Where no satisfaction note in the searched persons proceeding recorded separately, the jurisdiction assumed u/s 153C in the case of the assessee is not in accordance with provisions of section 153C – ITAT Delhi

• The assessee is a company incorporated on 14.01.2005 to carry on business of Real Estate.

• The assessee filed return u/s 139(1) relevant to the A.Y. 2007-08 on 30th March 2008 declaring income of Rs. Nil.

• The return was processed u/s 143(1) of Income Tax Act, 1961.

• Thereafter search u/s 132 of the Income Tax Act, 1961 was conducted by the investigation wing of the Department on 22.03.2011 in the Amtek group of cases.

• The assessee’s case was proposed for centralization by the investigation wing on the basis of certain documents found from the premises of M/s Excel Infotech Pvt. Ltd. at the Connaught Place, New Delhi.

• The Assessing officer wrote a satisfaction note, and held that these papers belong to the assessee and issued notice u/s 153C to the assessee.

• In response to notice u/s 153C, the assessee filed return declaring income of Nil on 20.12.2012

• The Assessing Officer made addition of Rs. 8.70 crores holding the view that the total amount of Rs. 14.98 crores was to be paid by the assessee out of which Rs. 6.28 crores have been paid by cheques and the balance amount of Rs. 8.70 crores was paid out of books.

• Being aggrieved by the assessment order, the assessee filed an appeal before the CIT(A). The CIT(A) allowed the appeal of the assessee.

• It was submitted that​​ the satisfaction note is not recorded in the file of the assessee searched u/s 132 and documents claimed to be owned by the assessee was transferred to the file of the assessee.

• The Assessing officer without any evidence held that these papers belong to the assessee and issued notice u/s 153C to the​​ assesse

• None of the seized documents was prepared by assessee as per the contention of the assessee before the Assessing Officer.

• Neither the said documents contained any name nor contain authorized person’s signature except the joint venture agreement as per the submissions of the assessee before the CIT(A)

Thus,​​ for the purpose of assuming jurisdiction u/s 153C of the Income Tax Act, there is a pre-requisite of preparing a satisfaction note​​ wherein all the relevant information regarding the assesse needs to be mentioned. In case no such satisfaction is recorded separately, the jurisdiction assumed u/s 153C is bad in law and hence, the order passed is void ab initio.​​