Madras High Court
Commissioner Of Income Tax vs M/S. Srm Systems And Software Pvt on 29 January, 2025
Author: R.Suresh Kumar
Bench: R.Suresh Kumar, C.Saravanan
2025:MHC:294
T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 29.10.2024
Pronounced on : 29.01.2025
CORAM:
THE HON'BLE MR. JUSTICE R.SURESH KUMAR
AND
THE HON'BLE MR.JUSTICE C.SARAVANAN
Tax Case (Appeal) Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
and connected miscellaneous petitions
T.C.A.No.1050 of 2015
Commissioner of Income Tax
Central-I,
121, M.G.Road,
Chennai - 600 034. ... Appellant / Appellant
Vs.
M/s. SRM Systems and Software Pvt., Ltd.,
120, G.N.Chetty Road,
T.Nagar, Chennai - 600 017.
PAN : AABCS5118D ... Respondent / Respondent
Prayer in T.C.A.No.1050 of 2015 : Appeal preferred under Section 260-A
of the Income Tax Act, 1961 against the order of the Income Tax Appellate
Tribunal, 'B' Bench, Chennai, dated 18.11.2014 in M.P.No.44/MDS/2014 in
I.T.A.No.997/MDS/2013.
For Appellant : Mr.Karthick Ranganathan
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
in all the TCAs Senior Standing counsel
For Respondent : Dr.S.Muralidhar
in all the TCAs Senior counsel
for Mr.G.Baskar and
Mr.V.Venkatesan
COMMON JUDGMENT
R.SURESH KUMAR, J.
Since the issue raised in all these Tax Case Appeals is one and the
same against the same assessee, all these Appeals were heard together and
are disposed by this common order.
2. The necessary facts which are required to be noticed for the
disposal of these Appeals are as follows :
(i) The Assessee was engaged in the business of Systems and
Software Services. On 12.08.2004, the search was conducted at the premises
of the Chairman of the Assessee Company under Section 132 of the Income
Tax Act 1961, in short “the Act”.
(ii) Pursuant to the search conducted, notice under Section 153C of
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010the Act was issued against the assessee for the block years, i.e., from 1999-
2000 to 2004-2005 and also the search year 2005-2006.
(iii) Pursuant to Section 153C notice, the assessee filed return of
income, based on which, the Assessing Officer had completed the
assessment by making certain additions.
(iv) The assessment orders were passed on 29.12.2006 for all these
seven years. Therefore aggrieved over the same, the assessee preferred
Appeals before the CIT(Appeals) in all the seven cases.
(v) On various dates between 18.12.2007 and 30.01.2008, orders were
passed by the CIT (Appeals). As against the order passed by the CIT
(Appeals), appeals were preferred by the Revenue, where regarding one
addition in all seven cases, the Revenue lost the cases, in respect of all other
issues, matters were remitted back to the Assessing Authority. Not satisfied
with the said orders passed by the ITAT, the Revenue filed seven Tax Case
(Appeals) against the one issue which they lost before the ITAT, in
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
T.C.A.Nos.1005, 1006, 1007, 1008, 1018, 1019 and 1020 of 2010.
(vi) Pursuant to the remand order, the Assessing Authority passed a
fresh assessment order on 30.12.2010, where the Assessing Authority
reconfirmed the earlier assessment order. As against those orders of
assessment passed by the Assessing Authority, the assessee filed seven
number of appeals before the CIT (Appeals).
(vii) In the meanwhile the Commissioner of Income Tax passed order
under Section 263 of the Act on 27.03.2009. Based on the order of revision
passed by the CIT on 27.03.2009 also, the Assessing Authority passed order
on 31.12.2009 giving effect to the revision order under Section 263 of the
Act.
(viii) In the meanwhile, as against the order passed by the CIT
(Appeals) dated 20.12.2013, the Revenue preferred 14 number of Appeals to
the ITAT as the CIT (Appeals), in all the 14 appeals decided in favour of the
assessee by accepting the ground raised by the assessee as an additional
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
ground that, for want of satisfaction report to be recorded by the Assessing
Authority of the searched person even in respect of the other person, the
proceedings u/s 153C gets vitiated.
(ix) Along with these Appeals, the Appeals against the assessment
made pursuant to the revision order under Section 263 of the Act also were
disposed. Therefore totally 14 appeals were disposed by the common order
of the CIT (Appeals) dated 20.12.2013. Against the said 20.12.2013 order of
the CIT (Appeals) as the Revenue lost in all those appeals on the sole ground
of non recording of the satisfaction report by the Assessing Authority of the
searched person, insofar as the other person who is the assessee herein, the
Revenue preferred 14 Appeals before the ITAT.
(x) All those 14 Appeals were disposed by the common order, dated
28.10.2013 by the ITAT in favour of the assessee and against the Revenue.
(xi) In fact, the assessee had also filed cross-objections which were
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
also disposed by the ITAT along with the Revenue’s Appeal, on 28.10.2013.
Since number of appeals were disposed by the order, dated 28.10.2013 of the
ITAT, Chennai, as against which, Appeals had been filed in this batch of
cases. During the pendency of the Appeals, some of the Appeals filed by the
Revenue were withdrawn as low tax effect.
(xii) Rectification applications also were filed by Revenue before the
ITAT and on 18.11.2014, those Rectification applications were dismissed by
the ITAT. Against that order also Tax Case (Appeals) were filed.
(xiii) Some of the Tax Case (Appeals) since were subsequently
withdrawn during the pendency of these Tax Case (Appeals), the remaining
Tax Case (Appeals) are 25 in number which were grouped together and are
disposed by this common order.
3. The following Substantial Questions of Law have been framed
commonly in all these Appeals :
“1. Whether on the facts and in the circumstances
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010of the case, the Appellate Tribunal was right in
quashing the assessment orders made under
Section 153C of the Income Tax Act without
verifying the Satisfaction Note recorded by the
Assessing Officer ?
2. Whether on the facts and in the
circumstances of the case, the Appellate Tribunal
was right in quashing the assessment orders
holding that the assessing officer has not recorded
the reasons before initiating proceedings under
Section 153BC of the Income Tax Act ?
3. Whether on the facts and circumstances
of the case, the Tribunal was right holding that
recording of reasons / satisfaction which is neither
mentioned in Section 153BC of the Act nor in the
circular explaining the new provisions introduced
in the Finance Act 2003 ?
4. Whether in the facts and circumstances of
the case, is the Tribunal justified in granting relief
for Asst. Year 2005-06 on the ground that no
satisfaction note was recorded u/s.153C, when
Section 153C is not applicable to the impugned
year ?
5. Whether on the facts and in the
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010circumstances of the case, the Income Tax
Appellate Tribunal was right in deleting the
addition made by the Assessing Officer u/s. 69C in
respect of the unexplained expenditure on salary
payments to employees as mentioned in their loan
applications to the banks which were duly
forwarded by the assessee and for which the
assessee undertook to guarantee for the re-payment
of the loans availed by the employees ?
6. Whether on the facts and in the
circumstances of the case, the Income Tax
Appellate Tribunal was right in not holding that
the loan applications of the employees to the banks
constituted prima facie evidence for the actual
salary payments and the burden of proof to show
that such expenditure was not actually incurred
was on the assessee?”
4. To have an easy understanding, the following tables would explain
the number of Tax Case (Appeals) covered in this batch of cases relates to
the Assessment Years arising out of ITA Nos. disposed by the ITAT,
Chennai.
A.Batch- I – Against common order of ITAT dated 26.02.2010
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
S.No TCA No. Against ITA A.Y Issue
of 2010 No. of 2008
1 1005 577 1999-00
2 1006 910 2000-01
3 1007 911 2001-02 Unexplained expenditure
4 1008 912 2002-03 u/s.69C of salary payments.
5 1018 913 2003-04
6 1019 914 2004-05
7 1020 915 2005-06
B. Batch-II – Against common order of ITAT, dated 28.10.2023
TCA 1066, 1067, 1068, 1069/2015 relating to A.Ys : 1999-00 &
2000-01 already withdrawn
Sl.No TAC No. Against ITA A.Y Remarks Issues
of 2015 No. of 2013
1 1070 997 2001-02 2nd round of Whether the
litigation ITAT is right
w.r.t.issues in holding that
remanded by there is no
ITAT to AO in ‘satisfaction
ITA Nos.910- note” placed
915/2008. before the
Tribunal.
2 1071 998 2002-03 Against order
u/s 153(C) rws
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
143(3) rws 263
3 1072 999 2002-03 2nd round of
litigation
w.r.t.issues
remanded by
ITAT to AO in
ITA Nos.910
-915/2008
4 1073 1000 2003-04 Against order
u/s 153(C) rws
143(3) rws 263
5 1074 1001 2003-04 2nd round of
litigation
w.r.t.issues
remanded by
ITAT to AO in
ITA Nos.910
-915/2008
6 1075 1002 2004-05 Against order
u/s 153(C) rws
153A rws 263
7 1076 1003 2004-05 Against order
u/s 153(C) rws
143(3) rws 263
8 1077 1004 2004-05 2nd round of
litigation
w.r.t.issues
remanded by
ITAT to AO in
ITA Nos.910
-915/2008
9 1078 1005 2005-06 2nd round of
litigation
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
w.r.t.issues
remanded by
ITAT to AO in
ITA Nos.910
-915/2008
Batch – III – Against common order of ITAT dated 18.11.2014
TCS 1046, 1047, 1048, 1049/2015 relating to A.Ys : 1999-00 & 2000-
01 already withdrawn
Sl.No TCA No. Against MP A.Y Issues
of 2015 No. of 2014
1 1050 44 2001-02
2 1051 45 2002-03
3 1052 46 2002-03
4 1053 47 2003-04 Whether the ITAT is right in
5 1054 48 2003-04 not recalling the earlier
orders holding that there is no
6 1055 49 2004-05 “satisfaction note” placed
7 1056 50 2004-05 before the Tribunal
8 1057 51 2004-05
9 1058 52 2005-06
5. When these cases came up for hearing on 24.09.2024, after hearing
Mr.Karthik Ranganathan, learned Senior Standing counsel and
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Dr.S.Muralidhar, learned Senior counsel assisted by Mr.G.Baskar, we have
given interim direction that, the original records are to be produced.
Therefore the Revenue was directed to produce the original records
pertaining to the satisfaction note for both persons, i.e., the searched person
and other person for all the Assessment Years.
6. It is to be noted that, in the second round of litigation before the
CIT (Appeals), the assessee in fact had raised a ground that, the Assessing
Officer had lacked jurisdiction under Section 153C of the Act because the
conditions laid down in the said Section was not satisfied. The said ground
since was taken by the assessee’s side on the reason that the Assessing
Officer of the searched person had failed to record the reason for satisfaction
for invoking the provision of Section 153C of the Act in respect of other
person who is none other than the assessee. Since the said ground was raised
by the assessee, which in fact was accepted by the CIT (Appeals) and
therefore such an additional ground was also taken into consideration for
decision.
7. The CIT (Appeals) since had passed a detailed order, whereby the
CIT (Appeals) had satisfied that there has been no satisfactory note
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
specifically recorded by the Assessing Officer of the searched person and
therefore on that ground itself, it was held by the CIT (Appeals) that the
Assessing Authority has not got the jurisdiction to proceed against the
assessee, who is the other person, by initiating action under Section 153C of
the Act.
8. That was the only reason based on which, the CIT (Appeals)
decided the cases in favour of the assessee and against the Revenue.
Aggrieved over the same, since Appeals were filed in I.T.A.Nos.993 to 1005
of 2013 etc., batch by the Revenue before the ITAT, all those ITA’s were
heard and disposed by the common order of the ITAT dated 28.10.2023,
which is impugned in all these Appeals of the year 2015.
9. Pursuant to the direction given by this Court by order, dated
24.09.2024, when the cases again came up for hearing on 23.10.2024, the
learned Senior Standing counsel appearing for the Revenue had produced
the relevant papers arising out of the original file pertaining to the assessee.
However, insofar as the searched person is concerned, whether such a
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
satisfaction note has been recorded by the Assessing Officer was asked by
the Court and the learned Senior Standing counsel appearing for the
Revenue on instructions had stated that, no such reason has been recorded in
respect of the searched person. However, the learned Senior Standing
counsel appearing for the Revenue would further add that, such a
requirement of recording satisfaction note in respect of the searched person
was not required during the relevant point of time in view of the fluid
situation with regard to the legal position as the new provision came in to
effect only on 01.06.2003 and the law has been settled only in the year 2014.
10. Therefore after hearing the learned Senior Standing counsel
appearing for the Revenue, on 23.10.2024, we have given a further direction
to the Revenue that, a responsible officer on behalf of the Revenue in these
cases shall file an affidavit stating that, there has been no satisfaction report
recorded insofar as the searched person is concerned.
11. Pursuant to the said direction given by this Court, the Deputy
Commissioner of Income Tax, Central Circle, Chennai, has filed an affidavit
dated 28.10.2024, whereby the Officer inter alia has stated that, file relates
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
to Assessment Year 1999-2000, 2001-2002 and 2002-2003 are available and
file relates to 2000-2001, 2003-2004 and 2004-2005 were not available.
12. We have verified the note recorded by the Assessing Officer in
respect of the searched person for the Assessment Years 1999-2000, 2001-
2002 and 2002-2003. Invariably in all these notes for these three years
verbatim the same note has been recorded, where the following satisfactory
note has been recorded by the Assessing Officer.
“For these and other grounds, I have reason to believe
that income chargeable to tax has escaped assessment
in this case and action is initiated u/s.153A of the
Income Tax Act. Notice is accordingly issued
u/s.153A for the assessment year mentioned above.”
13. After having perusal of the note submitted on behalf of the
Revenue for all these three years it was also contended by the learned Senior
Standing counsel appearing for the Revenue that similar note must have
been prepared and must be available in the file relates to other three years,
but immediately the files could not be produced as it is to be traced.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
14. In this context, it is to be noted that, assuming that in all the six
years, a similar note has been prepared by the Assessing Authority of the
searched person, such a note could be made useful for the purpose of
initiating action against the searched person under Section 153A of the Act.
15. However, here the question is, the Assessee being the category of
other person and action had been initiated against the assessee only under
Section 153C of the Act, whether a satisfactory note to that effect has been
recorded by the Assessing Officer or Authority insofar as the other person
also in the file of the such searched person? without which, whether the
Assessing Authority can proceed against the assessee being the other person
under Section 153C of the Act is the only question to be answered in this
batch of cases.
16. In this context, Dr.S.Muralidhar, learned Senior counsel appearing
for the respondent assessee by relying upon various decisions of the Hon’ble
Supreme Court and other High Courts have pointed out that, even if there is
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
one Assessing Authority for both the searched person and other person, in
order to proceed against the other person under Section 153C of the Act, the
Assessing Authority of the searched person, the moment he has satisfaction
with regard to the searched person, must also record his satisfaction about
the incriminating materials or documents which are made available pursuant
to the search conducted in the searched person premises and accordingly, his
satisfaction to transmit the file to himself as the Assessing Authority, for the
other person, must have been recorded in the note and it should be made
available in the files of the searched person.
17. The learned Senior counsel would make further submissions that,
even in this context, one search note is enough where there must be a clear
satisfactory note recorded as to the incriminating documents pertaining to
the other person, then only the cause of action to transmit the file to the
Assessing Authority of the other person in case the Assessing Authority is
different person or transfer it to himself or herself if the Assessing Authority
for the searched person and other person is one and the same, would arise.
18. He would also submit that, whether this satisfactory note is
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
available or not is to be examined and if such a note is not available in the
files of the searched person, the law declared by the Hon’ble Supreme Court
has to be applied to the facts of the present case and if it is so, the stand
taken by the assessee before the Tribunal that, no such satisfactory note was
available within the meaning of the Law having been declared by the
Hon’ble Courts of law in the context of Section 153A as well as 153C of the
Income Tax Act is to be accepted.
19. In support of his contention, the learned Senior Counsel has relied
upon the following decisions :
(i) Manish Maheshwari v. Assistant Commissioner of Income-tax,
(2007) 159 Taxman 258 (SC)
(ii) Commissioner of Income-tax-III v. Calcutta Knitwears, (2014) 43
taxmann.com 446 (SC)
(iii) Assistant Commissioner of Income-tax v. Pepsi Foods (P) Ltd.,
(2018) 89 taxmann.com 10 (SC)
(iv) Pepsi Foods (P) Ltd., v. Assistant Commissioner of Income-tax,
(2014) 52 taxmann.com 220 (Delhi)
(v) Principal Commissioner of Income-tax v. Gali Janardhana Reddy,
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010(2023) 152 taxmann.com 332 (Karnataka)
20. By relying upon these decisions, the learned Senior Counsel
appearing for the assessee would contend that the law has been well settled
and based on the law settled by the Courts, infact the CBDT issued a circular
in Circular No.24/2015, whereby it has been made clear that, even the
pending litigation with regard to recording of satisfaction note under Section
158BD/Section 153C should be withdrawn / not pressed if it does not meet
the guidelines laid by the Apex Court. Therefore the learned Senior counsel
would contend that, in fact the Revenue should have withdrawn the cases as
per the decision of the CBDT circular which in fact was issued by the CBDT
pursuant to the law settled by the Hon’ble Supreme Court. Therefore
absolutely there has been no scope for entertaining even these Appeals at
this juncture, therefore all these appeals filed by the Revenue are liable to be
dismissed and the question of law raised in this batch of appeals are to be
answered in favour of the assessee and against the Revenue, he contended.
21. On the contrary, Mr.Karthik Ranganathan, learned Senior
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Standing counsel appearing for the Revenue has argued that, when a search
has been made under Section 132 of the Act, if incriminating documents and
materials are seized from the premises of the searched person and some of
such materials and documents pertaining not to the searched person and to
the other persons, in respect of those other persons also, if the jurisdiction
Assessing Officer is one and the same, once such satisfactory note is made
by the Assessing Authority of the searched person under Section 153A
proceedings that is sufficient to have such a satisfaction to proceed or initiate
action against the other person within the meaning of Section 153C of the
Act.
22. Whether this proposition stated by the learned counsel appearing
for the Revenue has been accepted or endorsed in any of the decisions of the
Court of Law is yet another question also to be answered.
23. The learned Senior Standing counsel appearing for the Revenue
also has heavily relied upon the decision in Manish Maheshwari v. Assistant
Commissioner of Income-tax reported in (2007) 159 Taxman 258 (SC). He
also relied upon the decision of the Hon’ble Supreme Court in Super Malls
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
(P) Ltd., v. Principal Commissioner of Income Tax reported in (2020) 115
taxmann.com 105 (SC). Even some more decisions he has relied upon, those
decisions are not related to the issue which is involved in this batch of cases.
24. By citing these decisions and making the said submissions as
stated supra, the learned Senior Standing counsel appearing for the Revenue
seeks indulgence of this Court to interfere with the order passed by the
ITAT, which is impugned herein and wanted this Court to answer the
Substantial Questions of Law that has arisen in this batch of cases in favour
of the Revenue and against the assessee by allowing these Appeals.
25. We have given our anxious consideration to the said legal
submissions made by both the learned counsels and also have perused the
materials placed before this Court.
26. If we look at the common impugned order passed by the ITAT,
dated 28.10.2013, the ITAT has traced the common grounds raised in all
those Appeals in para 3 of the order impugned, where the main ground was
(1b), where it is stated that the CIT (Appeals) failed to note that the relied
upon Court order in the case of Manish Maheshwari was rendered in the
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
context of Section 158BD and provisions of 153C being different, this case
law cannot be applied to the facts of the case.
27. Another important ground which was raised by the Revenue
before the ITAT was ground (1d) where the Revenue stated that the CIT
(Appeals) failed to note that there is no specific requirement in Section 153C
of Income Tax Act, 1961, that reasons / satisfaction note has to be recorded
by the Assessing Officer before initiating proceedings under Section 153C.
When the provisions were newly introduced in 2003, the CBDT issued a
Circular explaining the new provisions. In this Circular No.7, there is no
such reference to recording of satisfaction. Normally recording of
satisfaction is prescribed in the section itself whenever the same is
warranted. In the absence of specific provision, recording of satisfaction is
not mandatory, however the Assessing Officer has recorded the reasons for
initiation of proceedings under Section 153C before issue of notice under
28. These grounds raised before the ITAT was answered by the ITAT
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
in the impugned order by following the earlier order passed in this regard in
para 9 of the ITAT’s order, where the ITAT has held that, so far as
jurisdiction under Section 153C is concerned, the CIT (Appeals) by
following various decisions including Tribunal’s decision in assessees group
cases has held that, the Assessing Officer has not assumed valid jurisdiction
under Section 153C because he has not recorded the requisite satisfaction
and the entire proceedings initiated under Section 153C was void ab initio.
29. By making these observation, the relevant portion of the order of
the ITAT has been recorded. The ITAT also has recorded the decision of the
Tribunal in the case of M/s. SRM Easwari Travels and Tours (P) Ltd., dated
08.01.2010 and after recording these reasons, the Tribunal was of the view
that, in view of the decision of the Hon’ble Supreme Court in the case of
Manish Maheshwari (cited supra), the Tribunal did not find any reason to
interfere with the order passed by the CIT (Appeals) and accordingly, the
ITAT has dismissed all those appeals including the cross-objections filed by
the assessee, as the cross-objections had been filed only to strengthen and
support the view taken by the CIT (Appeals) in favour of the assessee.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
30. Therefore the one and only issue which is revolving in this batch
of cases right from the beginning from the CIT (Appeals) till this Court is as
to whether there has been a separate satisfactory note by the Assessing
Authority of the searched person in respect of the other person for initiating
action under Section 153C of the Act.
31. In this context, the Judgment of the Hon’ble Apex Court in Manish
Maheshwari (cited supra) has been relied upon by both sides. If we look at
the said case, there has been a search conducted at the premises of the
assessee’s company’s Director in that case, which lead to seizure of several
incriminating documents relating to the assessee business therein. After
issuing notice purported to be under Section 158BD, the Assessing Officer
completed the block assessment in the assessee’s case. On Appeal, the
Tribunal held that, the Assessing Officer had no jurisdiction to proceed
against the assessee for making the block assessment in terms of Chapter
XIV-B as no search was conducted in terms of Section 132 in the assessee’s
case. On Appeal, the High Court was however holding that the Assessing
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Officer had the jurisdiction in terms of Section 158BD r/w Section (2)(31)
and therefore the Revenue’s Appeal was allowed. Assailing the same, when
Appeals were preferred before the Hon’ble Supreme Court, the Hon’ble
Supreme Court has held to the following effect :
“7. 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 precedents wherefor 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
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010Section 158BC against such other person.
8. 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.
9. A taxing statute, as is well-known, must be
construed strictly. In Sneh Enterprises v.
Commissioner of Customs, New Delhi [(2006) 7 SCC
714], it was held :
“While dealing with a taxing provision, the
principle of ‘Strict Interpretation’ should be
applied. The Court shall not interpret the
statutory provision in such a manner which
would create an additional fiscal burden on
a person. It would never be done by
invoking the provisions of another Act,
which are not attracted. It is also trite that
while two interpretations are possible, the
Court ordinarily would interpret the
provisions in favour of a tax-payer and
against the Revenue.”
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Yet again in J. Srinivasa Rao v. Govt. of A.P. &
Another [2006 (13) SCALE 27], it was held :
“In a case of doubt or dispute, it is well-
settled, construction has to be made in
favour of the taxpayer and against the
Revenue.”
In M/s. Ispat Industries Ltd. v. Commissioner of
Customs, Mumbai [JT 2006 (12) SC 379 : 2006 (9)
SCALE 652], this Court opined:
“In our opinion if there are two possible
interpretations of a rule, one which
subserves the object of a provision in the
parent statute and the other which does
not, we have to adopt the former, because
adopting the latter will make the rule ultra
vires the Act.”
10. Law in this regard is clear and explicit. The only
question which arises for our consideration is as to
whether the notice dated 06.02.1996 satisfies the
requirements of Section 158BD of the Act. The said
notice does not record any satisfaction on the part of
the Assessing Officer. Documents and other assets
recovered during search had not been handed over to
the Assessing Officer having jurisdiction in the matter.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
11. No proceeding under Section 158BC had been
initiated. There is, thus, a patent non-application of
mind. A prescribed form had been utilized. Even the
status of the assessee had not been specified. It had
only been mentioned that the search was conducted in
the month of November 1995. No other information
had been furnished. The provisions contained in
Chapter XIVB are drastic in nature. It has draconian
consequences. Such a proceeding can be initiated, it
would bear repetition to state, only if a raid is
conducted. When the provisions are attracted, legal
presumptions are raised against the assessee. The
burden shifts on the assessee. Audited accounts for a
period of ten years may have to be reopened.”
32. The Hon’ble Apex Court has held in Manish Maheshwari that, the
condition precedent for invoking the provisions of Section 158BD thus are
required to be satisfied before the provisions of Chapter XIV-B are applied
in relation to any person other than the person whose premises had been
searched under Section 132 or whose documents and other assets had been
requisitioned under Section 132A. The Supreme Court has also held in that
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
case that, a taxing statute as is well known must be construed strictly by
relying upon the Judgment of the Supreme Court in Sneh Enterprises v.
Commissioner of Customs reported in (2006) 7 SCC 714. It was further held
by the Supreme Court that, law in this regard is clear and explicit. The notice
in question issued under Section 158BD did not record any satisfaction on
the part of the Assessing Officer. The documents and other assets
recovered during search had not been handed over to the Assessing Officer
having jurisdiction in this matter.
33. Therefore what has been held in the said case in Manish
Maheshwari (cited supra) is not supporting the case of the Revenue instead
it supports the case of the assessee only.
34. The next decision is Commissioner of Income-tax-III v. Calcutta
Knitwears, reported in (2014) 43 taxmann.com 446 (SC). In this case, almost
with similar facts, where the proceedings initiated under Section 158BD
when was questioned on the ground that, satisfactory report should have
been recorded by the Assessing Officer under Section 158BD was on a date
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
subsequent to the framing of assessment under Section 158BC in case of the
searched person, i.e., beyond the period prescribed under Section
158BE(2)(b) and thereby notice issued under Section 158BD was belated
and consequently the assumption of jurisdiction by the Assessing Authority
in the impugned block assessment would be invalid.
35. In the said case, the Hon’ble Supreme Court has held in
unequivocal term to the following effect :
“44. In the result, we hold that for the purpose of
Section 158BD of the Act a satisfaction note is
sine qua non and must be prepared by the assessing
officer before he transmits the records to the other
assessing officer who has jurisdiction over such
other person. The satisfaction note could be
prepared at either of the following stages : (a) at the
time of or along with the initiation of proceedings
against the searched person under Section 158BC
of the Act; (b) along with the assessment
proceedings under Section 158BC of the Act; and
(c) immediately after the assessment proceedings
are completed under Section 158BC of the Act of30/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010the searched person.”
36. Therefore for the purpose of Section 158BD of the Act, a
satisfaction note is sine qua non and must be prepared by the Assessing
Officer before he transmits the records to the other Assessing Officer who
has jurisdiction over such other person. Though Section 158BC and Section
158BD are no longer in the Income Tax Act, 1961 and have been replaced
by Section 153A and Section 153C of the Income Tax Act, 1961, the ratio in
Calcutta Knitwears case has been accepted in Board Circular No.24/2015,
dated 31.12.2015.
37. Here in the case in hand, arguments were advanced by the learned
Senior Standing counsel appearing for the Revenue that, such a contingency
of preparing a satisfaction note by the Assessing Officer of the searched
person before transmitting the records to the Assessing Authority of the
other person would arise, if the Assessing Authority are two different
persons, however in case if the Assessing Authority is one and the same for
both searched person and other person, such a requirement may not be
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
required at all.
38. However, this position has been made clear after several
Judgments of the Apex Court by the CBDT in its Circular No.24/2015 dated
31.12.2015. For a easy reference, verbatim, the entirety of the Circular is
reproduced herein :
“Section 153C, Read with Section 158BD, of the
Income-Tax Act, 1961 – Search and Seizure –
Assessment of Income in case of other person –
Recording of Satisfaction Note under Section
158BD/153C of Said Act Circular No.24/2015
[F.No.279/Misc./140/2015/ITJ] Dated 31.12.2015.
The issue of recording satisfaction for the purposes
of section 158BD/153C has been subject matter of
litigation.
2. The Hon’ble Supreme Court in the case of M/s.
Calcutta Knitwears in its detailed judgment in Civil
Appeal No.3958 of 2014, dated 12.03.2014 [2014]
43 taxmann.com 446 (SC) (available in NJRS at
2014-LL-0312-51) has laid down that for the
purpose of section 158BD of the Act, recording of
a satisfaction note is a prerequisite and the32/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010satisfaction note must be prepared by the AO
before he transmits the record to the other AO who
has jurisdiction over such other person u/s 158BD.
the Hon’ble Court held that “the satisfaction note
could be prepared at any of the following stages:
(a) at the time of or along with the initiation of
proceedings against the searched person under
section 158BC of the Act; or
(b) in the course of the assessment proceedings
under section 158BC of the Act; or
(c) immediately after the assessment proceedings
are completed under section 158BC of the Act of
the searched person.”
3. Several High Courts have held that the
provisions of section 153C of the Act are
substantially similar/pari-materia to the provisions
of section 158BD of the Act and therfore, the
above guidelines of the Hon’ble SC, apply to
proceedings u/s 153C of the IT Act, for the
purposes of assessment of income of other than the
searched person. This view has been accepted by
CBDT.
4. The guidelines of the Hon’ble Supreme Court as
referred to in para 2 above, with regard to
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
recording of satisfaction note, may be brought to
the notice of all for strict compliance. It is further
clarified that even if the AO of the searched person
and the “other person” is one and the same, then
also he is required to record his satisfaction as has
been held by the Courts.
5. In view of the above, filing of appeals on the
issue of recording of satisfaction note should also
be decided in the light of the above judgment.
Accordingly, the Board hereby directs that pending
litigation with regard to recording of satisfaction
note under section 158BD/153C, should be
withdrawn/not pressed if it does not meet the
guidelines laid down by the Apex Court.”
(Emphasis supplied)
39. Para 5 of the Circular has made it very clear that, filing of appeals
on the issue of recording of satisfaction note should also be decided in the
light of the Judgment referred in the Circular, i.e., M/s. Calcutta Knitwears
(cited supra).
40. The Board has further stated that, accordingly, the Board directs
that pending litigation with regard to recording of satisfaction note under
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Section 158BD/153C should be withdrawn and not pressed if it does not
meet the guidelines laid down by the Apex Court.
41. In para 4 of the Circular, the CBDT has made it very clear that, the
Supreme Court’s guidelines with regard to the recording of satisfaction note
may be brought to the notice of all for strict compliance and the Circular has
further made it clear that, it is clarified that even if the Assessing Officer of
the searched person and the other person is one and the same, then also he is
required to record his satisfaction as has been held by the Courts.
42. Though circular issued by the CBDT is not binding on the Courts,
however it is binding on the Officers, therefore in fact these Appeals which
are revolving with the one and only issue of satisfactory note to be recorded
in this regard before initiating action under Section 153C and the old
analogous provision is Section 158BD, are liable to be withdrawn by the
Revenue itself. However for the reasons best known to them, they pressed
upon the matters and therefore hearing went on and are being disposed by
deciding the issue once again in this order.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
43. Almost similar view has been taken by the Delhi High Court in
Pepsi Foods (P) Ltd., v. Assistant Commissioner of Income-tax reported in
(2014) 52 taxmann.com 220 (Delhi). This has been confirmed by the
Hon’ble Supreme Court in the matter of Assistant Commissioner of Income-
tax v. Pepsin Foods (P) Ltd., reported in (2018) 89 taxmann.com 10 (SC).
44. All these decisions have been taken into account by a Division
Bench of the High Court of Karnataka in Principal Commissioner of
Income-tax v. Gali Janardhana Reddy reported in (2023) 152 taxmann.com
332 (Karnataka), where the question framed by the Court is as follows :
“Whether on the facts and circumstances of the
case, the Tribunal is right in law in setting aside
assessment order passed for assessment year 2011-
12 by holding that there is no satisfaction recorded
by the assessing officer of the searched person
(153A) in the file of the said person ignoring the
intention of legislature and even when the
assessing authority has passed assessment order
after recording satisfaction as required under36/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010Section 153C of the Act?”
45. In the said case, the Division Bench of the Karnataka High Court
has taken this issue elaborately and has held as follows :
“56.It is further contended that it is settled law that
while construing penal statutes and taxation
statutes, the Court has to apply strict rules of
interpretation and Article 226 of the Constitution
prohibits the State from extracting tax from the
citizen without authority of law. The natural
corollary to the said provision is that State cannot
burden the citizen without the authority of law and
thus, taxation statutes has to be interpreted strictly.
The Hon’ble Supreme Court in the case of Commr.
of Customs v. Dilip Kumar & Co., (2018) 9 SCC 1
held that if there are two view possible in the
matter of interpretation of a charging section, the
one favorable to the assessee needs to be applied.
Applying the aforesaid ratio to the facts of the
present case, the Hon’ble Delhi High Court in CIT
vs. RRJ Securities have on a strict interpretation
construed Section 153C of the Act and held that 6
years contemplated under sub-section 1 of Section37/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010153C have to be reckoned from the date of handing
over of documents to the AO of searched person
and not the date of search. Thus, even otherwise
the interpretation given by the Hon’ble High Court
to Section 153C of the Act is in terms of the
aforesaid law laid down by the Hon’ble Supreme
Court.
…
…
…
58.Even otherwise, the requirement of recording of
satisfaction note is clearly borne out of the
provisions contained in Section 153C of the Act.
The Hon’ble Supreme Court in the case of CIT vs.
Calcutta Knitwears, (2014) 6 SCC 444 has held
that the recording of satisfaction note is pre-
requisite and the same must be prepared by the AO
before he transmits the record to the other AO who
has jurisdiction over such other person. Several
Hon’ble High Courts have held that the provisions
of Section 153C of the Act are pari materia to the
provisions of Section 158BD of the Act, which was
the subject matter of interpretation before the
Hon’ble Supreme in the case of CIT vs. Calcutta38/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010Knitwears (supra). The aforesaid reliance are
squarely applicable to the present case on hand in
the given facts and circumstances of the case
wherein certain incriminating materials were found
during the course of search against the respondent /
Assessee as alleged.
…
…
…
60.In the facts of the present case, it is an admitted
position that the satisfaction note was not recorded
by the Assessing Officer of the searched person
and thus, the Income Tax Appellate Tribunal
passed an order quashing the assessment on
account of lack of jurisdiction to proceed against
the respondent / assessee under Section 153-C of
the Act. The said order does not suffer from any
infirmities but the Tribunal has rightly quashed the
assessment on account of lack of jurisdiction.
These are the contentions that have been made by
the learned counsel for the respondent / assessee.
Therefore, the learned counsel for the respondent /
assessee prays for dismissal of this appeal
preferred by the appellant / Revenue.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010…
…
…
64.Section 153-C of the IT Act, 1961 relates to
assessment of income of any other person. 153-C
(1): Notwithstanding anything contained in
Sections 139, 147, 148, 149, 151 and 153 where
the Assessing Officer is satisfied that, (a) any
money, bullion, jewellery or other valuable article
or thing, seized or requisitioned, belongs to; or (b)
any Books of Account or documents, seized or
requisitioned, pertains or pertain to, or any
information contained therein, relates 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.
…
…
…
67.In the present case on hand, the Income Tax
Appellate Tribunal had arrived at a conclusion in
ITA No.1444-1450/2014. It is seen that the
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Tribunal has not only followed the judgment of the
Allahabad High Court rendered in the case of M/s.
Gopi Apartment supra, but the Tribunal has also
considered and followed the judgment of the Apex
Court reported in the case of Calcutta Knitwears
(supra), and the judgment of the Hon’ble Apex
Court in the case of Manish Maheshwari (289 ITR
341). In the facts and circumstances of the present
case on hand relating to initiation of proceedings,
has been discussed based upon the materials. No
satisfaction was recorded by the Assessing Officer
of the searched person because it is seen that the
so-called satisfaction note prepared by the
Assessing Officer in his capacity as Assessing
Officer of the searched person, it could not be
shown by the Revenue that any satisfaction note
was prepared by him as the AO of the searched
person. Therefore, it is to be accepted that no
satisfaction was recorded by the AO of the
searched persons and therefore, the order of the
Tribunal and the judgments of the Allahabad High
Court rendered in M/s.Gopi Apartment (supra) and
of the judgment of the Hon’ble Apex Court
rendered in the case of Calcutta Knitwears (supra)
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
and Manish Maheshwari (supra) are applicable to
the given facts and circumstances of the case.
These judgments were followed by the Income Tax
Appellate Tribunal to hold that the notice issued by
the AO under Section 153-C of the IT Act deserves
to be quashed and accordingly had proceeded to
quash the assessment orders framed by the
Assessing Officer under Section 153-C read with
Section 143(3) of the Income Tax Act.
Accordingly, the additional ground was allowed in
all the seven years. The said finding has been
challenged in this appeal by urging various
grounds by the appellant / Revenue. But the
grounds proposed for framing substantial questions
of law and referred to certain provisions of the IT
Act which has been extracted supra, but the
grounds urged for preferring an appeal by the
appellant / Revenue do not have any substance
even for contending that it requires for dwelling in
detail to refer to each one of the substantial
questions of law. The judgment rendered by the
Tribunal does not suffer from any infirmity or
absurdity to call for interference the said judgment
and further no warranting circumstances arise.
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Consequently, these appeals deserve to be
rejected.”
46. However none of the Judgments cited by the Revenue has dealt
with the issue in favour of the Revenue and even the Manish Maheshwari
(cited supra) also has decided the issue in favour of the assessee and not in
favour of the Revenue. Though it was cited by the learned Senior Standing
counsel appearing for the Revenue, the case law in Super Malls (P) Ltd., v.
Principal Commissioner of Income Tax, New Delhi reported in (2020) 115
taxmann.com 105 (SC), the issue that was decided by the Apex Court in the
said Super Malls case was whether, when Assessing Officer of searched
person and other person is same, it is sufficient for Assessing Officer to
record in satisfaction note, the documents seized from searched person
belong to other person and there is no requirement of transmitting
documents seized from searched person. The question was answered in the
affirmative and in the said case, the Assessing Officer of searched person
and other person, i.e., assessee of the case was same and he was satisfied
that documents seized from searched person belonged to assessee which was
specifically mentioned in satisfaction note as well. Therefore requirement of
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Section 153C was duly fulfilled.
47. This case was mainly relied upon by the learned Senior Standing
counsel appearing for the Revenue. But if we look at the satisfaction note
recorded by the Assessing Officer of the searched person who is also happen
to be the Assessing Officer of the other person who is the assessee herein,
he has recorded as reproduced herein above in the earlier paras that, “for
these and other grounds, I have reason to believe that income chargeable to
tax has escaped assessment in this case and action is initiated under Section
153A of the Income Tax Act, notice is accordingly issued under Section
153A for the Assessment Year mentioned above. Absolutely, there has been
no whisper about the satisfaction of the Assessing Officer with regard to
other person, even in the note that has been prepared for the searched person.
48. There has been no separate note prepared for the other person who
is the assessee herein and no such file or note has been produced before this
Court and it is in fact admitted that a similar note with verbatim same
language or words used in every note prepared for the Assessment Years
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
1999-00, 2001-02, 2002-03. These are all the three years, for which the note
prepared by the Assessing Officer which is form part of the file had been
produced before this Court for perusal and remaining years, according to the
affidavit filed by the Officer concerned, those files are not available and it
was also stated during the argument by the learned Senior Standing counsel
appearing for the Revenue that similar note must have been prepared in
other Assessment Years also.
49. Be that as it may, the language used in the note as stated supra has
made very clear that the satisfaction note has been recorded by the Assessing
Officer only in respect of the searched person to initiate proceedings under
Section 153A alone and in the complete absence of any satisfaction note
recorded by the Assessing Officer of the searched person pertains to the
other person who is the assessee herein, the said Judgment cited by the
learned Senior Standing counsel appearing for the Revenue in Super Malls
(P) Ltd., case also would not apply to the present case, because in the said
case, since the Assessing Officer for both searched person and other person
is one and the same, he was satisfied that the documents seized from
45/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
searched person belong to assessee which was specifically mentioned in
satisfaction note as well, therefore the Court accepted that the requirement of
Section 153C was duly fulfilled.
50. No such satisfaction has been recorded herein as if the documents
seized from the searched person belong to the assessee i.e., other person. In
the absence of any such note, even the import of the said decision in Super
Malls (P) Ltd., case, would no way help the case of the Revenue.
51. Therefore on the basis of the law that has been settled in various
decisions of the Hon’ble Apex Court followed by the decisions of the various
High Courts, the recording of satisfaction report is a sine qua non before
initiating action under Section 153C of the Act. Based on the law settled by
the Hon’ble Apex Court, the CBDT itself issued a Circular, where they have
made very clear by way of clarification that even if the Assessing Officer of
the searched person and other person is one and the same, then also he is
required to record his satisfaction as has been held by the Courts. It has
further been stated in the CBDT Circular at para 5 that, the pending
litigation with regard to recording of satisfaction note under Section
46/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
158BD/153C should be withdrawn / not pressed if it does not meet the
guidelines laid down by the Apex Court.
52. Therefore as per the CBDT Circular dated 31.12.2015 of Circular
No.24/2015 in fact all these appeals should have been withdrawn by the
Revenue as the circular issued by CBDT binding the Revenue.
53. Therefore, at no stretch of imagination, it can be stated that, even
without a separate satisfaction note pertains to the other person by the
Assessing Officer of the searched person such a proceedings under Section
153C can be invoked and completed. Hence, the view taken initially by CIT
(Appeals) confirmed and concurred with the same by the ITAT in the order
impugned are all in consonance with the settled legal proposition. Therefore
we have no hesitation to hold that, absolutely there has been no infirmity
attached with the orders passed by the ITAT which is impugned herein.
54. Resultantly, all these Appeals fail, therefore they are liable to be
dismissed, accordingly all these Tax Case (Appeals) are dismissed.
47/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
Therefore the Question of Law that was recorded or arisen in this batch of
cases are answered in favour of the assessee and against the Revenue. There
is no order as to costs. Consequently, connected miscellaneous petitions are
closed.
(R.S.K., J.) (C.S.N., J.)
29.01.2025
Index : Yes
Speaking Order : Yes
Neutral Citation : Yes
tsvn
48/49
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T.C.(A).Nos.1050 to 1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to 1020 of 2010
R.SURESH KUMAR, J.
AND
C.SARAVANAN, J.
tsvn
Common Judgment in
Tax Case (Appeal) Nos.1050 to
1058 of 2015, 1070 to 1078 of 2015,
1005 to 1008 of 2010 and 1018 to
1020 of 2010
29.01.2025
49/49
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