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DATE: May 25, 2017 (Date of pronouncement)
DATE: May 26, 2017 (Date of publication)
AY: 2000-01 to 2004-05
FILE: Click here to view full post with file download link
CITATION:
S. 153A: Entire law explained on whether concluded assessments can be reopened u/s 153A even in the absence of incriminating material found during the search in the light of the apparently conflicting verdicts in CIT vs. Kabul Chawla 380 ITR 573 (Del) and Dayawanti Gupta v. CIT 390 ITR 496 (Del)

Section 153A of the Act is titled “Assessment in case of search or requisition”. It is connected to Section 132 which deals with ‘search and seizure’. Both these provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re-open at least six years of assessments earlier to the year of search. It is not to be exercised lightly. It is only if during the course of search under Section 132 incriminating material justifying the re-opening of the assessments for six previous years is found that the invocation of Section 153A qua each of the AYs would be justified. The question whether unearthing of incriminating material relating to any one of the AYs could justify the re-opening of the assessment for all the earlier AYs was considered both in CIT v. Anil Kumar Bhatia and CIT v. Chetan Das Lachman Das. Incidentally, both these decisions were discussed threadbare in the decision of this Court in Kabul Chawla 380 ITR 573 (Del)

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COURT:
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DATE: February 7, 2017 (Date of pronouncement)
DATE: February 15, 2017 (Date of publication)
AY: 2007-08
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CITATION:
S. 153C: The requirement that the documents found during search should “belong” to the assessee is a condition precedent and a jurisdictional issue. The non-satisfaction of the condition renders the entire proceedings null and void. The fact that the searched person and the assessee are alleged to be “hand in glove” is irrelevant

The grievance of the Revenue as submitted by Mr.Kotangale is a submission made on the basis of suspicion and not on the basis of any evidence on record which would indicate that the respondent – assessee and persons searched were all part of the same group. Be that as it may, the requirement of Section 153C of the Act cannot be ignored at the alter of suspicion. The Revenue has to strictly comply with Section 153C of the Act. We are of the view that non satisfaction of the condition precedent viz. the seized document must belong to the respondent – assessee is a jurisdictional issue and non satisfaction thereof would make the entire proceedings taken thereunder null and void. The issue of Section 69C of the Act can only arise for consideration if the proceedings under Section 153C of the Act are upheld

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DATE: September 30, 2016 (Date of pronouncement)
DATE: November 7, 2016 (Date of publication)
AY: 2002-03 to 2007-08
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CITATION:
S. 153C: An order u/s 153C passed without obtaining the approval of the JCIT u/s 153D is without jurisdiction and void in view of Calcutta Knitwears 362 ITR 673 (SC) and CBDT Circular No. 24/15 dated 31.12.2015

The guidelines of the Hon’ble Supreme Court as referred to in para 2 above, with regard to 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. 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.

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DATE: May 20, 2016 (Date of pronouncement)
DATE: May 26, 2016 (Date of publication)
AY: 2007-08
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CITATION:
S. 147/ 148/ 153C: A case where the AO detects incriminating material in search has to be processed only u/s 153C and not u/s 147. A notice u/s 148 to assess such undisclosed income is void ab initio

Reassessment was initiated on the basis of incriminating material found in search of third party and the validity of the same was challenged by the assessee before the Learned CIT(Appeals) and the Learned CIT(Appeals) vitiated the proceedings. The same was questioned by the Revenue before the ITAT and the ITAT after discussing the cases of the parties and the relevant provisions in details has come to the conclusion that in the above situation, provisions of sec. 153C were applicable which excludes the application of sections 147 and 148 of the Act. The ITAT held the notice issued under sec. 148 and proceedings under sec. 147 as illegal and void ab initio. It was held that Assessing Officer having not followed procedure under sec. 153C, reassessment order was rightly quashed by the CIT(Appeals)

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DATE: October 15, 2015 (Date of pronouncement)
DATE: May 6, 2016 (Date of publication)
AY: -
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CITATION:
S. 153A/ 153C: If the assessee stands amalgamated with another Co, it ceases to exists and all proceedings of search u/s 132, notice and assessment u/s 153C on the assessee are a nullity and void ab initio

In identical circumstances, in cases arising out of the same search, this Court has invalidated the assessment proceedings against the Assessee in those cases which, on account of having merged with another entity with effect from a date anterior to the search, also no longer existed on the date of search, on the date of the issue of notice and consequent assessment order passed under Section 153 C of the Act.

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DATE: August 28, 2015 (Date of pronouncement)
DATE: September 1, 2015 (Date of publication)
AY: 2002-03, 2005-06, 2006-07
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CITATION:
S. 153A/ 153C: Entire law on the scope of additions that can be made in a pending assessment and in a completed assessment pursuant to a search u/s 132 explained

Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment

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COURT:
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DATE: July 10, 2015 (Date of pronouncement)
DATE: July 15, 2015 (Date of publication)
AY: 2000-01 to 2006-07
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CITATION:
S. 153C: Even if the AO of the searched person and of the "other person" (i.e. the assessee) is the same, the proper satisfaction has to be recorded before assuming jurisdiction over the assessee. Failure to record satisfaction renders the assessment order null and void

The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being sine qua non. He cannot assume jurisdiction to transmit those items to another file which incidentally is pending before him concerning other person (person other than the person referred to in Section 153A). The question as to whether that may influence the opinion of the Assessing Officer having jurisdiction over such other person, also cannot be the basis to take any other view.

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DATE: June 24, 2015 (Date of pronouncement)
DATE: June 30, 2015 (Date of publication)
AY: 2007-08 to 2009-10
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CITATION:
S. 271(1)(c): Law on levy of penalty in a case where satisfaction is recorded in s. 153C/153D assessments by AO who is common to the searched party and the assessee explained

The attempt at the end of the assessee is that there should be a straight jacket system, whereby the satisfaction recorded even by the same AO then, that should be placed in the file of searched person and if it is placed in some other cupboard in his room by the AO then, there cannot be any satisfaction, we fail to appreciate that technical approach at the end of the assessee. The law does not require the manner and the procedure of keeping the files. The section only requires that a satisfaction be recorded and it should be during the period propounded by Hon’ble S.C. in CIT vs. Calcutta Knitwears 362 ITR 673

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COURT:
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DATE: May 29, 2015 (Date of pronouncement)
DATE: June 1, 2015 (Date of publication)
AY: 2003-04 to 2008-09
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CITATION:
S. 143(2) and 153C notices issued in the name of the non-existent amalgamating company are void and render the assessment order null and void (entire case law discussed)

For making the assessment, it is absolutely essential that the person so to be assessed should be in existence at the time of making the assessment. In the present case the assessment has been framed by the AO on a date when the present assessee was not in existence therefore, the assessment framed by the AO vide assessment order dated 31.12.2010 was not valid

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COURT:
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SECTION(S): ,
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DATE: January 16, 2015 (Date of pronouncement)
DATE: January 19, 2015 (Date of publication)
AY: 2003-04
FILE: Click here to view full post with file download link
CITATION:
S. 153C: Even if the AO of the person searched and the 'other person' is the same, the recording of satisfaction by the AO having jurisdiction over the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the ‘other person. Impact of amendment by Finance (No. 2) Act 2014 w.e.f. 1.10.2014 considered

It is a clear-cut proposition that the recording of satisfaction by the AO having jurisdiction over the person searched is an essential and prerequisite condition for bestowing jurisdiction to the AO of the ‘other person.’ On a close comparative study, it is overt that in so far as the question of acquiring jurisdiction by the AO of the person other than the person searched is concerned, the provisions of section 153C are in pari materia with section 158BD

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