before us. Section 153C of the Incometax Act, 1961 reads as under:-
"153C. [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, 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 to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A:]."
9. From the above, it is evident that action under Section 153C can be taken in respect of any other person than the person searched if the Assessing Officer of the person searched is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents belong to a person other than the person searched. In such circumstances, he shall hand over to the Assessing Officer of such other person money, bullion, jewellery or other valuable article/ thing or books of account/documents. Thereafter, the Assessing Officer of such other person shall proceed against the said person to assess or reassess his income in accordance with the provisions of Section 153A. Therefore, recording of satisfaction by the Assessing Officer of the person searched that any money, bullion, jewellery or other valuable article/thing or books of account/documents seized belong to the person other than the person searched is a sine qua non for initiating action under Section 153C. This interpretation of Section 153C by us is supported by the decision of Hon'ble Apex Court in the case of Manish Maheshwari Vs. ACIT and Another - (2007) 289 ITR 341 (SC) wherein their Lordships at page 348 held as under:-
"The condition precedent for invoking a block assessment is that a search has been conducted under section 132, or documents or assets have been requisitioned under section 132A. The said provision would apply in the case of any person in respect of whom search has been carried out under section 132A or documents or assets have been requisitioned under section 132A. Section 158BD, however, provides for taking recourse to a block assessment in terms of section 158BC in respect of any other person, the conditions precedent where for are : (i) satisfaction must be recorded by the Assessing Officer that any undisclosed income belongs to any person, other than the person with respect to whom search was made under section 132 of the Act; (ii) the books of account or other documents or assets seized or requisitioned had been handed over to the Assessing Officer having jurisdiction over such other person; and (iii) the Assessing Officer has proceeded under section 158BC against such other person.
The conditions precedent for invoking the provisions of section 158BD, thus, are required to be satisfied before the provisions of the said Chapter are applied in relation to any person other than the person whose premises had been searched or whose documents and other assets had been requisitioned under section 132A of the Act."
10. Though the above decision of Hon’ble Apex Court is with regard to issuance of notice u/s 158BD; however, the language of Section 153C and 158BD is similar; therefore, the above decision of Hon’ble Apex Court would be squarely applicable while considering the validity of issuance of notice u/s 158BC.
11. We find that Hon'ble Gujarat High Court, in the case of CIT Vs. Meghmani Organics Limited vide Tax Appeal No.2077 of 2009, compared the language of Section 153C and Section 158BD at internal page 6 of their order and held as under:-
"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 to a person other than the person referred to in Section 153-A he shall proceed against each such other person and issue such other person notice and assess or reassess 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 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."
12. From the above and also from the comparison of language of Sections 153C and 158BD, we find 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 valuable article/thing or books of account/documents belong to a person other than the person searched. Thereafter, the subsequent procedure in both Sections 158BD and 153C is the same, i.e., the Assessing Officer of the person searched has to hand over the books of account, documents or asset seized to the Assessing Officer having jurisdiction over such other person and thereafter, the Assessing Officer of such other person has to proceed to assess such other person. Thus, the basic condition of recording the satisfaction by the Assessing Officer of the person searched as well as handing over of books of account, other documents or assets seized to the Assessing Officer of such other person is present in both the Sections. To that extent, the decision of Hon'ble Apex Court in the case of Manish Maheshwari (supra) would be squarely applicable while interpreting Section 153C.
13. The ld. Departmental Representative has relied upon the decision of Hon’ble Kerala High Court in the case of Panchjanyam Management Agencies and Services (supra) and Bimbis Creams & Bakes (supra). We find that the Hon’ble Kerala High Court in the case of Bimbis Creams & Bakes (supra) followed the earlier decision in the case of Panchjanyam Management Agencies and Services (supra). The decision of ITAT, Ahmedabad Benches relied upon by the ld. CIT-DR in the case of Bharat Ginning & Pressing Factory (supra) also followed the decision of Hon’ble Kerala High Court in the case of Panchjanyam Management Agencies and Services (supra). We find that subsequently the Hon’ble Kerala High Court in the case of Dr. T.M. Kuriachan, [2012] 23 taxmann.com 28 (Kerala), considered the decision of earlier Division Bench in the case of Panchjanyam Management Agencies and Services (supra) and did not agree with the view expressed therein. The relevant finding of their Lordships in paragraph No.6 of the report, i.e., [2012] 23 taxmann.com 28 (Kerala), reads as under:-
“6. The Revenue has brought to our notice the decision of this Court in Commissioner of Income Tax v. Panchajanyam Management Agencies & Services, reported in [2011] 333 ITR 281 (Ker.), wherein the Division Bench of this Court of which one of us (CNR(J)) is a member, has taken the view that the satisfaction under Section 158BD is only about evidence of undisclosed income of a person other than the assessee searched and there is no requirement to record the same; and such satisfaction being only for transferring the file from one Officer to another, there is no requirement for the Officer transferring the file to record the reason for transfer. Wherever satisfaction is required to be recorded before issuing notice of assessment, the Act specifically provides for it. Reference may be made to Section 148(2) of the Act, which mandates that before issuing reassessment notice for making income escaping assessment, the Officer has to record his reasons for doing so. On the other hand, in case where search is made under Section 132 or documents or accounts are requisitioned under Section 132A, Chapter XIVB in Section 158BC provides for initiation of assessment of undisclosed income of block period, which is by calling for a return in Form No.2B. In fact, Section 158BC does not require the Assessing Officer to record his satisfaction for issuing notice for assessment of undisclosed income for the block period for assessing the assessee searched or whose accounts were called for under Section 132A of the Act. In fact, Section 158BD is only an enabling provision to assess any other assessee other than the searched assessee if in the course of search of another assessee evidence of undisclosed income is received in respect of the assessee who is not searched. However, the assessment pursuant to the enabling provision i.e. under Section 158BD also is an assessment under Section 158BC and the procedure contemplated is also one and the same. In fact, what Section 158BD says is that when the evidence collected in search of an assessee revealed undisclosed income of another assessee, who is not searched, the material or evidence so received can be the basis for making assessment under Section 158BC of the assessee who is not searched. The satisfaction required under Section 158BD for the Officer to transfer the material and evidence gathered during search or after requisition of accounts is only to justify transfer of the file to the Assessing Officer, who has jurisdiction to assess the assessee who is not searched but in respect of whose undisclosed income evidence is gathered. In fact, it is absolutely left to the Officer to whom the file is transferred under Section 158BD to consider the transferred evidence and materials and to decide whether to proceed with assessment against that assessee under Section 158BC or not. So much so, the satisfaction for transferring a file by one Officer to another is only prima facie satisfaction on jurisdiction and on identifying the Assessing Officer, who has the jurisdiction over the other assessee, the materials and evidence collected in search or requisition are transferred. The satisfaction for initiation and completion of assessment under Section 158BD is obviously that of the Assessing Officer to whom transfer is made by the Officer who conducted search.
Even though the above is our view and we have taken such a view in the decision above referred, the learned counsel for the respondent assessee has referred to the decision of the Supreme Court in Manish Maheshwari v. Asst. Commissioner of Income Tax & Another, reported in 289 ITR 341, wherein the Supreme Court has taken the view that if satisfaction is not recorded by the Assessing Officer for transferring the file under Section 158BD, the assessment made under Section 158BC is invalid. Since the decision of the Supreme Court above referred is binding on us, we have to only dismiss the Departmental Appeal. We, accordingly, dismiss the appeal filed by the Revenue.
14. Thus, the contention of the ld. Departmental Representative that no satisfaction is required to be recorded before the issuance of notice u/s 153C cannot be accepted. We also find the Hon’ble Jurisdictional High Court in thecase of Lalitkumar M. Patel (supra) has upheld the decision of ITAT, Ahmedabad Bench in the case of Lalitkumar M. Patel in IT(SS)A No.61/Ahd/2007 (supra). In the aforesaid case also the argument of the Revenue was similar, i.e., when the Assessing Officer in the case of person searched and the assessee in whose case the notice u/s 158BD was issued is the same, there is no requirement of recording of any satisfaction. However, the Hon’ble Jurisdictional High Court rejected the Revenue’s contention and upheld the order of the ITAT which has quashed the notice issued u/s 158BD without recording the satisfaction of the Assessing Officer of the person searched. The Relevant finding of the Hon’ble Jurisdictional High Court in paragraph Nos. 5-8 of the report, i.e., 36 taxmann.com 554, reads as under:-
“5. In the present appeal thus, we are essentially concerned with the question whether the Tribunal rightly quashed and set aside the notice under section 158BD and the assessment order passed incase of the assessee respondent on the ground that there was no valid satisfaction recorded by the Assessing Officer in case of the person searched prior to issuance of the notice to the assessee respondent.
6. We have heard learned counsel Shri K.M. Parikh for the department who has fervently argued before us that the Assessing Officer Shri A.K. Sinha was the Assessing Officer in case of both, searched and non searched assessees. He also further urged that the satisfaction recorded by the Assessing Officer in case of present assessee shall have to be construed in case of searched assessee only. The Tribunal incorrectly appreciated the law on the subject and also did not aptly apply the correct ratio to the facts of the case of the assessee. Therefore, the order requires interference.
7. Learned senior counsel Shri J.P. Shah appearing for the assessee respondent relying on various caselaws has urged that this appeal deserves no consideration on merits inasmuch as the mandatory requirements as set out by the Apex court in case of Manish Maheshwari v. Asst. Commissioner of Income-tax and another reported in (2007) 289 ITR 341(SC) have not been fulfilled. He further urged that the Tribunal while dealing with the issue in question has appropriately scanned the entire materials and has rightly arrived at a correct decision which calls for no intervention.
8. On thus hearing both the sides and on examination of the order impugned and the materials produced before us, for the reasons to follow herein-in-after, we are of the opinion that this appeal merits no consideration and deserves dismissal.”
15. Their Lordships reiterated the same views again in paragraph Nos. 11 to 14 of the judgment which reads as under:-
“11. Thus the law laid down on the subject is very clear that for taking recourse to block assessment under section 158BC in relation to the person not searched, whenever search has been conducted under section 132 or the documents have been requisitioned under section 132A, the
Assessing Officer of the searched person needs to record his satisfaction that undisclosed income belongs to the person, other than the person with respect to whom search was carried out under Section 132 of the Act. He is also required to hand over the books of account or other documents or assets seized, to the Assessing Officer having jurisdiction over such person and thereafter, the Assessing Officer who has the jurisdiction would proceed under Section 158BC against such person who has not been searched.
12. In the instant case, as could be noted from the record, search had been carried out in case of Jayraj Group. On examination of the files produced before us by the learned counsel Shri Parikh, it can be seen that the satisfaction recorded by the Assessing Officer is in the case of this very assessee. On pertinently questioned about the satisfaction of the Assessing Officer in case of the searched person (i.e. Jayraj Group), Revenue is unable to point out any such satisfaction of Assessing Officer in case of Jayraj Group. It had been emphatically argued before us that the Assessing Officer being the same person i.e. Shri A.K. Sinha, such satisfaction when recorded in case of the present assessee should be considered and construed as a due compliance under the provisions and there would not be any occasion to handover the materials to himself being the very officer.
13.As far as second requirement of endowing the papers to the Assessing Officer having the jurisdiction to initiate the proceedings under section 158BC is concerned, learned counsel Mr.Parikh is right and is also not being disputed by the respondent that such formal order of transfer to oneself would neither be warranted nor in any manner affect the validity of the proceedings.
14. However, the vital and mandatory requirement of recording the satisfaction under section 158BD is concerned, as has been rightly noted by the Tribunal, such satisfaction is absent as far as Jayraj Group is concerned in whose case search under section 132 of the Income Tax Act has been carried out by the department. As such an essential requirement prior to initiating the proceedings under section 158BC, has not been fulfilled, the Tribunal is justified in quashing the notice issued against the assessee respondent and the assessment order passed pursuant thereto. As the order of the Tribunal is in consonance with the law laid down on the subject in case of Manish Maheshwari (supra), we find no reason to interfere with the same.”
16. In view of the above decision of the Hon’ble Jurisdictional High Court as well as Apex Court, we are of the opinion…
(1) Satisfaction is to be recorded by the Assessing Officer of the persons searched;
(2) After recording the satisfaction, Assessing Officer of person searched should handover the seized material to the Assessing Officer of such other person;
(3) Thereafter, the Assessing Officer of such other person should issue notice u/s 153C.
17. In the case under appeal before us, admittedly, no satisfaction is recorded by the Assessing Officer of the person searched. In fact, no satisfaction is recorded by the Assessing Officer of the assessee under appeal before us, prior to issuing notice u/s 153C. Only in the notice u/s 153C, satisfaction is claimed to have been recorded. For ready reference, we reproduce herein below the copy of the notice issued for Assessment Year 2003-04.
“NOTICE UNDER SECTION 153 r.w.s. 153a OF THE INCOMETAX ACT, 1961
Date : 29.08.2008
PAN : AACFP 3995 R
AY 2003-04
To
M/s. Parshwa Corporation
Jaldhara Apartment
Opp. Maha Gujarat Hospital,
College Road, Nadiad
A search u/s 132 of the Income-tax Act was conducted/requisition made u/s 132A of the Income-tax Act in the group cases of Rameshbhai Babubhai Shah & other group of cases on 03.04.2008. I am satisfied that the money/bullion/jewellery/other valuable articles or things/books of account/documents seized belong(s) to you. Therefore, your income of six assessment years immediately preceding the assessment year relevant to previous year in which the aforesaid search was conducted was made i.e., from A.Ys. 2003-04 to 2008-09 is required to be assessed/re-assessed, in accordance with the provisions of Section 153A r.w.s. 153C of the Act. You are, therefore, required to furnish hour return of income under Section 153C of the Income-tax Act, 1961 for A.Y. 2003-04 being one out of the above six assessment years in respect of which you are assessable under the Income-tax Act, 1961. The return should be filed in the appropriate form as prescribed in Rule 12 of the Income-tax Rules, 1962. It should be duly verified and signed in accordance with the provisions of Section 140 of the Said Act and delivered at my office as mentioned above within forty five days from the service of this notice.
Sd/-
(ILA PARMAR)
Asstt. Commissioner of Income tax,
Central Circle 2, Baroda”
18. From the above, it is clear 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, we have no hesitation to hold that the basic condition for issue of notice u/s 153C has not been satisfied.
19. The ld. CIT-DR has claimed that any procedural irregularity in the issuance of notice u/s 153C is a curable defect as provided in Section 292B of the Income-tax Act. We are unable to agree with this contention of the ld. Departmental Representative. Section 292B reads as under:-
“292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.”
20. From the above, it is evident that as per Section 292B, any notice, summons or other proceeding would not be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding provided such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. However, before issuing of notice u/s 153C, the satisfaction of the Assessing Officer of the person searched is essential for assuming the jurisdiction u/s 153C by the Assessing Officer of such other person. Therefore, in the absence of satisfaction by the Assessing Officer of the person searched, the Assessing Officer of the present assessee does not get any jurisdiction to issue such notice. Accordingly, notice u/s 153C issued by the Assessing Officer of the person searched lacks jurisdiction which is not curable by virtue of provision of Section 292B. In view of above, we respectfully following the decision of Hon’ble Apex Court in the case of Manish Maheshwari (supra) and decision of Hon’ble jurisdictional High Court in the case of Lalitkumar M. Patel (supra), hold that the notices issued u/s 153C were invalid; accordingly the same are quashed. Consequently, the assessment orders framed u/s 153C r.w.s. 153A are also quashed. Since the assessment order itself has been quashed, the other grounds of the assessee’s appeal which is with regard to determination of the income of the assessee needs no adjudication.
IT(SS)A Nos. 28 to 31/Ahd/2012 – Assessee: Shiv Builders
IT(SS)A Nos. 32 to 35/Ahd/2012– Assessee: M/s. Padmavati Construction
IT(SS)A Nos. 36 to 41/Ahd/2012 – Assessee: M/s. Siddhgiri Developers
IT(SS)A Nos. 42 to 47/Ahd/2012 – Assessee: M/s. Parshwa Construction
IT(SS)A Nos. 48 to 52/Ahd/2012 – Assessee: M/s. R.B. Construction
IT(SS)A Nos. 53 to 56/Ahd/2012 – Assessee: M/s. Dharnendra Developers
IT(SS)A Nos. 57 to 58/Ahd/2012– Assessee: M /s. Mahavir Construction
IT(SS)A Nos. 60 to 63/Ahd/2012 – Assessee: M/s. Darshan Associates
IT(SS)A Nos. 64 to 67/Ahd/2012 – Assessee: M/s. Sagar Developers
21. In all the above appeals by the assessee, there is a common ground with regard to validity of notice u/s 153C. Both the parties fairly agreed that the facts in the case of all the above assessees’ in all the assessment years are identical to the facts in the case of M/s. Parshwa Corporation in as much as the notices have been issued on the basis of data of above assessees found in the laptop of Shri Rameshbhai B. Shah. Identically worded notices u/s 153C have been issued in the case of all the above assesses’. Therefore, for the detailed discussion in the case of M/s. Parshwa Corporation above, we quash the notices issued u/s 153C and consequently, the assessment orders completed u/s 153C r.w.s. 153A of the Income-tax Act. As the assessment order itself has been quashed, the other grounds of the assessees’ appeals, which is with regard to the determination of income, does not require any adjudication.
22. In the result, all the appeals of the assessees are allowed as above.
Order pronounced in the Court on 11th September, 2015 at Ahmedabad.
The order pronounced in the open court on