Meena Rani, New Delhi vs Assessee

Ms. Meena Rani, vs. ACIT, Central Circle 19, C/o Raj Kumar & Associates, New Delhi. Chartered Accountants, 4435/7, Ansari Road, Daryaganj, New Delhi - 110 002.

(PAN : AAWPR6753E)

(APPELLANT) (RESPONDENT)

ASSESSEE BY : Shri R.K. Gupta, CA and Shri Sumit Goel, CA REVENUE BY : Shri Gunjan Prasad, CIT DR

Date of Hearing : 12.06.2015 Date of Pronouncement : 17.06.2015

ORDER

PER GEORGE GEORGE K., JUDICIAL MEMBER :

This appeal, at the instance of the assessee, is directed against the

order of the Commissioner of Income-tax (Appeals)-XXXIII, New Delhi

dated 21.08.2013. The relevant assessment year is 2007-08.

2. Brief facts of the case are as follows.

A search and seizure operation was carried out in RH Agro Group of

cases. Notice u/s 153A read with section 153C of the Act was issued on 2 ITA No.6209/Del./2013

31.12.2009 requiring the assessee to file return of income for assessment

year under consideration. The assessee filed photo copy of the return

declaring total income at Rs. 2,79,000/-. The Assessing Officer completed

the assessment at a total income of Rs.4,78,900/- after making addition of

Rs.1,99,000/- on account of gift remaining unconfirmed. The CIT(A)

confirmed the AO's action dismissing the assessee's appeal.

3. Aggrieved, the assessee is in appeal before us.

4. The assessee filed the following effective grounds before us :-

"1. That in the absence of any incriminating material found belonging to assessee during the course of search on a 3rd party, the assumption of jurisdiction u/s 153C is unwarranted, therefore, consequential Asstt. Order framed u/s 153C is illegal and without jurisdiction.

2. That under the facts and circumstances, since, the issue of receipt of gift of Rs.1,99,900/- is not emanating from any seized material during search on a 3rd party and since, no addition for the same can be made in Asstt. Framed u/s 153C."

5. The assessee has also filed an application for admission of the

following additional ground :-

"That in the absence of recording any satisfaction for finding any valuable or records belonging to the assessee during search on a 3rd person by the AO of searched person or otherwise, as envisaged U/s. 153C(1), the complete proceedings are illegal and without jurisdiction."

After hearing both the sides, we admit the additional ground and take up

the same for disposal as it is a pure legal issue which goes to the root 3 ITA No.6209/Del./2013

of the matter and no new facts are required to be investigated or placed on

record for adjudicating of the same.

6. The ld. Counsel for the assessee submitted that no satisfaction was

recorded by the Assessing Officer in the case of searched persons but was

recorded in the case of assessee and, therefore, in view of the judgment of

Hon'ble Delhi High court in the case of Pepsi Foods (P) Ltd. Vs. ACIT

367 ITR 112, the entire proceedings were illegal. The ld. Counsel also

relied on various judicial pronouncements. The ld. Counsel further

submitted that the Tribunal has also on the same reasoning cancelled the

assessment order in assessee's own case for assessment year 2006-07 in

ITA No.256/Del/2013 vide order dated 29.04.2015 (copy placed on

record).

7. We have considered the rival submissions and perused the material

on record. At page 2 of the PB, the satisfaction note recorded by DCIT,

Central Circle,19, New Delhi is contained, which is reproduced hereunder:

"Satisfaction note for initiating proceedings u/s 153C of Income Tax Act, 1961in the case of Smt. Meena Rani, A-7, Ist Floor, South Extension-II, New Delhi.

31.12.2009: Search and seizure operation under section 132 of Income Tax Act, 1961 in Daawat Group (L.T. Foods Limited) of cases including M/s R.H. Agro Group was conducted on 10.02.2009 at the business premises and at the residential premises of the Directors. During the course of search action various documents were found and seized. While examining the seized documents of this group, I have come across with the following documents:

4 ITA No.6209/Del./2013 S.No. Premises form Annexure Remarks where seized No. & Page No.

1. A-7, 1st Floor, Annexure A- Form No.32 South 3, Page 46 contains the Extension Part- particulars of II, New Delhi appointment of Mrs. Meena Rani as Add Directors pursuant to section 303(2) of the Companies Act, 1956 in M/s.

Flair Furniture Pvt. Ltd.

2. A-7, 1st Floor, Annexure A- This document South 1, Page 94 contains the Extension Part- copy of capital II, New Delhi account of Smt. Meena Rani with M/s R.S. Rice & Gen Mills, Bhikhiwind (Amritsar)

I have gone through the above documents and from the examination of the same I am satisfied that these documents belong to Mrs Meena Rani and therefore, action u/s 153C of the Income tax Act is attracted in this case. Notices u/s 153A read with section 153C of Income Tax Act, 1961 for the assessment years 2003-04 to 2008-09 are being issued."

A perusal of the satisfaction note makes it clear that this has been recorded

in the records of assessee and not in the records of the searched persons

because notice u/s 153A read with section 153C was issued by the 5 ITA No.6209/Del./2013

Assessing Officer after examining the documents mentioned in the

satisfaction note. Therefore, this satisfaction note does not meet the

requirements of law. Therefore, respectfully following the judgment of

Hon'ble Delhi High court in the case of Pepsi Foods (P) Ltd. and the order

of the Tribunal in assessee's own case for assessment year 2006-07, cited

supra, we allow the additional ground and the impugned assessment order

is quashed.

8. Since we have quashed the assessment order while deciding the

additional ground, the other grounds taken by the assessee has become

academic and are not adjudicated.

9. In the result, assessee's appeal is allowed.

Order pronounced in open court on this 17th day of June, 2015.

Sd/- sd/- (S.V. MEHROTRA) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated the 17th day of June, 2015 TS

Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-XXXIII, New Delhi 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.